Safal Construction Pvt. Ltd., Ahmedabad V. The Income Tax Officer (Int. Taxn.)-2, Ahmedabad

ITA 2766/AHD/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3955 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2015-2016
• Appeal Filed On: 25-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Double taxation relief; Opportunity of being heard; Principle of natural justice; Audi alteram partem
• Section: 201(1); 195

Judgement Text

, CH CHCH CH IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD L LL LK KK KOZJH OZJH OZJH OZJH OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW;] U;KF;D ] U;KF;D ] U;KF;D ] U;KF;D LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.2766/AHD/2016 ( / ASSESSMENT YEAR : 2015-16) SAFAL CONSTRUCTION PVT. LTD., SAFAL HOUSE, NR. TEJ MOTORS, B/H. MIRCH MASALA RESTAURANT, AHMEDABAD 380 015. / VS. ITO (INTL. TAXATION)-2, AHMEDABAD. ./ ./ PAN/GIR NO. : AACCS 7461 C ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : MS. IRA KAPOOR, A.R. / RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. / DATE OF HEARING 19/07/2018 !'# / DATE OF PRONOUNCEMENT 08/10/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)13, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-1 3/AHD/87/2015- 16 DATED 07-09-2016 RELEVANT TO ASSESSMENT YEAR (AY ) 2015-16. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS UNDER:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE EX-PARTE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND DESERVES TO BE QUASHED. - 2 - 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE ORDER U/S 201(1) AND 201(1A) R.W.S. 195 OF THE INCOME TAX ACT 1961IS BAD IN LAW AND DESERVES TO BE CANCELLED. 3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, LEARNED CIT(A) HAS ERRED IN CONFIRMING ORDER PASSED BY ASSESSING OFFICER IN TREATING THE APPELLANT AS AN A SSESSEE IN DEFAULT U/S 201(1) AND 201(1A) OF THE INCOME TAX AC T 1961. 4. A) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, CIT(A) ERRED IN CONFIRMING ORDER PASSED BY AS SESSING OFFICER IN CHARACTERIZING THE PAYMENT MADE TO WIMBE RLY ALLISON TONG & GOO., USA (WATG) TO BE IN THE NATURE OF FEES FOR INCLUDED TECHNICAL SERVICES UNDER SECTION 9(1)(VII) OF THE ACT. B) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, CIT(A) ERRED IN CONFIRMING ORDER PASSED BY AS SESSING OFFICER IN CHARACTERIZING THE PAYMENT MADE TO WIMBE RLY ALLISON TONG & GOO., USA (WATG) TO BE IN THE NATURE OF FEES FOR INCLUDED TECHNICAL SERVICES UNDER ARTICLE 12(4) OF THE INDIA-USA DTAA. 5. THE APPELLANT CRAVES LEAVES TO ADD, ALTER, AMEND OR MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF H EARING OF APPEAL. 3. AT THE OUTSET, IT WAS OBSERVED FROM THE ORDER OF LD. CIT(A) THAT THE LAST DATE OF HEARING OF THE APPEAL WAS FIXED ON 22.08.2016 BUT NONE- APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) PASSED EX PARTE ORDER DUE TO NO COMPLIANCE OR NO SUBMISSIONS WERE MADE ON THE DATE OF HEARING. AGAINST THE IMPUGNED EX PARTE ORDE R OF LD. CIT(A) ASSESSEE FILED AN APPEAL BEFORE US AND PRAYED FOR R ESTORING THE APPEAL TO THE LD. CIT-A FOR FRESH ADJUDICATION ACCORDING TO T HE LAW. - 3 - ON THE OTHER HAND THE LD. DR DID NOT OBJECT IF THE MATTER IS RESTORED BACK TO THE LD. CIT-A FOR FRESH ADJUDICATION ACCORDING T O THE LAW. 4. ON PERUSAL OF APPELLATE ORDER, WE FIND THAT LD. CIT(A) AFFIRMED THE ACTION OF ASSESSING OFFICER BY PASSING AN EX-PA RTE ORDER. THE PROVISIONS OF SECTION 250(6) OF THE ACT REQUIRE THE COMMISSIONER (APPEAL) TO DISPOSE OF THE APPEAL IN WRITING WITH R EASONING. BUT WE FIND FROM THE IMPUGNED ORDER OF LD. CIT(A) WHO CONFIRMED THE ORDER OF AO WITHOUT DECIDING THE SAME ON MERIT. THE PRINCIPLE O F AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRE SSION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN AN OPPORTUNIT Y TO DEFEND HIMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVID ENCE, RIGHT TO REBUT ADVERSE EVIDENCE, RIGHT TO CROSS-EXAMINATION, RIGHT TO LEGAL REPRESENTATION, THE DISCLOSURE OF EVIDENCE TO THE P ARTY, REPORT OF INQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS. WE TOOK THIS GUIDANCE FOR THE RIGHT OF HEARING, FRO M THE RATIO AS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MA NEKA GANDHI V. UNION OF INDIA IN 1978 SCR (2) 621 , WHEREIN HON'BLE SUPREME COURT HAS LAID DOWN THAT RULE OF FAIR HEARING IS NECESSARY BE FORE PASSING ANY ORDER. WE FIND THAT IT IS THE PRE-DECISION HEARING STANDAR D OF THE NORM OF THE RULE OF AUDI ALTERAM PARTEM. WE FIND THAT IN THIS INSTANT CASE, THE ASSESSEE WAS NOT GIVEN A PROPER HEARING. THEREFORE, WE ARE O F THE VIEW THAT THE ASSESSEE MUST BE GIVEN ONE MORE OPPORTUNITY OF HEAR ING AND TO REPRESENT HIS CASE. THEREFORE, IN EXERCISE OF THE POWER CONFE RRED UNDER RULE 28 OF TRIBUNAL RULES, WE RESTORE THIS APPEAL TO THE FILE OF LD. CIT (A) FOR - 4 - RECONSIDERATION ALL GROUNDS OF APPEAL AFTER ALLOWIN G THE PROPER OPPORTUNITY OF BEING HEARD BY LAW. NEVERTHELESS, TO MENTION THAT THE ASSESSEE WILL COOPERATE IN THE APPEAL PROCEEDINGS A ND HIS FAILURE WILL ENTAIL CONFIRMATION OF THE IMPUGNED ADDITION MADE B Y THE AO. THE ASSESSEE WILL FILE NECESSARY EVIDENCE ON WHICH HE W ANTS TO RELY UPON. HENCE, THIS GROUND OF ASSESSEES APPEAL STANDS ALLO WED FOR STATISTICAL PURPOSE. 5. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 08/10/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 08/10/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-13, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD. 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD