Dr. Amit Kumar, Gurgaon V. ACIT, Faridabad

ITA 6209/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86753 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. C. M. GARG , JM ITA NO. 6207 /DEL/2012 : ASSTT. YEAR : 2002 - 03 ITA NO. 6208 /DEL/2012 : ASSTT. YEAR : 2003 - 04 ITA NO. 6209 /DEL/2012 : ASSTT. YEAR : 2004 - 05 ITA NO. 6210 /DEL/2012 : ASSTT. YEAR : 200 5 - 06 ITA NO. 6211 /DEL/2012 : ASSTT. YEAR : 2006 - 07 ITA NO. 6212 /DEL/2012 : ASSTT. YEAR : 2007 - 08 & ITA NO. 6213 /DEL/2012 : ASSTT. YEAR : 2008 - 09 AMIT KUMAR C/O - LIBERTY HEALTH CARE (P) LTD., H. NO. 4374, SECTOR - 23A, GURGAON VS ACIT, CENTRAL CIRCLE - I, FARIDABAD (APPELLANT) (RESPONDENT) PAN NO. AKLPK5190L ITA NO. 6214 /DEL/2012 : ASSTT. YEAR : 2002 - 03 ITA NO. 6215 /DEL/2012 : ASSTT. YEAR : 2003 - 04 ITA NO. 6216 /DEL/2012 : ASSTT. YEAR : 2004 - 05 ITA NO. 6217 /DEL/2012 : ASSTT. YEAR : 2005 - 06 ITA NO. 6218 /DEL/2012 : ASSTT. YEAR : 2006 - 07 ITA NO. 6219 /DEL/2012 : ASSTT. YEAR : 2007 - 08 & ITA NO. 6220 /DEL/2012 : ASSTT. YEAR : 2008 - 09 M/S LIBERTY HEALTH CARE (P) LTD., H. NO. 4374, SECTOR - 23A, GURGAON VS ACIT, CENTRAL CIRCLE - I, FARI DABAD (APPELLANT) (RESPONDENT) PAN NO. AAACL8899B ASSESSEE BY : SH. VINOD KUMAR BINDAL, CA REVENUE BY : MS. SULEKHA VERMA, CIT DR DATE OF HEARING : 11 .02 .2015 DATE OF PRONOUNCEMENT : 13 .02 .2015 ITA NO. 6207 TO 6220 /DEL /2012 AMIT KUMAR 2 ORDER PER BENCH : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE CONSOLIDATED ORDERS EACH DATED 15.10.2012 OF CIT(A), CENTRAL, GURGAON. SINCE THE ISSUES INVOLVED ARE SIMILAR HAVING IDENTICAL FACTS AND THE APPEALS WERE HEARD TOGETHER SO THESE ARE BE ING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. FIRST WE WILL DEAL WITH APPEAL OF THE ASSESSEE IN ITA NO. 6207/DEL/2012. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITIONS TOTALING TO RS. 8,72,465/ - MADE IN THE ASSESSMENT FRAMED U/S 153A/153C R.W.S. 144 WITHOUT AFFORDING REASONABLE OPPORTUNITY TO THE APPELLANT AND WITHOUT APPRECIATING THE PECULIAR CIRCUMSTANCES WHICH WERE BEYOND HIS CONTROL. THEREFO RE, THE ASSESSMENT SO FRAMED ON BEST JUDGMENT BASIS IS BAD IN LAW AND MUST BE ANNULLED. 2. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 15,754/ - MADE FOR ALLEGEDLY UNEXPLAINED CHEQUE DEPOSITS IN BANK ACCOUNTS MERELY ON THE BA SIS OF SPECIAL AUDIT REPORT BUT WITHOUT AFFORDING REASONABLE OPPORTUNITY TO THE APPELLANT TO EXPLAIN. THEREFORE, THE ADDITION SO CONFIRMED MUST BE DELETED. ITA NO. 6207 TO 6220 /DEL /2012 AMIT KUMAR 3 3. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 8,51,711/ - MADE MEREL Y ON THE BASIS OF APPLICATION FILED BEFORE THE SETTLEMENT COMMISSION WITHOUT AFFORDING REASONABLE OPPORTUNITY TO THE APPELLANT TO EXPLAIN AND EVEN WITHOUT TELESCOPING THE SAME WITH THE OTHER ADDITION MADE. THEREFORE, THE ADDITION SO CONFIRMED IS ARBITRARY AND IT MUST BE DELETED. 4. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITUTE, MODIFY DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 3. AT THE FIRST INSTANCE THE LD. COUNSEL FOR THE ASSESSEE ARGUED ON THE ISSUE RELA TING TO THE REASONABLE OPPORTUNITY OF BEING HEARD WHICH WAS CLAIMED TO BE NOT AFFORDED TO THE ASSESSEE. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE WAS RUNNING HIS PROFESSION OF DOCTOR AND FILED THE RETURN OF INCOME ON 20.02.2013 DECLARING TOTAL INCOME OF RS. 1,20,210/ - . THE ASSESSEE WAS ALSO MANAGING DIRECTOR OF M/S LIBERTY HEALTH CARE (P) LTD., WHEREIN A SURVEY OPERATION U/S 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED ON 18.08.2006 AND THE DOCUMENTS RELAT ING TO THE BUSINESS ACTIVITIES WERE FOUND AND IMPOUNDED BY THE SURVEY TEAM. THE ASSESSEE OFFERED FOR TAXATION VOLUNTARILY RS. 15 CRORE. LATER ON, THE SURRENDER WAS RETRACTED VIDE LETTERS DATED 25.08.2006 AND 08.09.2006 ON THE PLEA THAT SUCH SURRENDER WAS U NDER PRESSURE AND COERCION. THEREAFTER THE ASSESSEE FILED THE APPLICATION BEFORE THE INCOME TAX SETTLEMENT COMMISSION ON 31.05.2007 IN HIS INDIVIDUAL CAPACITY AND ON BEHALF OF HIS COMPANY M/S ITA NO. 6207 TO 6220 /DEL /2012 AMIT KUMAR 4 LIBERTY HEALTH CARE (P) LTD. THE ASSESSEE OFFERED RS. 2,74,90,17 2/ - AS ADDITIONAL INCOME FOR THE ASSESSMENT YEARS 2001 - 02 TO 2007 - 08 AND DETERMINED ADDITIONAL TAX AND INTEREST OF RS. 1,43,84,393/ - IN HIS INDIVIDUAL CAPACITY. THE ASSESSEE ALSO OFFERED ON BEHALF OF M/S LIBERTY HEALTH CARE (P) LTD., AN ADDITIONAL INCOME O F RS. 96,60,549/ - FOR THE ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 AND DETERMINED TAX PAYABLE OF RS. 44,51,206/ - . IT WAS ALSO INFORMED THE AO THAT FOR THE ASSESSMENT YEARS 2005 - 06 TO 2007 - 08, THE ASSESSEE PAID AN ADDITIONAL TAX OF RS. 30,40,669/ - ON HIS OWN BEH ALF AND RS. 32,43,488/ - ON BEHALF OF M/S LIBERTY HEALTH CARE (P) LTD. FOR THE ASSESSMENT YEARS 2005 - 06 TO 2007 - 08. THEREAFTER THE AO TO FIND OUT THE STATUS OF THE APPLICATION OF THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION WROTE A LETTER DATED 06.08.2010 TO THE REGISTRAR, SETTLEMENT COMMISSION. IN RESPONSE TO THE SAID LETTER IT WAS INFORMED VIDE LETTER DATED 10.08.2010 THAT AS PER THE RECORDS OF THE COMMISSION NO PROCEEDINGS ARE PENDING IN THE CASE OF DR. AMIT KUMAR AND M/S LIBERTY HEALTH CARE (P) LTD. AS THESE APPLICATIONS TAND ABATED IN THE ABSENCE OF ANY DIRECTIONS FROM ANY OF THE HIGH COURTS REGARDING STAY OF ABATEMENT OF PROCEEDINGS, W.E.F. 31.03.2008, IN TERMS OF THE AMENDED PROVISIONS OF THE S ECTION 245HA OF THE INCOME TAX ACT, 2007 . 5. SINCE, TH ERE WAS NO PROCEEDING PENDING BEFORE THE INCOME TAX SETTLEMENT COMMISSION, THE AO PROCEEDED TO FRAME THE ASSESSMENT. THE AO POINTED OUT THAT A SEARCH U/S 132 OF THE ACT WAS CONDUCTED ON 25.01.2008 AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF DR. UPEN DRA KUMAR DUBLISH AND SMT. ARCHANA RANI W/O DR. UPENDRA KUMAR DUBLISH ITA NO. 6207 TO 6220 /DEL /2012 AMIT KUMAR 5 OF SHREE RAM HOSPITAL, 23/5, MATHURA ROAD, BALLABHGARH. DURING THE COURSE OF SEARCH INCREMENTING DOCUMENTS PERTAINING TO THE ASSESSEE AND M/S LIBERTY HEALTH CARE (P) LTD. WERE FOUND AND SEIZED. THE AO AFTER RECORDING THE SATISFACTION NOTE, AS MANDATED IN SECTION 153C OF THE ACT ISSUED A NOTICE TO THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME . SINCE, THERE WAS NO RESPONSE T O THE NOTICES ISSUED BY THE AO, TH E BEST JUDGMENT WAS FRAMED U/S 144 OF THE ACT AT AN INCOME OF RS. 9,92,680/ - FOR THE ASSESSMENT YEAR 2002 - 03. 6 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO DECIDED THE APPEAL OF THE ASSESSEE EX - PARTE FOR THE REASONS MENTIONED IN PARA 3 OF THE IMPUGNED ORDER AS UNDER: 3. CASE WAS FIXED FOR HEARING VIDE F. NO. CIT(A)(C)/GGN/2011 - 12/102 DATED 10.01.2012 FOR 23.01.2012 AT 11.30 AM. THE ADDRESS IN THE NOTICE BEING THE SAME AS GIVEN IN THE APPEAL MEMO. HOWEVER, IT CAME BACK UNSERVED WITH THE REMARK THAT THE CHOWK IDAR REFUSED TO RECEIVE THE NOTICE. HOWEVER, ANOTHER NOTICE WAS ISSUED ON THE SAME ADDRESS ON 03/06.02.2012 FOR HEARING ON 27.02.2012. IN RESPONSE THE ASSESSEE SOUGHT TWO MONTHS ADJOURNMENT VIDE HIS LETTER DATED 22/23.02.2012 STATING THAT THE APPELLANT WAS STILL IN POLICE CUSTODY AND WILL NOT BE ABLE TO REPRESENT THE PROCEEDINGS ON THE SAID DATE. THIS ADJOURNMENT PETITION WAS SENT C/O THE SUPERINTENDENT, CENTRAL JAIL, AMBALA. AS TWO MONTHS TIME WAS SOUGHT THE NEXT DATE WAS FIXED FOR 06.06.2010 AT 11.30AM GI VING AMPLE TIME VIDE NOTICE DATED 10.04.2012 WHICH WAS SERVED THROUGH THE SUPERINTENDENT, CENTRAL JAIL, AMBALA. THE ASSESSEE VIDE LETTER DATED 05.06.2012 AGAIN SOUGHT ADJOURNMENTS, THIS TIME OF FOUR MONTHS, ON THE SAME GROUNDS. HOWEVER, HAVING ACCEDED TO A SSESSEE REQUEST FOR LONG ADJOURNMENT, THE LAST ITA NO. 6207 TO 6220 /DEL /2012 AMIT KUMAR 6 OPPORTUNITY WAS AFFORDED VIDE LETTER DATED 14.06.2012 GIVING THE DATE OF 12.10.2012 AT 11.30AM. AGAIN A LETTER DATED 08.10.2012 WAS RECEIVED SEEKING FURTHER TIME OF SIX MONTHS STATING THAT DURING THIS PERIOD T HE APPELLANT SHOULD BE RELEASED FROM POLICE CUSTODY AND COULD APPOINT REPRESENTATIVE FOR THE PROCEEDINGS. 7 . HOWEVER, T HE LD. CIT(A) CONFIRMED THE ACTION OF THE AO BY PASSING THE EX - PARTE ORDER DATED 15 . 10.2012 . 8 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NEITHER THE AO NOR THE LD. CIT(A) AFFORDED A REASONABLE OPPORTUNITY OF BEING HEARD AND DECIDED THE CASE EX - PARTE WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. IT WAS POINTED OUT THAT THE AO IN THE ABSENCE OF T HE ASSESSEE GOT THE SPECIAL AUDIT CONDUCTED U/S 142(2A) OF THE ACT AND WITHOUT CONFRONTING THE SPECIAL AUDIT REPORT TO THE ASSESSEE , MADE THE ARBITRARY ADDITIONS AND THE LD. CIT(A) ALSO DECIDED THE APPEAL OF THE ASSESSEE EX - PARTE WITHOUT PROVIDING AN OPPOR TUNITY OF BEING HEARD. HE REQUESTED THAT THE CASE MAY BE REMANDED BACK TO THE FILE OF THE AO TO BE DECIDED ON MERIT AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN HER RIVAL SUBMISSIONS THE LD. CIT DR VEHEMENTLY ARGUED THAT THE ASSESSEE DID NOT CO OPERATE AND NEVER APPEAR ED EITHER BEFORE THE AO OR BEFORE THE LD. CIT(A), SO THERE WAS NO ALTERNATIVE EXCEPT TO DECIDE THE CASE ON THE BASIS OF MATERIAL AVAILABLE ON THE RECORD. SHE FURTHER SUBMITTED THAT THE CASE MAY NOT BE RE MANDED BACK TO THE AO BECAUSE THE LD. CIT(A) HAS ITA NO. 6207 TO 6220 /DEL /2012 AMIT KUMAR 7 DECIDED THE APPEAL OF THE ASSESSEE ON MERIT AFTER CONSIDERING ALL THE RELEVANT MATERIAL AVAILABLE ON THE RECORD. 10 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MAT ERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS IN THE POLICE CUSTODY AND THE NOTICE WAS SENT TO HIM THROUGH THE SUPERINTENDENT, CENTRAL JAIL, AMBALA. THE ASSESSEE REQUESTED FOR ADJOURNMENT FOR THE REASON THA T HE WAS UNABLE TO REPRESENT THE PROCEEDINGS BECAUSE HE WAS IN THE POLICE CUSTODY AND WAS UNABLE TO COME OUT. IT IS ALSO NOTICED THAT THE AO FRAMED THE ASSESSMENT EX - PARTE BY STATING THAT THE SPECIAL AUDIT REPORT U/S 142(2A ) OF THE ACT WAS SERVED UPON THE ASSESSEE ON 21.06.2010 IN THE CENTRAL JAIL, JAIPUR AND AMBALA, S O , IT IS CLEAR THAT THE SPECIAL AUDIT REPORT WHICH WAS OBTAINED BY THE AO AT THE BACK OF THE ASSESSEE AND ANOTHER NOTICE S WERE SERVED TO THE ASSESSEE WHEN HE WAS LODGED IN THE JAIL EITHER AT J AIPUR OR AT AMBALA. IT, THEREFORE, CLEAR THAT THE PERSONAL HEARING WAS NOT AFFORDED TO THE ASSESSEE . MOREOVER, IT IS NOT CLEAR AS TO WHETHER THE ASSESSEE BEING IN JAIL WAS IN A POSITION TO CONTACT ANY LEGAL PERSON WHO WAS CONVERGENT WITH THE INCOME TAX MAT TERS. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS P ER THE MAXIM AUDI ALTERAM PARTEM . W E, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HERE IN ABOVE , SET ASIDE THE IMPUGNED ORDER AND DEEM IT APPROPRIATE TO REMAND THE CAS E BACK TO THE FILE OF THE AO TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THE ITA NO. 6207 TO 6220 /DEL /2012 AMIT KUMAR 8 ASSESSEE TO COOPERATE AND NOT TO SEEK UNWARRANTED OR UNREASONABLE ADJOURNMENTS. 1 1 . IN ALL OTHER APPEALS PERTAINING TO THIS ASSESSEE I.E. THE ITA NOS. 6208 TO 6213/DEL/2012 AND THE APPEALS IN ITA NOS. 6214 TO 6220/DEL/2012 FOR THE ASSESSMENT YEARS 2002 - 03 TO 2008 - 09 PERTAINING TO THE COMPANY M/S LIBERTY HEALTH CARE (P) LTD., GURGAON ( IN WHICH THE ASSESSEE IS A MANAGING DIRECTOR ), T HE FACTS ARE SIMILAR EVEN THE RIVAL CONTENTION S WERE THE SAME, THEREFORE, THE IMPUGNED ORDERS OF THE LD. CIT(A) RELATING TO ALL THOSE APPEALS ARE ALSO SET ASIDE AND THE CASES ARE REMANDED BACK TO THE FILE OF THE AO WITH THE SAME DIRECTION AS GIVEN IN ITA NO. 6207/DEL/2012 (SUPRA). 12 . IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE S ARE ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE OPEN COURT ON 13 /02 /2015 ) SD/ - SD/ - ( C. M GARG ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13 /02 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT( APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR