Orissa Meida Venture Pvt. Ltd, Bhubaneswar V. ITO, Bhubaneswar

ITA 309/CTK/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52404 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 03-06-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P R MOHANTY
• Keywords: Principle of natural justice; Set aside
• Section: 2

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 309/CTK/2011 (ASSESSMENT YEAR 2007 - 08) ORISSA MEDIA VENTURE PVT. LTD., BOMIKHAL, RASULGARH, BHUBANESWAR PAN: AAACO 4834 B V ERSUS INCOME - TAX OFFICER, WARD 2(3), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.R.MOHANTY, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 16.09.2011 DATE OF PRONOUNCEMENT : 23.09.2011 ORDER SHRI K.K.GUPTA, AM : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DT.31.3.2011 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE ASSESSMENT YEAR 2007 - 08. 2. AT THE OUTSET THE LEARNED AR OF THE ASSESSEE CONTENDED BEFORE US THAT THE LEARNED CIT(A) HAS DISMI SSED THE APPEAL FILED BEFORE HIM IN LIMINE , WHICH IS NOT IN ACCORDANCE WITH LAW. HE ARGUED THAT HE SHOULD HAVE DISPOSED OF THE APPEAL ON MERITS. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND CONTENDED THAT THE DI SMISSAL OF THE APPEAL IN LIMINE FOR WANT OF PROSECUTION, IS JUSTIFIED. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE IMPUGNED ORDER OF THE LEARNED CIT(A). WE FIND THAT INFERRING THAT THE ASSESSEE IS NOT INTERESTED TO PROSECUTE THE CASE, THE LEARNED CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE BY RELYING SOME OF JUDICIAL PRONOUNCEMENTS INCLUDING THE DECISIONS OF ITAT,DELHI BENCH IN THE CASE OF CIT V. MULTIPLANINDIA (38 ITD 320) AND MP HIGH COURT IN THE CASE OF LATE TUKOJIRAO HOLKAR VS. CWT (223 ITR 480). ACCORDING TO SECTION 250(6) THE ORDER OF CIT(A) SHOULD BE IN WRITING STATING POINTS OF DETERMINATION. SECTION 250(6) READS AS FOLLOWS : - ITA NO.309/CTK/2011 2 SEC. 250(6) THE ORDER OF THE [COMMISSIONER (APPEALS)] DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. THUS SECTION 250(6) ORDAINS THAT THE APPELLATE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY MUST - BE IN WRITING: AND - STATE THE POINTS FOR DETERMINATION, THE DE CISION THEREON AND THE REASONS FOR THE DECISION. THE PROVISIONS OF SECTION 250(6) ARE IN THE NATURE OF INSTRUCTION TO THE APPELLATE AUTHORITY AND EMPHASIZING THAT THE ORDER DISPOSING OF THE APPEAL SHALL BE A SPEAKING ORDER. THE ORDER SHALL NOT BE CRYPTIC. THE ORDER SHALL BE SELF - EXPLANATORY. THIS IS MORE SO, BECAUSE SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE APPELLATE TRIBUNAL. THE OBJECT IS TOO OBVIOUS. IT ENABLES A PARTY TO KNOW PRECISE POINTS DECIDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF FORMUL ATION OF THE POINTS FOR DECISION OR WANT OF CLARITY IN A DECISION UNDOUBTEDLY PUTS A PARTY IN QUANDARY. A DECISION BY ITS VERY NATURE MUST BE FIRM AND SHOULD NOT BE VAGUE AND UNCLEAR. REFERENCE IN THIS REGARD CAN BE MADE TO THE FOLLOWING DECISIONS : - 1. A BDUL SATHAR HAJI MOOSA SAIT DHARMASTAPANAM VS. CIT (1988) 169 ITR 84 (KER) 2 . CIT VS. KARAMCHAND PREMCHAND (P) LTD. 74 ITR 254 (GUJ) 3 . CIT VS. BUILDWELL ASSAM (P) LTD. (1982) 133 ITR 736 (GAUH) A JUDGMENT UNSUPPORTED BY REASONS IS NO JUDGMENT IN THE EYE OF LA W. IT IS WELL SETTLED THAT REASONS ARE THE LINKS BETWEEN THE MATERIAL ON RECORD AND THE CONCLUSION ARRIVED AT BY THE COURT [CIT VS. SURENDRA SINGH PAHWA (1995) 79 TAXMAN 298] AND LASTLY THE APPELLATE AUTHORITY IS A QUASI JUDICIAL AUTHORITY. HE SHOULD EXERC ISE THE DISCRETION VESTED IN HIM IN ACCORDANCE WITH LAW. THE ORDER PASSED BY HIM SHOULD SHOW THAT HE HAS APPLIED HIS MIND AND TAKEN INTO CONSIDERATION THE BASIC REQUIREMENTS GERMANE TO THE ISSUE [V.N. PURUSHOTHAMAN VS. AG.ITO (1984) 149 ITR 120 (KER.)]. F URTHER CO - ORDINATE ITA NO.309/CTK/2011 3 BRANCH IN THE CASE OF GUJARAT THEMIS BIOSYN LTD. VS. JT. CIT 74 ITD 339 (AHD) WHILE DISCUSSING U/S 250(6) HAS HELD THAT SECTION 254 CONFERS PLENARY JURISDICTION ON THE TRIBUNAL IN THE MATTER OF PASSING ORDERS UNDER S. 254 AND AS AGAINST THAT SECTION 250(6) DOES NOT CONTAIN SUCH POWER HENCE THE REFERENCE MADE BY CIT(A) TO THE CASE OF CIT VS. MULTIPLAN INDIA (P) LTD. (SUPRA) WAS ENTIRELY MISPLACED. IT WILL BE RELEVANT TO REPRODUCE FOLLOWING OBSERVATIONS OF THE TRIBUNAL FROM THE SAID DECISIO N : - 3. WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS SUBMISSIONS MADE BEFORE US. THE IMPUGNED ORDER PASSED BY THE CIT (A) IS CLEARLY VIOLATIVE OF THE EXPRESS PROVISIONS OF S. 250(6), WHICH PROVIDES THAT THE APPELLA TE ORDERS OF THE CIT(A) ARE TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE AUTHORITY THEREON AND THE REASONS FOR SUCH DECISION. THE UNDERLYING RATIONALE OF THE PROVISION IS THAT SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE TRIBUNAL. SP EAKING ORDER WOULD OBVIOUSLY ENABLE A PARTY TO KNOW PRECISE POINTS DECIDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF THE FORMULATION OF THE POINT FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDOUBTEDLY PUTS A PARTY IN QUANDARY. SEC. 250(6) EXPRESSLY EMBO DIES THE PRINCIPLES OF NATURAL JUSTICE AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. THE IMPUGNED ORDER PASSED BY THE CIT(A) IN VIOLATION OF THE PROVISIONS OF S. 250(6) CANNOT, THEREFORE, BE SUSTAINED. REGARDING THE DECISIONS OF THE DELHI BENCH OF THE TRIBUNAL IN MULTIPLAN INDIA LTD. (SUPRA) CITED BY THE LEARNED CIT(A), WE FIND THAT THE SAID DECISION IS CLEARLY DISTINGUISHABLE. SEC 254 REFERRING TO THE ORDERS OF THE TRIBUNAL CONFERS PLENARY JURISDICTION ON THE TRIBUNAL IN THE MATTER OF PASSING ORDER S UNDER S. 254(1). THERE IS NO SUCH EXPRESS STIPULATION IN S. 254 AS CONTAINED UNDER THE PROVISIONS OF S. 250(6) RELATING TO THE ORDERS OF FIRST APPELLATE AUTHORITY. THEREFORE, RELIANCE PLACED BY THE CIT(A) ON MULTIPLAN INDIA LTD. (SUPRA) IS ENTIRELY MISPL ACED. SIMILARLY, THE CASE OF LATE TUKOJIRAO HOLKAR (SUPRA) CITED BY THE LEARNED CIT(A) IS DISTINGUISHABLE AND DOES NOT SUPPORT THE VIEW TAKEN BY THE CIT(A). 4 . FOR THE REASONS INDICATED ABOVE, WE HEREBY SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND DIRECT THE CIT(A) TO DISPOSE OF THE APPEAL OF THE ASSESSEE AFRESH AFTER ALLOWING PROPER OPPORTUNITY IN ITA NO.309/CTK/2011 4 ACCORDANCE WITH LAW. IN VIEW OF THE ABOVE, WE HOLD THAT THE IMPUGNED ORDER PASSED BY THE CIT (A) IS CLEARLY VIOLATIVE OF THE EXPRESS PROVISIONS OF S. 250(6) A ND THEREFORE, CANNOT BE SUSTAINED. 4. COMING TO THE MERITS OF THE CASE, WHICH HAD BEEN ARGUED BEFORE THE LEARNED CIT(A), WE ARE OF THE CONSIDERED VIEW THAT THE ISSUES ARE FIT FOR RESTORATION TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION IN THE LIG HT OF THE FACTS THAT THE ASSESSEE HAD BEEN COMMENCED ITS BUSINESS IN THE MIDDLE OF THE YEAR CANNOT BE TAXED AS INCOME WHICH NEITHER COULD HAVE SAID TO HAVE ACCRUED TO HIM NOR COULD BE SAID TO HAVE ACTUALLY NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THE LEA RNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT VERIFICATION WITH RESPECT TO PAYMENTS TO THE ASSESSEE AS INTERMEDIARY BETWEEN THE CABLE OPERATORS AND CHANNELS SUCH AS STAR INDIA PVT. LTD., AND SET DISCOVERY PVT LTD., COULD NOT FORCE UPON THE RECOVERY FROM THE CABLE OPERATORS TO BE PAID TO THE CHANNELS. THE ASSESSING OFFICER, THEREFORE, COULD NOT HAVE FORCED THE ASSESSEE TO INCORPORATE INCOME WHICH WAS DIRECTLY TO BE COMPENSATED BY THE RECEIPTS FROM CABLE OPERATORS. IT WAS NOT THE CASE OF THE ASSESSING OFFICER TO FINAL WHICH FOR HOLDING THAT THE CHANNELS STAR INDIA PVT. LTD , AND SET DISCOVERY PVT LTD., OUGHT TO HAVE PAID THE SAME WHEN THE ASSESSEE HAS NOT RECOVERED THE SAID AMOUNT FROM THE CABLE OPERATORS WHO ARE THE FINAL CONSUMERS FOR MAINTAINING THE ASSESSEE S LICENSE TO UPHOLD THE PROGRAMMES BEAMED BY THE REPUTED CHANNELS. IN THIS VIEW OF THE MATTER, WE ARE OF THE CONSIDERED VIEW THAT THE INCOME WHICH HAS NOT AROSE OR ACCRUED TO THE ASSESSEE COULD NOT BE TAXED N THE IMPUGNED ASSESSMENT YEAR WHEN THE VERY PART IES BEING BROADCASTING CHANNELS AND BEAMING CHANNELS HAVE ALREADY DOWNLOADED AND AS A METER OF HISTORY COULD NOT BE THRUST UPON BY THE ASSESSING OFFICER. IN ANY CASE, THE ISSUES ARE TO BE CONSIDERED AFRESH IN ITA NO.309/CTK/2011 5 THE LIGHT OF THE FACT THAT THE ASSESSING OFFICE R HAD PASSED THE ORDER WITHOUT GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE WHEN THE CASE WAS HEARD ON 24.12.2009 FOR THE FIRST TIME AND THE ORDER WAS PASSED ON 31 ST DECEMBER, 2009. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE TH E MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE ABOVE PURPOSE IN THE LIGHT OF OUR DISCUSSIONS MADE ABOVE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/ - SD/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 23 RD SEPTEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: ORISSA MEDIA VENTURE PVT. LTD., BOMIKHAL, RASULGARH, BHUBANESWAR 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 2(3), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.