Shri Darbara Singh, Chandigarh V. ITO-Ward-5(5), Chandigarh

ITA 37/CHANDI/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1659 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-04-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 09-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation; Time period of passing order; Revised return; Set aside; Audi alteram partem
• Section: 271(1)(c); 246A; 148; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B, CHANDIGARH (VIRTUAL COURT) .., .. , BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM ./ ITA NO. 37/CHD/2020 [ [ / ASSESSMENT YEAR : 2010-11 SHRI DARBARA SINGH H.NO. 228, SECTOR-52 VILL: KAJHERI, CHANDIGARH THE ITO WARD-5(5) CHANDIGARH ./ PAN NO: CUBPS3108Q / APPELLANT / RESPONDENT [ / ASSESSEE BY : SHRI AMITOZ SINGH KAMBOJ, CA / REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL. CIT / DATE OF HEARING : 06/04/2021 / DATE OF PRONOUNCEMENT : 25/06/2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE APPELLANT/ASSESSEE AGAINST THE ORDER DATED 27/08/2019, PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH (FOR SHORT CIT(A)), FOR THE ASSESSMENT YEAR 2010-11, WHEREBY THE LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RECEIVED INTEREST OF RS. 59,12,449/- ON DELAYED PAYMENT OF COMPENSATION ON ACQUISITION OF LAND BY THE CHANDIGARH ADMINISTRATION. SINCE THE ASSESSEE HAD NOT FILED HIS RETURN OF INCOME, THE AO ISSUED NOTICE U/S 148 OF 2 ITA NO.37/CHD/2020 DARBARA SINGH THE ACT. THEREAFTER, THE ASSESSEE FILED HIS RETURN AND DECLARED TOTAL INCOME OF RS. 1,68,150/- UNDER THE HEAD INCOME FROM OTHER SOURCES. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE REVISED HIS RETURN AND CLAIMED REFUND. HOWEVER, THE AO REJECTING THE REVISED RETURN COMPLETED THE ASSESSMENT AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 35,84,839/-, AFTER MAKING ADDITION OF RS. 32,88,074/- RECEIVED AS INTEREST ON COMPENSATION OR ENHANCED COMPENSATION AND RS. 1,28, 615/- AS INTEREST RECEIVED FROM SAVING BANK ACCOUNT. THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER. IN FURTHER APPEAL THE ITAT CONFIRMED THE ORDER OF THE LD. CIT(A). ON THE BASIS OF THE SAID ADDITIONS, THE AO INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME AND IMPOSED PENALTY OF RS. 10,08,800/-. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT(A). HOWEVER, THE LD. CIT(A) DISMISSED THE APPEAL VIDE EX-PARTE ORDER DATED 27.08.2019, HOLDING THAT THE APPELLANT/ASSESSEE HAS FAILED TO PURSUE HIS APPEAL. AGAINST THE SAID FINDINGS OF THE LD. CIT(A), THE APPELLANT/ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. THE APPELLANT HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A)ON THE FOLLOWING GROUNDS: 1. THE LD. CIT(A)HAVE ERRED IN LAW BY CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE ISSUE OF YEAR OF TAXABILITY OF INTEREST RECEIVED ON COMPULSORY COMPENSATION AS THE SAME BEING A DEBATABLE ISSUE AND THUS THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME. 2. THE LD. CIT(A) HAVE ERRED IN LAW BY CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE ISSUE OF TAXABILITY OF 3 ITA NO.37/CHD/2020 DARBARA SINGH INTEREST INCOME ON FDR AND SAVING ACCOUNT TO THE TUNE OF RS. 1,28,615/- AS THE SAME BEING LOWER THAN THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX. 3. THE APPELLANT CRAVES PERMISSION TO FILE/RAISE/AMEND ANY OTHER GROUND OF APPEAL AT THE TIME OF HEARING. 4. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS A DELAY OF 70 DAYS IN FILING OF THE PRESENT APPEAL AND THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF THE SAID DELAY. THE LD. COUNSEL IN THE LIGHT OF THE SAID APPLICATION SUBMITTED THAT QUANTUM PROCEEDINGS WERE DEALT WITH BY MR. SHEETAL THAKUR AND MR. R.R. THAKUR. THE ASSESSEE WAS NOT AWARE ABOUT THE PENALTY PROCEEDINGS AS THE SAME WAS PASSED EX-PARTE . THE ASSESSEE RECEIVED THE IMPUGNED ORDER DATED 27.08.2019 ON 01.09.2019. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE IS AND OLD AND INFIRM PERSON AND DUE TO ILLNESS, HE COULD NOT CONTACT THE COUNSELS WHO HAD APPEARED BEFORE THE CONCERNED AUTHORITIES IN QUANTUM PROCEEDINGS. ULTIMATELY, THE ASSESSEE HAD TO ENGAGE NEW COUNSEL AND FOR THE SAID REASON THE ASSESSEE COULD NOT FILE THE PRESENT APPEAL WITH THE PERIOD OF LIMITATION. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE DELAY IS NOT CAUSED INTENTIONALLY OR DUE TO INACTION ON THE PART OF THE ASSESSEE, THE APPLICATION FOR CONDONATION MAY BE ALLOWED AND THE DELAY MAY BE CONDONED IN THE INTEREST OF JUSTICE. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) OPPOSED THE APPLICATION ON THE GROUND THAT THE REASON STATED BY THE LD. COUNSEL IS NOT SUFFICIENT TO CONDONE THE DELAY IN THE PRESENT CASE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE APPELLANT/ASSESSEE HAS SUBMITTED AN AFFIDAVIT IN SUPPORT OF HIS 4 ITA NO.37/CHD/2020 DARBARA SINGH CONTENTION. THE HON'BLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS (1987) AIR 1353, 1987 SCR (2) 387 HAS INTER ALIA HELD THAT THERE IS NO PRESUMPTION THAT DELAY IS CAUSED DELIBERATELY OR ON DUE TO NEGLIGENCE OR ON ACCOUNT OF MALA FIDES AND THAT A LITIGANT DOES NOT GET ANY BENEFIT BY RESORTING TO DELAY RATHER HE RUNS A SERIOUS RISK. FURTHER, WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED. 7. IN THE PRESENT CASES, WE DID NOT FIND ANY MALA FIDES IN NOT FILING THE APPEAL WITHIN THE LIMITATION PERIOD. IN OUR CONSIDERED VIEW THE ASSESSEE HAD A SUFFICIENT CAUSE DUE TO WHICH HE COULD NOT FILE THE PRESENT WITHIN THE LIMITATION PERIOD. FURTHER, IN OUR OPINION NO PREJUDICE IS GOING TO BE CAUSED TO THE REVENUE IN CASE THE DELAY IS CONDONED. HENCE, IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS (SUPRA), WE ALLOWED THE APPLICATION AND CONDONED THE DELAY IN FILING OF THE PRESENT APPEAL. ACCORDINGLY, WE ALLOWED THE LD. COUNSEL TO ARGUE THE APPEAL ON BEHALF OF THE APPELLANT /ASSESSEE. 8. THE LD. COUNSEL SUBMITTED BEFORE US THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS BAD IN LAW AND LIABLE TO BE SET ASIDE AS THE SAME HAS BEEN PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE I.E., WITHOUT AFFORDING A REASONABLE OPPORTUNITY OF BEING HEAD TO THE APPELLANT/ASSESSEE. ON MERITS, THE LD. COUNSEL CONTENDED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO DIFFERENT 5 ITA NO.37/CHD/2020 DARBARA SINGH PROCEEDINGS AND ADDITION OF INCOME IN THE ASSESSMENT PROCEEDINGS DOES NOT IPSO FACTO MAKES THE ASSESSEE LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. THE LD. COUNSEL FURTHER CONTENDED THAT SINCE THE ISSUE OF YEAR OF TAXABILITY OF INTEREST RECEIVED ON COMPULSORY ACQUISITION IS DEBATABLE, THE ASSESSEE HAS NEITHER CONCEALED HIS INCOME NOR HAS FURNISHED INACCURATE PARTICULARS THEREOF WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. THE LD. COUNSEL RELIED ON THE DECISIONS OF THE CHANDIGARH BENCHES OF THE TRIBUNAL IN SUPPORT OF HIS CONTENTION. SIMILARLY, THE LD. COUNSEL CONTENDED THAT SINCE THE INTEREST INCOME FROM FDR AND SAVING ACCOUNT WAS LOWER THAN THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX, THE LD. CIT(A) HAS WRONGLY CONFIRMED THE PENALTY. 9. ON THE OTHER HAND, THE LD. DR SUPPORTING THE FINDINGS OF THE LD. CIT(A) SUBMITTED THAT SINCE THE ASSESSEE FAILED TO PURSUE HIS APPEAL, THE LD. CIT(A) HAS RIGHTLY PASSED THE EX-PARTE ORDER AND CONFIRMED THE PENALTY LEVIED BY THE AO. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT HEARING THE APPELLANT/ASSESSEE. THE LD. CIT(A) HAS NOT MENTIONED THE DATES AND DETAILS ON WHICH THE APPEAL WAS FIXED FOR HEARING AND THE NOTICES WERE ISSUE TO THE ASSESSEE. THE LD. CIT(A) HAS EVEN NOT MENTIONED IN THE IMPUGNED ORDER THAT NOTICE WAS ISSUED AND SERVED UPON THE APPELLANT/ASSESSEE BEFORE PROCEEDING EX- PARTE . THE LD. CIT(A) HAS RELIED ON THE DECISIONS OF THE HONBLE SUPREME 6 ITA NO.37/CHD/2020 DARBARA SINGH COURT, HONBLE HIGH COURTS OF DELHI AND MUMBAI AND THE DECISIONS OF THE DELHI BENCHES OF THE TRIBUNAL TO JUSTIFY THE ACTION OF PROCEEDING EX-PARTE . HOWEVER, THE LD. CIT(A) HAS NOT POINTED OUT THE DATES ON WHICH THE ASSESSEE FAILED TO APPEAR DESPITE SERVICE OF NOTICE. THE ONLY OBSERVATION OF THE LD. CIT(A) THAT IN PURSUANCE TO THE APPEAL FILED BY THE APPELLANT U/S 246A OF THE ACT, NO ONE APPEARED IS NOT SUFFICIENT TO CONCUR WITH THE LD. CIT(A) THAT THE ASSESSEE WAS NOT INTERESTED IN PROSECUTING ITS APPEAL. HENCE, IN OUR CONSIDERED VIEW, THE IMPUGNED ORDER HAS BEEN PASSED IN VIOLATION OF ONE OF THE MOST IMPORTANT PRINCIPLES OF NATURAL JUSTICE AUDI ALTERAM PARTEM . WE THEREFORE WITHOUT GOING INTO THE MERITS OF THE CASE, SET ASIDE THE IMPUGNED ORDER AND SEND THE APPEAL BACK TO THE LD. CIT(A) FOR DECIDING THE SAME ON MERITS AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT ASSESSEE. HOWEVER, WE DIRECT THE APPELLANT/ASSESSEE TO APPEAR BEFORE THE LD. CIT(A) AS AND WHEN ASKED AND NOT TO SEEK ADJOURNMENTS ON ANY FRIVOLOUS GROUNDS. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 25 TH JUNE, 2021. SD/- SD/- .., .. ( N.K. SAINI) (R.L. NEGI ) / VICE PRESIDENT / JUDICIAL MEMBER AG DATE: 25/06/2021 7 ITA NO.37/CHD/2020 DARBARA SINGH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ()/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. [ / GUARD FILE