Nandika Consultancy Services P. Ltd., Raipur V. Pr. Commissioner of Income Tax-1, Raipur

ITA 24/RPR/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3781 (ITAT-RAIPUR)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 12-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Opportunity of being heard; Principle of natural justice; Audi alteram partem
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA , HON'BLE ACCOUNTANT MEMBER & SHRI N.K. CHOUDHRY, HONBLE JUDICIAL MEMBER I.T.A. NO. 24 / RPR /2021 (ASST. YEAR : 2015 - 1 6 ) NANDIKA CONSULTANCY SERVICES P. LTD., C/O BASANT KUMAR JAIN, D - 13/14, SHAILENDRA NAGAR, RAIPUR (CG) V S. PR. CIT , RAIPUR (CG). PAN NO. AADCN 2903 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.B. DOSHI , C A. DEPARTMENT BY : SHRI P.K. MISHRA , CIT - DR DATE OF HEARING : 30 / 0 7 /2021 . DATE OF PRONOUNCEMENT : 11 / 1 0 /2021 . O R D E R PER N.K. CHOUDHRY , JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE A SSESSEE AGAINST THE ORDER DATED 2 2/0 3 /20 2 1 IMPUGNED HEREIN PASSED BY THE LD. PR INCIPAL COMMISSIONER OF INCOME TAX [FOR SHORT, LD. PR.CIT ], RAIPUR - 1 , U/SEC. 26 3 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT') FOR THE A.Y. 2015 - 1 6 . 2 ITA NO. 24/RPR/2021 (NANDIKA CONSULTANCY SERVICES PVT. LTD. ) 2. IN THE INSTANT CASE, THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON DATED 3 1 / 1 0/201 5 WHICH WAS SELECTED FOR LIMITED SCRUTINY UNDER CASS AND RESULTED INTO COMPLETION OF ASSESSMENT DATED 06 /1 1 /201 7 U/SEC.143(3) OF THE ACT ASSESSING TOTAL INCOME OF RS.5 1,54 , 110 / - . LATER ON, THE LD. COMMISSIONER SCRU TINIZED THE ASSESSMENT AND ISSUED THE NOTICE DATED 26/02/2021 U/S 263 OF THE ACT BY FIXING THE DATE OF HEARING ON 05/03/2021 AT 1.30 PM. AS THE ASSESSEE HAS NOT COMPLIED WITH THE NOTICE, THE L D. COMMISSIONER PASSED THE IMPUGNED ORDER ON DATED 22/03/2021 AG AINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE ASSESSEE AT THE OUTSET RAISED THE ISSUE THAT NO PROPER AND REASONABLE OPPORTUNITY OF BEING HEARD WAS PROVIDED TO THE ASSESSEE BEFORE PASSING THE IMPUGNED ORDER. THOUGH THE ASSESSEE HAS NOT RAISED ANY SPECIFIC GROUND QUA NON - PROVIDING OF AN OPPORTUNITY OF BEING HEARD, HOWEVER AT THE TIME OF ARGUMENT OF APPEAL EMPHASISED ON THE SAME. AS THE CONTROVERSY GOES TO THE ROOT OF THE CASE THEREFORE WE ARE INCLINED TO ENTERTAIN THIS PLEA. 4. THE FOREMOST CONTROVERSY RAISED BY THE ASSESSEE RELATES TO NON - PROVIDIN G OF AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND PASSING OF THE IMPUGNED ORDER U/SEC. 263 OF THE ACT IN HASTY MANNER WITHOUT FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND HENCE BAD IN LAW. 3 ITA NO. 24/RPR/2021 (NANDIKA CONSULTANCY SERVICES PVT. LTD. ) 5. ON THE OTHER HAND, THOUGH THE LD. DR SUPPORTED THE IMPUGNED ORDER, HOWEVER ALTERNATIVELY PRAYED THAT IN CASE OF REVERSAL OF THE IMPUGNED ORDER, THE CASE MAY BE REMANDED TO THE FILE OF LD. COMMISSIONER FOR DECISION AFRESH. 6 . AS PER SECTION 263 OF THE ACT , LD. PR.CIT OR COMMISSIONER IS EMPOWERED TO CALL FOR AND EXAMINE THE RECORD OR ANY PROCEEDINGS UNDER THE ACT IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND SECONDLY AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT, 7. THE HON'BLE APEX COURT IN THE CASE OF CIT VS. AMITABH BACHCHAN [(2016) 384 ITR 200 (SC)] HAS HELD THAT WHAT IS CONTEMPLATED BY SECTION 263 IS AN OPPORTUNITY OF HEARING TO BE AFFORDED TO THE ASSESSEE. FAILURE TO GIVE SUCH AN OPPORTUNITY WOULD RENDER THE REVISIONAL ORDER LEGALLY FRAGILE NOT ON THE GROUND OF LACK OF JURISDICTION BUT O N THE GROUND OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 8. IN THE LANDMARK CASE OF MANEKA GANDHI VS. UNION OF INDIA (1978 AIR 597), IT HAS BEEN HELD BY CONSTITUTION BENCH OF THE 4 ITA NO. 24/RPR/2021 (NANDIKA CONSULTANCY SERVICES PVT. LTD. ) HONBLE APEX COURT THAT THE LAW AND PROCEDURE MUST BE FAIR, JUST AND REASONABLE. THE DOCTRINE ENSURES A FAIR HEARING AND FAIR JUSTICE TO BOTH THE PARTIES. UNDER THIS DOCTRINE, BOTH THE PARTIES HAVE THE RIGHT TO SPEAK. THE AIM OF THIS PRINCIPLE IS TO GIVE AN OPPORTUNITY TO THE PARTIES TO DEFEND THEMSELVES. BEFORE THE COURT, BOTH THE PARTIES ARE EQUAL AND ARE ENTITLEMENT OF EQUAL OPPORTUNITY TO REPRESENT THEM. IF THE ORDER IS PASSED BY THE AUTHORITY WITHOUT PROVIDING THE REASONABLE OPPORTUNITY OF BEING HEARD TO THE PERSON AFFECTED BY IT ADVERSELY WILL BE INVALID. 9. THE COOR DINATE BENCH AT AHMADABAD IN THE CASE OF SMT. SHARDABEN B. PATEL VS. PR.CIT [(2020) 180 ITD 328 (AHD. TRIB.)] ALSO DEALT WITH THE SAME ISSUE QUA NON - PROVIDING THE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND HELD THAT GRANTING OF EFFECTIVE OPPORTUNITY IS A SIN QUA NON IN SECTION 263 OF THE ACT FOR UNSETTLING A STATUTORY ORDER. IT IS THE DUTY OF THE REVISIONAL COMMISSIONER TO PROVIDE THE ASSESSEE AN EFFECTIVE OPPORTUNITY TO ENABLE IT TO DISENGAGE THE TRUT H FROM WRONGS INSTEAD OF TAKING AN EASY COURSE OF REJECTING THE REPLY IN ITS ENTIRETY, SOLELY ON THE GROUND THAT SAME IS NOT ACCEPTABLE. 10. THE COORDINATE BENCH IN ITS ORDER ALSO REFERRED THE JUDGMENT OF THE COORDINATE BENCH AT MUMBAI IN THE CASE OF TATA CHEMICALS LIMITED VS. DCIT IN ITA NO.3127/MUM/2010, ORDER DATED 30TH JUNE, 2011 WHEREIN IT WAS HELD THAT IN ANY CASE IT IS ONE OF THE FUND AMENTAL PRINCIPLES OF NATURAL JUSTICE THAT NO PERSON CAN BE CONDEMNED UNHEARD I.E. AUDI ALTERAM PARTEM AND THE IMPUGNED REVISION ORDER WAS THUS PASSED IN VIOLATION OF THE PRINCIPLES OF 5 ITA NO. 24/RPR/2021 (NANDIKA CONSULTANCY SERVICES PVT. LTD. ) NATURAL JUSTICE AS THE ASSESSEE HAD NO OPPORTUNITY ON THE GROUND WHICH IS ULTIMATELY DECIDED AGAINST HIM. 11. THE COORDINATE BENCHES AT AHMADABAD AND MUMBAI TRIBUNAL IN THE AFORESAID CASES OF SMT. SHARDABEN B. PATEL (SUPRA) AND TATA CHEMICALS LIMITED (SUPRA) RESPECTIVELY, DEALT WITH THE SITUATION TO THE EFFECT AS WELL, WHERE THE PROPER OPPORTUNITY OF BEING HEARD WAS NOT GIVEN TO THE ASSESSEE, IN THAT EVENTUALITY, WHETHER AT THIS STAGE THE CASE CAN BE REMANDED TO THE PR.CIT FOR DECISION AFRESH. THE COORDINATE BENCHES OF THE TRIBUNAL CLEARLY HELD THAT WE CANNOT GIVE LIFE TO THE NULL AND VOID ORDER BY REMITTING IT BACK TO THE PR.CIT FOR GIVING AN OPPORTUNITY FOR PASSING FRESH ORDER AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF HEARING, WHERE THE TIME LIMIT FOR PASSING OF SUCH ORDER HAS ALREADY BEEN EXPIRED AND THEREFORE WE C ANNOT EXTEND THE SAME BY DIRECTING HIM. 12. IT IS TRITE TO SAY THAT EVERY PERSON HAS THE RIGHT TO SPEAK AND BE HEARD WHEN ALLEGATIONS ARE BEING PUT AGAINST HIM OR HER. NO ONE CAN BE INFLICTED WITH AN ADVERSE ORDER WITHOUT BEING AFFORDED A MINIMUM OPPOR TUNITY OF HEARING. IF NO OPPORTUNITY HAS BEEN GIVEN TO THE PARTY EFFECTED, THEN IT SHALL AMOUNT TO VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE, WHICH EMBEDDED IN LATIN WORDS AUDI ALTERAM PARTEM WHICH MEANS HEAR THE OTHER SIDE, OR NO MAN SHOULD BE C ONDEMNED UN - HEARD OR BOTH THE SIDES MUST BE HEARD BEFORE PASSING ANY ORDER. THE PRINCIPLE OF AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF THE PRINCIPLE OF NATURAL JUSTICE AND HAS NOT EVOLVED FROM THE CONSTITUTION BUT EVOLVED THROUGH CIVILIZATION AND MANK IND AND IS 6 ITA NO. 24/RPR/2021 (NANDIKA CONSULTANCY SERVICES PVT. LTD. ) THE CONCEPT OF COMMON LAW, WHICH IMPLIES FAIRNESS, REASONABLENESS, EQUALITY AND EQUITY. IN INDIA, THE PRINCIPLES OF NATURAL JUSTICE ARE THE GROUNDS OF ARTICLE 14 AND 21 OF THE CONSTITUTION. 13. NOW COMING TO THE INSTANT CASE, IT IS CLEARLY RE FLECTS FROM THE NOTICE DATED 26/02/2021 U/S 263 OF THE ACT BY WHICH THE CASE WAS FIXED FOR HEARING ON 05/03/2021 AT 1. 3 0 PM IN FACT DIGITALLY SIGNED BY THE LD. PCIT ONLY ON 05 TH MARCH 2021 AT 11.23 AM (THE DATE OF HEARING) AND SHOULD HAVE BEEN ISSUED TO THE ASSESSEE ON OR AFTER 05 TH MARCH 2021 AND THEREFORE THE SAID NOTICE WAS ILLUSORY AND FARCE IN NATURE AND HAD NO ESSENCE OF PRINCIPLES OF NATURAL JUSTICE AND THUS GOES TO SHOW T HAT NO REASONABLE OPPORTUNITY OF BEING HEARD WAS AFFORDED TO THE ASSESSEE BEFORE PASSING THE ADVERSE ORDER AGAINST THE ASSESSEE. ON THE AFORESAID ANALYZATIONS AND CONSIDERATIONS AND FOLLOWING THE MANDATES OF THE HON'BLE APEX COURT, IN THE CASE OF AMIT ABH BACHCHAN (SUPRA) WHEREIN IT WAS HELD THAT FAILURE TO GIVE SUCH AN OPPORTUNITY WOULD RENDER THE REVISIONAL ORDER LEGALLY FRAGILE NOT ON THE GROUND OF LACK OF JURISDICTION BUT ON THE GROUND OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND IN THE CASE O F MANEKA GANDHI VS. UNION OF INDIA (SUPRA) WHEREIN IT WAS HELD THAT IF THE ORDER IS PASSED BY THE AUTHORITY WITHOUT PROVIDING THE REASONABLE OPPORTUNITY OF BEING HEARD TO THE PERSON AFFECTED BY IT ADVERSELY WILL BE INVALID, THE QUESTION OF REMANDING THE CASE TO THE FILE OF LD. PCIT AS PRAYED FOR BY THE LD. 7 ITA NO. 24/RPR/2021 (NANDIKA CONSULTANCY SERVICES PVT. LTD. ) DR, AT THIS JUNCTURE AT ALL DOES NOT ARISE AS HELD BY CO - ORDINATE BENCHES AS WELL IN THE AFORESAID CASES. IN OVERALL EFFECT, THE IMPUGNED ORDER HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE WHICH IS E SSENCE OF FAIR TRIAL, THUS THE SAME IS QUASHED. 14. AS WE HAVE QUASHED THE IMPUGNED ORDER ON LEGAL POINT, HENCE THERE IS NO NEED TO DECIDE THE FACTUAL GROUNDS. 15. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON DATED 1 1 - 1 0 - 2021 AS PER RULE 34(5) OF IT (APPELLATE TRIBUNAL) RULES. S D / - S D / - ( PRADIP KUMAR KEDIA ) ( N.K. CHOUDHRY ) ACCOUNTANT MEMBER JUDICIAL MEMBER VR/ - COPY TO: 1. THE ASSESSEE - NANDIKA CONSULTANCY SERVICES P. LTD., C/O BASANT KUMAR JAIN, D - 13/14, SHAILENDRA NAGAR, RAIPUR (CG) 2. THE REVENUE PR.CIT, RAIPUR (CG). 3. THE D.R . , RAIPUR . 4. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, RAIPUR (ON TOUR) .