N.N.A.Azeez, Chidambaram V. DCIT, CHENNAI

ITA 552/CHNY/2015

• Counselvise Citation: 55221714 RSA 2015
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: V D GOPAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL S M C BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NOS.539 & 540/MDS/2015 ! '#! / ASSESSMENT YEARS : 2003-04 & 2007-08 SHRI N.A. ABUTHAHIR, GNANAGURU CONSULTANCY, NO.121-A, EAST CAR STREET, CHIDAMBARAM 608 001. PAN : ADXPA 5890 N V. THE JOINT COMMISSIONER OF INCOME TAX, THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(1), CHENNAI - 600 034. (%&/ APPELLANT) ('(%&/ RESPONDENT) ./ ITA NOS.550, 551 & 552/MDS/2015 ! '#! / ASSESSMENT YEARS : 2005-06 TO 2007-08 SHRI N.N.A. AZEEZ, GNANAGURU CONSULTANCY, NO.121-A, EAST CAR STREET, CHIDAMBARAM 608 001. PAN : ADFPN 2914 C V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(1), CHENNAI - 600 034. (%&/ APPELLANT) ('(%&/ RESPONDENT) %& ) * / APPELLANT BY : SHRI V.D. GOPAL, ADVOCATE '(%& ) * / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT + ' ) ,- / DATE OF HEARING : 03.07.2015 ./# ) ,- / DATE OF PRONOUNCEMENT : 17.07.2015 2 I.T.A. NOS.539 & 540/MDS/15 I.T.A. NOS.550 TO 552/MDS/15 / O R D E R ALL THE APPEALS OF THE TWO INDEPENDENT ASSESSEES ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMI SSIONER OF INCOME TAX (APPEALS)-19, CHENNAI, DATED 28.11.2014. SINCE COMMON ISSUE ARISES IN ALL THESE APPEALS, I HEARD T HE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON O RDER. 2. SHRI V.D. GOPAL, THE LD.COUNSEL FOR THE ASSESSEE S, SUBMITTED THAT THE CIT(APPEALS) DISMISSED THE APPEALS OF THE ASSESSEES MAINLY ON THE GROUND THAT THE REPRESENTATIVE OF THE ASSESSEES HAS NOT APPEARED BEFORE HIM. THE CIT(APPEALS) HAS ALSO FOUND THAT THE ASSESSEES HAVE NOT FILED ANY MATERIAL BEFORE HIM. ACCORDING TO THE LD. COUNSEL, WHEN AN APPEAL WAS FILED BEFORE THE CI T(APPEALS), HE IS EXPECTED TO DISPOSE OF THE SAME ON MERIT IRRESPE CTIVE OF THE FACT WHETHER THE ASSESSEE OR HIS REPRESENTATIVE APPEARED BEFORE HIM OR NOT. 3. ACCORDING TO THE LD. COUNSEL, MERELY BECAUSE THE REPRESENTATIVE OF THE ASSESSEE HAS NOT APPEARED BEF ORE THE CIT(APPEALS), THE ASSESSEE CANNOT BE PENALIZED. TH EREFORE, IN THE INTEREST OF ASSESSEE, THE CIT(APPEALS) IS EXPECTED TO DISPOSE OF THE APPEAL AFTER CALLING FOR RECORDS FROM THE ASSESSING OFFICER, ON MERIT. 3 I.T.A. NOS.539 & 540/MDS/15 I.T.A. NOS.550 TO 552/MDS/15 THE LD.COUNSEL FURTHER SUBMITTED THAT AN OPPORTUNIT Y MAY BE GIVEN TO THE ASSESSEES TO ARGUE THE CASE ON MERIT BEFORE THE LOWER AUTHORITY. THE LD.COUNSEL PLACED HIS RELIANCE ON T HE JUDGMENT OF INDORE BENCH OF MADHYA PRADESH HIGH COURT IN MAHAVE ER PRASAD JAIN V. CIT (172 ITR 331) AND SUBMITTED THAT FOR TH E FAILURE OF THE COUNSEL FOR THE ASSESSEE TO APPEAR BEFORE THE CIT(A PPEALS), THE ASSESSEE CANNOT BE PENALIZED. THE MADHYA PRADESH H IGH COURT FOUND THAT THE APPEAL CANNOT BE DISMISSED FOR DEFAU LT. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE CANNOT BE MADE TO SUF FER FOR THE NEGLIGENCE OF HIS COUNSEL. THE MADHYA PRADESH HIGH COURT, ACCORDING TO THE LD. COUNSEL, PLACED ITS RELIANCE O N THE JUDGMENT OF THE APEX COURT IN RAFIQ V. MUNSHILAL (1981) AIR 198 1 SC 1400. 4. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEES HAVE N OT FILED ANY MATERIAL BEFORE THE CIT(APPEALS). IN THE ABSENCE O F MATERIAL, THE CIT(APPEALS) CONFIRMED THE ORDERS OF THE ASSESSING OFFICER. HOWEVER, THE LD. D.R. FAIRLY SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSIN G OFFICER FOR RECONSIDERATION. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE CIT(A PPEALS) FOUND 4 I.T.A. NOS.539 & 540/MDS/15 I.T.A. NOS.550 TO 552/MDS/15 THAT THE ASSESSEES HAVE NOT APPEARED BEFORE HIM. T HEREFORE, PLACING RELIANCE ON THE DECISION OF DELHI BENCH OF THIS TRIBUNAL IN CIT V. MULTIPLAN (INDIA) PVT. LTD. (38 ITD 320) AN D OTHER JUDGMENTS FOUND THAT THE ASSESSEES ARE NOT INTERESTED IN PROS ECUTING THEIR APPEALS. THE CIT(APPEALS) HAS ALSO FOUND THAT THE ASSESSEES HAVE NOT FILED ANY MATERIAL BEFORE HIM SO AS TO ADJUDICA TE THE MATTER ON MERIT. THE FACT REMAINS THAT THE CIT(APPEALS) IS A STATUTORY AUTHORITY AND JUDICIAL POWER IS CONFERRED ON HIM UN DER THE PROVISIONS OF INCOME-TAX ACT TO DISPOSE THE APPEALS ARISING OU T OF THE ORDERS OF THE ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) IS EXPECTED TO DISPOS E OF THE APPEALS ON MERIT AFTER CALLING FOR RECORDS FROM THE ASSESSI NG OFFICER. THE CIT(APPEALS), BEING THE SENIOR-MOST OFFICER OF THE DEPARTMENT, CANNOT DISOWN HIS RESPONSIBILITY BY SAYING THAT THE ASSESSEES HAVE NOT FILED ANY MATERIAL BEFORE HIM. THE CIT(APPEALS ), BEING THE FIRST APPELLATE AUTHORITY UNDER THE SCHEME OF THE INCOME- TAX ACT, HAS TO CALL FOR THE MATERIAL FILED BEFORE THE ASSESSING OF FICER AND DISPOSE OF THE APPEALS ON MERIT. 6. THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF MULTIPLAN (INDIA) PVT. LTD. (SUPRA) TREATED THE APPEAL AS UNA DMITTED SINCE THERE WAS DEFECT. IN THIS CASE, THE CIT(APPEALS) H AS NOT TREATED THE 5 I.T.A. NOS.539 & 540/MDS/15 I.T.A. NOS.550 TO 552/MDS/15 APPEALS AS UNADMITTED, NEITHER ANY DEFECT WAS POINT ED OUT BY THE CIT(APPEALS) NOR ANY DEFECT MEMO WAS ISSUED TO THE ASSESSEES. THEREFORE, AT ANY STRETCH OF IMAGINATION, THE CIT(A PPEALS) CANNOT TREAT THE APPEALS FILED BEFORE HIM AS UNADMITTED. MOREOVER, THE APPEAL BEFORE THE CIT(APPEALS) IS A STATUTORY APPEA L AS PER PROVISIONS OF THE INCOME-TAX ACT. THEREFORE, THERE IS NO QUESTION OF ANY ADMISSION. THE ASSESSEE, AS A MATTER OF RIGHT, CAN FILE APPEAL BEFORE THE CIT(APPEALS) AND THE CIT(APPEALS) IS BOU ND TO DISPOSE THE SAME ON MERIT. AN AUTHORITY, WHO HAS COTERMINO US POWER AS THAT OF AN ORIGINAL AUTHORITY / ASSESSING OFFICER, CANNOT DISMISS THE APPEAL FOR NON-PROSECUTION. OTHERWISE, THE POWER C ONFERRED ON CIT(APPEALS) TO ENHANCE THE ASSESSMENT WOULD BE MEA NINGLESS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS NO POWER/AUTHORITY TO DISMISS THE APPEAL FOR NON-PR OSECUTION. 7. THE INCOME-TAX ACT PROCEEDING IS A PECULIAR ONE TO ASSESS THE TOTAL INCOME OF THE ASSESSEE AND LEVY TAX THERE ON. IT CANNOT BE EQUATED WITH OTHER PROCEEDINGS BEFORE CIVIL / CRIMI NAL COURTS. UNDER THE PROVISIONS OF INCOME-TAX ACT, THE ASSESSEE IS E XPECTED TO FILE RETURN OF INCOME EVERY YEAR AND IF THE DEPARTMENT M ADE ANY ADDITION TO THE TOTAL INCOME, THE ASSESSEE MAY TAKE UP THE MATTER ON APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. TH EREFORE, NOTHING 6 I.T.A. NOS.539 & 540/MDS/15 I.T.A. NOS.550 TO 552/MDS/15 WRONG IF THE ASSESSEE EXPECTS A FAIR AND REASONABLE ORDER FROM THE CIT(APPEALS), WHO IS HAVING COTERMINOUS POWER AS TH AT OF ASSESSING OFFICER, ON THE BASIS OF THE MATERIAL AVA ILABLE ON RECORD. FURTHERMORE, AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THE ASSESSEE CANNOT BE ALLOWED TO SUFFER FOR THE NEGLIGENCE OF HIS COUNSEL. THE MADHYA PRADESH HIGH COURT IN FACT EXTRACTED THE OBSERVATION OF THE APEX COURT IN RAFI Q V. MUNSHILAL (SUPRA) AT PAGES 331 AND 332 OF THE ITR, WHICH IS R EPRODUCED HEREUNDER:- ' THE DISTURBING FEATURE OF THE CASE IS THAT UNDER OUR PRESENT ADVERSARY LEGAL SYSTEM, WHERE THE PARTI ES GENERALLY APPEAR THROUGH THEIR ADVOCATES, THE OBLIG ATION OF THE PARTIES IS TO SELECT HIS ADVOCATE, BRIEF HIM , PAY THE FEES DEMANDED BY HIM AND THEN TRUST THE LEARNED ADVOCATE TO DO THE REST OF THE THINGS. THE PARTY MA Y BE A VILLAGER OR MAY BELONG TO A RURAL AREA AND MAY HAVE NO KNOWLEDGE OF THE COURT'S PROCEDURE. AFTER ENGAGING A LAWYER, THE PARTY MAY REMAIN SUPREMELY CONFIDENT TH AT THE LAWYER WILL LOOK AFTER HIS INTEREST. AT THE TIM E OF THE HEARING OF THE APPEAL, THE PERSONAL APPEARANCE OF T HE PARTY IS NOT ONLY NOT REQUIRED BUT HARDLY USEFUL. THEREFORE, THE PARTY HAVING DONE EVERYTHING IN HIS POWER TO EFFECTIVELY PARTICIPATE IN THE PROCEEDINGS CAN R EST ASSURED THAT HE HAS NEITHER TO GO TO THE HIGH COURT TO INQUIRE AS TO WHAT IS HAPPENING IN THE HIGH COURT W ITH REGARD TO HIS APPEAL NOR IS HE TO ACT AS A WATCHDOG OF THE ADVOCATE THAT THE LATTER APPEARS IN THE MATTER WHEN IT IS LISTED. IT IS NO PART OF HIS JOB. MR. A. K. SANGHI STATED THAT A PRACTICE HAS GROWN UP IN THE HIGH COURT OF ALLAHABAD AMONGST THE LAWYERS THAT THEY REMAIN ABSE NT WHEN THEY DO NOT LIKE A PARTICULAR BENCH. MAY BE WE DO 7 I.T.A. NOS.539 & 540/MDS/15 I.T.A. NOS.550 TO 552/MDS/15 NOT KNOW, HE IS BETTER INFORMED IN THIS MATTER. IGN ORANCE IN THIS BEHALF IS OUR BLISS. EVEN IF WE DO NOT PUT OUR SEAL OF IMPRIMATUR ON THE ALLEGED PRACTICE BY DISMISSING THIS MATTER, WHICH MAY DISCOURAGE SUCH A TENDENCY, WOULD IT NOT BRING JUSTICE DELIVERY SYSTEM INTO DISREPUTE ? WHAT IS THE FAULT OF THE PARTY WHO, HAVING DONE EVERYTHING IN HIS POWER AND EXPECTED OF HIM, HAS TO SUFFER BECAUSE OF THE DEFAULT OF HIS ADVOCATE ? IF WE REJECT THIS APPEAL, AS MR. A. K. SANGHI INVITED US TO DO, THE ONLY ONE WHO WOU LD SUFFER WOULD NOT BE THE LAWYER WHO DID NOT APPEAR B UT THE PARTY WHOSE INTEREST HE REPRESENTED. THE PROBLE M THAT AGITATES US IS WHETHER IT IS PROPER THAT THE P ARTY SHOULD SUFFER FOR THE INACTION, DELIBERATE OMISSION OR MISDEMEANOUR OF HIS AGENT. THE ANSWER OBVIOUSLY IS IN THE NEGATIVE. MAY BE THAT THE LEARNED ADVOCATE ABSENTED HIMSELF DELIBERATELY OR INTENTIONALLY. WE HAVE NO M ATERIAL FOR ASCERTAINING THAT ASPECT OF THE MATTER. WE SAY NOTHING MORE ON THAT ASPECT OF THE MATTER. HOWEVER, WE CANNOT BE A PARTY TO AN INNOCENT PARTY SUFFERING IN JUSTICE MERELY BECAUSE HIS CHOSEN ADVOCATE DEFAULTED. THEREFORE, WE ALLOW THIS APPEAL, SET ASIDE THE ORDE R OF THE HIGH COURT, BOTH DISMISSING THE APPEAL AND REFU SING TO RECALL THAT ORDER. WE DIRECT THAT THE APPEAL BE RESTORED TO ITS ORIGINAL NUMBER IN THE HIGH COURT A ND BE DISPOSED OF ACCORDING TO LAW.' 8. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE CIT(APPEALS) HAS TO DISPOSE THE AP PEALS ON MERIT ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AN D THAT MAY BE PRODUCED BY THE ASSESSEES BEFORE HIM. GIVING ONE M ORE OPPORTUNITY TO THE ASSESSEE TO PRODUCE NECESSARY MA TERIAL BEFORE THE ASSESSING OFFICER WOULD NOT PREJUDICE THE INTER EST OF REVENUE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT GIV ING ONE MORE OPPORTUNITY TO THE ASSESSEES TO PRODUCE NECESSARY M ATERIAL WOULD 8 I.T.A. NOS.539 & 540/MDS/15 I.T.A. NOS.550 TO 552/MDS/15 DEFINITELY PROMOTE THE CAUSE OF JUSTICE. ACCORDING LY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICERS. THE AS SESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE MAT ERIAL THAT MAY BE FILED BY THE ASSESSEES AND THEREAFTER DECIDE THE SA ME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEES. 9. IN THE RESULT, ALL THE APPEALS OF BOTH THE ASSES SEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 17 TH JULY, 2015 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 1 /DATED, THE 17 TH JULY, 2015. KRI. ) ',23 43#, /COPY TO: 1. %& /APPELLANT 2. '(%& /RESPONDENT 3. + 5, () /CIT(A) 4. + 5, /CIT 5. 3'6 ', /DR 6. 7! 8 /GF.