M/S DIGGANTH STEEL INDUSTRIES & ENGINEERING WORKS, Nagpur V. I.T.O. (TDS) WARD 1(1), Nagpur

ITA 24/NAG/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4516 (ITAT-NAGPUR)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 24-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Principle of natural justice

Judgement Text

1 ITA NOS. 24 TO 28/NAG/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) S.NO. ITA NO. ASSTT. YEA R. 1. 24/NAG/2016 2010 - 11. 2. 25/NAG/2016 2011 - 12. 3. 26/NAG/2016 2012 - 13. 4. 27/NAG/2016 2013 - 14. 5. 28/NAG/2016 2014 - 15. M/S DI GGANATH STEEL INDUSTRIES THE INCOME - TAX OFFICER, & ENGINEERING WORKS, VS. TDS/WARD - 1(1), NAGPU. NAGPUR. PAN AACFM0137A. APPELLANT. RESPONDENT. APPELLANT BY : SHRI ABHAY AGRAWAL. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 2 3 - 09 - 2016 DATE OF PRONOUNCEMENT : 26 TH SEPT., 2016 O R D E R THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST COMMON ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 16 - 11 - 2015 FOR THE ABOVE FIVE ASSESSMENT YEARS. 2. THE FIRST COMMON ISSUE RAISED IS THAT THE ORDERS HAVE BEEN PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. ANOTHER ISSUE ON MERITS IS THAT THE LEARNED CIT(APPEALS) ERRED IN AFFIRMING THE AOS ORDER IN TREATING THE ASSESSEE AS ASSESSEE IN DEFAULT U/S 206 C(6A) AND 206 C(7). 2 ITA NOS. 24 TO 28/NAG/2016. 3. IN THESE CASES ORDER S WERE PASSED U/S 206C(6A)/206C(7) AND FOLLOWING TAX DEMANDS WERE RAISED FOR THE CONCERNED ASSESSMENT YEARS : ASSTT. YEAR 2010 - 11 : RS. 4,20,155/ - ASSTT. YEAR 2011 - 12 : RS.21,48,726/ - ASSTT. YEAR 2012 - 13 : RS. 9,20,574/ - ASSTT. YEAR 2013 - 14 : RS.11,93,191/ - ASSTT. YEAR 2014 - 15 : RS. 5,93,527/ - 4. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) NOTED THAT THE CASE WAS FIXED FOR SEVERAL TI MES. SOMETIMES THE ASSESSEE ATTENDED AND SOMETIMES REQUESTED FOR ADJOURNMENT. LEARNED CIT(APPEALS) PROCEEDED TO HOLD THAT THE ASSESSEES APPEAL WAS LIABLE TO BE DISMISSED FOR NON PROSECUTION. HE FURTHER LACONICALLY HELD THAT EVEN ON MERITS THE APPEAL DESER VES TO BE DISMISSED. LEARNED CIT(APPEALS) DID NO T PASS A SPEAKING ORDER ON MERITS. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT SECTION 251 OF THE I.T. ACT WHIC H DEALS WITH THE POWERS OF LEARNED CIT(APPEALS) DOES NOT PROVIDE FOR ANY POWER TO DISMISS AN APPEAL FOR NON PROSECUTION. THE HONBLE JURISDICTIONAL HIGH COURT DOES NOT EVEN PERMIT THE ITAT TO DISMISS THE APPEAL FOR NON PROSECUTION . 7. FURTHER MORE ON MERITS LEARNED CIT(APPEALS) HAS IN ONE LINE HELD THAT EVEN ON MERITS THE APPEAL DESERVES TO BE DISMISSED AS THE AO HAS PASSED THE ORDER CONSIDERING THE FACTS OF THE CASE. IN MY CONSIDERED OPINION SU CH AN ORDER CANNOT BE SUSTAINED AND THE SAME IS IN VIOLATI ON OF PRINCIPLES OF NATURAL JUSTICE. HONBLE APEX COURT IN THE CASE OF SAHARA INDIA (FIRM) VS. CIT 300 ITR 403 HAS HELD THAT NOT EVEN JUDICIAL AND QUASI JUDICIAL BUT EVEN ADMINISTRATIVE ORDERS HAVE TO BE CONSISTENT WITH THE RULE S OF NATURAL JUSTICE. 3 ITA NOS. 24 TO 28/NAG/2016. 8. AS REGARDS THE MERITS OF THIS CASE IT IS NOTED THAT THE ASSESSEE HAS BEEN HELD TO BE THE ASSESSEE IN DEFAULT FOR NOT COLLECTING TCS. THE ASSESSEE HAS PURCHASED IRON/SCRAP FROM INDIAN RAILWAYS AND SUBSEQUENTLY SOLD THE SAME IN THE MARKET. THE AO WAS OF TH E OPINION THAT THIS IS SALE OF SCRAP COMING UNDER THE AMBIT OF PROVISIONS OF SECTION 206 C. HOWEVER, LEARNED COUNSEL OF THE ASSESSEE IN THIS REGARD HAS REFERRED TO THE DEFINITION OF A SCRAP MENTIONED IN EXPLANATION B OF THE ABOVE SECTION THAT THE SCRAP MEAN S WASTE AND SCRAP FROM THE MANUFACTURE OR MECHANICAL WORKING OF MATERIALS WHICH IS DEFINITELY NOT USABLE AS SUCH BECAUSE OF BREAKAGE AND CUTTING UP, WEAR AND OTHER REASONS. LEARNED COUNSEL PLEADED THAT THE ITEMS MAY BE SCRAP FOR THE RAILWA Y S BUT THEY WER E NOT SCRAP FOR THE ASSESSEE WHO HAS TRADED IN THOSE ITEMS AND SOLD THE SAME. LEARNED COUNSEL SUBMITTED THAT THE ITEMS ARE USABLE AS SUCH IN CONSTRUCTION AND OTHER INDUSTRIES. HENCE LEARNED COUNSEL SUBMITTED THAT THE TRANSACTION OF THE ASSESSEE DOES NOT ATTRACT THE PROVISIONS OF SECTION 206C. IN THIS REGARD LEARNED COUNSEL HAS PLACED RELIANCE UPON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PRIYA BLUE INDUSTRIES (P) LTD. IN INCOME TAX APPEAL NO. 604 OF 2015 VIDE ORDER DATED NOVEMBER 3, 2015, 65 TAXMANN.COM.206 (GUJARAT). 9. UPON CAREFUL CONSIDERATION I AM OF THE CONSIDERED OPINION THAT SINCE THE LEARNED CIT(APPEALS) HAS NOT CONSIDERED THE MERITS OF THE ISSUE, THE MATTER NEEDS TO BE REMITTED TO HIS FILE FOR CONSIDERATION AFRESH. HOWEV ER, LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE ISSUE MAY BE REMITTED TO TH E FILE OF THE AO AS PROPER OPPORTUNITY WAS NOT GRANTED TO THE ASSESSEE BY THE AO ALSO. 10. UPON CAREFUL CONSIDERATION I AM INCLINED TO REMIT THE ISSUE TO THE FILE OF THE AO. THE AO SHALL EXAMINE THE ASSESSEES SUBMISSION HEREIN ABOVE AND DECIDE THE ISSUE TAKING INTO ACCOUNT THE CASE LAW OF HONBLE GUJARAT HIGH COURT CITED ABOVE. 4 ITA NOS. 24 TO 28/NAG/2016. 11. IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEE STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF SEPT., 2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 26 TH SE PT., 2016. COPY FORWARDED TO : 1. DIGGANATH STEEL INDUSTRIES & ENGINEERING WORKS, PLOT NO. 7 & 27, EASTERN INDUSTRIAL AREA, KALMANA, NAGPUR - 440008. 2. I.T.O., TDS/WARD - 1(1), NAGPUR. 3. C.I.T. - (TDS) , NAGPUR. 4. CIT(APPEALS), - I I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.