DCIT, Dehradun V. M/s. Shri Krishna Educational Trust, Kurukshetra

ITA 3236/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6905 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 17-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUJIT KUMAR SENIOR
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NO.3236/DEL./2013 (ASSESSMENT YEAR : 2008-09) DCIT, CENTRAL CIRCLE, VS. M/S. SHRI KRISHNA EDUCAT IONAL TRUST DEHRADUN. SKIET, RATTAN DERA ROAD, KURUKSHETRA. (PAN : AAATS3624C) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL, ADVOCATE REVENUE BY : SHRI SUJIT KUMAR, SENIOR DR O R D E R PER A.T. VARKEY, JUDICIAL MEMBER : THIS APPEAL, AT THE INSTANCE OF THE REVENUE, IS FIL ED AGAINST THE ORDER OF CIT (APPEAL), KARNAL DATED 09.01.2013 FOR THE AS SESSMENT YEAR 2008- 09. 2. THE ASSESSEE IS A TRUST RUNNING EDUCATION INSTIT UTIONS UNDER THE NAME AND STYLE OF SHRI KRISHAN INSTITUTE OF ENGINEE RING & TECHNOLOGY AND SHRI KRISHAN POLYTECHNIC AT KURUKSHETRA. THE TRUST EXISTS SOLELY FOR EDUCATIONAL PURPOSES. THE TRUST WAS GRANTED EXEMPTI ON U/S 10(23C)(VI) VIDE ORDER DATED 31.10.2008 FOR THE AY 2008-09 ONWA RDS BY CHIEF COMMISSIONER OF INCOME TAX, HARYANA REGION, PANCHKU LA. THE ASSESSEE ITA NO.3236/DEL./2013 2 FILED RETURN DECLARING TOTAL LOSS AT RS.93,98,215/- ON 29.09.2008. THE RETURN WAS ACCOMPANIED WITH AUDITED SET OF ACCOUNTS. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED COMPL ETE BOOKS OF ACCOUNTS SUPPORTING VOUCHERS, BILLS, BANK STATEMENT S ETC. AS WAS REQUISITIONED BY ASSESSING OFFICER. THE ASSESSING O FFICER HAS PROCEEDED TO FRAME THE ASSESSMENT BY MAKING VARIOUS ADDITIONS AND THEREBY COMPUTING THE TOTAL INCOME AT RS.1,78,79,322/-. BE ING AGGRIEVED, THE ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT (A) WH O IN TURN PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. 4. AT THE OUTSET, LD. AR CONTENDED THAT THE BASIS O F THE ADDITIONS ARE BASED ON STATEMENTS RECORDED BY THE AO BEHIND THE B ACK OF THE ASSESSEE AND THE ASSESSEES PLEA FOR CROSS EXAMINATION WAS N OT ALLOWED BY THE AO, THEREFORE, VITIATING THE ENTIRE ADDITIONS FOR VIOLA TION OF NATURAL JUSTICE AND CITED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M/S. ANDAMAN TIMBER INDUSTRIES IN CIVIL APPEAL NO.4228 OF 2006 W HEREIN THE HONBLE SUPREME COURT HAS HELD THAT VIOLATION OF NATURAL JU STICE MAKES THE ORDER A NULLITY. LD. AR ALSO CITED THE FOLLOWING JUDGMENTS :- (I) M.G. SHAHANI & CO. (DELHI) LTD. VS. COLLECTOR O F CENTRAL EXCISE 1994 (73) ELT 3 (SC); (II) UNITED COMMERCIAL BANK VS. CIT (1982) 137 IT R 434 (CAL.); ITA NO.3236/DEL./2013 3 (III) MAHARANI KANAK KUMAR SAHIBA VS. CIT (1955) 28 ITR 462 (PAT.); (IV) KARNATAKA WAKF BOARD VS. STATE OF KARNATAKA AIR 1996 KAR. 55; (V) GHASI RAM DAYANAND VS. CST 92 STC 478 5. WE HAVE HEARD BOTH THE SIDES. WE ARE, HOWEVER, NOT CONVINCED BY THE AFORESAID ARGUMENT OF THE LD. AR BECAUSE OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. SINCE WE FIND THAT THER E ARE CERTAIN EVIDENCES COLLECTED BY THE AO WHICH HAVE COME ON RECORD AND W HICH NECESSARILY HAD TO BE TESTED ON THE TOUCHSTONE OF CROSS EXAMINATION PARTICULARLY WHEN THE ASSESSEE HAS MADE A SPECIFIC REQUEST FOR IT, THEN I T OUGHT TO HAVE BEEN DONE BEFORE ADDITION COULD HAVE BEEN SADDLED ON THE ASSE SSEE. HOWEVER, WE FIND THAT IN THE INTEREST OF SUBSTANTIAL JUSTICE AN D WE TAKE ADDITIONAL NOTE OF THE FACT THAT IN PAGE NO. 7 & 8 OF THE AO ORDER, TH E AO REFERS TO CERTAIN ENQUIRY ORDERED BY THE HONBLE HIGH COURT AGAINST T HE ASSESSEE AND THE AO HAS RELIED ON THE REPORT OF THE ENQUIRY COMMITTE E TOO, SO WE ARE OF THE OPINION THAT THIS MATTER NEEDS TO BE REMANDED BACK TO THE FILE OF THE AO PARTICULARLY TO CROSS EXAMINE THE WITNESSES AND TO GIVE OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCES IF THE ASSESSEE FEELS IT HAS TO REBUT THE CLAIM OF THE AO. HERE IN THIS CASE, THE AO HAS CITED LAC K OF TIME TO DENY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SINCE LIMITATION WAS SETTING IN, SO HE COMPLETED THE ASSESSMENT. FOR REMANDING THE ENTIRE PROCEEDINGS, WE ITA NO.3236/DEL./2013 4 RELY ON THE THREE HONBLE JUDGES DECISION OF THE HO NBLE SUPREME COURT IN THE CASE OF TIN BOX COMPANY V. COMMISSIONER OF I NCOME-TAX, 249 ITR 216 (SC), WHEREIN THE HONBLE LORDSHIPS HELD AS UND ER :- IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THES E MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF THE TRIBU NAL, THE FACT- FINDING AUTHORITY, THAT READS THUS : 'WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEE'S SUBMISSION THAT THE INCOME-TAX OFFICER HAD NOT GIV EN TO THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD.' THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL I S REALLY OF NO CONSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT CO UNTS. THAT ORDER MUST BE MADE AFTER THE ASSESSEE HAS BEEN GI VEN A REASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE HIGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESS MENT AFTER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY OF BEI NG HEARD. TWO QUESTIONS WERE PLACED BEFORE THE HIGH COURT, OF WHICH THE SECOND QUESTION IS NOT PRESSED. THE FIRS T QUESTION READS THUS : '1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING AS IDE THE ASSESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME-TAX OFFICER HAD NOT GIVEN A PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE ?' IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THIS QUESTION WHICH IS INHERENT IN THE QUESTION ITSELF : IN THE N EGATIVE AND IN FAVOUR OF THE ASSESSEE. THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSION ER (APPEALS) AND OF THE TRIBUNAL ARE ALSO SET ASIDE. T HE MATTER ITA NO.3236/DEL./2013 5 SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FO R FRESH CONSIDERATION, AS AFORESTATED. NO ORDER AS TO COSTS . THEREFORE, IN THE INTEREST OF JUSTICE, WE ARE OF TH E OPINION THAT THE ENTIRE PROCEEDINGS ARE SET ASIDE TO THE FILE OF THE AO TO PROCEED DE NOVO AGAINST THE ASSESSEE UNTRAMMELED BY ANY OBSERVATION MADE BY US IN THIS ORDER. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 5 TH DAY OF FEBRUARY, 2016. SD/- SD/- (N.K. SAINI) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 5 TH DAY OF FEBRUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), KARNAL. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.