DCIT, New Delhi V. M/s. A.K. Service Ltd., New Delhi

ITA 3686/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52848 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G C SRIVASTAVA SPL
• Keywords: Invalid notice; Principle of natural justice; Additional evidence

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRESIDE NT AND SHRI A.D. JAIN, JUDICIAL MEMBER I.T.A. NOS. 2733, 2734, 2735, 2736 & 2737/DEL/2010 A.YRS.. : 2002-03, 2005-06, 2006-07, 2007-08 & 2008- 09 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, NEW DELHI ROOM NO. 333, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. SH. A.K. MITTAL, V/287, RAJOURI GARDEN, NEW DELHI (PAN/GIR NO. : AAAHA 5422N) I.T.A. NOS. 3683, 3684, 3685, 3686 & 3687/DEL/201 0 A.YRS.. : 2002-03, 2005-06, 2006-07, 2007-08 & 2008- 09 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, NEW DELHI ROOM NO. 333, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. SH. A.K. SERVICES LTD. FLAT NO. N, SAGAR APPARTMENT, 6, TILAK MARG, NEW DELHI (PAN/GIR NO. : AABCA 1591L) I.T.A. NOS. 3274, 3275, 3276, 3277, 3278, 3279, 32 80/DEL/2010 A.YRS.. : 2002-03, 2003-04, 2004-05, 2005-06, 2006-0 7, 2007-08 & 2008-09 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, NEW DELHI ROOM NO. 333, E-2, ARA CENTRE, VS. SH. A.K. CAPITAL SERVICES LTD. FLAT NO. N, SAGAR APPARTMENT, 6, TILAK MARG, NEW DELHI 2 JHANDEWALAN EXTN., NEW DELHI (PAN/GIR NO. : AAACA 1069L ) AND AND AND AND I.T.A. NOS. 3767 & 4097/DEL/2010 A.YRS.. : 2006-07 & 2008-09 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-20, NEW DELHI ROOM NO. 333, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. SH. A.K. CAPITAL MARKET S LTD. FLAT NO. N, SAGAR APPARTMENT, 6, TILAK MARG, NEW DELHI (PAN/GIR NO. : AADCA 9960D) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. ASHWANI KUMAR, CA DEPARTMENT BY : SH. G.C. SRIVASTAVA, SPL. COUNSEL FOR THE REVENUE ORDER ORDER ORDER ORDER PER A.D. JAIN : JM THESE ARE DEPARTMENTS APPEALS FOR A.YRS. 2002-03 TO 2008-09 IN THE CASE OF THREE ASSESSEES. THERE IS ONE PRELIMINARY GROU ND COMMON IN ALL THESE APPEALS. IN ITA NOS. 2733 TO 2737, IT HAS BEEN TAKEN AS AN AD DITIONAL GROUND, WHICH IS ADMITTED. AS PER THIS GROUND, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ALLOWING THE APPEALS WITHOUT AFFORDING OP PORTUNITY OF HEARING TO THE ASSESSING OFFICER. 2. THE LD. SENIOR COUNSEL FOR THE DEPARTMENT HAS FIL ED THE COPIES OF ITNS-51 TO SHOW THAT IN ITEM NO. 7 THEREOF, THE ASSESSING OFFIC ER HAD SPECIFICALLY STATED THAT 3 HE WAS DESIROUS OF BEING PRESENT AT THE TIME OF HEA RING OF THE APPEALS. THE LD. SENIOR COUNSEL FOR THE DEPARTMENT HAS CONTENDED T HAT DESPITE THIS SPECIFIC MENTION BY THE ASSESSING OFFICER IN ITNS-51, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT DEEMED IT PROPER OR NECESSARY TO ENSURE THE PRESENCE OF THE ASSESSING OFFICER BEFORE HIM AT THE TIME OF HEARI NG OF THE APPEALS. LD. SENIOR COUNSEL, IN THIS REGARD, HAS ALSO FILED BEFORE US A FFIDAVITS OF THE ASSESSING OFFICER. IN THESE AFFIDAVITS, IT HAS BEEN STATED THAT HE COMM UNICATED TO THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THROUGH ITNS-51, THAT HE WOULD LIKE TO BE HEARD IN THE MATTER; THAT HOWEVER, NO NOTICE OF HEARING IN WRITI NG WAS SENT TO THE ASSESSING OFFICER, NOR WAS HE INFORMED OTHERWISE, REGARDING T HE DATE OF HEARING OF THE APPEALS. 3. THE LD. SENIOR COUNSEL FOR THE DEPARTMENT HAS DRA WN OUR ATTENTION TO SECTION 250(2)(B) OF THE IT ACT AND IT HAS BEEN CONTENDED TH AT AS PER THIS PROVISION, IT IS MANDATORY FOR THE ASSESSING OFFICER TO BE HEARD AT THE TIME OF HEARING OF THE APPEAL BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL S). ATTENTION HAS ALSO BEEN DRAWN TO RULE 46A OF THE IT RULES, TO CONTEND THAT AS PER THIS RULE, IT IS MANDATORY FOR THE LD. COMMISSIONER OF INCOME TAX (APPEALS) TO PROVIDE A REASONABLE OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE TH E EVIDENCES PRODUCED BY THE ASSESSEE OR TO PRODUCE ANY EVIDENCE IN REBUTTAL OF THE EVIDENCES PRODUCED BY THE ASSESSEE, BEFORE THE LD. COMMISSIONER OF INCOME TAX ( APPEALS), AS ADDITIONAL EVIDENCES, WITHOUT WHICH OPPORTUNITY, THE ADDITIONA L EVIDENCES PRODUCED BY THE ASSESSEE CANNOT BE TAKEN INTO ACCOUNT BY THE LD. CO MMISSIONER OF INCOME TAX (APPEALS). 4 4. THE LD. SENIOR COUNSEL FOR THE DEPARTMENT HAS THU S, CONTENDED THAT SINCE NOT ONLY THE MANDATORY PROVISIONS OF THE ACT, BUT ALSO THE PRINCIPLES OF NATURAL JUSTICE STAND VIOLATED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING THE ASSESSEES APPEALS EXPARTE QUA THE ASSESSING OFFICE R, THE MATTER BE REMITTED TO THE LD. COMMISSIONER OF INCOME TAX (APPEALS), TO BE DECI DED AFRESH, IN ACCORDANCE WITH LAW, ON AFFORDING DUE AND ADEQUATE OPPORTUNITY TO THE ASSESSING OFFICER. 5. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE HAS CONTENDED THAT THOUGH NO OPPORTUNITY MIGHT HAVE BEEN GRANTED BY THE LD. C OMMISSIONER OF INCOME TAX (APPEALS) TO THE ASSESSING OFFICER, NO PREJUDICE OR HARM HAS THEREBY BEEN CAUSED TO THE ASSESSING OFFICER, THAT NO ADDITIONAL EVIDEN CE WAS ENTERED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AT THE BACK OF THE ASSESSING OFFICER; THAT IT IS NOT A CASE WHERE THE MATTER REQUIRES TO BE REMITTED TO THE LD. COMMISSIONER OF INCOME TAX (APPEALS), BUT THE TRIBUNAL, BEING ALL COM PETENT, MUST DECIDE THE MERITS OF THE CONTROVERSIES INVOLVED AT THIS STAGE ITSELF. RELIANCE IN THIS REGARD HAS BEEN PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN CIVIL APPEAL NO. 4222 OF 2008, ARISING OUT OF SLP (CIVIL) NO. 5950 OF 2007 IN HARYANA FINANCIAL CORPORATION AND ANOTHER VS. KAILASH CHAND AHUJA, VIDE JUDGEMENT DATED 8.7.2008 (COPY PLACED ON RECORD). RELIANCE HAS AL SO BEEN PLACED SATNAM SINGH VS. C.I.T. 355 ITR 243 (P&H). 6. SINCE THIS ISSUE OF THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) HAVING ALLOWED THE ASSESSEES APPEALS, WITHOUT PROVIDING THE ASSESSING OFFICER DUE AND ADEQUATE OPPORTUNITY OF HEARING, IS A FUNDAMENTAL J URISDICTIONAL ISSUE GOING TO THE ROOT OF THE MATTER, IT REQUIRES TO BE DEALT WITH F IRST. THE PARTIES ADDRESSED US ON 5 THIS ISSUE ONLY, AT THIS STAGE. WE HAVE HEARD THE PARTIES WITH REGARD TO THIS ISSUE AND HAVE PERUSED THE MATTER ON RECORD CONCERNING I T. 7. UNDENIABLY, THE APPEALS OF THE ASSESSEES HAVE BE EN ALLOWED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT AFFORDI NG ANY OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER. THIS IS EVIDENT FROM THE COPIES OF ITNS-51 FILED BEFORE US. IN THE ITNS 51, THE ASSESSING OFFICER HAD EXPRESSLY ST ATED HIS DESIRE OF BEING PRESENT AT THE TIME OF HEARING OF THE APPEALS AS F OLLOWS: ..7.WHETHER THE ASSESSING OFFICER/DEPUTY COMMISS IONER OF INCOME TAX DESIRES TO BE PRESENT AT THE HEARING YE S . 8. FURTHER, ASSESSING OFFICER HAS ALSO FILED AFFID AVITS TO SUPPORT THIS CONTENTION. NOW, SECTION 250(2)(B) OF THE IT ACT SPECIFICALLY ST ATES AS FOLLOWS: 250(2) THE FOLLOWING SHALL HAVE THE RIGHT TO BE HE ARD AT THE TIME OF HEARING OF THE APPEAL (A) (B) THE ASSESSING OFFICER, EITHER IN PERSON OR BY A REPRESENTATIVE. 9. THEREFORE, THE SECTION PROVIDES THAT ASSESSING OF FICER HAS A RIGHT OF HEARING AT THE TIME OF HEARING OF THE APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE EXPRESSION EMPLOYED IS SHALL, EVI NCING THE MANDATE OF THE PROVISION AND THIS IS IN KEEPING THE NATURAL JUSTI CE PRINCIPLE OF AUDI ALTERAM PARTEM, I.E., HEAR THE OTHER PARTY, FOR NOBODY CAN BE CO NDEMNED UNHEARD AND EVERYBODY HAS TO BE PROVIDED A FAIR AND PROPER OPPORTUNITY OF HEARING. 10. THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEA LS) ARE IN CLEAR VIOLATION OF THE NATURAL JUSTICE PRINCIPLE OF AUDI ALTERAM PA RTEM. 6 11. THE ASSESSEES RELIANCE ON HARYANA FINANCIAL CORP ORATION IS NOT OF ANY HELP TO THEM. FIRSTLY, IT NOWHERE OVERRIDES THE NATURAL JUSTICE OF PRINCIPLE OF AUDI ALTERAM PARTEM. FURTHER, THEREIN, IT WAS HELD THAT NO PREJ UDICE HAD BEEN CAUSED TO M AND THAT THE ONLY CONCLUSION WHICH COULD BE DRAWN WAS T HAT HAD M BEING GIVEN A NOTICE, IT WOULD NOT HAVE MADE ANY DIFFERENCE. IN THE PRESENT CASE, HOWEVER, IT CANNOT BE SAID SO. THE APPEALS OF THE ASSESSEES HA VE BEEN ALLOWED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT AFFORDI NG ANY OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER AND THERE IS NO REASON, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TO CONCLUDE THAT HAD THE ASSESSING OFFIC ER BEEN GIVEN A NOTICE, IT WOULD NOT HAVE MADE ANY DIFFERENCE AND THAT THEREFORE, NO PREJUDICE HAD BEEN CAUSED TO THE ASSESSEE. 12. SO FAR AS REGARDS SATNAM SINGH (SUPRA), THERE IN ALSO, THE FACTS ARE ENTIRELY AT VARIANCE. THE REASSESSMENT WAS SET ASIDE ON MERI TS BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THE TRIBUNAL HELD THE SERVICE OF NOTICE NOT VALID AND REMANDED THE MATTER. IT WAS IN THESE FACTS THAT THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT THE TRIBUNAL SHOULD HAVE CONSIDERED THE ISSUE ON MERITS AND THAT THE ORDER OF THE REMAND WAS VALID. SATNAM SINGH TOO , THEREFORE, IS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, AS DISCUSSED ABOVE. 13. IN VIEW OF THE ABOVE, WE DEEM IT APPROPRIATE, IN THE INTEREST OF JUSTICE, TO REMAND ALL THESE NINETEEN APPEALS TO THE FILE OF T HE LD. COMMISSIONER OF INCOME TAX (APPEALS), TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON AFFORDING DUE AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSING OF FICER ALONGSIDE THE ASSESSEES, IN ACCORDANCE WITH LAW. 7 14. SINCE THESE APPEALS HAVE BEEN SO REMANDED TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THIS PRELIMI NARY JURISDICTIONAL ISSUE, THE PARTIES HAVE NOT ADDRESSED THE ISSUE ON MERITS. 15. IN THE RESULT, FOR STATISTICAL PURPOSES ALL THES E NINETEEN APPEALS OF THE DEPARTMENT ARE TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2011. SD/- SD/- [ [[ [ G.E. VEERABHADRAPPA G.E. VEERABHADRAPPA G.E. VEERABHADRAPPA G.E. VEERABHADRAPPA ] ]] ] [ [[ [A.D. JAIN] A.D. JAIN] A.D. JAIN] A.D. JAIN] VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT JUDICIAL M JUDICIAL M JUDICIAL M JUDICIAL MEMBER EMBER EMBER EMBER DATE 14/10/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES