Sri Mallikarjun Vidya Vardhak Sangha , Vijayapur V. The Income Tax Officer (Exemptions) ward-1 , Gulbarga

ITA 1994/BANG/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7157 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 12-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H L SOUMYA ACHAR
• Assessee Lawyers: MALLAH RAO
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, B ENGALURU (SMC) SHRI JASON P BOAZ , ACCOUNTANT MEMBER I TA NO S . 1993 & 1994 / BANG/2 0 1 8 (ASSESSMENT YEAR S : 20 04 - 05 & 2005 - 06 ) SRI MALLIKARJUN VIDYA VARDHAK SANGH, C/O RKM, AYURVEDIC MEDICAL COLLEGE, BEHIND K C NAGAR, 100 FT. RING ROAD, VIJAYAPUR - 586103. PAN:AAGTS4396D VS. APPELLANT INCOME - TAX OFFICER (EXEMPTIONS), WARD - 1, GULBARGA. RESPONDENT APPELLANT BY : SHRI MALLAH RAO, ADVOCATE. RESPONDENT BY : SMT. H.L.SOUMYA ACHAR, ADDL.CIT(DR ) DATE OF HEARING : 20/09/2018 DATE OF PRONOUNCEMENT : 28 /09/2018 O R D E R THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE EX - PARTE ORDERS OF THE LD.CIT(A) , GULBARGA; BOTH DATED 30/03/2018 FOR ASSESSMENT YEARS 2004 - 05 2005 - 06. SINCE BO TH APPEALS WERE HEARD TOGETHER, WE DEEM IT APPROPRIATE TO DISPOSE THEM OFF BY WAY OF THIS COMMON ORDER. 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THESE APPEALS ARE AS UNDER: - 2.1 THE ASSESSEE FILED ITS RETURNS OF INCOME FOR ASSESSMENT Y E ARS 2004 - 05 AND 2005 - 06 ON 19/2/2007 DECLARING NIL INCOME. THE ASSESSING OFFICER (AO) OBSERVING THAT THE ASSESSEE HAS SURPLUS INCOME OF RS.20, 7 3,550/ - AND RS.25,02,320/ - IN ASSESSMENT YEARS 20 0 4 - 05 AND 2005 - 06, INITIATED PROCEEDINGS U/S 147 OF THE INCOME - TAX ACT,1961 (IN SHORT THE ACT ). SINCE THE ASSESSEE DID NOT RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT AND OTHER NOTICES AND LETTERS ISSUED U/S 148 OF THE ACT AND OTHER NOTICES AND LETTERS ISSUED BY THE AO, THE ASSESSMENT PROCEEDING S FOR BOTH ASSESSME NT YEARS ITA NO. 1993 /BANG/20 18 PAGE 2 OF 7 WERE CONCLUDED EX - PARTE U/S 144 U/S 147 OF THE ACT VIDE SEPARATE ORDERS DATED 21/12/2010. ON APPEAL, THE LD.CIT(A) , BELGAUM, DUE TO NON - APPEARANCE BY THE ASSESSEE DISMISSED THE ASSESSEE S APPEALS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 EX - PARTE VIDE ORDERS DATED 4/2/2014. ON FURTHER APPEAL BY THE ASSESSEE, A CO - ORDINATE BENCH OF THIS TRIBUNAL IN ITS COMBINED ORDER IN ITA NOS.525 & 664/BANG/2014 DATED 27/6/2014 RESTORED THE ASSESSMENT FOR BOTH ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 , TO THE FILE OF THE AO FOR RE - ADJUDICATION. 2.2 IN THE SECOND ROUND OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, ASSESSEE DID NOT RESPOND TO NOTICE ISSUED U/S 142(1) OF THE ACT AND NEITHER APPEARED BEFORE THE AO NOR FILED/PRODUCED ANY DETAILS DOCU MENTS TO SUBSTANTIATE ITS CLAIM MADE IN THE RETURNS OF INCOME. IN THESE CIRCUMSTANCES, THE AO, ONCE AGAIN CONCLUDED THE ASSESSMENTS FOR BOTH THESE ASSESSMENT YEARS EX - PARTE U/S 143(3) R.W.S.254 OF THE ACT VIDE ORDERS DATED 31/3/2016. 2.3 AGGRIEVED BY THE ORDERS OF ASSESSMENT DATED 31/3/2016 PASSED U/S 143(3) R.W.S. 254 OF THE ACT FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, THE ASSESSEE PREFERRED APPEALS FOR THESE ASSESSMENT YEARS BEFORE THE LD. CIT(A) , GULBARGA. THE LD. CIT(A) DISMISSED BOTH THE ASSESS EE S APPEALS EX - PARTE VIDE SEPARATE ORDERS DATED 30/3/2018 FOR NON - PROSECUTION; HOLDING AS UNDER AT PARAS.8.0 TO 10.0 (EXTRACTED FROM IMPUGNED ORDER FOR ASSESSMENT YEAR 2004 - 05): - ITA NO. 1993 /BANG/20 18 PAGE 3 OF 7 3.1 THE ASSESSEE, BEING AGGRIEVED BY THE ORDERS OF THE LD. CIT(A) , GU LBARGA, DATED 30/3/2018 FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL, WHEREIN IT HAS RAISED IDENTICAL GROUNDS. WE EXTRACT HEREUNDER THE GROUNDS RAISED IN THE APPEAL FOR ASSESSMENT YEAR 2004 - 05: - THE LD.AR W AS HEARD IN SUPPORT OF THE GROUNDS RAISED (SUPRA).THE LD.AR, AT THE BAR, UNDERTOOK TO ENSURE THE ASSESSEE CO - ITA NO. 1993 /BANG/20 18 PAGE 4 OF 7 OPERATE S WITH THE DEPARTMENT IN COMPLYING WITH NOTICES FOR HEARING AND FILING OF DETAILS/SUBMISSIONS, SHOULD THE ASSESSEE S PLEA IN GROUND NO.6 OF THESE APPEALS , FOR SETTING ASIDE OF THE ORDERS OF THE AUTHORITIES BELOW BE ALLOWED. 3.2 PER CONTRA, THE LD. DR FOR REVENUE EMPHATICALLY OPPOSED THE GROUNDS RAISED BY THE ASSESSEE SEEKING SET ASIDE OF THE IMPUGNED ORDERS. ACCORDING TO THE LD. DR, TH E CONDUCT OF THE ASSESSEE, IN NOT COMPLYING WITH THE STATUTORY NOTICES ISSUED FOR HEARING OF THE ASSESSEE S CASE IN BOTH ASSESSMENT AND APPELLATE PR OCEEDINGS, DEMONSTRATE THE IMPUN ITY WITH WHICH THE ASSESSEE IGNORES AND REFUSES TO CO - OPERATE S WITH THE DEPA RTMENT IN CONCLUDING BOTH ASSESSMENT S AND APPEALS. EVEN THOUGH THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN ITS ORDERS DATED 27/6.2014 FOR THESE VERY ASSESSMENT YEARS (SUPRA) HAD AFFORDED THE ASSESSEE WITH A SECOND CHANCE TO EXPLAIN ITS CLAIMS, THE ASSESSEE HAS FAILED TO ATTEND THE HEARING OPPORTUNITIES GRANTED, CONSTRAINING THE AUTHORITIES BELOW TO DISPOSE ITS ASSESSMENTS/APPEALS EX - PARTE FOR NON - PROSECUTION. IN VIEW OF THE ABOVE, THE LD. DR SUBMITS THAT EVEN THOUGH THE IMPUGNED ORDERS ARE PASSED EX - PARTE , NO USEFUL PURPOSE WOULD BE SERVED BY SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW FOR RE - ADJUDICATION IN THE LIGHT OF THE ASSESSEE S NON - COMPLIANT CONDUCT IN THE FIRST TWO ROUNDS OF ASSESSMENTS AND APPEALS. 3.3.1 I HAVE HEAD THE RIVAL CONTENTION S AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. FROM AN APPRAISAL OF THE MATERIAL ON RECORD IT IS SEEN THAT THE FIRST ROUND OF ASSESSMENTS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 WERE PASSED EX - PARTE U/S 144 R.W.S.147 OF THE ACT , VIDE SEPA RATE ORDERS DATED 21/12/2010. ON APPEAL, THE LD. CIT(A) BELGAUM, DISPOSED THE APPEALS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 EX - PARTE FOR NON - PROSECUTION BY THE ASSESSEE. ON FURTHER APPEAL, THE CO - ORDI N ATE BENCH OF THIS TRIBUNAL IN ITS ORDERS IN ITA NO S.525 & 664/BANG/2014 DATED 27/6/2014 SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORED THE ASSESSMENTS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 TO THE FILE OF THE AO FOR RE - ADJUDICATION, ITA NO. 1993 /BANG/20 18 PAGE 5 OF 7 GIVING THE ASSESSEE LIBERTY TO RAISE ALL THE PLEAS AND SUBM IT DETAILS IN SUPPORT OF ITS EXPLANATION. 3.3.2 IN THE SECOND ROUND OF PROCEEDINGS ALSO, THE AO CONCLUDED THE ASSESSMENTS EX - PARTE U/S 143(3) R.W.S. 254 VIDE ORDERS DATED 31/3/2016. IN THIS REGARD, WE OBSERVE FROM THE FINDINGS OF THE LD. CIT(A) AT PARAS. 8 TO 10 OF THE IMPUGNED ORDERS FOR BOTH ASSESSMENT YEARS 2004 - 05 AND 2005 - 06, (EXTRACTED AT PARA 2.3 OF THIS ORDER) THAT THE LD. CIT(A) WAS OF THE VIEW THAT THE AO HAD VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. AT PARA.8 THE LD.CIT(A) OBSERVED THAT: 8.......IT IS SEEN THAT THE ASSESSING OFFICER ISSUED NOTICE DATED 23/03/2016 POSTING THE CASE FOR HEARING ON 30/03/2016 AND THE SAID NOTICE WAS SERVED ON 29/03/2016. THE AO HAS NOT FOLLOWED PRINCIPLES OF NATURAL JUSTICE AND HAS NOT AFFORDED SUFFICIENT OPPORTUNITY AND PROCEEDED TO COMPLETE THE ASSESSMENT EX - PARTE. THE CONTENTION S OF THE APPELLANT THAT HE WAS NOT GIVEN A REASONABLE OPPORTUNITY DESERVES CERTAIN CONSIDERATION . . 3.3.3 AFTER HAVING MADE THE ABOVE OBSERVATIONS AND RENDERED SUCH FINDINGS, THE LD. CIT(A) , HIMSELF, AFTER AFFORDING THE ASSESSEE TWO HEARINGS ON 17/4/2017 AND 28/2/2018, AS RECORDED IN THE IMPUGNED ORDERS, ALSO PROCEEDED TO DISMISS THE ASSESSEE S APPEALS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 EX - PARTE , FOR NON - PROSECUT ION, WITHOUT DISPOSING OFF ON MERITS, THE ASSESSEE S APPEALS, INTER ALIA, ON THE ISSUE OF ITS CLAIM FOR EXEMPTION U/S 10(23C)(III AD ) OF THE ACT, RAISED IN GROUND OF APPEAL NO.6 BEFORE HIM. 3.3.4 IN THE FACTUAL MATRIX OF THE CASE, AS DISCUSSED A BOVE FROM PARAS. 3.1 TO 3.3.3 OF THIS ORDER (SUPRA), I FIND THAT IN BOTH ROUNDS OF ASSESSMENT AND APPELLATE PROCEEDINGS, THE ASSESSMENTS AND APPEALS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 HAVE BEEN PASSED EX - PARTE FOR NON - PROSECUTION/NON - APPEARANCE/NON - A TTENDANCE BY THE ASSESSEE. IT IS T RUE THAT, IN THE SECOND ROUND OF PROCEEDINGS AS DI RECTED BY THE CO - ORDINATE BENCH OF THIS TRIBUNAL (SUPRA), THE ASSESSEE HAD FAILED TO COMPLY WITH THE NOTICE ISSUED FOR ITA NO. 1993 /BANG/20 18 PAGE 6 OF 7 HEARING ISSUED BY THE AUTHORITIES BELOW. HOWEVER, A S OBSERVED BY LD.CIT(A) AT PARA.8 OF IMPUGNED ORDERS (SUPRA), IT IS SEEN THAT AFTER THE TRIBUNAL S ORDER DATED 27/6/2014 SETTING ASIDE THE ASSESSMENTS FOR RE - ADJUDICATION TO THE FILE OF THE AO, THE AO AFFORDED THE ASSESSEE ONLY ONE OPPORTUNITY OF HEARING, AFTER ALMOST 21 MONTHS AFTER THE TRIBUNAL S ORDER DATED 27/6/2014 AND THAT TOO ISSUED THE ONLY NOTICE FOR HEARING DATED 23/3/2016 , THAT WAS SERVED ON ASSESSEE ON 29/3/2016 , POSTING THE CASE FOR HEARING ON 30/3/2016, AND PROCEEDED TO COMPLETE THE ORDERS OF ASSESSMENT EX - PARTE ON 31/3/2016. AFTER SITTING ON THE RE - ADJUDICATION OF ASSESSMENTS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 FOR ALMOST 21 MONTHS, THE RECORD SHOWS AO COMPLETED THE ENTIRE RE - ASSESSMENT PROCEEDINGS; ALL IN THE MATTER OF 7 DAYS. HAVING HIMSELF FAILED TO CARRY OUT THE DIRECTIONS OF THE TRIBUNAL IN LETTER AND SPIRIT, THE AO, TO ADD INSULT TO INJURY, RECORDS AT PARA. 4 OF HIS ORDERS OF ASSESSMENT: 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DESPITE THE SP ECIFIC DIRECTION ORDERED BY THE HON BLE ITAT, BANGALORE, THE ASSESSEE NEITHER ATTENDED THIS OFFICE NOR PRODUCED ANY EXPLANATION/DETAILS . . . . 3.3.5 A S RIGHTLY POINTED OUT BY THE LD.CIT(A) IN THE IMPUGNED ORDERS, THE AO HAS NOT FOLLOWED THE PRINCIP LES OF NATURAL JUSTICE AND NOT AFFORDED THE ASSESSEE SUFFICIENT OPPORTUNITY OF BEING HEARD BEFORE COMPLETING THE ASSESSMENTS EX - PARTE FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06; ALL IN A PERIOD OF 7/8 DAYS; FROM DATE OF ISSUE OF NOTICE ON 23/3/2016, SERVICE OF NOTICE ON 29/3/2016; THE HEARING ON 30/3/2016 AND COMPLETION OF ASSESSMENT ON 31/3/2016 . THIS IS A CLASSIC CASE WHERE THE PRINCIPLES OF NATURAL JUSTICE HAVE BEEN GROSSLY VIOLATED BY THE CALLOUS, CASUAL AND PERVERSE ATTITUDE OF THE AO , TO AN ASSESSEE. I ALSO FIND THAT THE LD.CIT(A) HIMSELF, AFTER FIXING TWO HEARINGS, HAS ALSO DISPOSED OFF THE APPEALS EX - PARTE FOR NON - PROSECUTION; WITHOUT ADJUDICATION OR THE MERITS OF THE ASSESSEE S CLAIM FOR EXEMPTION U/S 10(23C)(IIIAD) OF THE ACT RAISED IN GROUND OF AP PEAL NO.6 BEFORE LD.CIT(A). IN THESE CIRCUMSTANCES, AS NARRATED ABOVE, FROM PARS.3 TO 3.3.5 OF THIS ORDER, I AM ITA NO. 1993 /BANG/20 18 PAGE 7 OF 7 CONSTRAINED TO SET ASIDE NOT ONLY THE EX - PARTE ORDERS OF ASSESSMENT PASSED U/S 143(3) R.W.S. 254 OF THE ACT DATED 31/3/2016 FOR BOTH ASSESSMEN T YEARS 2004 - 05 AND 2005 - 06, BUT ALSO THE IMPUGNED ORDER S OF THE LD.CIT(A) THEREON DATED 30/3/2018 AND RESTORE THE MATTER OF ASSESSMENT FOR THESE TWO ASSESSMENT YEARS TO THE FILE OF THE AO FOR RE - ADJUDICATION. THE AO IS DIRECTED TO TAKE UP THE RE - ASSESSME NT PROCEEDINGS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 IMMEDIATELY ON RECEIPT OF THESE ORDERS AND AFFORD THE ASSESSEE SUFFICIENT AND ADEQUATE OPPORTUNITIES OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS IN REGARD TO ITS CLAIMS, INTER ALIA, ITS CLAIM FOR E XEMPTIONS 10(23C)(IIIAD) OF THE ACT; WHICH SHALL BE DULY CONSIDERED BEFORE ADJUDICATING THEREON BY WAY OF SPEAKING AND REASONED ORDERS. THE ASSESSEE IS ALSO DIRECTED TO COMPLY WITH NOTICES FOR HEARING AND CO - OPERATE WITH THE REVENUE IN FILING DETAILS REQU IRED AND CALLED FOR I.E. ORALLY UNDERTAKEN BY THE LD. AR AT THE BAR. FAILURE TO DO SO BY THE ASSESSEE WOULD BE VIEWED ADVERSELY AND REVENUE WOULD BE FREE TO TAKE ACTION IN THIS REGARD AS PER LAW. I HOLD AND DIRECT ACCORDINGLY. 4. IN THE RESULT, T HE ASSESSEE S APPEALS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEP T EMBER , 2018 SD/ - ( JASON P BO AZ ) ACCOUNTANT MEMBER PLACE : BENGALURU. D A T E D : 28 / 0 9 /201 8 SRINIVASULU, SPS COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME - TAX APPELLATE TRIBUNAL BANGALORE