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

ITA 6190/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7406 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 14-06-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 19-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Assessee Lawyers: DR RAM SAMUJH
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.O.P.KANT, ACCOUNTANT MEMBER I.T.A .NOS.-6189 T O 6191/DEL/2013 (ASSESSMENT YEAR-2002-03) PRAGATI FINSEC LTD., 204, TRIVENI PLAZA, 17A/56, KAROL BAGH,NEW DELHI-110008. PAN-AAACP4524B (APPELLANT) VS ITO, WARD-14(3), NEW DELHI (RESPONDENT) A SSESSEE BY DR. RAM SAMUJH, ADV. REVENUE BY MS. ANIMA BARNWAL, SR. DR ORDER PER DIVA SINGH, JM THESE THREE APPEALS HAVE BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 15.07.2013 PASSED BY THE CIT(A)-XVII, NEW DELHI PERTAINING TO 2002-03 ASSESSMENT YEAR IN THE QUANTUM PROCEEDINGS AND PENALTY PROCEEDINGS U/S 271(1)(B) AND 271(1)(C) PERTAINING TO THE SAME ASSESSMENT YEAR. 2. THE LD.AR APPEARING ON BEHALF OF THE ASSESSEE IN VITING ATTENTION TO THE IMPUGNED ORDERS IN EACH OF THESE THREE APPEALS SUBM ITTED THAT THE ORDERS PASSED UNDER CHALLENGE ARE EX-PARTE ORDERS WHEREIN THE LIMITED PRAYER OF THE ASSESSEE IS THAT THE ISSUES MAY BE RESTORED TO THE FILE OF THE CIT(A). SUPPORT WAS DRAWN FROM THE ORDER DATED 10.10.2014 IN ITA NO .4320/DEL/2010 PERTAINING TO 2001-02 AY WHEREIN ON SIMILAR FACTS A ND CIRCUMSTANCES THE ISSUES WERE RESTORED IN ORDER TO AFFORD A REASONABLE OPPOR TUNITY OF BEING HEARD. IT WAS DATE OF HEARING 14.06.2016 DATE OF PRONOUNCEMENT 22.06.2016 I.T.A .NOS.-6189 TO 6191/DEL/2013 PAGE 2 OF 4 HIS SUBMISSION THAT THE ASSESSEE REMAINED UNREPRESE NTED FOR NO FAULT OF ITS OWN AS THE NEW MANAGEMENT WAS UNDER THE IMPRESSION THAT ALL TAX MATTERS WOULD BE ATTENDED TO BY THE OLD MANAGEMENT WHO HAD THE REQUI SITE PAPERS. INVITING ATTENTION TO PARA 2 OF THE SAID ORDER IT WAS SUBMIT TED THAT HE WAS READY TO GIVE HIS ORAL UNDERTAKING INCASE THE ISSUE IS RESTORED T O THE CIT(A) THAT THE ASSESSEE WOULD PARTICIPATE IN THE PROCEEDINGS. FOR READY-RE FERENCE, THE SPECIFIC PARA RELIED UPON IS REPRODUCED HEREUNDER:- 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 UNREPRESENTED ON ACCOUNT OF THE MANAGEMENT PROBLEMS. REFERRING TO PAPER BOOK PAGE 57 TO 59 PA RA 4 TO PARA 6 OF THE SAME, IT WAS SUBMITTED THAT THE NEW MANAGEMENT HAD TAKEN OVER FROM THE OLD MANAGEMENT ON THE UNDERSTANDING THAT T HE OLD MANAGEMENT WOULD GET THE INCOME TAX PROCEEDINGS COM PLETED WHICH CONDITION WAS NOT FULFILLED AS A RESULT OF WH ICH THE ASSESSEE REMAINED UNREPRESENTED. THE LD. AR GAVE H IS PERSONAL UNDERTAKING STATING THAT IN CASE THE ISSUE IS RESTO RED TO THE CIT(A), THE ASSESSEE WOULD PARTICIPATE IN THE PROCE EDINGS AS ADMITTEDLY THE IMPUGNED ORDER WAS PASSED EX-PARTE. THE LD. S R. DR, SH. DEVI SHARAN SINGH HAD NO OBJECTION TO THE SAID REQUEST OF THE ASSESSEE CONSIDERING THE PECULIAR FACTS AND CIRCUMS TANCES OF THE CASE. (EMPHASIS PROVIDED) 3. THE LD. SR. DR, MS. ANIMA BARNWAL CONSIDERING HE MATERIAL AVAILABLE ON RECORD AND THE ARGUMENTS THAT NON-REPRESENTATION HA S OCCURRED ON ACCOUNT OF THE OLD MANAGEMENT NOT FOLLOWING UP THE INCOME TAX PROCEEDINGS SUBMITTED THAT THE ASSESSEE SHOULD NOT BE ALLOWED TO ABUSE THE PRO CEDURE. SUBJECT TO THAT SHE HAD NO OBJECTION IF THE ISSUE IS RESTORED ON THE CL EAR UNDERSTANDING THAT THE ASSESSEE SHALL PARTICIPATE THIS TIME. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE CO-ORDINATE BENCH O N IDENTICAL FACTS AND CIRCUMSTANCES IN ITA NO.4230/DEL/2010 RESTORED THE ISSUE BACK TO THE FILE TO THE CIT(A) WITH THE FOLLOWING DIRECTION:- 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE LIGHT OF THE SUBMISSIO NS ADVANCED, WE DEEM I.T.A .NOS.-6189 TO 6191/DEL/2013 PAGE 3 OF 4 IT APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FIL E 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 ALTE RAM PARTEM IS ONE OF THE MOST FAMOUS AND CELEBRATED RULE OF NATURAL JUST ICE. THE PRINCIPLES OF NATURAL JUSTICE ARE THOSE WHICH HAVE BEEN LAID O UT BY THE COURTS AS BEING THE MINIMUM PROTECTION OF THE RIGHTS OF AN IN DIVIDUAL AGAINST THE ARBITRARY PROCEDURE THAT MAY BE ADOPTED BY A JUDICI AL, QUASI-JUDICIAL AND ADMINISTRATIVE AUTHORITY WHILE MAKING AN ORDER AFFECTING THOSE RIGHTS. A CAREFUL PERUSAL OF THE CONSISTENT JUDGEM ENTS 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 PR INCIPLE OF NATURAL JUSTICE EVOLVED UNDER THE COMMON LAW IS TO CHECK AR BITRARY EXERCISE OF POWER BY THE STATE OR ITS FUNCTIONARIES. ACCORDING LY, THE PRINCIPLE BY ITS VERY NATURE IMPLIES THE DUTY TO ACT FAIRLY I.E. FAI R PLAY IN ACTION MUST BE EVIDENT AT EVERY STAGE. FAIR PLAY DEMANDS THAT NOB ODY 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, I T IS OBSERVED THAT THE AIM OF RULES OF NATURAL JUSTICE IS TO SECURE J USTICE 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 I S NOT POSSIBLE TO MAKE AN EXHAUSTIVE CATALOGUE OF SUCH RULES HOWEVER IT CAN BE READILY SAID THAT THERE ARE TWO BASIC MAXIMS OF NATURAL JUS TICE 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 ARE (A) NOT ICE OF THE CASE TO BE MET; AND (B) OPPORTUNITY TO EXPLAIN. THEIR LORDSHI PS HAVE CAUTIONED THAT THESE RULES CANNOT BE SACRIFICED AT THE ALTAR OF TH E ADMINISTRATIVE CONVENIENCE OR CELEBRITY. THE ASSESSEE HAS RAISED GROUND NO.-1 & 2 IN REGARD TO THE OPPORTUNITY OF BEING HEARD AGITATED B EFORE US AND CONSIDERING THE SUBMISSIONS OF EITHER SIDE WHERE IN THE SOLE ISSUE AGITATED BEFORE US IS PERTAINING TO GRANTING OF OPP ORTUNITY OF BEING HEARD WHICH ADMITTEDLY HAS NOT BEEN MADE AVAILABLE TO THE ASSESSEE WE ARE INCLINED TO ACCEPT THE PRAYER OF THE ASSESSEE ON A CAREFUL CONSIDERATION OF THE LEGAL POSITION THEREON. ACCORDINGLY THE GRO UND NO.-1 & 2 RAISED BY THE ASSESSEE IS ALLOWED AND THE REMAINING GROUND S ARE RESTORED BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION T O DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REA SONABLE OPPORTUNITY OF BEING HEARD. LOOKING AT THE FACTS OF THE PRESEN T CASE, WE DEEM IT APPROPRIATE TO ADD THAT IT IS HOPED THAT THE ASSESS EE UTILIZES THE OPPORTUNITY SO GRANTED BY RESPONSIBLY AND MEANINGFU LLY PARTICIPATING IN LETTER AND SPIRIT IN THE PROCEEDINGS AS THE REMEDIE S AVAILABLE IN LAW ARE NOT TO BE ABUSED AND COURTS TAKE A VERY SERIOUS VIE W WHERE OPPORTUNITIES SO GRANTED ARE MIS-UTILIZED. THE ISS UE IS RESTORED IN THE INTERESTS OF SUBSTANTIAL JUSTICE. IT IS HOPED THA T THE OPPORTUNITY SO PROVIDED SHALL NOT BE ABUSED BY THE ASSESSEE AND T HEREFORE, THE GROUNDS ARE BEING ALLOWED. 5. RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDERS IN EACH OF THESE APPEALS AND RESTORE THE ISSUES BACK TO THE FILE TO THE CIT(A) TAKING I.T.A .NOS.-6189 TO 6191/DEL/2013 PAGE 4 OF 4 THE ORAL UNDERTAKING GIVEN BY THE LD. AR ON RECORD THAT THE ASSESSEE SHALL MAKE FULL AND COMPLIANCE BEFORE THE SAID AUTHORITY. WHI LE SO DIRECTING IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED TO THE ASSESSEE SHALL N OT BE ABUSED AND THE OPPORTUNITY SO PROVIDED IN GOOD FAITH IN THE INTERE STS OF SUBSTANTIAL JUSTICE IS USED EFFECTIVELY AND COMPLETELY AS FALLING WHICH TH E LD. CIT(A) SHALL BE AT LIBERTY TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. CONSIDERING THE FACT THAT THE ASSESSMENT HAS BEEN MADE U/S 144 OF THE ACT THE ASSESSEE MAY SEEK PERMISSION TO MOVE FRESH EVIDENCE IN SUPPORT OF ITS CLAIM BEFORE THE CIT(A). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 22 OF JUNE, 2016. (O.P.KANT) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTA NT REGISTRAR ITAT NEW DELHI