KRISHNAPING ALLOYS P. LTD, RAIGAD V. DCIT PANVEL CIRCLE, PANVEL, MUMBAI

ITA 4790/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3770 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-05-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR DR
• Assessee Lawyers: VIRAG M SHAH
• Keywords: Opportunity of being heard; Principle of natural justice; Right to appeal
• Section: 143(3)

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENC H, MUMBAI . . , . , ! '#$ ' BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI D. KARUN AKARA RAO, AM ' ./I.T.A. NO.4790/M/2011 ( %& ' / ASSESSMENT YEAR :2007-2008) M/S. KRISHNAPING ALLOYS PVT. LTD., 41/4 TH FLOOR, BFLR CHS, PLOT NO.18, SECTOR-3, NEW PANVEL, RAIGAD DIST. & / VS. DCIT, PANVEL CIRCLE, PANVEL. $( ! ' ./PAN : AACCK 0121 F ( () /APPELLANT) .. ( *+() / RESPONDENT) () , - ' / APPELLANT BY : SHRI VIRAG M SHAH *+() , - ' / RESPONDENT BY : SHRI MANOJ KUMAR, DR ' & , .! /DATE OF HEARING : 9.5.2013 /0' , .! /DATE OF PRONOUNCEMENT : 15.5.2013 #1 #1 #1 #1 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 15.6.2011 IS A GAINST THE ORDER OF CIT (A)- 1, THANE DATED 14.01.2011 FOR THE ASSESSMENT YEAR 2 007-2008. 2. IN THIS APPEAL, ASSESSEE RAISED FOUR EFFECTIVE GR OUNDS. ALL THE GROUNDS RELATE TO THE MERITS OF ADDITIONS IN THE ASSESSMENT. BEFO RE US, ASSESSEE FILED AN ADDITIONAL GROUND VIDE THE LETTER DATED 8.5.2013 AND THE SAID ADDITIONAL GROUND READS AS UNDER: THE LD CIT (A) DID NOT PROVIDE AN ADEQUATE OPPORTU NITY OF BEING HEARD BEFORE HIM DURING THE COURSE OF APPELLATE PROCEEDINGS AND THER EBY PASSED AN EX-PARTE APPELLATE ORDER. IN CONNECTION WITH THE ABOVE, YOUR A PPELLANT PRAYS TO KINDLY REMAND BACK THE APPEAL FIXED BEFORE YOUR HONOUR, TO THE FILES OF TH E LD CIT (A) TO DECIDE THE MATTER AFRESH ON IT MERITS. 3. BRIEFLY EXPLAINING THE VARIOUS DEVELOPMENTS WHIC H LED TO THE EX-PARTE ORDER BY THE CIT(A), LD COUNSEL FOR THE ASSESSEE MENTIONED THAT ORIGINALLY THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 24,16,663/-. AS A RESULT OF SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT, THE TOTA L INCOME OF THE ASSESSEE WAS 2 DETERMINED AT RS. 1,20,13,631/-. DURING THE ASSESSM ENT PROCEEDINGS, AO MADE VARIOUS DISALLOWANCES OUT OF EXCAVATION EXPENSES IN VIEW OF THE CASH TRANSACTIONS. FURTHER, AO ALSO MADE CERTAIN ADDITI ONS INVOKING THE PROVISIONS OF SECTION 40A(3), U/S 40(A)(IA) AND UNDER LABOUR CHAR GES ETC. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. DUR ING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, NONE APPEARED BEFORE THE CIT (A) TO REPRESENT THE ASSESSEES CASE, DESPITE POSTING OF THE CASE FOR HE ARING AT VARIOUS DATES. REFERRING TO THE IMPUGNED ORDER OF THE CIT (A), LD COUNSEL ME NTIONED THAT THE ORDER REFERS TO THE FACT THAT SOME HEARING NOTICES ISSUED BY THE CI T(A) COULD NOT BE SERVED. THE CONTENTS OF PARA 4.5 ARE RELEVANT IN THIS REGARD. EVENTUALLY, THE CIT (A) CAME TO THE CONCLUSION THAT THE ASSESSEE IS NOT INTERESTED TO PURSUE THE APPEAL. CRYPTICALLY COMMENTING ON THE DISALLOWANCES, CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE. IN THE CONTEXT OF THE ABOVE FACTUAL MATRIX OF THE CASE , LD COUNSEL BROUGHT OUR ATTENTION TO THE ADDITIONAL GROUND AND MENTIONED THAT THE CIT (A) FAILED TO GRANT AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSES SEE AND IT LED TO THE PASSING OF AN EX-PARTE ORDER BY THE CIT (A). FINALLY, LD COUNSEL PRAYED F OR REMANDING THE GROUNDS TO THE FILES OF THE CIT (A) F OR FRESH ADJUDICATION OF THE ISSUES ON MERITS, WHICH ARE RAISED IN ORIGINAL GROUNDS OF APPEAL FILED BEFORE US. 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES AS WELL AS THE ADDITIONAL GROUND PLACED BEFORE US. WE FIND THE SAID ADDITIONAL GROUND RELATES TO THE ISSUE OF PRINCIPLE S OF NATURAL JUSTICE AND GRANTING OF REASONABLE OPPORTUNITY. ON CONSIDERING THE LEGAL NA TURE OF THE ADDITIONAL GROUND, WE ADMIT THE SAME. IT IS A FACT THAT DESPITE THE ISSU E OF NOTICES BY THE CIT (A), EXCEPT IN ONE INSTANCE, IN ALL OTHER CASES THE NOTICE COUL D NOT EFFECTIVELY BE SERVED ON THE ASSESSEE. THEREFORE, THE EX-PARTE ORDER PASSED BY THE CIT (A) IS CERTAINLY A CASE OF COMPLETION OF APPEAL WITHOUT HEARING THE ASSESSEE A DEQUATELY. THIS ISSUE FOR GRANTING OF AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WAS EXAMINED THOROUGHLY BY THE VARIOUS HIGH COURTS AND JUDGMENT IN THE CASE OF RADHIKA CHARAN BANERJEE V. SAMBALPUR MUNICIPALITY , AIR 1979 (ORI) 69 IS RELEVANT. THE SAME IS RELEVANT FOR THE PROPOSITION WHICH IS NARRATED AT P AGE 7639 OF CHATURVEDI & 3 PITHISARIAS INCOME TAX LAW, FIFTH EDITION. IN VIEW OF THE RELEVANCE OF THE SAID PROPOSITION, THE SAME IS REPRODUCED AS UNDER: RIGHT TO BE HEARD.- A RIGHT OF APPEAL WHEREVER CONFERRED INCLUDES A RIGHT OF BE ING AFFORDED AN OPPORTUNITY OF BEING HEARD, IRRESPECTIV E OF THE LANGUAGE CONFERRING SUCH RIGHT. THAT IS A PART AND PARCEL OF THE PRINCIPLE O F NATURAL JUSTICE. WHERE AN AUTHORITY IS REQUIRED TO ACT IN A QUASI-JUDICIAL CAPACITY, IT IS IMPERATIVE TO GIVE THE APPELLANT AN ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE APPEAL. OPPORTUNITY OF HEARING DOES NOT ALWAYS NECESSARILY MEAN GIVING A P ERSONAL HEARING. A WRITTEN REPRESENTATION, IF COMPLETE AND ELABORATE IN ALL RE SPECTS FULLY EXPLAINING THE POINTS OF VIEW OF THE APPELLANT, WHEN ACCEPTED MAY, IN SOME C ASES, AMOUNT TO AFFORDING OPPORTUNITY OF HEARING. WHAT PARTICULAR RULE OF NAT URAL JUSTICE SHOULD APPLY TO A GIVEN CASE MUST ALSO DEPEND TO A GREAT EXTENT ON THE FACT S AND CIRCUMSTANCES OF THAT CASE. IN THAT VIEW OF THE MATTER, IT WAS HELD THAT WHERE NO EFFECTIVE OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE APPELLANT IN DISPOSING OF HI S APPEAL INSPITE OF HIS EXPRESS REQUEST THAT HIS COUNSEL SHOULD BE HEARD, THE ORDER MUST BE QUASHED (RADHIKA CHARAN BANERJEE V. SAMBALPUR MUNICIPALITY, AIR 1979 ORI 69). 6. THEREFORE, IN THE INSTANT CASE, THE CIT(A) COULD NOT SERVE THE NOTICES ON THE ASSESSEE BEFORE THE APPEAL OF THE ASSESSEE IS ADJUD ICATED. THUS, THE REQUIREMENT OF THE PRINCIPLES OF NATURAL JUSTICE IS NOT MET BY THE CIT(A). CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT AS REQUESTED BY THE ASSESSE E IN THE ADDITIONAL GROUND, WE REMAND ALL THE GROUNDS RAISED BEFORE US TO THE CIT (A) FOR FRESH ADJUDICATION OF THE APPEAL AFTER GRANTING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE SET ASIDE . 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.5.2013. . #1 , /0' ! 2#&3 15.5.2013 0 , 4 5 5 SD/- SD/- (H.L. KARWA) (D. KARUNAKARA RAO ) / PRESIDENT ! '#$ / ACCOUNTANT MEMBER MUMBAI; 2#& DATED 15/05/2013 . %& . ' ./ OKK , SR. PS #1 #1 #1 #1 , ,, , *%.67 *%.67 *%.67 *%.67 87'. 87'. 87'. 87'. / COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. *+() / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 4 5. 7:4 *%.%& , , / DR, ITAT, MUMBAI 6. 4 ; / GUARD FILE. '+7. *%. //TRUE COPY// #1& ' #1& ' #1& ' #1& ' / BY ORDER, < << < / '= '= '= '= > > > > (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI