Sh. Sukhninder Pal Singh Bajwa S/O S. Ajit Singh Bajwa, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 266/ASR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5592 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANISH MIDHA; SHILPA MAHA JAN C AS
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER I.T.A NOS.265 & 266 (ASR)/2015 ASSESSMENT YEAR:2008-09 SH. SUKHNINDER PAL SINGH BAJWA S/O S. AJIT SINGH BAJWA, 18, BLUE CITY, LOHARKA ROAD. AMRITSAR. PAN: ADQPB 0492E VS. INCOME TAX OFFICER, WARD-5(1), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. MANISH MIDHA & SHILPA MAHA JAN (C.AS) RESPONDENT BY: SH. RAHUL DHAWAN (DR.) DATE OF HEARING: 19.04.2017 DATE OF PRONO UNCEMENT: 16 . 05.2017 ORDER PER DIVA SINGH,JM: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSEE AS SAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 09.09.2014 OF CIT(A)-, AMRITSAR, PERTAINING TO 2008-09 ASSESSMENT YEAR IN THE QUANTUM A ND THE PENALTY PROCEEDINGS. 2. THE RECORD SHOWS THAT REGISTRY IN THE PRESENT APPE ALS HAS POINTED OUT A DEFECT THAT THERE IS A DELAY OF 160 DAYS IN FILING OF THE APPEALS. 3. ADDRESSING THE DELAY, MR. MANISH MIDHA APPEARING ON BEH ALF OF THE ASSESSEE RELYING UPON THE CONDONATION OF DELAY PETITION FIL ED SUBMITTED THAT THE AFORE SAID APPEALS HAD BEEN DECIDED BY THE OR DER OF THE CIT(A), AMRITSAR DATED 09.09.2014 AND COMMUNICATED TO THE ASSES SEE ON 22.10.2014. HE AGREED THAT THE APPEALS SHOULD HAVE BEE N FILED WITHIN THE STATUTORY TIME OF 60 DAYS FROM THE DATE OF COMMUNICATION OF THE ORDER. HOWEVER, THE ASSESSEE ON ACCOUNT OF THE PATENT MISTAK ES AND ERRORS IN THE ORDERS PASSED, PURSUED THE ALTERNATE REMEDY OF SEEKING RECTIFICATION APPLICATION BEFORE THE CIT(A). THE MISTAKES HAD OCCURRED AS THE TWO APPEALS FILED BY THE ASSESSEE WERE DECIDED TOGETHER TREAT ING THE ARGUMENTS ADVANCED IN THE QUANTUM APPEAL FOR DECIDING THE APPEAL IN THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND VICE VERSA. INVITIN G ATTENTION TO THE RECORD, IT WAS SUBMITTED THAT THE APPEAL AGAINST THE PENALTY ORDER UNDER SECTION 271(L)(C) OF THE INCOME TAX ACT,1961 WAS NUMB ERED BY THE 2 OFFICE OF THE LD. CIT(APPEALS) AS APPEAL NO. 1/2011-12 AND THE SECOND APPEAL AGAINST THE ORDER PASSED BY THE INCOME TAX OFFICE R UNDER SECTION 143(3) OF THE INCOME TAX ACT,1961 WAS NUMBERED AS NO. 2/ 2011-12. THE LD. CIT(APPEALS) WHILE PASSING THE ORDER BY MISTAKE CONSIDERE D THE SUBMISSIONS IN THE QUANTUM ORDER FOR DECIDING THE PENALTY PROCEEDINGS AND VICE- VERSA. AS SUCH BOTH THE ORDERS WERE BASED O N SUBMISSIONS WHICH WERE SUBMITTED FOR THE OTHER APPEAL AND THESE WE RE SOUGHT TO BE ADDRESSED IN THE RECTIFICATION PROCEEDINGS. THE SAID FACT W AS COMMUNICATED TO THE LD CIT (A) AND HE WAS REQUESTED TO RECTIFY THE ORDERS PASSED. A WRITTEN APPLICATION WAS SUBMITTED ON NOV., 4, 201 4 BEFORE THE LD. CIT(APPEALS) TO RECTIFY THE ORDERS PASSED [COPY OF RECT IFICATION LETTER ENCLOSED ALONGWITH THE APPLICATION). RELYING UPON THE APPLICAT ION, IT WAS SUBMITTED THAT THE ASSESSEE WAITED FOR THE RECTIFIED ORDE RS AS THE ENTIRE ORDERS NEEDED RECTIFICATION. HOWEVER, EVEN AFTER THE EXPIR Y OF SIX MONTHS FROM THE DATE OF REQUEST NO ORDER OF RECTIFICATION WAS PAS SED. AS SUCH IN THE CIRCUMSTANCES, IT WAS CONSIDERED APPROPRIATE TO FILE TH E APPEALS WITH A REQUEST OF CONDONING THE DELAY IN FILING THE APPEALS AS THE DELAY HAS OCCURRED FOR THE REASON BEYOND THE CONTROL OF THE ASSESSEE. 4. ON THE MERITS OF THE APPEAL ATTENTION WAS INVITED TO THE ORDER PASSED IN THE QUANTUM APPEAL WHICH IS SHOWN TO BE APPEAL NO.2/2012-13. IN I TA NO.266(ASR)/2015, THE ARGUMENTS REPRODUCED THEREIN, IT WAS SUBMITTED WOULD SHOW THAT IT IS THE PENALTY APPEAL WHICH IS BEING C ONSIDERED BY THE LD. CIT(APPEALS) PAGE 2 OF THE IMPUGNED ORDER IN ITA 266(AS R)/2015 NUMBERED AS APPEAL NO. 2/2011-12. THE RELEVANT EXTRACT IS REPRODUCED HEREUNDER: 3. THAT THE LD. AO HAS GROSSLY ERRED IN LEVYING 100% PENALTY OF RS.186781.00 ON TAX OF RS.186781.00 SOUGHT TO BE EVADED ON UNEX PLAINED CASH DEPOSITS IN STANDARD CHARTERED BANK WITHOUT GI VING EFFECT TO LOSSES FROM DEALING IN SHARES, FUTURES & OPTIONS FROM THAT BANK ACCOUNT ONLY. (EMPHASIS SUPPLIED) 4.1 ACCORDINGLY, ON READING THE RELEVANT EXTRACTS FROM THE APPELLATE ORDER IN THE PENALTY PROCEEDINGS, IT WAS HIS SUBMISSION THA T SIMILAR CONFUSION HAS OCCURRED IN THE PENALTY APPEAL ALSO. 5. THE LD. SR. DR WAS REQUIRED TO ADDRESS THE CONDONAT ION OF DELAY PETITION FILED IN BOTH THE APPEALS. CONSIDERING THE FACTS, THE LD. DR SUBMITTED THAT HE HAS NO OBJECTION IN THE PECULIAR FACTS IF THE DELAY IS CONDONED. ON MERITS, HE DEFENDED THE IMPUGNED ORDERS STATING THAT THE ASSESSEE BY FILING THE APPEALS TOGETHER, A CONFUSION MAY H AVE OCCURRED. 3 HOWEVER, HE WAS UNABLE TO ADDRESS HOW APPEAL NO.1 CAME TO BE DECIDED FIRST WHICH IS THE PENALTY APPEAL AND APPEAL NO.2 CAME TO B E DECIDED SUBSEQUENTLY, WHICH IS THE QUANTUM APPEAL. IT WAS HIS SUB MISSION THAT BOTH THE APPEALS MAY HAVE BEEN FILED TOGETHER AND HENCE , THE CONFUSION HAS ARISEN. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ISSUE RAISED IN TH E CONDONATION OF DELAY PETITION IS INEXTRICABLY LINKED WITH THE ISSUES ADDRES SED IN THE APPEALS OF THE ASSESSEE AS ADDRESSED IN GROUND NO.2 WH ICH RAISED BY THE ASSESSEE IN THE QUANTUM PROCEEDINGS BEFORE THE ITAT AN D GROUND NO.1 RAISED IN THE PRESENT FORUM IN THE PENALTY PROCEEDINGS. F OR READY REFERENCE GROUND NO.2 OF ITA NO. 265(ASR)/2015 AND GROUND NO.1 IN ITA NO. 266(ASR)/2015 ARE REPRODUCED RESPECTIVELY HEREIN BELOW. 2. THAT THE LD. CIT(A) HAS ERRED IN DECIDING THE A PPEAL BY CONSIDERING THE ENTIRE SUBMISSIONS WRONGLY. THE CIT (A) HAS CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT IN APPEAL NO.1/2011-12 (RELATING TO PENALTY PROCEEDINGS) WHIL E DECIDING APPEAL NO.2/2011-12 WHICH WAS RELATED TO ASSESSMENT PROCEEDINGS. 1. THAT THE LD. CIT(A) HAS ERRED IN DECIDING THE A PPEAL BY CONSIDERING THE ENTIRE SUBMISSIONS WRONGLY. THE CIT (A) HAS CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT IN APPEAL NO.2/2011-12 (RELATING TO ASSESSMENT PROCEEDINGS) W HILE DECIDING APPEAL NO.1/2011-12 WHICH WAS RELATED TO PENALTY PR OCEEDINGS . 6.1 CONSIDERING THE FACT THAT THE APPEALS HAVE BEEN FILE D AT THE SAME TIME BEFORE THE FIRST APPELLATE AUTHORITY, IT IS THUS POSSIBLE THAT THE QUANTUM AND PENALTY APPEALS MAY HAVE BEEN GIVEN A WRON G SEQUENTIAL NUMBERING. HOWEVER, THE FACT REMAINS THAT NOTWITHSTANDING THE NUMBERING, IT IS THE QUANTUM APPEAL WHICH HAS TO BE DECIDE D FIRST. HERE AGAIN, THERE IS A GREY AREA AS THE IMPUGNED ORDERS HAVE BOTH BEEN PASSED ON 9.9.2014. THUS, IT IS NOT POSSIBLE TO DETERMINE AS TO W HICH ORDER WAS PASSED FIRST. IN THESE CIRCUMSTANCES, THE FACT WHICH REM AINS UNREBUTTED ON RECORD IS THAT THE ARGUMENTS ADDRESSED IN THE PENA LTY PROCEEDINGS HAVE BEEN ADDRESSED TO DECIDE THE QUANTUM APPEAL AND VICE VERSA. EVEN OTHERWISE, THE FACT REMAINS THAT THE LD. CIT(APPEALS) HAVING PASSED AN ADVERSE QUANTUM ORDER, SHOULD HAVE GIVEN A REASONABLE T IME TO THE ASSESSEE TO GO THROUGH THE SAME SO AS TO ADVANCE HIS ARGUMENTS IN THE PENALTY PROCEEDINGS. THE ORDER PASSED WITHOUT AN EFFECTIV E OPPORTUNITY OF BEING HEARD IS PROCEDURALLY INCORRECT. THE LAW AS ITS STA ND IS, WELL SETTLED 4 AND ESTABLISHED AND THE COURTS HAVE REPEATEDLY CLARIFIED THAT THE PENALTY PROCEEDINGS AND THE QUANTUM PROCEEDINGS ARE SEPARATE AND DISTINCT PROCEEDINGS. THE MERE FACT THAT THE ADDITIONS HAVE BEEN CONFIRMED IN THE QUANTUM PROCEEDINGS BY ITSELF CANNOT BE THE DETERMINATIV E FACTOR TO HOLD THAT THE PENALTY ALSO HAS TO BE UPHELD. ONLY IN THE EVE NTUALITY, WHERE TOTAL RELIEF IS GRANTED IN THE QUANTUM PROCEEDINGS, IT MAY B E APPROPRIATE TO DECIDE THE PENALTY PROCEEDINGS SIMULTANEOUSLY. HOWEVE R, IN THE FACTS OF THE PRESENT CASE, AN ADVERSE ORDER HAS BEEN PASSED IN THE QUANTUM PROCEEDINGS, HENCE, IT WAS INCUMBENT UPON THE LD. CIT(A) TO GIVE THE ASSESSEE A REASONABLE OPPORTUNITY OF GOING THROUGH THE QUANTUM ORDER AND THEN DEFEND THE APPEAL, IF SO ADVISED IN THE PENALTY P ROCEEDINGS. THE ABOVE OBSERVATION HAS BEEN MADE IN THE LIGHT OF THE FACT THAT HAD THE CORRECT SETTLED LEGAL PROCEDURE BEEN FOLLOWED, THE OCCASION TO INCORRECTLY CONSIDER THE ARGUMENTS ADVANCED IN THE QUANTUM PROCEE DINGS IN THE PENALTY PROCEEDINGS AND VICE VERSA WOULD NOT HAVE OCCUR RED. IN THE FACTS OF THE PRESENT CASE, IT IS SEEN THAT THE ASSESSEE HAS A SSAILED THAT ARGUMENTS RELATABLE TO THE PENALTY PROCEEDINGS HAVE BE EN CONSIDERED IN THE QUANTUM PROCEEDINGS AND THE ARGUMENTS RELATABLE TO THE QUANTUM PROCEEDINGS HAVE BEEN REFERRED TO IN THE PENALTY PROCE EDINGS. I HAVE ALREADY, IN THE EARLIER PART OF THIS ORDER, EXTRACTED FROM THE IMPUGNED ORDER IN THE QUANTUM PROCEEDINGS PARA 3 WHICH CONTAINS AN ARGUMENT, WHICH ADMITTEDLY WAS TO BE CONSIDERED IN THE PENALTY PRO CEEDINGS. ON A PERUSAL OF THE SAID ORDER, IT IS PATENTLY CLEAR THAT THE S AID ARGUMENT CANNOT BE SAID TO HAVE BEEN ADVANCED IN THE QUANTUM P ROCEEDINGS. ACCORDINGLY, CONSIDERING THE FACTS AND SUBMISSIONS OF THE P ARTIES WHICH HAVE BEEN ADDRESSED AT LENGTH IN THE EARLIER PART OF THIS ORDER, I AM OF THE VIEW THAT THE DELAY OF 160 DAYS, IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE DESERVES TO BE CONDONED. ORDERED ACCORDINGL Y. 6.2 AS NOTED, THE FACTS RELATABLE FOR DECIDING THE DELAY ARE INEXTRICABLY LINKED WITH THE MERITS OF THE ISSUES AGITATED IN THE PRESEN T APPEAL. ACCORDINGLY, SINCE ADMITTEDLY INCORRECT SUBMISSIONS HAVE B EEN CONSIDERED IN THE QUANTUM AND PENALTY PROCEEDINGS, THE IMPUGNED ORD ERS ARE SET ASIDE BACK TO THE FILE OF THE LD. CIT(A) DIRECTING HIM TO FIRST DECIDE THE QUANTUM APPEAL AND THEREAFTER GIVE A REASONABLE GAP BEFO RE DECIDING THE PENALTY APPEAL. IN THE EVENTUALITY, THE QUANTUM ORDER IS DECIDED AGAINST THE ASSESSEE, AN OPPORTUNITY TO GO THROUGH THE CONCLUS ION ON FACTS IN THE 5 QUANTUM PROCEEDINGS MUST BE MADE AVAILABLE TO THE ASSES SEE. ONLY THEN IT CAN BE SAID THAT AN EFFECTIVE AND REASONABLE OPPORTUNIT Y OF BEING HEARD HAS BEEN PROVIDED. SAID ORDER WAS PRONOUNCED AT THE TIME OF HEARING ITSELF IN THE OPEN COURT. 7 . IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PART LY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MAY,2017. SD/- (DIVA SINGH) JUDICIA L MEMBER /PK/PS./POONAM(CHD) COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER FIT FOR PUBLICATION SD/- (DIVA SINGH) JUDICIAL MEMBER