ASHOK KUMAR SHIVPURI, NAVI MUMBAI V. CIT 22, NAVI MUMBAI

ITA 631/MUM/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84079 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Keywords: Principle of natural justice; Condonation of delay; Ignorance of law
• Section: 143(3); 263

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 631/MUM/2014 (ASSESSMENT YEAR: 2008-09) ASHOK KUMAR SHIVPURI, ARIHANT SPARSH, FLAT NO 702, PLOT NO 13 & 14, SECTOR 26, VASHI, NAVI MUMBAI -400 703 .: PAN: AAAPS 7414 C VS CIT 22, 3 RD FLOOR, TOWER NO 6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI -400 703 (APPELLANT-CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : MISS RITIKA AGARWAL RESPONDENT BY : MISS S PADMAJA !'#$% /DATE OF HEARING : 12-08-2014 &'( #$%/ DATE OF PRONOUNCEMENT : 07-11-2014 * + * + * + * + O R D E R , , , , -'' -'' -'' -'' '. '. '. '. , . . . . . .. . PER VIVEK VARMA, J.M. : THE APPEAL IS FILED AGAINST ORDER OF CIT -22, MUMBA I, DATED 05.02.2013, PASSED UNDER SECTION 263 OF THE INCOME TAX ACT. 2. IN THE INSTANT CASE, RETURN WAS FILED AT RS. 5,1 5,288/- AND AN ASSESSMENT UNDER SECTION 143(3) WAS MADE AT RS. 6,2 1490/-. 3. IN THE ASSESSMENT PROCEEDINGS, IT WAS NOTICED TH AT THE ASSESSEE SOLD A PLOT, BEARING NO. C-89, EAST OF KAILASH, NEW DELHI AT RS. 4,99,500/-. THE AO REFERRED THE VALUATION OF THE PL OT TO DVO, UNDER SECTION 55A((B)(II). NO REPORT WAS RECEIVED TILL TH E FRAMING OF THE ASSESSMENT ORDER ON 21.12.2010, WHICH THE AO MENTIO NS IN THE ORDER. ASHOK KUMAR SHIVPURI ITA 631/MUM/2014 2 4. THE CIT RECEIVED A PROPOSAL FOR REVISING THE SAI D ASSESSMENT FROM THE AO ON 19.03.2012. IT WAS POINTED OUT THAT ACTUALLY THE PROPERTY WAS SOLD FOR RS. 80 LACS. THE AO ALSO INFO RMED THE CIT THAT ON RECEIPT OF REPORT FROM DVO, IT WAS SEEN THAT THE VALUATION CAME TO RS. 1,20,93,200/- AND VALUATION AS ON 01.04.1981 CA ME AT RS. 3,34,500/-. THE AO, THEREFORE INTIMATED, THAT BASED ON THESE FACTS AND FIGURES, CAPITAL GAIN WOULD REQUIRE RE-COMPUTATION. 5. ON THIS INFORMATION RECEIVED AS A PROPOSAL FROM THE AO, THE CIT INITIATED REVISION PROCEEDINGS UNDER SECTION 263 VI DE SHOW CAUSE NOTICE DATED 18.12.2012. 6. THE CIT AFTER CONSIDERING THE REPLY OF THE ASSES SEE SET ASIDE THE ORDER OF THE AO, PASSED UNDER SECTION 143(3) DATED 22.12.2010 AND DIRECTED HIM TO PASS FRESH ASSESSMENT ORDER. 7. AGAINST THIS ORDER, THE ASSESSEE HAS FILED AN AP PEAL BEFORE THE ITAT. 8. IT WAS NOTICED THAT THERE WAS A DELAY OF 285 DAY S IN FILING THE IMPUGNED APPEAL. THE AR APPEARING IN THE MATTER, IN FORMED THAT AFFIDAVIT, GIVING REASONS FOR THE DELAY IN FILING O F THE APPEAL WAS FILED ALONG WITH THE MEMORANDUM OF APPEAL IN FORM NO. 36, SEEKING CONDONATION OF DELAY, WHICH READS, I, ASHOK KUMAR SHIPURI, SON OF LATE SHRI PANDIT TAP ESHWAR NATH SHIPURI, AGED ABOUT 78 YEARS, R/O ARIHANT SPARSH, FL AT NO. 702, 7 TH FLOOR, PLOT NO. 13 & 14, SECTOR 26, VASHI, NAVI MUM BAI -400 703 DO HEREBY STATE ON OATH AS UNDER: (1) THAT THE ORDER DATED 05/02/2013 PASSED U/S 263 OF THE INCOME TAX ACT, 1961 FOR AY 200809 WAS RECEIVED BY ME ON 13/ 02/2013. (2) THAT THE LAST DATE FOR FILING AN APPEAL BEFORE THE HONBLE ITAT, MUMBAI WAS 14/04/2013 BUT I COULD MANAGE TO FILE IT ONLY ON 24/01/2014, RESULTING IN A DELAY OF ABOUT 9 MONTHS. (3) THAT THE LD. CIT VIDE HIS ORDER DATED 5/2/2013 HAD DIRECTED THE AO TO PASS A FRESH ASSESSMENT ORDER AFTER GIVING DUE O PPORTUNITY OF BEING HEARD AND AT THAT TIME, THE IMPORTANCE OF THE ORDER WAS NOT UNDERSTOOD BY ME. ASHOK KUMAR SHIVPURI ITA 631/MUM/2014 3 (4) THAT IN PURSUANCE OF THE ORDER OF THE LD. CIT, AN A SSESSMENT ORDER DATED 29/11/2013 U/S 143 R W S 263 WAS PASSED, LEVY ING A HUGE DEMAND OF RS. 20,22,300/-. (5) THAT I AM AN ENGINEER BY QUALIFICATION AND BEING A RETIRED PERSON WAS APPEARING IN MY OWN MATTERS TILL THAT STAGE. (6) THAT FACED WITH THIS HUGE DEMAND, I REALIZED THAT I WOULD NEED PROFESSIONAL HELP. TO THAT PURPOSE I APPROACHED SMT . RITIKA AGARWAL, CA LLB, (ADVOCATE HIGH COURT). SHE ADVISED ME TO FILE AN APPEAL AGAINST THE ASSESSMENT ORDER DATED 29/11/201 3 PASSED U/S 143(3) R W S 263. SHE FURTHER ADVISED ME TO FIL E AN APPEAL ALBEIT BELATEDLY AGAINST THE ORDER U/S 263 DATED 5/02/2013 AS WELL, SINCE IT WAS THE FOUNDATION OF THE ASSESSMENT ORDER DATED 29/11/2013. (7) THAT BASED UPON SUCH PROFESSIONAL ADVICE, I HAVE FI LED AN APPEAL AGAINST THE ORDER U/S 263 OF THE ACT. (8) THAT, I HUMBLY SUBMIT BEFORE YOUR HONOURS THAT THE OMISSION TO FILE THE PRESENT APPEAL IN TIME OCCURRED BECAUSE OF MY L ACK OF KNOWLEDGE ABOUT THE INCOME TAX LAWS. (9) THAT MERE TECHNICALITY OR DELAY IN FILING THE APPEA L WHICH WAS NOT CAUSED PREJUDICE TO THE DEPARTMENT, DESERVES TO BE CONDONED IN THE LARGER INTEREST OF JUSTICE, EQUITY AND FAIR PLAY AN D TO REJECT THE APPEAL AT THE THRESHOLD BECAUSE OF DELAY COMMITTED WOULD RESULT IN A GREAT LOSS AND VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. (10)IN SUPPORT OF MY PLEA FOR CONDONATION OF DELAY, RELIANCE IS PLACED ON THE JUDGMENT IN THE CASE OF MOTILAL PADAMPAT SUGAR MILLS CO LTD VS STATE OF UTTAR PRADESH AND OTHERS (1979) 118 ITR 326 (SC) WHEREIN LORD ATKIN HAS BEEN QUOTED FROM EVANS V BARTLAM (19 37) AC 473 THAT THERE IS THE RULE THAT IGNORANCE OF LAW DOES NOT EXCUSE, A MAXIM OF VERY DIFFERENT SCOPE AND APPLICATION. (11)THAT IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANC ES OF THE CASE, IT IS RESPECTFULLY PRAYED THAT THE DELAY OF APPROXIMATELY 9 MONTH IN FILING THE APPEAL MAY KINDLY BE CONDONED AND APPEAL BE ADM ITTED FOR ADJUDICATION ON MERITS. 9. THE AR SUBMITS THAT A LENIENT VIEW MAY BE TAKEN . 10. THE DR ON THE OTHER HAND HAS STRONGLY OBJECTED TO THE PRAYER FOR CONDONATION OF DELAY AND SUBMITTED THAT THE DELAY C ANNOT BE CONDONED ON THE MERE PLEA OF IGNORANCE OF INCOME TA X LAWS. 11. WE HAVE HEARD THE PARTIES ON THE ISSUE AND WE A RE OF THE VIEW THAT PROVISIONS OF LAW HAVE TO BE ADHERED STRICTLY AND THAT ONE CANNOT BE ALLOWED TO ACT IN LEISURE AND MAKE A MOCKERY OF ENACTED LAW, BECAUSE LAW & PROVISIONS ARE LAID DOWN TO BENEFIT B OTH SIDES OF LITIGATION. BE THAT AS IT MAY, WE HAVE TO DO JUSTIC E AND THE HONBLE ASHOK KUMAR SHIVPURI ITA 631/MUM/2014 4 SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUIS ITION VS MST. KATIJI AND OTHERS , REPORTED IN 167 ITR 471, (1988 SC 897) (7) OBSERVES . 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES T O BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY. 13. WHEN WE WEIGH THESE TWO ASPECTS THEN THE SIDE O F JUSTICE BECOMES HEAVIER AND CASTS A DUTY ON US TO DELIVER J USTICE. 14. WE, THEREFORE, CONDONE THE DELAY AND PROCEED WI TH THE APPEAL AS FILED BY THE ASSESSEE, WHEREIN, THE FOLLOWING GROUN D SHAVE BEEN FILED: 1. BECAUSE, THE ORDER APPEALED AGAINST IS ILLEGAL SINCE IT IS A REVISION OF AN ASSESSMENT ORDER PASSED U/S 143(3) O F THE ACT WHICH WAS: (I) INCORRECT AS IT WAS PASSED ON A PROVISIONAL BASIS A ND (II) SUCH AN ASSESSMENT ORDER DESERVED TO BE QUASHED AT THE OUTSET. 2. BECAUSE, LD. CIT HAS ERRED IN LAW AND ON FACTS IN REVISING U/S 263, AN ASSESSMENT U/S 143(3) SIMPLY ON THE BASIS O F THE PROPOSAL FROM THE AO , WITHOUT ESTABLISHING THAT THE ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF THE REVENUE. 3. BECAUSE, LD. CIT HAS ERRED IN LAW AND ON FACTS IN INVOKING SECTION 263 FOR REVERSING AN ASSESSMENT U/S 143(3) ON THE BASIS OF DVOS REPORT U/S 55A(B)(II) OF THE ACT WHICH WAS N OT APPLICABLE IN LAW OR ON FACTS TO THE PRESENT CASE. 4. BECAUSE, LD. CIT HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO PASS A FRESH ASSESSMENT ORDER ON THE BASIS OF DVOS REPORT U/S 55A(B)(II) OF THE ACT WHICH WAS NOT APPL ICABLE IN LAW OR ON FACTS TO PRESENT CASE. 15. AS MENTIONED EARLIER IN THE ORDER, IT HAS BEEN OBSERVED BY US THAT THE ASSESSMENT WAS FRAMED SUBJECT TO VALUATION BY THE DVO. THIS, BY ITSELF IS A DEFICIENCY IN THE ORDER UNDER SECTION 143(3). 16. WE FURTHER FIND THAT THE PROPOSAL WAS RECEIVED BY THE CIT FROM THE AO, WHICH CLEARLY MEANS THAT THERE HAS BEEN NO INDEPENDENT APPLICATION OF MIND BY THE CIT, BECAUSE SECTION 263 (1) CLEARLY SAYS, THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECO RDS OF ANY PROCEEDINGS UNDER THIS ACT, AND IF HE CONSIDERS , WHICH MEANS THAT ASHOK KUMAR SHIVPURI ITA 631/MUM/2014 5 PROPOSAL FOR INITIATION OF REVISION PROCEEDINGS MUS T BE INITIATED BY THE CIT, BECAUSE, IT IS THE CIT WHO HAS TO CALL FOR AND EXAMINE THE RECORDS. BUT IN THE INSTANT CASE THE PROPOSAL CAME FROM THE AO AND ON RECEIPT OF THE PROPOSAL, THE CIT INITIATED REVISION PROCEED INGS. THEREFORE, IN OUR OPINION, THE PROCEEDING GETS FLAGGED AT THE THR ESHOLD. 17. SINCE THE PROCEEDINGS GOT IN THE INFIRMITY ZONE AT THE FIRST STAGE, IT IS NOT NECESSARY FOR US TO PROCEED FURTHER ON ME RITS. 18. WE, THEREFORE, HOLD THAT THE PROCEEDINGS WERE B AD IN LAW AND THUS SUBSEQUENT PROCEEDINGS ARE ANNULLED. 19. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH NOVEMBER, 2014. SD/- SD/- (B R BASKARAN) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 7 TH NOVEMBER, 2014 $/ COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT -22, MUMBAI. 4) / CIT-CONCERN ______/CIT/JT. CIT-22(3), MUMBAI / THE CIT- CONCERN______/ /JT. CIT-23, MUMBAI. 5) -'01$! A , THE D.R. A BENCH, MUMBAI. 6) 12.3 COPY TO GUARD FILE. *+! / BY ORDER / / TRUE COPY / / [ 4/56 , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *895!'.!.