M. Inoue : Care Sanjay Kochhar, New Delhi V. ACIT, New Delhi

ITA 2241/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3716 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-07-2010
• Assessment Year: 1996-1997
• Appeal Filed On: 26-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: SANJAY KOC HHAR
• Keywords: Principle of natural justice; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F ; NEW DELHI BEFORE SHRI C.L. SETHI, JM AND SHRI A.K. GARODIA, A M I.T.A. NO.2241/DEL OF 2009 ASSESSMENT YEAR: 1996-97 M. INUOUE C/O SANJAY KOCHHAR, ACIT, CIRCLE 47(1 ), KOCHHAR & CO., ADVOCATES & SOLICITORS VS NEW DELH I. S-454, GREATER KAILASH PART-II, NEW DELHI. APPELLANT RESPONDENT APPELLANT BY: S/SHRI K. SAMPATH & SANJAY KOC HHAR RESPONDENT BY: SHRI H.K. LAL, DR ORDER PER C.L. SETHI, JM THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 13.1.2006 PASSED BY THE LD. CIT(A) IN THE MATTER OF AN ASSESSMENT MADE BY THE AO U/S 143(3)/254 OF THE INCOME-TAX ACT, 1961 (THE ACT) D ATED 9.3.2005 PERTAINING TO THE ASSESSMENT YEAR 1996-97. 2. THE GROUND RAISED BY THE ASSESSEE READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE APPEAL WAS INCOMPETENT. THE CIT(A) HAS FURTHER ERRED IN DISMISSING THE APPEAL ON THAT ACCOUNT WITHOUT PROVIDING A REASONABLE, PROPER OR ADEQUATE OPPORTUNITY FOR SETTING ARIGHT THE 2 ALLEGED DISCREPANCY. SUCH NOT HAVING BEEN DONE THE ORDER IS OPPOSED TO FAIR PLAY AND NATURAL JUSTICE AND IS LIABLE TO BE SET ASIDE FOR DE NOVO CONSIDERATION. AT ANY RATE BEING A COVERED ISSUE IN TERMS OF THE ORDER IN ITA NO.2381/DEL/2000 DATED 30.11.2005 THE AUTHORITIES BELOW WERE BOUND TO ABIDE BY CITED ORDER AND APPLY TO THE SAME TO THE FACTS OF THE SUBJECT CASE. SUCH NOT HAVING BEEN DONE, THE ORDER IS PALPABLY ERRONEOUS, GROSSLY ILLEGAL AND OPPOSED TO NATURAL JUSTICE AND PROPRIETY AND SO MUST BE QUASHED. 3. BEFORE DEALING WITH THE GROUND ON MERITS, WE PRO CEED TO STATE THAT THIS APPEAL FILED BY THE ASSESSEE WAS INITIALLY DISMISSE D FOR DEFAULT VIDE OUR ORDER DATED 11.8.2009. THEREAFTER, THE ASSESSEE FILED A MISCELLANEOUS APPLICATION, WHICH WAS REGISTERED AS MA NO.582/DEL/2009, AND HAS BEEN DISPOSED OFF VIDE TRIBUNALS ORDER DATED 1.1.2010 WHEREBY THE TR IBUNALS EARLIER ORDER DATED 11.8.2009 DISMISSING THE ASSESSEES APPEAL WA S RECALLED, AND THIS APPEAL WAS RESTORED TO ITS ORIGINAL POSITION. THUS , THIS APPEAL HAS COME UP AGAIN FOR OUR CONSIDERATION AND DISPOSAL. 4. IT IS HAS BEEN NOTED BY THE REGISTRY THAT THIS A PPEAL IS DELAYED BY ABOUT 3 YEARS INASMUCH AS, THE IMPUGNED ORDER PASSE D BY THE CIT(A) IS DATED 13.1.2006, THOUGH THE APPEAL HAS BEEN FILED B Y THE ASSESSEE ON 26.5.2009. 5. WE HAVE HEARD BOTH THE PARTIES ON THE QUESTION O F DELAY IN FILING THIS APPEAL. 3 6. IN THE MEMORANDUM OF APPEAL (FORM NO.36) FILED B Y THE ASSESSEE, UNDER COLUMN NO.9 AGAINST THE DATE OF COMMUNICATION OF THE ORDER APPEALED AGAINST, IT HAS BEEN MENTIONED BY THE ASSESSEE AS MISCARRIED. IT HAS BEEN CLARIFIED BY THE LEARNED COUNSEL FOR THE ASSESSEE T HAT THE IMPUGNED ORDER OF CIT(A) NEVER REACHED THE ASSESSEE, AND HAVING KNOWN ABOUT THE APPELLATE ORDER, THE ASSESSEE FILED THE APPEAL WITHOUT ANY FU RTHER DELAY. 7. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE DELAY IN FILING THE APPEAL DESERVES NOT TO BE CONDONED. 8. WE HAVE GONE THROUGH THE ORDER OF THE LEARNED CI T(A), AND ON PERUSAL THEREOF, WE FIND THAT THE FOLLOWING FACTS WERE NOTE D IN THE ORDER: (I) THE ASSESSEE WAS AN EMPLOYEE OF MATS USHITA ELECTRIC INDUSTRIAL CO LTD. (MEI), A COMPANY INCORPORATED IN JAPAN. (II) THE ASSESSMENT WAS ORIGINALLY COMPLETED ON 28 TH JANUARY, 1999. (III) THE MATTER WENT UPTO THE STAGE OF THE TRIBUNA L, AND THE TRIBUNAL VIDE ORDER DATED 23.2.2004 RESTORED THE MATTER BACK TO THE FILE OF THE AO. (IV) THE AO THEN MADE A FRESH ASSESSMENT U/S 143(3) /254 ON 9 TH MARCH, 2005. (V) THE ASSESSEE WAS NOT AVAILABLE IN INDIA. HOWEV ER, MEI REPRESENT THE ASSESSEES CASE BEFORE THE AO, AND ALSO AGREED TO PAY THE 4 TAXES DUE FROM ASSESSEE ON THE CONDITION THAT IF TH E APPEAL IS SETTLED IN FAVOUR OF THE ASSESSEE, THE REFUND OF TH E TAX WOULD BE GRANTED TO THE MEI. (VI) IT IS ALSO NOTICED BY US THAT AGAINST THE AOS ORDER, APPEAL BEFORE THE LEARNED CIT(A) HAS BEEN FILED BY MEI, AS REPRES ENTATIVE ASSESSEE, FOR THE PRESENT ASSESSEE. (VII) IT IS, THUS, CLEAR THAT THE APPEAL WAS FILED BY MEI, WHICH HAS BEEN DISPOSED OFF BY THE LEARNED CIT(A) VIDE ORDER DATED 13.1.2006 BY DISMISSING THE ASSESSEES APPEAL FOR THE REASON THA T MEI IS NOT THE AUTHORIZED PERSON TO FILE THE APPEAL FOR AND ON BEH ALF OF THE ASSESSEE. (VIII) IT IS, THUS, CLEAR THAT THE APPEAL HAS BEEN DISMISSED BY THE CIT(A) FOR THE AFORESAID LACUNA. (IX) IN THE BODY OF THE CIT(A)S ORDER, THE ADDRESS OF THE ASSESSEE IS MENTIONED AS UNDER: SHRI M. INOUE C/O BSR & CO., 4-B, DLF CORPORATE PARK, DLF CITY, PASE-III. GURGAON, HARYANA. (X) FROM THE AFORESAID ADDRESS, IT IS, THUS, CLEAR THAT THE COPY OF APPELLATE ORDER HAS BEEN SERVED UPON BSR & CO., WHO IS THE AUTHORIZED REPRESENTATIVE OF MEI. 5 (XI) IN OTHER WORDS, MEI APPOINTED BSR & CO. TO REP RESENT THE ASSESSEES CASE. 9. ALL THESE FACTS TAKEN TOGETHER GOES TO SHOW THAT THE ORDER OF LEARNED CIT(A) HAS NOT BEEN DIRECTLY SERVED UPON THE ASSESS EE BUT HAS BEEN SERVED UPON MEI OR ITS AUTHORIZED REPRESENTATIVE. WHEN LE ARNED CIT(A) HAS TAKEN A VIEW THAT MEI IS NOT THE AUTHORIZED PERSON BY WHO M THE RETURN OF INCOME OF THE PRESENT ASSESSEE CAN BE SIGNED AND FILED, TH E SERVICE OF NOTICE ON MEI CANNOT BE SAID TO BE VALID SO AS TO RECKON THE PERI OD OF LIMITATION ON THAT DAY ON WHICH THE CIT(A)S ORDER WAS RECEIVED BY MEI OR ITS AUTHORIZED REPRESENTATIVE. THE ASSESSEE HAS NOW ENGAGED MR. S ANJAY KOCHHAR S/O SHRI K.K. KOCHHAR, RESIDENT OF 84-ANAND LOK, NEW DELHI 110049 TO REPRESENT HIM BEFORE THE INCOME-TAX AUTHORITIES IN RELATION T O THE ASSESSMENT PROCEEDINGS OR APPELLATE PROCEEDINGS FOR THE ASSTT. YEAR 1996-97, AND THIS APPEAL HAS BEEN FILED BY MR. SANJAY KOCHHAR AS AN A UTHORIZED ATTORNEY FOR THE ASSESSEE. 10. IN THE LIGHT OF THE FACTS DISCUSSED ABOVE, WE, THEREFORE, HOLD THAT THIS APPEAL IS NOT TIME BARRED, AND EVEN IF IT IS TIME B ARRED, THE DELAY DESERVES TO BE CONDONED INASMUCH AS, THE ASSESSEE HAS BEEN ABLE TO SHOW UNAVOIDABLE AND COMPELLING CIRCUMSTANCES, WHICH PREVENTED THE A SSESSEE FROM FILING THE 6 APPEAL BEFORE THE TRIBUNAL WITHIN TIME. WE, THEREFO RE, ADMIT THIS APPEAL FOR DISPOSAL ON MERITS. 11. NOW, WE COME TO THE MAIN GROUND RAISED BY THE A SSESSEE IN THIS APPEAL. 12. THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTEN DED THAT THE CIT(A) HAS FURTHER ERRED IN DISMISSING THIS APPEAL AS INCO MPETENT FOR THE REASON THAT MEI IS NOT THE AUTHORIZED PERSON TO FILE APPEAL FOR AND ON BEHALF OF ASSESSEE. HE FURTHER SUBMITTED THAT THE LEARNED CIT(A) HAS DI SMISSED THIS APPEAL WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE TO R EMOVE THE DEFECT, AND, THEREFORE, THE CIT(A)S ACTION IN DISMISSING THE AP PEAL WITHOUT AFFORDING AN OPPORTUNITY TO SET RIGHT THE DEFECT IS NOT PROPER AND IS LIABLE TO BE SET ASIDE. 13. THE LEARNED DR, ON THE OTHER HAND, SUPPORTS HE ORDER OF LEARNED CIT(A). 14. AFTER HEARING BOTH THE PARTIES, AND HAVING REGA RD TO THE FACT THAT THE ASSESSEES APPEAL HAS BEEN DISMISSED ON TECHNICAL G ROUND, WE ARE OF THE CONSIDERED VIEW THAT THE CIT(A) SHOULD HAVE GIVEN A T LEAST ONE OPPORTUNITY TO THE ASSESSEE TO REMOVE THE DEFECT INFILLING AND SIGNING THE MEMORANDUM OF APPEAL FILED BEFORE HIM. WE, THEREFORE, SET ASID E THE LEARNED CIT(A)S ORDER, AND RESTORE THE MATTER BACK TO HIS FILE FOR HIS FRESH ADJUDICATION. WE DO HEREBY DIRECT THE ASSESSEE TO REMOVE THE LACUNA IN MEMORANDUM OF 7 APPEAL FILED BEFORE CIT(A) WITHIN THREE MONTHS FROM THE END OF THE MONTH IN WHICH THIS ORDER OF THE TRIBUNAL IS RECEIVED BY THE ASSESSEES REPRESENTATIVE SHRI SANJAY KOCHHAR, WHO HAS FILED T HIS APPEAL AS AN AUTHORIZED ATTORNEY FOR THE ASSESSEE. ON REMOVAL O F DEFECT BY THE ASSESSEE, THE LEARNED CIT(A) SHALL DECIDE THE ISSUE RAISED BE FORE HIM ON ITS MERIT AFTER HEARING BOTH THE ASSESSEE AS WELL AS THE AO. WE ORD ER ACCORDINGLY. 15. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED TO BE ALLOWED FOR A STATISTICAL PURPOSE. 16. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 5 TH JULY, 2010 IMMEDIATELY AFTER THE HEARING WAS OVER. (A.K. GARODIA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH JULY, 2010 VIJAY COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-XXX, NEW DELHI. 5. DR ASSISTANT REGISTRAR