M/s. Pragati Finsee Ltd., New Delhi V. ITO, New Delhi

ITA 4230/DEL/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7288 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 18-09-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 14-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEVI SHARAN SINGH
• Assessee Lawyers: RAM SAMUJH
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. B.C.MEENA, ACCOUNTANT MEMBER I.T.A .NO. - 4230/DE L/201 0 (ASSESSMENT YEAR - 2001 - 02 ) M/S PRAGATI FINSEC LTD., 204, TRIVENI PLAZA, 17A/56, W.E.A., KAROL BAGH, NEW DELHI - 110005 (APPELLANT) VS ITO , WARD - 14(3), NEW DELHI (RESPONDENT) APPELLANT BY SH. RAM SAMUJH, ADV. RESPONDENT BY SH. DEVI SHARAN SINGH, SR. DR ORDER PER DIVA SINGH, JM TH IS IS AN APPEAL FILED BY THE AS SESSEE AGAINST THE ORDER DATED 10.03.2010 OF THE CIT(A) - XVII, NEW DELHI PERTAINING TO 2001 - 02 ASSESSMENT YEAR ON VARIOUS GROUNDS. HOWEVER THE PARTIES WERE HEARD ONLY IN RESPECT OF GROUND NO - 1 & 2 WHICH READ S AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XVII GROSSLY ERRED IN ALLEGING THAT THE APPELLANT IS NOT INTERESTED IN PROSECUTION OF APPEAL, AND DISMISSING THE APPEAL OF APPELLANT IN LIMINE. 2. ON THE FAC TS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XVII GROSSLY ERRED NOT PROVIDING THE PROPER OPPORTUNITY OF BEING HEARD. 2. INVITING ATTENTION TO THE IMPUGNED ORDER IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE COULD NOT BE HEARD AS THE NOTICE WHICH MAY HAVE BEEN SENT REMAINED UNREP RE SENTED ON ACCOUNT OF THE MANAGEMENT PROBLEMS. REFERRING TO PAPER BOOK PAGE 57 TO 59 PARA 4 TO PARA 6 OF THE SAME, IT WAS SUBM I TTED THAT THE NEW MANAGEMENT HAD TAKEN OVER FROM THE OLD MANAGEMENT ON THE UNDERSTANDING THAT THE OLD MANAGEMENT WOULD GET THE INCOME TAX PROCEEDINGS COMPLETED WHICH 2 I.T.A .NO. - 4230 /DEL/201 0 CONDITION WAS NOT FULFILLED AS A RESULT OF WHICH THE ASSESSEE REMAINED UNREPRESENTED. TH E LD. AR GAVE HIS PERSONAL UNDERTAKING STATING THAT IN CASE THE ISS U E IS RESTORED TO THE CIT(A), T HE ASSESSEE WOULD PARTICIPATE IN THE PROCEEDINGS AS ADMITTEDLY THE IMPUGNED ORDER WAS PASSED EX - PARTE. THE LD. SR. DR, SH. D E VI SHARAN SINGH HAD NO OBJECTION TO THE SAID REQUEST OF THE ASSESSEE CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE LIGHT OF THE SUBMISSIONS ADVANCED, WE DEEM IT APPROPRIATE TO RES TORE THE ISSUE BACK TO THE FILE TO THE CIT(A) WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW BY WAY OF SPEAKING ORDER. TAKING NOTE OF THE FACT THAT THE AUDI ALTERAM PARTEM IS ONE OF THE MOST FAMOUS AND 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 PROCEDURE THAT MAY BE ADOPTED BY A JUDICIAL, QUASI - JUDICIAL AND ADMINISTRATIVE AUTHORITY WHILE MAKING AN ORDER AFFECTING THOSE RIGHTS. A CAREFUL PERUSAL OF THE CONSISTENT 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 VERY NATURE IMPLIES THE DUTY TO ACT FA IRLY I.E. FAIR PLAY IN ACTION MUST BE EVIDENT AT EVERY STAGE. FAIR PLAY DEMANDS THAT NOBODY SHALL BE CONDEMNED UNHEARD. 3.1. IN THE CELEBRATED JUDGEMENT OF THE APEX COURT IN 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 NEGATIVELY TO PREVENT MISCARRIAGE OF JUSTICE. THE SAID RULES ARE MEANS TO AN END AND NOT AN END IN THEMSELVES AND THOUGH IT IS NOT POSSIBLE TO MAKE AN EXHAUSTIVE CATALOGUE OF SUCH RUL ES HOWEVER IT CAN BE READILY SAID THAT THERE ARE TWO BASIC MAXIMS OF NATURAL JUSTICE NAMELY AUDI ALTERAM 3 I.T.A .NO. - 4230 /DEL/201 0 PARTEM AND NEMO JUDEX IN RE SUA . IN THE PRESENT FACTS OF THE CASE WE ARE CONCERNED WITH THE MAXIM AUDI ALTERM PARTEM WHICH AGAIN MAY HAVE MANY FACETS , TWO OF THEM ARE (A) NOTICE OF THE CASE TO BE MET; AND (B) OPPORTUNITY TO EXPLAIN. THEIR LORDSHIPS HAVE CAUTIONED THAT THESE RULES CANNOT BE SACRIFICED AT THE ALTAR OF THE ADMINISTRATIVE CONVENIENCE OR CELEBRITY. THE ASSESSEE HAS RAISED GROUND NO. - 1 & 2 IN REGARD TO THE OPPORTUNITY OF BEING HEARD AGITATED BEFORE US AND CONSIDERING THE SUBMISSIONS OF EITHER SIDE WHERE IN THE SOLE ISSUE AGITATED BEFORE US IS PERTAINING TO GRANTING OF OPPORTUNITY OF BEING HEARD WHICH ADMITTEDLY HAS NOT BEEN MADE AVAIL ABLE TO THE ASSESSEE WE ARE INCLINED TO ACCEPT THE PRAYER OF THE ASSESSEE ON A CAREFUL CONSIDERATION OF THE LEGAL POSITION THEREON. ACCORDINGLY THE GROUND NO. - 1 & 2 RAISED BY THE ASSESSEE IS ALLOWED AND THE REMAINING GROUNDS ARE RESTORED BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. LOOKING AT THE FACTS OF THE PRESENT CASE, WE DEEM IT APPROPRIATE TO ADD THAT IT IS HOPED THAT THE ASSESSEE UTILIZ ES THE OPPORTUNITY SO GRANTED BY RESPONSIBLY AND MEANINGFULLY PARTICIPATING IN LETTER AND SPIRIT IN THE PROCEEDINGS AS THE REMEDIES AVAILABLE IN LAW ARE NOT TO BE ABUSED AND COURTS TAKE A VERY SERIOUS VIEW WHERE OPPORTUNITIES SO GRANTED ARE MIS - UT I LIZED. THE ISSUE IS RESTORED IN THE INTERESTS OF SUBSTANTIAL JUSTICE. IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED SHALL NOT BE ABUSED BY THE ASSESSEE AND THEREFORE, THE GROUNDS ARE BEING ALLOWED. 4 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. THE ORDER IS PRONOUNC ED IN TH E OPEN COURT ON 1 0 T H OF O C T O B E R 2014. S D / - S D / - ( B.C.MEENA ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 0 / 1 0 /2014 *AMIT KUMAR / S U B O D H K U M A R *KAVITA, P.S.