RICOH INIDA LTD, MUMBAI V. ADDL CIT RG 3(3), MUMBAI

ITA 3451/MUM/2011

• Counselvise Citation: 345119914 RSA 2011
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 29-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B SENTHIL KUMAR
• Assessee Lawyers: R SANTHAN AM
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Assessment record; Revised return; Unabsorbed depreciation
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, D, MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND B. RAMAKOTAIAH ( A.M ) ITA NO.3451/MUM/2011 (ASSESSMENT YEAR : 2005-06) M/S RICOH INDIA LTD., 1201, 1 ST FLOOR, BUILDING NO.12, SOLITAIRE CORPORATE PARK, ANDHERI-GHATKOPAR LINK ROAD, ANDHERI EAST, MUMBAI-400093 PAN: AAACR4151J ADDL. COMMISSIONER OF INCOME TAX, RANGE 3(3), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 APPELLANT V/S RESPONDENT DATE OF HEARING : 23.8.2011 DATE OF PRONOUNCEMENT : 30.8.2011 APPELLANT BY : SHRI R.SANTHANAM RESPONDENT BY : DR.B.SENTHIL KUMAR O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30.3.2011 PASSED BY THE LE ARNED COMMISSIONER OF INCOME TAX -3, MUMBAI UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING AND MANUFACTURING OF COPIES, FAX MACHINES IN ELECTRONIC BOARDS. IT FILED RETURN DECLARING INCOME AT RS.27,78,54,51 7/- AND 2 ITA NO.3451/MUM/2011 (ASSESSMENT YEAR : 2005-06) AFTER SET OFF BUSINESS LOSS OF EARLIER YEARS AND UN ABSORBED DEPRECIATION, IT HAS SHOWN THE INCOME TO RS.NIL. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN COM PUTING THE INCOME AT RS.28,10,73,091/- AND AFTER SET OFF BUSINESS LOSS OF EARLIER YEARS AND UNABSORBED DEPRECIATION T HE REVISED INCOME WAS SHOWN AGAIN AT RS.NIL. HOWEVER, THE AO AFTER EXAMINING THE VARIOUS ISSUES COMPLETED THE ASSESSME NT AT AN INCOME OF RS.20,42,82,619/- UNDER SECTION 115J B OF THE ACT VIDE ORDER DATED 31.12.2008 PASSED UNDER SECTIO N 143(3) OF THE ACT. SUBSEQUENTLY, THE LD.CIT ON EXAMINATIO N OF ASSESSMENT RECORDS OBSERVED THAT THE AO HAS NOT CONSIDERED THE INCOME OF RS.19,83,817/- OFFERED BY THE ASSESSEE UNDER THE HEAD CAPITAL GAINS AND HAS ALL OWED EXCESS CARRIED FORWARD BUSINESS LOSS/UNABSORBED DEPRECIATION TO THE TUNE OF RS.3,57,02,100/- AND H ENCE ACCORDING TO THE LD.CIT, THE ORDER PASSED BY THE AO IS FOUND TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS O F THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE ACT. ACCORDINGLY, THE LD. CIT HAS ISSUED NOTICE DATED 22 .2.2011 UNDER SECTION 263 OF THE ACT TO SHOW CAUSE AS TO W HY THE ASSESSMENT ORDER PASSED BY THE AO BE NOT SET ASIDE WITH A DIRECTION TO THE AO TO RE-FRAME THE ASSESSMENT AFRE SH AND FIXED THE DATE OF HEARING ON 3.3.2011. IN RESPONS E, THE ASSESSEE FILED REPLY ON 3.3.2011. THE LD.CIT WHILE OBSERVING THAT IN THE ABSENCE OF ANY POWER OF ATTORNEY OR LET TER OF 3 ITA NO.3451/MUM/2011 (ASSESSMENT YEAR : 2005-06) AUTHORITY OF THE CA, HOWEVER, CONSIDERED THE WRITTE N SUBMISSIONS FILED BY THE ASSESSEE AND SET ASIDE THE ASSESSMENT TO THE FILE OF THE AO TO BE MADE AFRESH. 3. BEING AGGRIEVED BY THE ORDER OF THE LD.CIT, THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE VALIDITY OF THE ORDER PASSED BY THE LD . CIT UNDER SECTION 263 OF THE ACT IN VIOLATION OF RULE OF NA TURAL JUSTICE, WITHOUT PROVIDING THE PROPER OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. IT WAS FURTHER CONTENDED THAT THE ASSES SMENT ORDER HAS ALREADY BEEN MERGED WITH THE ORDER OF THE LD.CIT(A), THEREFORE, THE ORDER PASSED BY THE LD. C IT IS WITHOUT JURISDICTION AND LIABLE TO BE CANCELLED. 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITS THAT IN THIS CASE THE HEARING WAS FIXED AT 2.30 P.M. ON 3.3.2011, BUT THE LD. CIT WAS NOT AVAILABLE IN THE OFFICE AND THE PRELIMINARY SUBMISSIONS AND OBJECTIONS OF THE ASSESSEE WERE REC EIVED BY THE PA OF THE LD. CIT WHO DULY ACKNOWLEDGED THE SA ME. HE FURTHER SUBMITS THAT THE LD. CIT WITHOUT GIVING AN Y FURTHER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, AFTER CONSIDERING THE SAID PRELIMINARY SUBMISSIONS HAS DECIDED THE CA SE VIDE ORDER DATED 30.3.2011 WHEREIN HE HAS SET ASIDE THE ASSESSMENT TO BE MADE AFRESH. HE FURTHER SUBMITS THAT SINCE NO PROPER OPPORTUNITY /PERSONAL HEARING WAS PROVIDED 4 ITA NO.3451/MUM/2011 (ASSESSMENT YEAR : 2005-06) TO THE ASSESSEE, THEREFORE, IN THE INTERESTS OF JUS TICE THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE LD . CIT TO DECIDE THE SAME AFRESH AFTER PROVIDING THE REASONAB LE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. ON THE OTHER HAND, THE LD.DR WHILE RELYING ON TH E ORDER OF THE LD.CIT SUBMITS THAT SINCE THE LD.CIT HAS CON SIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, THER EFORE, THERE IS NO VIOLATION OF RULE OF NATURAL JUSTICE AN D THEREFORE THE ORDER PASSED BY THE LD.CIT BE UPHELD. IN ALTERN ATIVE, HE SUBMITS THAT HE HAS NO OBJECTION IF THE MATTER IS R ESTORED BACK TO THE FILE OF THE LD. CIT FOR PROVIDING FURTH ER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD WE FIND THAT THERE IS NO DISPUTE THAT THE LD. CIT ISSUED NO TICE UNDER SECTION 263 OF THE ACT FIXING THE CASE FOR 3.3.2011 . WE FURTHER FIND THAT IT IS ALSO NOT IN DISPUTE THAT O N THE SAID DATE OF HEARING THE ASSESSEE FILED WRITTEN SUBMISSIONS DATED 3.3.2011 WHICH WERE ACKNOWLEDGED BY THE OFFICE OF T HE LD. CIT. HOWEVER, THERE IS NO MATERIAL ON RECORD TO SH OW AS TO WHETHER ANY PERSONAL HEARING WAS PROVIDED TO THE AS SESSEE. THE LD. CIT WITHOUT PROVIDING ANY FURTHER OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE HAS DECIDED THE CASE ON THE B ASIS OF 5 ITA NO.3451/MUM/2011 (ASSESSMENT YEAR : 2005-06) ASSESSEES WRITTEN SUBMISSIONS DATED 3.3.2011 AND S ET ASIDE THE ORDER PASSED BY THE AO TO BE MADE AFRESH. 7. A FAIR OPPORTUNITY OF HEARING IS A PRE-CONDIT ION. THIS IS A BASIC PRINCIPLE OF NATURAL JUSTICE. THE PRINCI PLE OF NATURAL JUSTICE EMBODIED IN THE LATIN DICTUM AUDI ALTERAM PARTEM ONLY MEANS THAT A PERSON HAS RIGHT TO BE HEARD BY W AY OF AN OPPORTUNITY, WHICH SHOULD BE ADEQUATE AND REASONABL E, SO AS TO ENABLE THE PERSON AFFECTED TO MEET THE CASE AGAI NST HIM. 8. IN THIS CASE, THERE IS NO MATERIAL ON RECORD TO SHOW THAT ANY PERSONAL HEARING WAS PROVIDED TO THE ASSESSEE O N THE DATE OF HEARING ON 3.3.2011 OR THEREAFTER. IT IS A LSO NOT THE CASE OF THE REVENUE THAT THE ASSESSEE HAS WAIVED THE PERSONAL HEARING. THE LD. CIT ON THE BASIS OF PREL IMINARY OBJECTIONS AND SUBMISSIONS DATED 3.3.2011 FILED BY THE ASSESSEE HAS DECIDED THE MATTER WITHOUT GIVING ANY OTHER PERSONAL HEARING TO THE ASSESSEE AS ACCORDING TO TH E LEARNED COUNSEL FOR THE ASSESSEE, LD.CIT WAS NOT AVAILABLE ON THE APPOINTED DATE. THUS, THERE IS A GROSS VIOLATION OF RULE OF NATURAL JUSTICE. THUS, WE ARE OF THE VIEW THAT I N THE INTERESTS OF JUSTICE THE ORDER PASSED BY THE LD. CI T BE SET ASIDE TO HIS FILE AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD.CIT AND RESTORE THE MATTER TO HIS FILE TO DECIDE THE SAME AFRESH AFTER CONSIDERING ALL THE O BJECTIONS RAISED BY THE ASSESSEE INCLUDING THE OBJECTIONS RAI SED 6 ITA NO.3451/MUM/2011 (ASSESSMENT YEAR : 2005-06) AT THIS STAGE AND IN ACCORDANCE WITH LAW AFTER PROV IDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES.. 9. IN THE RESULT, THE ASSESSEES APPEAL STANDS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH AUGUST, 2011. SD SD (B. RAMAKOTAIAH) (D. K.AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 30TH AUGUST, 2011 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI