Sh. Anil SIngh, New Delhi V. ITO, New Delhi

ITA 3289/DEL/2012

• Counselvise Citation: 328920114 RSA 2012
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 27-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRITHI LAL
• Assessee Lawyers: APPLICATION ADJ REJECTED
• Keywords: Unexplained investment; Principle of natural justice
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENC H BEFORE SHRI HARI OM MARATHA, JM & SHRI A.N. PAHUJA, AM ITA NO.3289/DEL/2012 ASSESSMENT YEAR:2002-03 SH. ANIL SINGH,C/O RAWLA & CO. 504, SURYA KIRAN BUILDING, K.G. MARG,NEW DELHI V/S . INCOME-TAX OFFICER, WARD 23(2), NEW DELHI [PAN : ASXPS 7932 G] (APPELLANT) (RESPONDENT) ASSESSEE BY APPLICATION FOR ADJ. REJECTED REVENUE BY SHRI PRITHI LAL, DR DATE OF HEARING 30-08-2012 DATE OF PRONOUNCEMENT 30-08-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 27.06.2012 BY THE ASSESSEE AG AINST AN ORDER DATED 1 ST FEBRUARY, 2012 OF THE LD. CIT(A)-XIX, NEW DELHI, R AISES THE FOLLOWING GROUNDS:- 1. THE ORDER OF LD. CIT(A) AND ASSESSING OFFICER IS BAD IN LAW AND CONTRARY TO FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THA T NO NOTICE OF HEARING OF APPEAL AFTER 11.01.2011 WAS SERVED ON TH E ASSESSEE. THEREFORE, THE ORDER PASSED BY LD. CIT(A ) BEING CONTRARY TO THE RULES OF NATURAL JUSTICE, IS NOT SU STAINABLE AND LIABLE TO BE SET ASIDE. 3. THE LD. CIT(A) HAS FAILED TO TAKE NOTICE OF THE ADDRESS OF THE ASSESSEE FURNISHED IN FORM 35 OF THE MEMO OF THE AP PEAL WHICH WAS DIFFERENT THAT THE ONE ON WHICH NUMBER OF NOTICES WERE SENT AND THEREFORE, THE ORDER IS CONTRARY TO T HE MATERIAL AND RECORD AND/THUS NOT SUSTAINABLE. 4. THAT THE ORDER OF THE CIT(A) APART FROM BEING NO N-SPEAKING IS CONTRARY TO THE PROVISIONS OF SECTION 250(6) OF THE INCOME-TAX ACT IS THUS NON SUSTAINABLE AND IS LIABLE TO BE SET ASIDE. ITA N O.3289 /DEL./2012 2 5. THAT THE RELIANCE TO THE ORDER SO REFERRED IN PA RA 4.5 OF CIT(A) IS MISPLACED AND ARE NOT BASED ON SIMILAR FACTS AND CIRCUMSTANCES. 6. THE LD. CIT(A) HAS ERRED IN NOT GIVING OPPORTUN ITY TO ASSESSEE TO SUBMIT EVIDENCE AND SUBMISSIONS AND THUS IS CONT RARY TO RULE OF NATURAL JUSTICE. 7. THE LD. CIT(A) HAS ERRED IN PASSING ORDER IN ABS ENCE OF GIVING THROUGH THE FINANCIAL STATEMENTS EARLIER FILED ALON G WITH RETURN OF INCOME. 8. ASSESSEE PRAYS THAT HE BE ALLOWED TO SUBMIT ADDI TIONAL GROUNDS OF APPEAL ON OR BEFORE THE APPEAL BEING HEA RD. 2. AT THE OUTSET, A LETTER DATED 29 TH AUGUST, 2012 SIGNED BY SHRI YP RAWLA,CA WAS PLACED BEFORE US, SEEKING ADJOURNMENT ON THE GROUND THAT CHARTERED ACCOUNTANT REPRESENTING THE CASE WAS UNWE LL. HOWEVER, CONSIDERING THE NATURE OF ISSUE AND FINDINGS OF THE LD. CIT(A), THE BENCH REJECTED THE REQUEST FOR ADJOURNMENT AND PROCEEDED TO DISPOSE OF THE APP EAL AFTER HEARING THE LD. DR. 3. FACTS IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF ` ` 4,65,930/- FILED ON 31.03.2003 BY THE ASSESSEE, AFT ER BEING PROCESSED ON 23 RD MAY, 2003 U/S 143 (1) OF THE INCOME-TAX ACT, 1961, (HEREINAFTER REFERRED TO AS THE ACT), WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ISSUED ON 28.10.2003. HOWEVER, THE NOTICE DATED 28 .10.2003 WAS RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS NO SUCH PE RSON IN S-517, GK-II. EVEN THE SUBSEQUENT NOTICES DATED 11.3.2004, 17 TH AUGUST, 2004, 8.11.2004, 25 TH JANUARY, 2005 AND FINAL SHOWCAUSE NOTICE 14 TH FEBRUARY, 2005 WENT UNRESPONDED. ACCORDINGLY, THE ASSESSING OFFICER[AO IN SHORT] PROCEEDED TO COMPLETE THE ASSESSMENT IN TERMS OF PROVISIONS OF S ECTION 144 OF THE ACT ON THE BASIS OF MATERIAL ON RECORD, WITH THE DISALLOWANCE OF 50% OF THE EXPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT, AMOUNTING T O ` ` 2,85,905/- BESIDE ADDITIONS TOWARDS UNEXPLAINED INVESTMENT OF ` `2,88,230/-; ` `3,50,000/- AND ` `1,33,855/-. 4. ON APPEAL, A NUMBER OF NOTICES WERE SENT BY THE LD. CIT(A) AS DETAILED IN PARA 4.1 OF THE IMPUGNED ORDER. NOTICE DATED 9.3.2006, 28.06.2006, 29.3.2007, 17.8.2007, 31.3.2008, WERE RETURNED UNSE RVED WHILE IN RESPONSE TO ITA N O.3289 /DEL./2012 3 NOTICE DATED 27.6.2008, THE ASSESSEE SOUGHT ADJOURN MENT FOR 21 ST AUGUST, 2008, WHEN NONE APPEARED. EVEN IN RESPONSE TO A NOTICE D ATED 4 TH SEPTEMBER,2008 THE ASSESSEE SOUGHT ADJOURNMENT ON 17 TH SEPTEMBER, 2008 . ACCORDINGLY, ANOTHER NOTICE WAS ISSUED ON 27 TH JULY, 2010 WHEN NONE APPEARED ON 19 TH AUGUST, 2010. HOWEVER, ON 20 TH AUGUST, 2010, THE ASSESSEE FILED AN APPLICATION SEEKING ADJOURNMENT. ACCORDINGLY, THE CASE WAS INI TIALLY ADJOURNED FOR 10 TH SEPTEMBER, 2010, AGAIN FOR 5 TH OCTOBER, 2010 AND FINALLY FOR 20 TH OCTOBER, 2010, WHEN NONE APPEARED. HOWEVER, THE ASSESSEE SUBMITTED AN APPLICATION ON 21.10.2010,AND THE APPEAL WAS ADJOURNED FOR 9 TH NOVEMBER, 2010,WHEN AGAIN ADJOURNMENT WAS SOUGHT FOR 23 RD NOVEMBER, 2010 AND AGAIN FOR 3.1.2011 AND FINALLY FOR 11.01.2012, WHEN NONE APPEARED. EVEN NOTICES SENT ON 19 TH SEPTEMBER, 2011, 13 TH OCTOBER, 2011, 16 TH NOVEMBER, 2011 AND 15 TH DECEMBER,2011 WERE NOT RESPONDED. ACCORDINGLY, WHI LE RELYING DECISIONS IN THE CASE TITAGHUR PAPER MILLS CO. LTD. VS. STATE OF ORI SSA; PINKI SENGUPTA VS. STATE OF ORISSA (1983) 142 ITR 663 (SC); CIT VS. B.N. BHA TTACHARGEE AND ANOTHER, 118 ITR 461 AND VIPUL LOGISTIC & WAREHOUSING PVT. L TD. VS. INCOME-TAX OFFICER IN I.T.A. NO..5454/D/2010 FOR ASSESSMENT YEAR 2006- 07, THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN THE FOLLOWING TERMS:- 4.7 SINCE MORE THAN ENOUGH OPPORTUNITY WAS GIVEN AND THE APPELLANT HAS CHOSEN NOT TO APPEAR OR TO FILE A NY WRITTEN SUBMISSIONS, THE APPEAL IS BEING DECIDED ON MERITS ON THE BASIS OF STATEMENT OF FACTS AND THE GROUNDS OF APPEAL AND TH E MATERIAL AVAILABLE ON RECORD. 5. I HAVE GONE THROUGH THE ASSESSMENT ORDER, STATE MENT OF FACTS AND GROUNDS OF APPEAL. 6. THE AO MADE THE ADDITIONS/DISALLOWANCES GIVING SPECIFIC REASONS. AFTER CAREFUL CONSIDERATION OF T HE FACTS OF THE CASE, THE ADDITIONS/DISALLOWANCES ARE PROPERLY MADE AND ACCORDINGLY UPHELD. 5. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. DR SUPPORTED THE FINDINGS IN THE IMPUGNED ORDER. ITA N O.3289 /DEL./2012 4 6. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE F ACTS OF THE CASE. AS IS APPARENT FROM THE FACTS OF THE CASE, DESPITE ISSUANCE OF 13 NOTICES BY THE LD. CIT(A) , THE ASSESSEE EITHER SOUGHT ADJOURNMENT OR CHOSE NOT TO APPEAR WHILE FEW NOTICES WERE RETURNED UNSERVED. THE APPRO ACH OF THE ASSESSEE IN SEEKING ADJOURNMENTS ON ONE PRETEXT OR THE OTHER BE FORE THE LOWER AUTHORITIES AND THEN NOT APPEARING ON THE ADJOURNED DATE OF HE ARING, IS NOT IN ACCORDANCE WITH LAW AND APPARENTLY, THE ASSESSEE DID NOT CO-OP ERATE WITH THE LD. CIT(A) IN DETERMINING CORRECT INCOME OF THE ASSESSEE. WE MAY CLARIFY THAT WE ARE NOT CONDONING THE DEFAULT ON THE PART OF THE ASSESSEE. SINCE THE ASSESSEE CHOSE NOT TO PURSUE HIS APPEAL, THE LD. CIT(A) DISMISSED THE APPEAL WITHOUT EVEN ANALYZING THE ISSUES OR RECORDING HIS SPECIFIC FINDINGS ON THE SAID ISSUES RAISED IN THE GROUNDS OF APPEAL BEFORE HIM . THIS APPROACH OF TH E LD. CIT(A) IS NOT IN ACCORDANCE WITH LAW. A MERE GLANCE AT THE IMPUGNED ORDER REVEALS THAT THE ORDER PASSED BY THE LD. CIT(A) IS CRYPTIC AND GROSSLY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE, NAMELY, THAT EVERY JUDICIAL/QUASI-JUDICIAL BODY/AUTHORITY MUST PASS RE ASONED ORDER, WHICH SHOULD REFLECT APPLICATION OF MIND BY THE CON CERNED AUTHORITY TO THE ISSUES/POINTS RAISED BEFORE IT. THE APPLICAT ION OF MIND TO THE MATERIAL FACTS AND THE ARGUMENTS SHOULD MANIFEST IT SELF IN THE ORDER. SECTION 250(6) OF THE ACT MANDATES THAT THE ORDE R OF THE CIT(A) WHILE DISPOSING OF THE APPEAL SHALL BE IN WRITING A ND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASONS FOR THE DECISION. THE REQUIREMENT OF RECORDING OF REASO NS AND COMMUNICATION THEREOF BY THE QUASI-JUDICIAL AUTHORI TIES HAS BEEN READ AS AN INTEGRAL PART OF THE CONCEPT OF FAIR PRO CEDURE AND IS AN IMPORTANT SAFEGUARD TO ENSURE OBSERVANCE OF THE RUL E OF LAW. IT INTRODUCES CLARITY, CHECKS THE INTRODUCTION OF EXTR ANEOUS OR IRRELEVANT CONSIDERATIONS AND MINIMIZES ARBITRARINE SS IN THE DECISION-MAKING PROCESS. WE MAY REITERATE THAT A D ECISION DOES ITA N O.3289 /DEL./2012 5 NOT MERELY MEAN THE CONCLUSION. IT EMBRACES WITHI N ITS FOLD THE REASONS FORMING BASIS FOR THE CONCLUSION.[MUKHTIAR SINGH VS. STATE OF PUNJAB,(1995)1SCC 760(SC)]. IT IS WELL SETTLED T HAT REASONS ARE THE LINKS BETWEEN THE MATERIAL ON RECORD AND THE CONCLUSION A RRIVED AT BY THE COURT AND THE APPELLATE AUTHORITY BEING A QUASI JUDICIAL AUTH ORITY, 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. PURUSHOTH AMAN VS. AG.ITO (1984) 149 ITR 120 (KER.)]. 6.1 A CO-ORDINATE BRANCH IN THE CASE OF GUJARAT THEMIS BIOSYN LTD. VS. JT. CIT 74 ITD 339 (AHD) ,IN IDENTICAL CIRCUMSTANCES, OBSER VED AS UNDER: 3. WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIRC UMSTANCES OF THE CASE AS WELL AS SUBMISSIONS MADE BEFORE US. THE IMP UGNED ORDER PASSED BY THE CIT(A) IS CLEARLY VIOLATIVE OF THE EXPRESS P ROVISIONS OF S. 250(6), WHICH PROVIDES THAT THE APPELLATE 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 TR IBUNAL. SPEAKING ORDER WOULD OBVIOUSLY ENABLE A PARTY TO KNOW PRECISE POIN TS DECIDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF THE FORMULATION O F THE POINT FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDOUBTEDLY PUTS A PARTY IN QUANDARY. SEC. 250(6) EXPRESSLY EMBODIES THE PRINCIPLES OF NATURAL JUSTICE AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. THE IMPU GNED 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 BEN CH OF THE TRIBUNAL IN MULTIPLAN INDIA LTD. (SUPRA) CITED BY THE LEARNED C IT(A), WE FIND THAT THE SAID DECISION IS CLEARLY DISTINGUISHABLE. SEC 254 R EFERRING TO THE ORDERS OF THE TRIBUNAL CONFERS PLENARY JURISDICTION ON THE TR IBUNAL IN THE MATTER OF PASSING ORDERS UNDER S. 254(1). THERE IS NO SUCH EX PRESS STIPULATION IN S. 254 AS CONTAINED UNDER THE PROVISIONS OF S. 250(6) RELATING TO THE ORDERS OF FIRST APPELLATE AUTHORITY. THEREFORE, RELIANCE PLAC ED BY THE CIT(A) ON MULTIPLAN INDIA LTD. (SUPRA) IS ENTIRELY MISPLACED. 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). FOR THE REASONS INDICATED ABOVE, WE HERE BY 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 ACCORDA NCE WITH LAW. ITA N O.3289 /DEL./2012 6 7. IN VIEW OF THE FOREGOING, ESPECIALLY WHEN THE L D. CIT(A) HAS NOT PASSED A SPEAKING ORDER ON VARIOUS ISSUES RAISED BEFORE HIM ,WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A ) AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE ISSUES RAISED IN THE GROUNDS RAISED BEFORE HIM BY THE ASSESSEE, AFRESH IN ACCORDANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLES S TO SAY THAT WHILE REDECIDING THE APPEAL, THE LD. CIT(A) SHALL PASS A SPEAKING ORDER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISI ONS OF SEC. 250(6) OF THE ACT. THE ASSESSEE SHALL SUO MOTU APPROACH T HE LD. CIT(A) WITHIN THREE MONTHS OF THE RECEIPT OF THIS ORDER FO R EXPEDITIOUS DISPOSAL OF APPEAL AND SHALL NOT SEEK ANY ADJOURNME NT WITHOUT VALID REASONS. 8. NO OTHER PLEA OR ARGUMENT WAS RAISED BEFORE US . 9. IN THE RESULT, APPEAL IS ALLOWED BUT FOR STATI STICAL PURPOSES. SD/- SD/- (HARI OM MARATHA) (A.N. PAHUJA ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. INCOME-TAX OFFICER,WARD 23(2),NEW DELHI 3. CIT CONCERNED 4. CIT(A)-XIX, NEW DELHI 5. DR, ITAT,A BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT