M/s Mansa Land Developers, Chandigarh V. ACIT, Chandigarh

ITA 641/CHANDI/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9022 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 05-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Opportunity of being heard; Principle of natural justice; Bonafide belief; Reasonable cause
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 641 TO 643/CHD/2012 ASSESSMENT YEAR: 2005-06 TO 2007-08 M/S MANSA LAND DEVELOPERS, VS THE ACIT, SCO 199-200, SECTOR 34, CENTRAL CIRCLE, CHANDIGARH. CHANDIGARH. PAN: AALFM7151K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGG ARWAL RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 06.10.2016 DATE OF PRONOUNCEMENT : 18.10.2016 O R D E R PER BHAVNESH SAINI, JM ALL THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS) CENTRAL, GURGA ON DATED 28.03.2012 FOR ASSESSMENT YEARS 2005-06 TO 2007-08. 2. EARLIER, ALL THE APPEALS WERE DISMISSED IN DEFAU LT, HOWEVER, THE ASSESSEE MOVED MISCELLANEOUS APPLICATI ONS FOR RECALLING OF THE EARLIER ORDER EXPLAINING THE R EASONS FOR NON-APPEARANCE. THE MISCELLANEOUS APPLICATIONS OF 2 THE ASSESSEE WERE ALLOWED AND APPEALS WERE RE-FIXED FOR HEARING ON MERIT. 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IN ALL THE APPEALS HAS RAISED THE PRELIMIN ARY GROUND THAT THE ORDER OF THE LD. CIT(APPEALS) IS IL LEGAL, BAD IN LAW AND VOID ABINITIO BEING AGAINST PRINCIPL E OF NATURAL JUSTICE. OTHER GROUNDS AS WELL AS ADDITION S ON MERIT HAVE ALSO BEEN CHALLENGED. 4. THE LD. CIT(APPEALS) NOTED VARIOUS DATES OF HEAR ING FIXED BEFORE HIM FOR HEARING THESE APPEALS. IT IS NOTED THAT ONLY ON ONE OCCASION, WRITTEN SUBMISSION WAS F ILED. ULTIMATELY, THE APPEAL WAS FIXED FOR HEARING ON 21.12.2011. AS NONE ATTENDED, FURTHER NOTICE WAS ISSUED FOR 18.01.2012. ON 18.01.2012 SHRI DINESH VERMA, ADVOCATE APPEARED AND SOUGHT ADJOURNMENT ON THE GROUND THAT BRIEF WAS RECEIVED IN THE MORNING O NLY AND IT WAS NOT POSSIBLE FOR HIM TO ARGUE THE MATTER . APPEAL OF THE ASSESSEE, THEREFORE, ADJOURNED TO 03.02.2012 AND FURTHER ADJOURNED TO 23.02.2012. SH RI DINESH VERMA, ADVOCATE AGAIN SOUGHT ADJOURNMENT WHICH WAS GIVEN FOR 07.03.2012 AND REMAND REPORT WA S ALSO HANDED OVER TO THE COUNSEL FOR COMMENTS. ON 07.03.2012, AGAIN SHRI DINESH VERMA, ADVOCATE SOUGH T ADJOURNMENT ON THE GROUND THAT SEIZED MATERIAL TO B E SUPPLIED BY THE DEPARTMENT WHICH HAD NOT REACHED HI S 3 OFFICE AND THEREFORE, HE IS NOT IN A POSITION TO PR EPARE THE PAPER BOOK. MATTER WAS AGAIN ADJOURNED TO 15.03.2012. ON 15.03.2012, AGAIN APPEALS WERE ADJOURNED TO 22.03.2012. WHILE OTHER GROUP CASES W ERE DISCUSSED BEFORE LD. CIT(APPEALS), COUNSEL SOUGHT S HORT ADJOURNMENT WHICH HAS BEEN GRANTED FOR NEXT DAY. O N NEXT DAY, ADJOURNMENT WAS REJECTED. THE LD. CIT(APPEALS), THEREFORE, NOTED THAT ASSESSEE HAS BE EN GIVEN ADEQUATE OPPORTUNITIES TO PRESENT THE CASE. HOWEVER, DESPITE GIVING SUFFICIENT TIME, NO ARGUMEN TS HAVE BEEN MADE, THEREFORE, APPEALS WERE DECIDED EX- PARTE AND VIDE SEPARATE ORDERS, ALL APPEALS OF THE ASSESSEE HAVE BEEN DISMISSED ON MERITS. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THESE CASES, SEARCH & SEIZURE OPERATION UNDER SECTI ON 132 OF THE ACT WERE CONDUCTED AND ASSESSMENTS UNDER SECTION 153A OF THE ACT HAVE BEEN FRAMED. HE HAS F ILED AFFIDAVITS OF SHRI TEJINDER SINGH, MANAGER OF M/S M ANSA LAND DEVELOPERS, CHANDIGARH I.E. THE ASSESSEE AND S HRI AMITOZ SINGH, PARTNER IN M/S AARYAA & ASSOCIATES, CHARTERED ACCOUNTANT UNDER RULE 10 OF APPELLATE TRIBUNAL RULES TO EXPLAIN THE NON-APPEARANCE BEFORE LD. CIT(APPEALS). COPIES OF THESE AFFIDAVITS HAVE BEEN SUPPLIED TO THE LD. DR. 6. THE LD. COUNSEL FOR THE ASSESSEE, BY REFERRING T O THE CONTENTS OF THESE AFFIDAVITS SUBMITTED THAT ASSESSE E HAS REASONABLE CAUSE FOR NON-APPEARANCE BEFORE LD. 4 CIT(APPEALS), THEREFORE, IN THE INTEREST OF JUSTICE , MATTERS MAY BE REMANDED TO THE FILE OF LD. CIT(APPE ALS) FOR RE-CONSIDERATION OF THE ISSUES ON MERITS. THE L D. DR, HOWEVER, RELIED UPON THE ORDERS OF LD. CIT(APPEALS) . 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE AVERMENTS CONTAINED IN THE ABOVE AFFIDA VITS FILED ON RECORD UNDER RULE 10 OF APPELLATE TRIBUNAL RULES. THE ASSESSEE HAS FILED AFFIDAVIT OF SHRI TE JINDER SINGH, MANAGER IN ASSESSEE FIRM IN WHICH HE HAS AFFIRMED THAT THERE WERE THREE PARTNERS IN THE ASSE SSEE FIRM AND IN THE YEAR 2006, FIRM CEASED OPERATIONS. SUBSEQUENT TO THE CESSATION OF FIRMS BUSINESS, COU NSEL APPOINTED TO REPRESENT THE FIRM BEFORE INCOME TAX AUTHORITIES, STOPPED TAKING INTEREST IN THE CASE. EVEN THE COUNSEL DID NOT APPEAR BEFORE ASSESSING OFFICER FOR FINALIZATION OF THE ASSESSMENTS. SINCE FIRM WAS NOT HAVING ANY BUSINESS ACTIVITIES, THEREFORE, HE HAD T AKEN CARE OF ALL THE MATTERS WITH WHATEVER INFORMATION A ND RESOURCES HE HAD. HE HAD TO RELY UPON ASSURANCE OF THE COUNSEL FOR APPEARING BEFORE LD. CIT(APPEALS), CENT RAL, GURGAON AND ULTIMATELY, HE CAME TO KNOW THAT HIS COUNSEL SHRI DINESH VERMA, ADVOCATE DID NOT APPEAR BEFORE LD. CIT(APPEALS). THEY HAVE, THEREFORE, CHA NGED THEIR COUNSEL AND APPOINTED NEW COUNSEL M/S AARYAA & ASSOCIATES, CHARTERED ACCOUNTANTS. WHILE THE NEW COUNSEL WERE IN THE PROCESS OF PREPARING THE CASE, APPEALS HAD BEEN DECIDED EX-PARTE ON 28.03.2012 DUE TO 5 NON-APPEARANCE OF THE COUNSEL. HE HAS PRAYED THAT JUSTICE MAY BE GRANTED BY THIS BENCH AND HAS GIVEN ASSURANCE THAT THEY SHALL COOPERATE AND COMPLY WITH THE DIRECTIONS OF THE TRIBUNAL. SHRI TEJINDER SINGH IN HIS FURTHER AFFIDAVIT HAS CONFIRMED THAT COPIES OF THE SEIZED MATERIAL WERE PROVIDED TO HIM IN THE FAG END OF MARCH,2012 AND WITHIN A WEEK OF PROCURING COPIES BY HIM, THE APPEALS HAVE BEEN DECIDED BY LD. CIT(APPEA LS), CENTRAL, GURGAON. THEREFORE, THEY WERE NOT IN A POSITION TO PROVIDE AND FILE WRITTEN SUBMISSIONS DU E TO PAUCITY OF TIME. 7(I) THE ASSESSEE ALSO FILED AFFIDAVIT OF SHRI AM ITOZ SINGH, CHARTERED ACCOUNTANT, PARTNER IN M/S AARYAA & ASSOCIATES, CHARTERED ACCOUNTANTS, PANCHKULA IN WHI CH IT IS AFFIRMED THAT SHRI TEJINDER SINGH, MANAGER OF ASSESSEE FIRM APPROACHED THEM FOR TAKING UP THEIR F IRMS APPEALS BEFORE LD. CIT(APPEALS), CENTRAL, GUGAON. BECAUSE EARLIER THIS CASE WAS DEALT BY SHRI DINESH VERMA, ADVOCATE, THEY TOOK UP THE PROCEEDINGS. DUE TO CESSATION OF FIRMS BUSINESS, IT WAS TAKING TIME TO PREPARE THE REQUIRED INFORMATION/SUBMISSIONS TO BE MADE BEFORE LD. CIT(APPEALS). WHILE THEY WERE IN PROCESS OF PREPARING THE CASE, APPEALS WERE DECIDED EX- PARTE ON 28.03.2012 DUE TO NON-APPEARANCE WHICH WAS COMPLETELY UN-INTENTIONAL AND BONAFIDE. NO COUNTER AFFIDAVITS HAVE BEEN FILED AGAINST THESE AFFIDAVITS . 6 7(II) CONSIDERING AVERMENTS CONTAINED IN THESE AFFIDAVITS, IT IS CLEAR THAT THE SEIZED MATERIAL/DO CUMENTS WERE SUPPLIED TO SHRI TEJINDER SINGH AT THE FAG END OF MARCH,2012. THE LD. CIT(APPEALS) ALSO NOTED IN THE IMPUGNED ORDER THAT ON 07.03.2012, SHRI DINESH VERM A REQUESTED FOR SHORT ADJOURNMENT ON THE GROUND THAT SEIZED MATERIAL TO BE SUPPLIED BY THE DEPARTMENT HA D NOT REACHED HIS OFFICE AND THEREFORE, HE WAS NOT IN A POSITION TO PREPARE THE PAPER BOOK. ON THIS REASON , LD. CIT(APPEALS) ADJOURNED THE CASE TO 15.03.2012. IT IS A CASE OF SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT. THEREFORE, IT IS NECESSARY TO SUPPLY SEIZED MATERIA L TO THE ASSESSEE FOR PREPARATION OF THE CASE. THE AFFI DAVIT OF SHRI TEJINDER SINGH IS, THEREFORE, CORRECT TO AF FIRM THAT THE SEIZED MATERIAL WAS SUPPLIED IN THE FAG EN D OF MARCH,2012. ANYHOW, IT IS CLEAR FROM THE OBSERVATI ON OF THE LD. CIT(APPEALS) THAT TILL 07.03.2012, THE SEIZ ED MATERIAL COULD NOT BE RECEIVED BY THE ASSESSEE. TH E IMPUGNED ORDERS HAVE BEEN PASSED ON 28.03.2012, THEREFORE, IN A CASE OF SEARCH, IT WOULD BE DIFFICU LT TO BELIEVE THAT ASSESSEE COULD PREPARE THE CASE WITHIN A SHORT SPAN OF PERIOD. IT, THEREFORE, APPEARS TO US THAT ASSESSEE HAS NOT BEEN AFFORDED REASONABLE OPPORTUNI TY OF BEING HEARD TO ARGUE THE APPEALS BEFORE LD. CIT(APPEALS) IN THE END OF MARCH,2012. FURTHER, TH E AFFIDAVITS OF SHRI TEJINDER SINGH, MANAGER OF THE ASSESSEE AND SHRI AMITOZ SINGH, CHARTERED ACCOUNTAN T ALSO SUPPORT THE CASE OF THE ASSESSEE AND BUSINESS OF 7 THE ASSESSEE FIRM WAS CLOSED SINCE LONG AND ASSESSE E WAS DEPENDANT MAINLY UPON PERFORMANCE OF SHRI DINES H VERMA, ADVOCATE AND ULTIMATELY HE WAS CHANGED BECAU SE OF HIS NON-APPEARANCE AND ANOTHER CHARTERED ACCOUNTANT WAS APPOINTED TO LOOK AFTER THE CASES OF THE ASSESSEE. THEREFORE, THE FACTS AND CIRCUMSTANCES N OTED ABOVE AND AVERMENTS CONTAINED IN THE AFFIDAVITS OF THE DEPONENT ABOVE, IT IS CLEAR THAT ASSESSEE HAD NOT B EEN NEGLIGENT IN NOT APPEARING AND PROSECUTING THE APPE ALS BEFORE LD. CIT(APPEALS). THE EXPLANATION OF THE AS SESSEE IS BONAFIDE THAT DUE TO BONAFIDE BELIEF AND DEPENDI NG UPON THE COUNSELS, THE ASSESSEE COULD NOT REPRESENT PROPERLY BEFORE LD. CIT(APPEALS). THE INTEREST OF JUSTICE, THEREFORE, REQUIRES THAT ONE MORE CHANCE COULD BE G IVEN TO THE ASSESSEE TO ARGUE THE APPEALS BEFORE LD. CIT(APPEALS) IN WHICH SUBSTANTIVE ISSUES AND ADDITI ONS ARE INVOLVED, THEREFORE, IN OUR VIEW THE MATTER SHO ULD BE REMANDED TO THE FILE OF LD. CIT(APPEALS) FOR FRESH ADJUDICATION ON MERITS. 8. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW T HAT IMPUGNED ORDERS HAVE BEEN PASSED AGAINST PRINCIPLE OF NATURAL JUSTICE. WE, THEREFORE, SET ASIDE THE IMPU GNED ORDERS AND RESTORE ALL THE APPEALS TO THE FILE OF L D. CIT(APPEALS), CENTRAL, GURGAON WITH DIRECTION TO RE - DECIDE THE APPEALS OF THE ASSESSEE BY GIVING REASON ABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE LD. 8 CIT(APPEALS) AND NOT TO SEEK UNNECESSARY ADJOURNMEN T IN THE MATTER. IN THIS VIEW OF THE MATTER, THE ADD ITIONS AND ISSUES ON MERITS HAVE NOT BEEN ADJUDICATED. 9. IN THE RESULT, ALL APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH S AINI) ACCUNTANT MEMBER JUDICIAL MEMBE R DATED : 18 TH OCTOBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH