Pankaj Sharma, Meerut V. ITO, Meerut

ITA 3308/DEL/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69575 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEEHAR RANJAN
• Keywords: Opportunity of being heard; Principle of natural justice; Non passing of speaking order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.-3308/DEL/2013 (ASSESSMENT YEAR-2009-10) PANKAJ SHARMA, A-36/21(V), SHASTRI NAGAR, MEERUT (U.P.) PAN-AGOPS8542D (APPELLANT) VS ITO, WARD-2(1), MEERUT (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. NEEHAR RANJAN PANDEY, SR. DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27.02.2012 OF CIT(A), MEERUT PERTAINING TO 2009-10 ASSESSMENT YEAR. 2. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING. HOWEVER AN ADJOURNMENT REQUEST WAS FILED BY LD. AR, SH. ANURAG RISHI ALLEGEDLY ON BEHALF OF THE ASSESSEE. IT IS SEEN FR OM THE RECORD THAT NEITHER THE SAID COUNSEL REPRESENTED BEFORE THE CIT(A) NOR ANY POWER OF ATTORNEY IN HIS FAVOUR HAS BEEN ISSUED BY THE ASSESSEE. IT IS FURTHER SEE N THAT CONSIDERING THE MATERIAL AVAILABLE ON RECORD THE PRESENT APPEAL CAN BE DECID ED AFTER HEARING THE LD. SR. DR, SH. NEEHAR RANJAN PANDEY. ACCORDINGLY THE ADJO URNMENT PETITION MOVE, WAS REJECTED AND IT WAS CONSIDERED APPROPRIATE TO P ROCEED WITH THE PRESENT APPEAL EX-PARTE QUA THE ASSESSEE APPELLANT ON MERIT. ITA NO.3308/DEL/2013 2 2.1. THE GROUNDS RAISED BY THE ASSESSEE WHICH WERE CONSIDERED FOR A DECISION AFTER HEARING THE LD. SR. DR READ AS UNDER:- 3. THAT THE LD. CIT(APPEALS) HAS ERRED IN PASSING THE IMPUGNED ORDER EX-PARTE, IN UTTER CONTRAVENTION TO THE PRINCIPLES OF NATURAL JUSTICE, THEREBY RENDERING THE SAID ORDER AS ILLEGAL, AND LI ABLE TO BE QUASHED. 4. THAT THE IMPUGNED ORDER IS BAD IN LAW, IN AS MUC H AS THE LD. CIT(APPEALS) HAS NOT PASSED A SPEAKING ORDER, DUE T O THE REASON THAT THE HE HAS NOT GONE INTO THE MERITS OF THE CAS E, NOR RELIED UPON THE SUBMISSIONS OF THE APPELLANT REGARDING THEIR DE FENCE, AND HAS PASSED AN ARBITRARY ORDER BY INDULGING INTO THE PER IPHERY AND TECHNICALITIES OF NOTICES AND ADJOURNMENTS, THUS RE NDERING SUCH ORDER PASSED BY HIM AS A NON SPEAKING ORDER, WHICH IS LIABLE TO BE SET ASIDE. 2.2 THE RELEVANT FACTS OF THE CASE ARE THAT THE ASS ESSEE WHO IS CLAIMING TO BE WORKING AS FACTORY MANAGER WITH M/S SURYODAYA TEXTI LES (P) LTD. FILED A RETURN OF INCOME ON 26.02.2010 DECLARING AN INCOME OF RS.1 ,94,312/-. THE SAID RETURN WHICH WAS SELECTED FOR SCRUTINY BY COMPUTER ASSISTE D SELECTION METHOD AS IT WAS FOUND THAT THE ASSESSEE HAD DEPOSITED CASH TO THE T UNE OF RS.14,43,720/- IN A SPECIFIC SAVING BANK A/C NO-505102010009386 WITH UN ION BANK OF INDIA AND 12,17,350/- IN A SPECIFIC SAVING BANK A/C NO.-2410 10101774166 WITH AXIS BANK. CONSIDERING THE REPLY OF THE ASSESSEE ON BEI NG CONFRONTED WITH THESE FACTS, THE AO MADE AN ADDITION OF RS.26,61,070/-. APART F ROM THAT CERTAIN OTHER ADDITIONS WERE ALSO MADE RESULTING IN THE ASSESSMEN T BEING CONCLUDED AT A FIGURE OF RS.28,84,545/-. 3. AGGRIEVED BY THIS THE ASSESSEE WENT IN APPEAL BE FORE THE CIT(A). THE RECORD STATES THAT THE NOTICE SENT TO THE ASSESSEE BY THE FIRST APPELLATE AUTHORITY RETURNED UNSERVED AND AFTER MAKING INQUIRIES NOTICE WAS SERVED ON THE NEW ADDRESS INDICATED THE HEARING FIXED ON 15.02.2013, THE ASSESSEE WAS REPRESENTED THROUGH SH. ANURAG RISHI WHO ALONGWITH A POWER OF A TTORNEY SOUGHT AN ADJOURNMENT ON THE GROUND THAT HE COULD NOT BE PRES ENT AS HE WAS OUT GOING OF ITA NO.3308/DEL/2013 3 STATION. THE SAID REQUEST WAS ACCEPTED BY THE CIT( A) WHO GRANTED AN ADJOURNMENT STATING THAT THIS WOULD BE A FINAL ADJO URNMENT AND THE NEXT DATE OF HEARING WAS FIXED FOR 27.02.2013. IN THE VIEW OF T HE FACT THAT NO ONE APPEARED ON BEHALF OF THE ASSESSEE, ON THE SAID DATE, THE CI T(A) AS PER THE IMPUGNED ORDER MADE INQUIRY FROM THE SAID COUNSEL I.E SHRI A. RISH I WHO INDICATED THAT HE WAS NO LONGER REPRESENTING THE CASE. THEREAFTER AT THE END OF THE DAY THE ASSESSEE WAS REPRESENTED THROUGH SH. S.K.ARORA WITH A VAKALATNA MA IN HIS FAVOUR STATING THAT HE HAD BEEN ENGAGED RECENTLY AND ACCORDINGLY S OUGHT TIME. IN THIS BACKGROUND, THE CIT(A) DISCUSSED THE APPEAL HOLDING THAT THE ASSESSEE IS NOT SERIOUS IN PURSUING THE APPEAL. FOR READY-REFERENC E, WE EXTRACT FROM THE IMPUGNED ORDER HEREUNDER:- 2. THE APPEAL WAS FIXED BY A NOTICE DATED 01.11.2012 FIXING THE DATE OF HEARING AS 19.11.2012. THE NOTICE WAS HOWE VER RETURNED WITH THE REMARK FROM THE POSTAL AUTHORITIES THAT NO PERSON OF SUCH NAME RESIDES AT THE ADDRESS INDICATED. ANOTHE R NOTICE DATED 30.11.2012 WAS ONCE AGAIN ISSUED AT THE SAME ADDRES S AND WAS AGAIN RETURNED WITHOUT SERVICE WITH AN IDENTICAL RE MARK. SUBSEQUENTLY, ENQUIRIES WERE MADE BY THIS OFFICE AN D THE ASSESSEE WAS CONTACTED AND REQUESTED TO FURNISH HIS CORRECT ADDRESS. IN RESPONSE, A LETTER WAS FILED ON 28.01.2013 INDICATI NG THAT THE ADDRESS IS UNDERGONE A CHANGE AFTER THE FILING OF T HE APPEAL. A NEW ADDRESS HAS BEEN INDICATED. ANOTHER NOTICE DAT ED 28.01.2013 WAS ISSUED TO THE ASSESSEE FIXING THE CA SE FOR HEARING ON 15.02.2013. ON THIS DATE, SHRI ANURAG RISHI, IN WHOSE FAVOUR A POWER OF ATTORNEY HAD BEEN ENCLOSED ALONG WITH TH E APPEAL MEMO, FILED AN ADJOURNMENT APPLICATION STATING THAT HE IS UNABLE TO ATTEND THE HEARING FOR THE REASON THAT HE HAD TO GO OUT OF STATION. A FINAL ADJOURNMENT WAS GRANTED FOR 27.02 .2013. ON THIS DATE, AS NONE ATTENDED DURING THE FORENOON, EN QUIRIES WERE MADE FROM SHRI ANURAG RISHI. IT WAS INTIMATED BY H IM THAT HE IS NO LONGER REPRESENTING THE CASE. SUBSEQUENTLY, AT THE FAG END OF THE DAY, ONE SHRI S.K.ARORA, ADVOCATE, APPEARED AND FILED A VAKALATNAMA SIGNED BY THE ASSESSEE IN HIS FAVOUR. IT WAS INFORMED THAT THIS CASE HAD BEEN RECEIVED BY THIS C OUNSEL ONLY A ITA NO.3308/DEL/2013 4 COUPLE OF DAYS BACK AND THEREFORE AN ADJOURNMENT WE RE REQUESTED. KEEPING IN VIEW THE EFFORTS MADE BY THI S OFFICE IN ENSURING THAT ADEQUATE OPPORTUNITY IS GRANTED TO TH E APPELLANT TO PRESENT HIS CASE AND THE FACT THAT THE ASSESSEE HAD FAILED TO INTIMATE HIS NEW ADDRESS AND EVEN WHEN NOTICES WERE ISSUED AT THE NEW ADDRESS AND THERE WAS NO SERIOUS EFFORT MAD E TO PRESENT THE CASE, THE ADJOURNMENT REQUEST WAS REFUSED. UND ER THE CIRCUMSTANCES, IT APPEARS THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING HIS CASE. IN VIEW OF THE ABOVE, THE APPEAL IS DISMISSED. 3.1. IN THE AFORE-MENTIONED PECULIAR FACTS AND CIRC UMSTANCES, WE ARE OF THE VIEW THAT THE IMPUGNED ORDER CANNOT BE UPHELD AS TH E CIT(A) DOES NOT HAVE THE POWER TO DISMISS THE APPEAL WITHOUT ADDRESSING THE FACTS AND MATERIAL AVAILABLE ON RECORD. NO DOUBT IT IS THE DUTY OF THE ASSESSEE TO KEEP THE APPELLATE AUTHORITY INFORMED ABOUT ANY CHANGE OF ADDRESS AND IT IS ALSO HIS DUTY TO ENSURE THAT HE IS PRESENT OR REPRESENTED THOUGH AN AUTHORIZED PERSON ON THE DATE OF HEARING. HOWEVER IT APPEARS THAT ON 27.02.2013 FOR REASONS B EST KNOWN TO THE ASSESSEE AND HIS COUNSEL SH. ANURAG RISHI THE ASSESSEE HAD T O CHANGE HIS COUNSEL WHO APPARENTLY WAS NOT PREPARED WITH THE CASE ON ACCOUN T OF BEING ENGAGED RECENTLY. IN THESE CIRCUMSTANCES, HOLDING THAT DUE TO THE COM MUNICATION GAP BETWEEN THE COUNSEL AND THE ASSESSEE THE ASSESSEES CASE SHOULD NOT SUFFER AND SECONDLY THE IMPUGNED ORDER CANNOT BE SAID TO BE AN ORDER WHICH CAN BE UPHELD IN LAW. AS SECTION 250 LAYS DOWN THE FOLLOWING PROCEDURE FOR T HE CIT(A) FOR DECIDING THE APPEALS AND IN THE FACTS OF THE PRESENT CASE THE PR OCEDURE LAID DOWN IN SECTION 250(6) HAS NOT BEEN ADHERED. THE RELEVANT PORTION OF THE ACT IS REPRODUCE FOR READY REFERENCE:- 250. (1) THE COMMISSIONER (APPEALS) SHALL FIX A DA Y AND PLACE FOR THE HEARING OF THE APPEAL, AND SHALL GIVE NOTICE OF THE SAME TO THE APPELLANT AND TO THE [ASSESSING] OFFICER AGAINST W HOSE ORDER THE APPEAL IS PREFERRED. (2) THE FOLLOWING SHALL HAVE THE RIGHT TO BE HEARD AT THE HEARING OF THE APPEAL- ITA NO.3308/DEL/2013 5 (A) THE APPELLANT, EITHER IN PERSON OR BY AN AUTHOR IZED REPRESENTATIVE; (B) THE [ASSESSING] OFFICER, EITHER IN PERSON OR BY A REPRESENTATIVE. (3) THE [COMMISSIONER(APPEALS)] SHALL HAVE THE POW ER TO ADJOURN THE HEARING OF THE APPEAL FROM TIME TO TIME . (4) THE [COMMISSIONER(APPEALS)] MAY, BEFORE DISPOSI NG OF ANY APPEAL, MAKE SUCH FURTHER INQUIRY AS HE THINKS FIT, OR MAY DIRECT THE [ASSESSING] OFFICER TO MAKE FURTHER INQU IRY AND REPORT THE RESULT OF THE SAME TO THE [COMMISSIONER( APPEALS)]. (5) THE [COMMISSIONER(APPEALS)] MAY, AT THE HEARING OF AN APPEAL, ALLOW THE APPELLANT TO GO INTO ANY GROUND O F APPEAL NOT SPECIFIED IN THE GROUNDS OF APPEAL, IF THE [COMMISSIONER(APPEALS)] IS SATISFIED THAT THE OMISS ION OF THAT GROUND FROM THE FORM OF APPEAL WAS NOT WILLFUL OR UNREASONABLE. (6) THE ORDER OF THE [COMMISSIONER(APPEALS)] DISPOS ING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE T HE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. [(6A) IN EVERY APPEAL, THE [COMMISSIONER(APPEALS)] WHERE IT IS POSSIBLE, MAY HEAR AND DECIDE SUCH APPEAL WITHIN A PERIOD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN W HICH SUCH APPEAL IS FILED BEFORE HIM UNDER SUB-SECTION (1) OF SECTION 246A]. (7) ON THE DISPOSAL OF THE APPEAL THE [COMMISSIONER(APPEALS)] SHALL COMMUNICATE THE ORDER PASSED BY HIM TO THE ASSESSEE AND TO THE [CHIEF COM MISSIONER OR COMMISSIONER]. 3.2 A PERUSAL OF THE ABOVE SHOWS THAT THE DUTY OF T HE CIT(A) IS NOT LIMITED TO FIXING THE DATE AND PLACE OF HEARING SECTION 250(6) MANDATES THAT THE CIT(A) WHILE DISPOSING OF THE APPEAL SHALL PASS AN ORDER IN WRITING AND STATING THE POINTS FOR DETERMINATION THE DECISION THEREON AND THE REAS ONS FOR THE DECISION. THE SAID EXERCISE IS FOUND MISSING IN THE PRESENT ORDER. WE ARE ALSO OF THE VIEW THAT THE RIGHT TO BE HEARD IS AN IMPORTANT RIGHT TO WHICH A PARTY WHO IS FACED WITH AN ADVERSE VIEW IS ENTITLED TO AUDI ALTERAM PARTEM IS ONE OF THE MOST FAMOUS AND ITA NO.3308/DEL/2013 6 CELEBRATED RULE OF NATURAL JUSTICE. THE PRINCIPLES OF NATURAL JUSTICE ARE THOSE WHICH HAVE BEEN LAID OUT BY THE COURTS AS BEING THE MINIMUM PROTECTION OF THE RIGHTS OF AN INDIVIDUAL AGAINST THE ARBITRARY PROCE DURE THAT MAY BE ADOPTED BY A JUDICIAL, QUASI-JUDICIAL AND ADMINISTRATIVE AUTHORI TY WHILE MAKING AN ORDER AFFECTING THOSE RIGHTS. A CAREFUL PERUSAL OF THE C ONSISTENT JUDGEMENTS OF THE APEX COURT WOULD SHOW THAT IT HAS CONSISTENTLY BEEN HELD THAT THE RULES OF NATURAL JUSTICE ARE NOT EMBODIED RULES AND THE SAID PHRASE IS NOT AND CANNOT BE CAPABLE OF A PRECISE DEFINITION. THE UNDERLYING PRINCIPLE OF NATURAL JUSTICE EVOLVED UNDER THE COMMON LAW IS TO CHECK ARBITRARY EXERCISE OF POWER BY THE STATE OR ITS FUNCTIONARIES. ACCORDINGLY, THE PRINCIPLE BY ITS V ERY NATURE IMPLIES THE DUTY TO ACT FAIRLY I.E. FAIR PLAY IN ACTION MUST BE EVIDENT AT EVERY STAGE. FAIR PLAY DEMANDS THAT NOBODY SHALL BE CONDEMNED UNHEARD. 3.3. IN THE CELEBRATED JUDGMENT OF THE APEX COURT I N THE CASE OF A.K.KRAIPAK VS- UNION OF INDIA (1969) 2 SCC 262, IT IS OBSERVED THAT THE AIM OF RULES OF NATURAL JUSTICE IS TO SECURE JUSTICE OR TO PUT IT N EGATIVELY TO PREVENT MISCARRIAGE OF JUSTICE. THE SAID RULES ARE MEANS TO AN END AND NO T AN END IN THEMSELVES AND THOUGH IT IS NOT POSSIBLE TO MAKE AN EXHAUSTIVE CAT ALOGUE OF SUCH RULES HOWEVER IT CAN BE READILY SAID THAT THERE ARE TWO BASIC MAXIMS OF NATURAL JUSTICE NAMELY AUDI ALTERAM PARTEM AND NEMO JUDEX IN RE SUA. IN THE PRESENT FACTS OF THE CASE WE ARE CONCERNED WITH THE MAXIM AUDI ALTERM P ARTEM WHICH AGAIN MAY HAVE MANY FACETS TWO OF THEM (A) NOTICE OF THE CASE TO B E MET; AND (B) OPPORTUNITY TO EXPLAIN. THEIR LORDSHIPS HAVE CAUTIONED THAT THESE RULES CANNOT BE SACRIFICED AT THE ALTAR OF THE ADMINISTRATIVE CONVENIENCE OR CELE BRITY. THE ASSESSEE HAS RAISED GROUND NO.- 3&4 IN REGARD TO THE OPPORTUNITY OF BE ING HEARD AGITATED BEFORE US AND CONSIDERING MATERIAL AVAILABLE ON RECORD. WE A RE INCLINED TO ACCEPT THE PRAYER OF THE ASSESSEE ON A CAREFUL CONSIDERATION O F THE LEGAL POSITION THEREON. ACCORDINGLY THE GROUND NO.- 3 & 4 RAISED BY THE ASS ESSEE ARE ALLOWED AND THE ITA NO.3308/DEL/2013 7 REMAINING GROUNDS ARE RESTORED BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIV ING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. IT IS HOPED THAT THE A SSESSEE DOES NOT ABUSE THE OPPORTUNITY SO GRANTED AND UTILIZES IT IN PROPER LE TTER, AND SPIRIT AND ENSURES BY PARTICIPATING FULLY IN THE PROCEEDINGS BEFORE THE C IT(A) AS ON THE FAILURE OF THE ASSESSEE TO AVAIL OF THE OPPORTUNITY THE CIT(A) WOU LD AT LIBERTY TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AS PER THE SC HEME OF THE INCOME TAX ACT 1961 WHICH HAS BEEN DELIBERATED ABOVE AT LENGTH. T HE SAID ORDER WAS PRONOUNCED ON THE DATE OF HEARING ITSELF IN THE OPEN COURT. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 6TH OF DECEMBER 2013. SD/- SD /- (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 06 /12/2013 *AMIT KUMAR/R.NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT RE GISTRAR ITAT NEW DELHI