Kamaljeet Singh Bedi, New Delhi V. ITO, New Delhi

ITA 3509/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65534 (ITAT-DELHI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 04-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Principle of natural justice
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI I BENC H BEFORE SHRI I.C. SUDHIR , JM & SHRI A.N. PAHUJA, AM ITA NO.3509/DEL./2012 ASSESSMENT YEAR: 2005-06 KAMALJEET SINGH BEDI, 70/E, GARHI, ANGAD MEDICOS EAST OF KAILASH NEW DELHI-65. V/S . DAO-61,CIT-VIII,VIKAS BHAWAN,,I.P. ESTATE, NEW DELHI [PAN : AFWPB19 63N] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI R.S.SINGHVI, AR REVENUE BY MS.Y.KAKKAR, DR DATE OF HEARING 04-10-2012 DATE OF PRONOUNCEMENT 04-10-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 04.07.2012 BY THE ASSESSEE AG AINST AN ORDER DATED 25.04.2012 OF THE LD. CIT(A)-XII, NEW DELHI, RAISES FOLLOWING GROUNDS :- 1(I). THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(A) WAS NOT JUSTIFIED IN PASSING EX PARTE ORDER WITHOUT PROPER SERVICE OF NOTICE AND REASONABLE OPPORTUNITY TO THE APPELLANT. (II) THAT THE APPELLANT HAD NO INTIMATION ABOUT SER VICE OF NOTICE AND DEFAULT IF ANY, WAS ON ACCOUNT OF GENUIN E AND BONAFIDE REASONS AND AS SUCH THE EX PARTE ORDER IS NOT JUSTIFIED ON THE FACTS OF THE CASE AND IN THE INTEREST OF JUS TICE. (III) THAT EVEN OTHERWISE, THE APPELLATE ORDER IS N OT IN CONFORMITY WITH PROVISIONS OF SEC. 250(6) AS CIT(A) HAS NOT DISPOSED OF VARIOUS GROUNDS IN DISPUTE ON MERITS AS REQUIRED UNDER SEC. 250(6) OF THE INCOME TAX ACT, 1961. 2(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN ESTIMATING INCOME AT ` 3,35,450/- WITHOUT APPRECIATING THE FACTS OF THE CA SE OR PROPER AND REASONABLE OPPORTUNITY TO THE ASSESSEE. I.T.A .NO.3509/DEL./2012 2 (II) THAT ESTIMATION OF INCOME AT ` 3,35,450/- IS HIGHLY ARBITRARY AND EXCESSIVE AND IN TOTAL DISREGARD TO F ACTS OF THE CASE. 3. THAT ORDERS OF THE LOWER AUTHORITIES ARE NOT JUS TIFIED ON FACTS AND SAME ARE BAD IN LAW. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT ON RECEIPT OF CIB/AIR INFORMATION REGARDING INVESTMENT OF ` .3,35,450/- THROUGH CREDIT CARD DURING THE PERIOD UNDER CONSIDERATION, THE ASSESSING OFFICER[ AO IN SHORT] SERVED A NOTICE DATED 21.11.2007 ISSUED U/S 142(1) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON THE ASSESSEE .NONE RE SPONDED TO THIS NOTICE. EVEN SUBSEQUENT NOTICE DATED 07.12.2007 U/S 142(1) OF TH E ACT, WENT UN-RESPONDED. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT U/S 14 4OF THE ACT WITH THE ADDITION OF AFORESAID AMOUNT OF ` .3,35,450/-, TREATING THE AMOUNT FROM UNDISCLOSED S OURCES. 3. ON APPEAL, NONE APPEARED BEFORE THE LD. CIT(A) D ESPITE NOTICES SENT THROUGH SPEED POST ON 21.01.2010, 30-09.2011, 12.12 .2011, 14.02.2012 AND 16.04.2012. ACCORDINGLY, IN THE ABSENCE OF ANY WRI TTEN SUBMISSIONS AND REPRESENTATION ON BEHALF OF THE ASSESSEE, THE LD. C IT(A) DISMISSED THE APPEAL EX- PARTE, HOLDING AS UNDER :- IN VIEW OF THE FACTS STATED ABOVE, IT IS OBSERVED THAT THE ASSESSEE WAS GIVEN FIVE OPPORTUNITIES (LISTED ABOVE) TO REPRESENT HIS CASE BEFORE THE UNDERSIGNED BUT THERE WAS NO COMPLI ANCE FROM THE ASSESSEE. THE ASSESSEE HAS FILED PAPERBOOK ONLY BE FORE THE CIT(A)- XXIII BUT NEVER FILED ANY WRITTEN SUBMISSION BEFOR E THE UNDERSIGNED. THE NOTICES WERE SENT BY SPEED POST FOR WHICH IT IS PRESUMED THAT ASSESSEE MUST HAVE RECEIVED WITHIN 3 DAYS BUT HE NE VER ATTENDED ON THE DATES OF HEARING NOR FILED ANY ADJOURNMENT. IN VIEW OF THE INDIFFERENT APPROACH, I FIND NO USEFUL PURPOSE WOUL D BE SERVED BY KEEPING THE APPEAL PROCEEDINGS PENDING INDEFINITELY . THEREFORE, IT IS PRESUMED THAT THE ASSESSEE HAS NOTHING TO SAY IN FA VOUR OF HIS APPEAL. HENCE, THE ADDITION MADE BY THE A.O IS UPH ELD AND THE APPEAL DISMISSED. 4. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD.. CIT(A)- XII, NEW DELHI. AT THE OUTSET, THE LD. . AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE LD.. CIT(A) HAD NOT PASSED A SPE AKING ORDER ON ANY OF THE I.T.A .NO.3509/DEL./2012 3 GROUNDS RAISED BY THE ASSESSEE BEFORE HIM NOR THE NOTICES ISSUED BY THE LD. CIT(A), WERE SERVED UPON THE ASSESSEE. ON THE OTHE R HAND, LD. DR SUPPORTED THE FINDINGS OF LD. CIT(A) WHILE CONTENDING THAT IN THE EVENT MATTER IS RESTORED BACK TO THE FILE OF THE LD. CIT(A), THE PRESENCE OF THE ASSESSEE BEFORE HIM SHOULD BE ENSURED.. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROU GH THE FACTS OF THE CASE. AS IS APPARENT FROM THE FACTS OF THE CASE, NONE OF THE NO TICE DATED 21.01.2010, 30- 09.2011, 12.12.2011, 14.02.2012 AND 16.04.2012 ISSU ED BY THE LD. CIT(A) APPEAR TO HAVE BEEN SERVED UPON THE ASSESSEE NOR THE LD. D R PLACED BEFORE US ANY MATERIAL REGARDING SERVICE OF ANY OF THESE NOTICES. IN ANY CASE, THE LD. CIT(A) DISMISSED THE APPEAL WITHOUT EVEN ANALYZING THE ISS UES OR RECORDING HIS SPECIFIC FINDINGS ON THE SAID ISSUES RAISED IN THE GROUNDS OF APPEAL BEFORE HIM . THIS APPROACH OF THE LEARNED 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 REASONED ORDER, WHICH SHOU LD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHORITY TO T HE ISSUES/POINTS RAISED BEFORE IT. THE APPLICATION OF MIND TO THE MA TERIAL FACTS AND THE ARGUMENTS SHOULD MANIFEST ITSELF IN THE ORDER. SECT ION 250(6) OF THE ACT MANDATES THAT THE ORDER OF THE CIT(A) WHILE DIS POSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POIN TS FOR DETERMINATION, THE DECISION THEREON AND THE REASONS FOR THE DECISI ON. THE REQUIREMENT OF RECORDING OF REASONS AND COMMUNICATI ON THEREOF BY THE QUASI-JUDICIAL AUTHORITIES HAS BEEN READ AS AN INTEGRAL PART OF THE CONCEPT OF FAIR PROCEDURE AND IS AN IMPORTANT SAFEG UARD TO ENSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCES CLARIT Y, CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERAT IONS AND MINIMIZES ARBITRARINESS IN THE DECISION-MAKING PROCESS. WE MA Y REITERATE THAT A DECISION DOES NOT MERELY MEAN THE CONCLUSION. I T EMBRACES WITHIN ITS FOLD THE REASONS FORMING BASIS FOR THE CONCLUSI ON.[MUKHTIAR SINGH VS. STATE OF PUNJAB,(1995)1SCC 760(SC)]. IT IS WELL SETTLED THAT REASONS I.T.A .NO.3509/DEL./2012 4 ARE THE LINKS BETWEEN THE MATERIAL ON RECORD AND TH E CONCLUSION ARRIVED AT BY THE COURT AND THE APPELLATE AUTHORITY BEING A QUASI JU DICIAL AUTHORITY, 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. PUR USHOTHAMAN VS. AG.ITO (1984) 149 ITR 120 (KER.)]. 5.1 A CO-ORDINATE BRANCH IN THE CASE OF GUJARAT THE MIS BIOSYN LTD. VS. JT. CIT 74 ITD 339 (AHD) ,IN IDENTICAL CIRCUMSTANCES, O BSERVED AS UNDER: 3.WE HAVE CAREFULLY CONSIDERED THE FACTS AND CIRCU MSTANCES OF THE CASE AS WELL AS SUBMISSIONS MADE BEFORE US. THE IMPUGNED OR DER PASSED BY THE CIT(A) IS CLEARLY VIOLATIVE OF THE EXPRESS PROVISIO NS OF S. 250(6), WHICH PROVIDES THAT THE APPELLATE ORDERS OF THE CIT(A) AR E TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE AUTHORI TY THEREON AND THE REASONS FOR SUCH DECISION. THE UNDERLYING RATIONALE OF THE PROVISION IS THAT SUCH ORDERS ARE SUBJECT TO FURTHER APPEAL TO THE TRIBUNA L. SPEAKING ORDER WOULD OBVIOUSLY ENABLE A PARTY TO KNOW PRECISE POINTS DEC IDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF THE FORMULATION OF THE POIN T FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDOUBTEDLY PUTS A PARTY IN Q UANDARY. SEC. 250(6) EXPRESSLY EMBODIES THE PRINCIPLES OF NATURAL JUSTIC E AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. THE IMPUGNED ORDER PA SSED BY THE CIT(A) IN VIOLATION OF THE PROVISIONS OF S. 250(6) CANNOT, TH EREFORE, BE SUSTAINED. REGARDING THE DECISIONS OF THE DELHI BENCH OF THE T RIBUNAL IN MULTIPLAN INDIA LTD. (SUPRA) CITED BY THE LEARNED CIT(A), WE FIND T HAT THE SAID DECISION IS CLEARLY DISTINGUISHABLE. SEC 254 REFERRING TO THE O RDERS OF THE TRIBUNAL CONFERS PLENARY JURISDICTION ON THE TRIBUNAL IN THE MATTER OF PASSING ORDERS UNDER S. 254(1). THERE IS NO SUCH EXPRESS STIPULATI ON IN S. 254 AS CONTAINED UNDER THE PROVISIONS OF S. 250(6) RELATING TO THE O RDERS OF FIRST APPELLATE AUTHORITY. THEREFORE, RELIANCE PLACED 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 DISTINGUISHA BLE 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. 6. IN VIEW OF THE FOREGOING, ESPECIALLY WHEN THE LD . 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 IN THE GROUNDS RAISED BEF ORE HIM BY THE I.T.A .NO.3509/DEL./2012 5 ASSESSEE, AFRESH IN ACCORDANCE WITH LAW, AFTER ALLO WING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY TH AT WHILE REDECIDING THE APPEAL, THE LD. CIT(A) SHALL PASS A SPEAKING OR DER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISIONS OF SEC. 250(6) OF THE ACT. THE ASSESSEE SHALL SUO MOTU APPROACH THE LD. CIT(A ) WITHIN THREE MONTHS OF THE RECEIPT OF THIS ORDER FOR EXPEDITIOUS DISPOSAL OF APPEAL AND SHALL NOT SEEK ANY ADJOURNMENT WITHOUT VALID RE ASONS. 7. NO OTHER PLEA OR ARGUMENT WAS RAISED BEFORE US . 8. IN THE RESULT, APPEAL IS ALLOWED BUT FOR STATI STICAL PURPOSES.. SD/- SD /- (I.C. SUDHIR) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AMIT COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. DAO-61,CIT-VIII,VIKAS BHAWAN,,I.P. ESTATE, NEW DELHI 3. CIT CONCERNED 4. CIT(A)-XII, DELHI. 5. DR, ITAT, I BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT