M/s. Shivji Palace Hotel & Club Pvt. Ltd., Saharanpur V. DCIT, Uttar Pradesh

ITA 5586/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6912 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 08-01-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 15-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL SENIOR
• Assessee Lawyers: V K GARG
• Keywords: Opportunity of being heard; Principle of natural justice; Right to appeal; Bonafide mistake
• Section: 143(3); 148

Judgement Text

PIN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NOS.5583 TO 5587/DEL./2014 (ASSESSMENT YEARS : 1998-99 TO 2002-03) M/S. SHIVJI PALACE HOTEL & CLUB PVT. LTD., VS. DCIT , CIRCLE, C/O HOTEL CLARK INTERNATIONAL, SAHARANPUR. DEHRADUN ROAD, SAHARANPUR (UP) (PAN : AACCS6882R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL CHOPRA, FCA & SHRI V.K. GA RG, ADVOCATE REVENUE BY : SMT. ANIMA BARNWAL, SENIOR DR O R D E R PER BENCH : THESE APPEALS, AT THE INSTANCE OF THE ASSESSEE, ARE FILED AGAINST THE ORDER OF CIT (APPEALS), MUZAFFARNAGAR DATED 01.07.2014 FO R THE ASSESSMENT YEARS 1998-99 TO 2002-03. 2. FIRST, WE DEAL WITH THE GROUND OF APPEAL TAKEN B Y THE ASSESSEE THAT THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DISMIS SING THE APPEAL AS NOT MAINTAINABLE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF HOTEL RUNNING. RETURN D ECLARING NIL INCOME WAS ITA NO.5583 TO 5587/DEL./2014 2 FILED ON 25.11.1998 AND ORIGINALLY, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961 ON 14.12.2000 ON AN INCOME OF RS.2,27,800/- AS AGAINST NIL INCOME. THEREAFTER, NOTICE U/S 148 WAS ISSUED ON 18.03.2004 WHICH WAS DULY SERVED ON 19.03.2004. THE SAID NOTI CE WAS ISSUED AFTER TAKING PRIOR APPROVAL OF THE LD. COMMISSIONER OF IN COME-TAX, MUZAFFARNAGAR VIDE LETTER DATED 11.03.2004. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT U/S 144/148 OF THE ACT ON 31.12.2004 DETERMINING IN COME AT RS.97,97,500/- AFTER MAKING VARIOUS ADDITIONS. 4. IN THE APPEAL BEFORE THE CIT (A), THE CIT (A) OB SERVED THAT AGAINST THE ASSESSMENT ORDER PASSED BY THE AO U/S 144/148 OF TH E ACT DATED 31.12.2004, THE ASSESSEE DID NOT FILE APPEAL BEFORE THE CIT (AP PEALS), MUZAFFARNAGAR BUT RATHER PREFERRED TO FILE WRIT PETITIONS BEFORE THE HONBLE ALLAHABAD HIGH COURT WHEREIN THEIR LORDSHIPS WERE PLEASED TO DISMI SS THE WRIT PETITION VIDE ORDER DATED 20.08.2013. THE CIT (A), AFTER GOING T HROUGH THE SUBMISSIONS OF THE LD. AR AND AFTER PERUSAL OF THE ORDER OF THE HO NBLE HIGH COURT, DISMISSED THE APPEALS FILED OF THE ASSESSEE BY HOLDING THAT T HE APPEALS FILED BY THE ASSESSEE ARE NOT MAINTAINABLE AND BEYOND JURISDICTI ON AND SO THE SAME ARE NOT ENTERTAINABLE. 5. LD. AR FOR THE ASSESSEE SUBMITTED THAT THE ASSES SEE CHALLENGED THE VALIDITY OF REASSESSMENT/ASSESSMENT ORDERS IN WRIT PETITIONS BEFORE THE HONBLE ALLAHABAD HIGH COURT ON THE GROUND OF ARBIT RARINESS AND VIOLATION OF ITA NO.5583 TO 5587/DEL./2014 3 NATURAL JUSTICE AND FOR NON-PROVIDING COPIES OF THE IMPOUNDED MATERIAL. HE SUBMITTED THAT THE HONBLE HIGH COURT VIDE INTERIM ORDER DATED 03.02.2005 HAD STAYED THE OPERATION OF THE IMPUGNED REASSESSME NT/ASSESSMENT ORDERS U/S 144/148 DATED 31.12.2004. HE SUBMITTED THAT AS THE STAY WAS GRANTED BY THE HONBLE HIGH COURT AGAINST THE IMPUGNED REASSESSMEN T/ASSESSMENT ORDERS, NO APPEAL WAS FILED BEFORE THE CIT (A). HE FURTHER SU BMITTED THAT THE HON'BLE HIGH COURT VIDE ORDER DATED 20.8.2013 DISMISSED THE WRIT AND UPHELD THE VALIDITY OF REASSESSMENT/ASSESSMENT ORDERS AND SHOT DOWN THE GROUND OF ARBITRARINESS AND VIOLATION OF NATURAL JUSTICE RAIS ED BY THE ASSESSEE. HE SUBMITTED THAT IN THE WRIT BEFORE THE HON'BLE HIGH COURT, THERE WAS NO ISSUE ON THE VALIDITY OF REASSESSMENT / ASSESSMENT U/S 14 7/144 AND THE HONBLE COURT HAD ALSO NOT DECIDED ON THE MERITS OF THE ADD ITIONS MADE. IT WAS POINTED OUT BY THE LD. AR THAT ONCE THE HONBLE HIG H COURT DISMISSED THE WRIT PETITION ON 20.08.2013, THE ASSESSEE PROMPTLY ON 17 .09.2013 FILED APPEAL BEFORE THE LD. CIT (A) AGAINST THE RE-ASSESSMENT/AS SESSMENT ORDERS BOTH ON MERITS AND VALIDITY OF RE-ASSESSMENT ALONG WITH AN APPLICATION FOR CONDONATION OF DELAY. HE SUBMITTED THAT THE ASSESS EE FILED THE APPEAL BEFORE THE LD. CIT (A) WITHIN 30 DAYS OF RECEIPT OF FINAL WRIT ORDER DATED 20.08.2013. HE FURTHER SUBMITTED THAT INVOKING WRIT JURISDICTIO N OF THE HONBLE HIGH COURT AND PURSUING AN ALTERNATE REMEDY AVAILABLE AS ENVISAGED IN THE CONSTITUTION OF INDIA BY WAY OF WRIT, DOES NOT TAKE AWAY ASSESSEES STATUTORY ITA NO.5583 TO 5587/DEL./2014 4 RIGHT OF FILING APPEAL BEFORE CIT (A). HE ALSO SUB MITTED THAT THERE WAS NO ISSUE OF LEGALITY OF REASSESSMENT/ASSESSMENT OR ISS UES ON MERITS OF ADDITIONS BEFORE THE HONBLE HIGH COURT, THEREFORE, VARIOUS I SSUES RAISED IN THE APPEAL BEFORE THE CIT (A) WERE NOT DECIDED AND SETTLED BY THE HONBLE HIGH COURT WHILE DISMISSING WRIT PETITION PREFERRED BY THE ASS ESSEE. HE SUBMITTED THAT THE LD. CIT (A) WAS NOT REVIEWING OR INTERFERING IN THE DECISION OF SUPERIOR COURT AND WHERE GROUNDS OF APPEAL BEFORE HIM ARE NO T COVERED BY THE HONBLE HIGH COURTS ORDER IN THE WRIT. HE FURTHER SUBMITT ED THAT IT IS A SETTLED LAW THAT DELAY IF ANY IN FILING APPEAL INCLUDING WHERE IT WAS FOR PURSUING ALTERNATE REMEDY SHOULD BE CONDONED AND THE APPROACH OF THE C OURTS SHOULD BE PRAGMATIC AND LIBERAL IN CONDONING THE DELAY CAUSED FOR GOOD AND SUFFICIENT CAUSE; AND ALSO FOR ADVANCING SUBSTANTIAL JUSTICE I S OF PRIME IMPORTANCE. IN THIS REGARD, THE ASSESSEE RELIED ON VARIOUS JUDICIA L PRONOUNCEMENTS. FURTHER, AS REGARDS THE LD. CIT(A)'S REMARKS THAT THE ASSESS EE IS NOT ENTITLED TO AVAIL THE CHANNEL OF CIT(A) WHERE THE ASSESSEE HAS ALREADY CH OSEN TO FILE A WRIT BEFORE THE HON'BLE HIGH COURT, HE SUBMITTED THAT THE SAME IS NOT ACCEPTABLE AND IT IS A SETTLED LAW THAT PURSUING ALTERNATE REMEDY OF WRI T DOES NOT TAKE AWAY ASSESSEE'S REMEDY OF FILING OF APPEAL TO CIT(A). HE ALSO RELIED ON VARIOUS JUDICIAL PRONOUNCEMENTS IN THIS REGARD. ACCORDINGLY , HE PLEADED THAT THE APPEALS OF THE ASSESSEE BE ADMITTED AS MAINTAINABLE AND THE MATTER BE RESTORED ITA NO.5583 TO 5587/DEL./2014 5 BACK TO THE FILE OF THE LD. CIT (A) TO BE DECIDED O N MERITS AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES B ELOW AND CONTENDED THAT SINCE THE HONBLE HIGH COURT HAS DISMISSED THE WRIT PETITIONS NEITHER THE CIT (A) NOR THE TRIBUNAL CAN REVIEW THE ORDER PASSED BY THE HONBLE HIGH COURT. SHE FURTHER SUBMITTED THAT DISMISSAL OF THE WRIT PE TITIONS SHUT OUT THE APPEAL BEFORE THE CIT (A) AND EVEN THE TRIBUNAL. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT THE AO PASSED ASSESSMENT ORDERS FOR AY 19 98-99 TO 2002-03 ON 31.12.2004. THE ASSESSEE PREFERRED CIVIL MISC. WRI T PETITION (TAX) NO.167 OF 2005 & FIVE OTHERS BEFORE THE HONBLE ALLAHABAD HIG H COURT (HONBLE JURISDICTIONAL HIGH COURT) AGAINST THE ASSESSMENT O RDER DATED 31.12.2004. THE HONBLE ALLAHABAD HIGH COURT VIDE ORDER DATED 0 3.02.2005 STAYED THE ORDER OF THE AO DATED 30.12.2004. THE RELEVANT POR TION OF THE INTERIM ORDER IS REPRODUCED AS BELOW:- .UNTIL FURTHER ORDERS WE STAY THE OPERATION OF TH E ASSESSMENT ORDER DATED 31.12.2004/ANNEXURE-IV TO THE WRIT PETITION P ASSED BY RESPONDENT NO.2/ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE S AHARANPUR, SAHARANPUR, U.P. PERTAINING TO ASSESSMENT YEAR 1988 -99 TO 2002-03. THEREAFTER, WE FIND THAT THE WRIT PETITION PREFERRE D BY THE ASSESSEE WAS DISMISSED ON 20.08.2013. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) ON 17.09.2013 WHICH IS WITHIN 30 DAYS FROM THE RECEIPT OF THE HONBLE ITA NO.5583 TO 5587/DEL./2014 6 HIGH COURTS ORDER. THE CIT (A) HAS DISMISSED THE APPEAL BY OBSERVING AS UNDER :- AFTER DISMISSAL OF THE WRIT PETITIONS BY THE HON' BLE ALLAHABAD HIGH COURT VIDE ORDER DATED 20-08-2013, THE ASSESSE E FILED APPEAL BEFORE THE CIT(APPEALS), MUZAFFARNAGAR ON 17-09-2013. THE APPELLANT HAS NOT EXPLAINED AS TO WHY SUCH APPEALS WERE FILED AFTER A GAP OF 8 YEARS, SEVEN MONTHS AND 20 DAYS AGAINST THE ORDER OF THE AO DATE D 31.12.2004. THE APPELLANT IS NOT ENTITLED TO AVAIL THE CHANNEL OF CIT(APPEALS) AT THIS STAGE. THE APPELLANT HAS ALREADY CHOSEN TO FILE A WRIT PETITION BEFORE THE HON'BLE HIGH COURT OF ALLAHABAD INSTEAD OF FILI NG APPEAL BEFORE THE CIT(APPEALS). THE HON'BLE ALLAHABAD HIGH COURT HAS DISMISSED THE WRIT OF THE APPELLANT. THE IMPUGNED ISSUES RAISED IN THE APPEALS HAVE BEEN DECIDED AND SETTLED BY THE HON'BLE ALLAHABAD HIGH C OURT AS UNDER.- ' .... 32. WE MAY OBSERVE HERE THAT AN APPEAL WAS M AINTAINABLE AGAINST THE ASSESSMENT AND THE PENALTY ORDERS, WHIC H HAVE BEEN CHALLENGED IN THESE WRIT PETITIONS. INSTEAD OF FILI NG STATUTORY APPEALS, THE PETITIONER-COMPANY TOOK THE RISK OF AP PROACHING THIS COURT AND OBTAINED INTERIM ORDERS, WHICH HAVE CONTI NUED FOR NINE YEARS. WE ARE NOT INCLINED TO GO INTO THE REASONS A S TO WHY THE WRIT PETITIONS WERE NOT LISTED AND HEARD FOR SUCH A LONG TIME. 33. WE DO NOT FIND ANY MERIT IN THE WRIT PETITIONS ..... (EMPHASIS SUPPLIED) IN VIEW OF THE DECISION OF THE HON'BLE ALLAHABAD HI GH COURT, THE APPEAL FILED BEFORE THE UNDERSIGNED IS NOT MAINTAIN ABLE. NO SUBORDINATE COURT OR AUTHORITY HAS ANY JURISDICTION OR RIGHT TO REVIEW OR INTERFERE IN THE DECISION OF A SUPERIOR COURT. THE APPEALS ARE DISMI SSED. 4. IN RESULT, SINCE THE APPEAL FILED BY THE APPELL ANT IS BEYOND JURISDICTION, THE SAME IS NOT ENTERTAINABLE AND IS ACCORDINGLY DISMISSED. WE TAKE NOTE THAT THE ASSESSEE PREFERRED THE WRIT P ETITIONS ALLEGING FUNDAMENTAL RIGHT VIOLATION AND INVOKING THE WRIT J URISDICTION OF THE HONBLE HIGH COURT WHEREIN THE INTERIM ORDER OF STAY OF THE ASSESSMENT ORDER WAS PASSED BY THE HONBLE HIGH COURT BY ORDER DATED 03. 02.2005 AND THE WRIT PETITION WAS DISMISSED ON 20.08.2013. THE DRS CON TENTION IS THAT SINCE THE ITA NO.5583 TO 5587/DEL./2014 7 HONBLE HIGH COURT HAS DISMISSED THE WRIT PETITION NEITHER THE CIT (A) NOR THE TRIBUNAL CAN REVIEW THE ORDER PASSED BY THE HON BLE HIGH COURT. ACCORDING TO HER, DISMISSAL OF THE WRIT PETITION FO RECLOSES THE APPEAL BEFORE THE CIT (A) AND THE TRIBUNAL. THIS ARGUMENT OF THE REVENUE IS MISPLACED AND MISCONCEIVED, SO IS NOT TENABLE. WHAT THE CIT (A) H AS TO DECIDE IN THE APPEAL PREFERRED BY THE ASSESSEE IS THE ADJUDICATION OF GR OUNDS RAISED BY THE ASSESSEE AGAINST THE ORDER DATED 31.12.2004 PASSED BY THE AO AND NOT TO SIT IN APPEAL OR REVIEW THE ORDER OF THE HONBLE HIGH COURT. THE ASSESSEE HAS INVOKED THE WRIT JURISDICTION ALLEGING FUNDAMENTAL RIGHT VIOLAT ION AND OTHER RIGHTS UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA AND THE HO NBLE HIGH COURT STAYED THE OPERATION OF THE ASSESSMENT ORDER DATED 31.12.2 004 AND THE STAY ORDER WAS IN FORCE UP TO 20.08.2013, SINCE IT WAS NOT VACATED AND THE REVENUE COULD NOT PLACE ANY MATERIAL TO SHOW WHETHER THE INTERIM ORDE R OF STAY WAS VACATED BEFORE THE WRIT PETITION WAS DISMISSED ON 20.08.201 3. AN ACT OF COURT SHALL NOT PREJUDICE ANY ONE IS REITERATED IN THE CASE OF KRISHNASWAMY S PD AND ANR. VS UOI AND ORS - 281 ITR 305 :- 16. THE MAXIM 'ACTUS CURIAE NEMINEM GRAVABIT' I.E. , AN ACT OF COURT SHALL PREJUDICE NO MAN IS AN IMPORTANT ONE. THE MAX IM 'IS FOUNDED UPON JUSTICE AND GOOD SENSE, AND AFFORDS A SAFE AND CERT AIN GUIDE FOR THE ADMINISTRATION OF THE LAW', SAID CRESSWELL, J. IN F REEMAN V. TRANAH 12 CB 406. AN UNINTENTIONAL MISTAKE OF THE COURT WHICH MA Y PREJUDICE THE CAUSE OF ANY PARTY MUST AND ALONE COULD BE RECTIFIED. 17. THE MAXIMUM OF EQUITY, NAMELY, ACTUS CURIAE NEM INEM GRAVABIT- AN ACT OF COURT SHALL PREJUDICE NO MAN, IS FOUNDED UPON JUSTICE AND GOOD SENSE WHICH SERVES A SAFE AND CERTAIN GUIDE (OR THE ADMINISTRATION OF LAW. THE OTHER RELEVANT MAXIM IS, LEX NON COGIT AD IMPOS SIBILIA - THE LAW DOES NOT COMPEL A MAN TO DO WHAT HE CANNOT POSSIBLY PERF ORM. THE LAW ITSELF ITA NO.5583 TO 5587/DEL./2014 8 AND ITS ADMINISTRATION IS UNDERSTOOD TO DISCLAIM AS IT DOES IN ITS GENERAL APHORISMS, ALL INTENTION OF COMPELLING IMPOSSIBILIT IES, AND THE ADMINISTRATION OF LAW MUST ADOPT THAT GENERAL EXCEP TION IN THE CONSIDERATION OF PARTICULAR CASES - UP SRTC V. IMTI AZ HUSSAIN [2006J 1 SCC 380, SHAIKH SALIM HAJI ABDUL KHAGUMSAB V. KUMAR [2006J 1 SCC 46, MOHAMMAD GAZI VS. STATE OF MP [2000J 4 SCC 342 AND GURSHARAN SINGH V. NEW DELHI MUNICIPAL COMMITTEE [1996J 2 SCC 459. ' BROOM LEGAL MAXIMS (PAGE 73 TENTH EDITION) ACTUS CURLE NEMINEM GRAVABIT- AN ACT OF THE COURT SHALL PREJUDICE NO MAN. THIS MAXIM IS FOUNDED UPON JUSTICE AND GOOD SENSE; AND AFFORDS A SAFE AND CERTAIN GUIDE FOR THE ADMINISTRATION OF LA W. IN VIRTUE OF IT, WHERE A CASE STANDS OVER FOR ARGUMENT AN ACCOUNT OF THE M ULTIPLICITY OF BUSINESS IN COURT, OR FOR JUDGMENT FROM THE INTRICACY OF THE QUESTION, THE PARTY OUGHT NOT TO BE PREJUDICED BY THAT DELAY, BUT SHOULD BE A LLOWED TO ENTER UP HIS JUDGEMENT RETROSPECTIVELY TO MEET THE JUSTICE OF TH E CASE. AS IT CAN BE SEEN FROM THE AFORESAID MAXIM, THAT TH E ACT OF COURT DOES NOT PREJUDICE ANYONE WHICH MEANS, IN THIS CASE, THE ASS ESSEE DID NOT PREFER THE APPEAL AGAINST THE ORDER OF THE AO DATED 30.12.2004 BEFORE THE LD. CIT (A) SINCE THE HONBLE HIGH COURT WAS PLEASED TO STAY IT ON 03.02.2005AND IT WAS NOT VACATED TILL IT WAS DISMISSED ON 20.08.2013. SO THE DELAY CAUSED FOR DISPOSAL OF WRIT PETITION CANNOT PREJUDICE ANY ONE AND SO THE ASSESSEES STATUTORY RIGHT TO FILE AN APPEAL CANNOT BE FORECLO SED BY THE CIT(A). 7.4 WE FIND THAT THE ASSESSEE, AFTER THE DISMISSAL OF THE WRIT PETITIONS, HAS DULY FILED THE APPEALS WITHIN THE 30 DAYS, THEREFOR E, THE PERIOD BETWEEN 03.02.2005 AND 20.08.2013 CANNOT BE COUNTED FOR THE PURPOSE OF FILING OF APPEAL AND WE FIND THAT THE ASSESSEE IN FACT HAD FI LED THE STATUTORY APPEAL WELL WITHIN 30 DAYS FROM THE DATE OF DISPOSAL OF THE WRI T PETITION. SINCE THE ASSESSEE HAS PREFERRED AN APPEAL ON DISMISSAL OF TH E WRIT PETITION WITHIN 30 ITA NO.5583 TO 5587/DEL./2014 9 DAYS, CIT (A) OUGHT TO HAVE ENTERTAINED THE STATUTO RY APPEAL PREFERRED U/S 246A WHICH IS A STATUTORILY RECOGNIZED RIGHT OF THE ASSESSEE AND MUST HAVE BEEN ADMITTED AND ADJUDICATED THE ISSUE ON MERITS. ACCORDINGLY, WE DIRECT THE CIT (A) TO ADMIT ALL THE APPEALS SINCE THEY ARE MAI NTAINABLE AND RESTORE THE MATTERS BACK TO THE FILE OF THE CIT (A) TO BE DECID ED ON MERITS AFTER PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. WE ORDER A CCORDINGLY. 9. AS WE HAVE RESTORED THE MATTERS TO THE FILE OF T HE LD. CIT (A), WE NEED NOT DECIDE THE OTHER GROUNDS WHICH ARE ON MERITS. 10. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 5 TH DAY OF FEBRUARY, 2016. SD/- SD/- (N.K. SAINI) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 5 TH DAY OF FEBRUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MUZAFFARNAGAR. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.