M/s. Nagata India Pvt. Ltd., Gurgaon V. ACIT, Gurgaon

ITA 4721/DEL/2013

• Counselvise Citation: 472120114 RSA 2013
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 28-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-08-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KEYUR PATEL
• Keywords: Principle of natural justice

Judgement Text

ITA NO. 4721.DEL.13 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A .NO.-4721/DEL/2013 (ASSESSMENT YEAR-2008-09) NAGATA INDIA PVT. LTD. PLOT NO. 154-155, SEC-3 IMT MANESAR GURGAON AABCN0042P (APPELLANT) VS ACIT CIRCLE-II GURGAON (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SH. KEYUR PATEL, SR. DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/5/2013 OF CIT(A) FARIDABAD PERTAINING TO 2008-09 ASSESSMENT Y EAR. NO ONE WAS PRESENT AT THE TIME OF HEARING ON BEHALF OF THE ASSESSEE. HOW EVER, ON GOING THROUGH THE MATERIAL AVAILABLE ON RECORD IT WAS CONSIDERED APPR OPRIATE TO PROCEED WITH THE PRESENT APPEAL EX-PARTE QUA THE ASSESSEE APPELLANT ON MERITS AFTER HEARING THE LD. SR. DR. 2. THE RELEVANT FACTS OF THE CASE AS PER THE ASSE SSMENT ORDER ARE THAT THE ASSESSEE A JOINT VENTURE OF NAGATA AUTO PART COMPAN Y LTD JAPAN (84.55%), JAY BHARAT MARUTI LTD. (15%) AND SKH METAL LTD (0.45%) WAS STATED TO BE ENGAGED IN MANUFACTURE OF SHEET METAL DIE FOR AUTOMOBILE INDUS TRIES ALONG WITH SMALL JOB WORKS OF MACHINING ETC. NIL INCOME WAS DECLARED BY THE ASSESSEE BY WAY OF E- ITA NO. 4721.DEL.13 2 RETURN FILED WHICH WAS CONCLUDED AT A POSITIVE INCO ME OF 1,97,18,202/-, WHICH LED TO THE PASSING OF THE PENALTY ORDER U/S 271(1)(C) W HEREIN PENALTY OF RS. 20,05,120/- WAS IMPOSED. THE SAID ORDER WAS CHALLENGED IN APPE AL BEFORE THE CIT(A) WHEREIN THE ACTION OF THE ASSESSING OFFICER WAS UPHELD BY A N EX-PARTE ORDER. THE REASONS FOR PASSING THE EX-PARTE ORDER ARE SET OUT IN PARA 3.1 WHICH IS REPRODUCED FOR READY REFERENCE:- 3.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, NO TICE U/S250 WAS ISSUED ON 12/11/2012 SEEKING APPELLANTS PRESENCE AND SUBMISS IONS ON 23/11/2012. ANOTHER NOTICE U/S 250 WAS ISSUED ON 29/11/2012 FIX ING THE CASE FOR 10/12/2012. SINCE THERE WAS NO COMPLIANCE TO THESE FIRST TWO NO TICES, ANOTHER NOTICE WAS ISSUED ON 8/1/2013 FIXING THE CASE FOR 16/1/2013. THE APPELLANT DID NOT BOTHER TO COMPLY WITH THE FIRST 3 NOTICES AS A RESULT OF WHIC H IT WAS DECIDED TO ISSUE THE NEXT NOTICE DATED 17/1/2013 TO THE AR OF THE APPELLANT N AMELY, M/S MALHOTRA ARUN & CO. C.A, 57/20, BASEMENT, OLD RAJENDER NAGAR, NEW D ELHI-110060 SEEKING HIS COMPLIANCE ON 8/2/1013. AS THE NOTICE SENT AT THE ADDRESS OF MALHOTRA ARUN & CO. CAME BACK UNSERVED, THE LATST ADDRESS OF M/S MA LHOTRA ARUN & CO. WAS FOUND OUT AND A NOTICE DATED 23/1/2013 WAS SENT AT THE FO LLOWING ADDRESS OF THE AR OF THE APPELLANT: M/S MALHOTRA ARUN & CO. CA D-1102, CELEBRIT Y HOMES, PALAM VIHAR, GURGAON. THIS NOTICE DID NOT COME BACK UNSERVED BUT THERE WAS NO COMPLIANCE ON THE PART OF THE APPELLANT OR HIS AUTHORIZED REPRESENTATIVE O N 22/3/2013. ANOTHER NOTICE WAS SENT TO THE APPELLANT COMPANY AT THE ADDRESS AV AILABLE IN THE PAN DATABASES OF THE INCOME TAX DEPARTMENT. THIS NOTICE WAS DATE D 23/3/2013 FIXING THE CASE FOR 16/4/2013. AS IN THE PAST, THE APPELLANT COMPA NY DECIDED NOT TO COMPLY WITH THIS NOTICE AS WELL. IN ORDER TO MEET THE END OF N ATURAL JUSTICE AND ENSURE FAIR PLAY, A FINAL OPPORTUNITY WAS GIVEN BY ISSUE OF NOT ICE U/S 250 DATED 21/5/2013, FIXING THE CASE FOR 28/5/2013. THE APPELLANT, AS I N THE PAST DID NOT COMPLY WITH THE NOTICE. NEITHER DID THE APPELLANT APPEAR IN PE RSON, NOR THE AUTHORIZED REPRESENTATIVE APPEARED ALONG WITH SUBMISSIONS. TH IS MAKES IT OBVIOUS THAT THE APPELLANT HAS NOTHING TO STATE AGAINST THE IMPOSITI ON OF PENALTY BY THE AO U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. I, THEREFOR E, PROCEED TO DECIDE THE APPEAL AGAISNT THE IMPOSITIONS OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORDS. 3. IN THE ABOVE FACTUAL POSITION IT IS RELEVANT TO REFER TO GROUNDS RAISED BY THE ASSESSEE BEFORE THE PRESENT FORUM. A PERUSAL OF TH E SAME SHOWS THAT A CLAIM IS PUT FORTH ON BEHALF OF THE ASSESSEE THAT IT COULD NOT B E REPRESENTED ON ACCOUNT OF ITA NO. 4721.DEL.13 3 MEDICAL GROUNDS OF ILLNESS OF THE CHARTERED ACCOUNT ANT. FOR READY REFERENCE WE REPRODUCE THE SAID GROUND:- 2. THE APPELLANT CONTENDS THAT THE NOTICES REFERRED BY THE CIT(A) WERE RECEIVED AND WERE HANDED OVER TO THE CHARTERED ACCOUNTANT FOR FU RTHER ACTION. HOWEVER, DUE TO MEDICAL GROUNDS HE WAS UNABLE TO ATTEND THE HEAR INGS RESULTING IN THE EX-PARTE ORDER. APPELLATE PRAYS THAT DUE TO THIS REASON ASS ESSEE SHOULD NOT BE DENIED JUSTICE. APPELLANT PRAYS THAT OPPORTUNITY MAY BE G IVEN TO THE APPELLANT FOR HEARING AND DISPOSED ON MERITS. 4. IT IS SEEN THAT NO DOUBT SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE ASSESSEE BY THE A.O HOWEVER THE ASSESSEE WAS DENIED THE OPPO RTUNITY OF BEING HEARD BEFORE THE CIT(A) FOR REASONS BEYOND HIS CONTROL. ACCORDI NGLY AFTER HEARING THE LD. SR. DR WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A)AS RIGHT TO BE HEARD IS AN IMPORTANT RIGHT TO WHICH A PARTY WHO IS FACED WITH AN ADVERSE VIEW IS ENTITLE D TO AUDI ALTERAM PARTEM IS ONE OF THE MOST FAMOUS AND CELEBRATED RULE OF NATUR AL 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 A GAINST THE ARBITRARY PROCEDURE THAT MAY BE ADOPTED BY A JUDICIAL, QUASI-JUDICIAL A ND 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 UND ERLYING PRINCIPLE OF NATURAL JUSTICE EVOLVED UNDER THE COMMON LAW IS TO CHECK AR BITRARY EXERCISE OF POWER BY THE STATE OR ITS FUNCTIONARIES. ACCORDINGLY, THE P RINCIPLE BY ITS VERY NATURE IMPLIES THE DUTY TO ACT FAIRLY I.E. FAIR PLAY IN ACTION MUS T BE EVIDENT AT EVERY STAGE. FAIR PLAY DEMANDS THAT NOBODY SHALL BE CONDEMNED UNHEARD . 4.1 IN THE CELEBRATED JUDGMENT 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 ITA NO. 4721.DEL.13 4 JUSTICE IS TO SECURE JUSTICE OR TO PUT IT NEGATIVEL Y TO PREVENT MISCARRIAGE OF JUSTICE. THE SAID RULES ARE MEANS TO AN END AND NOT AN END I N THEMSELVES AND THOUGH IT IS NOT POSSIBLE TO MAKE AN EXHAUSTIVE CATALOGUE OF SUC H RULES HOWEVER IT CAN BE READILY SAID THAT THERE ARE TWO BASIC MAXIMS OF NAT URAL JUSTICE NAMELY AUDI ALTERAM 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 (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. ACCORDING LY THE GROUND NO.- 2 RAISED BY THE ASSESSEE IS ALLOWED AND THE REMAINING GROUNDS A RE 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 BEI NG HEARD. IT IS HOPED THAT THE ASSESSEE DOES NOT ABUSE THE OPPORTUNITY SO GRANTED AND UTILIZES IT IN PROPER LETTER, AND SPIRIT AND ENSURES BY PARTICIPATING FULLY IN T HE PROCEEDINGS BEFORE THE CIT(A) AS ON THE FAILURE OF THE ASSESSEE TO AVAIL OF THE O PPORTUNITY THE CIT(A) WOULD AT LIBERTY TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW. THE SAID ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE OF HEARING ITSELF. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 7TH OF FEBRUARY, 2014. SD/- SD/- (B.C.MEENA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 07 /02/2014 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT ITA NO. 4721.DEL.13 5 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI