SH. WILLIAM MASIH, JALANDHAR V. INCOME TAX OFFICER, WARD IV(1), JALANDHAR

ITA 651/ASR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3617 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-08-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 11-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM DEB
• Assessee Lawyers: J S BHASIN
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I. T. A. NOS. 651 & 652/(ASR)/2017 ASSESSMENT YEAR: 2010-11 WILLIAM MASIH, S/O DAULAT MASIH, H. NO. 950, ARJUN NAGAR, LADOWALI ROAD, JALANDHAR [PAN: CWPPM 1681J] VS. I. T. O., WARD IV(1), JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. J. S. BHASIN (ADV.) RESPONDENT BY: SH. GAUTAM DEB (D.R.) DATE OF HEARING: 09.08.2018 DATE OF PRONOUNCEMENT: 20.08.2018 ORDER PER SANJAY ARORA, AM: THIS IS A SET OF TWO APPEALS BY THE ASSESSEE FOR AS SESSMENT YEAR (AY) 2010-11, I.E., CONTESTING HIS ASSESSMENT UNDER THE INCOME TAX ACT, 1961, ('THE ACT' HEREINAFTER) AS WELL AS PENALTY U/S. 271(1)(C) OF T HE ACT BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, JALANDHAR (CIT (A) FOR SH ORT) VIDE HIS ORDERS OF EVEN DATE, I.E., 11.08.2017. 2. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. COUNS EL, SH. J. S. BHASIN, ADVOCATE, THAT THE IMPUGNED ORDERS ARE EX PARTE ORDERS AND, ACCORDINGLY, NEED TO BE SET ASIDE IN THE INTEREST OF JUSTICE. THE ASSESSEE IS RESIDIN G ABROAD (U.K.) AND, AS SUCH, WAS NOT AWARE OF THE ASSESSMENT PROCEEDINGS, LEADING TO THE NON-COMPLIANCE AND THE ITA NOS. 651&652/ASR/2017 (AY 2010-11) WILLIAM MASIH V. ITO 2 RESULTANT FRAMING OF THE ASSESSMENT U/S. 144 AND, I N CONSEQUENCE, LEVY OF PENALTY U/S. 271(1)(C). THE ASSESSEE, ON BEING MADE AWARE O F THESE DEVELOPMENTS, CAME TO INDIA ON 15.03.2016, AND VISITED THE INCOME-TAX DEP ARTMENT ON 18.03.2016 AS WELL AS DEPOSITED RS.5 LACS TOWARD HIS TAX LIABILIT Y, WHICH SHOWS EARNESTNESS ON HIS PART. THE APPEALS WERE ACCORDINGLY FILED BEFORE THE FIRST APPELLATE AUTHORITY ON 08.04.2016 THROUGH A COUNSEL. BEFORE THE FIRST APPE LLATE AUTHORITY, SH. BHASIN WOULD CONTINUE, HE ATTENDED ON 21.07.2017, ON WHICH DATE HOWEVER THE SAID AUTHORITY WAS AWAY. THE OFFICE OF THE LD. CIT(A) WA S APPROACHED AGAIN, I.E., AFTER PASSING OF THE IMPUGNED ORDERS (13/7/2018), AND INS PECTION MADE. THE IMPUGNED ORDERS MAY, ACCORDINGLY, IN THE INTEREST OF JUSTICE , BE SET ASIDE TO ENABLE THE ASSESSEE TO PLEAD HIS CASE BEFORE THE FIRST APPELLA TE AUTHORITY. THE LD. DEPARTMENTAL REPRESENTATIVE (DR), SH. GAUTAM DEB, WOULD OBJECT, STATING THAT MORE THAN ADEQUATE OPPORTUNITY, AS APPARENT FROM THE TABLE AT PARA 3 OF THE IMPUGNED ORDERS, ALLOWING SEVERAL (7) OPPORTUNITIES TO THE ASSESSEE (BY SERVICE OF THE NOTICES OF HEARING THROUGH SPEED POST, WHICH REMAINED UNRESPON DED OR BY SEEKING ADJOURNMENT BY THE COUNSEL (ON 4 OCCASIONS)), SO TH AT THE LD. CIT(A) WAS JUSTIFIED TO CONCLUDE THAT THE ASSESSEE HAD NOTHING FURTHER T O SAY IN THE MATTER. THE ASSESSMENT AND PENALTY WAS ACCORDINGLY CONFIRMED. N O CASE FOR A SET ASIDE IS, UNDER THE CIRCUMSTANCES, MADE OUT. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE ASSESSMENT PROCEEDINGS IN THE INSTANT CASE WER E INITIATED BY THE ISSUE OF NOTICE U/S. 148 ON 11.12.2013 ON THE BASIS OF THE CASH DEPOSITED IN THE ASSESSEE S SAVING BANK ACCOUNT AT RS.36.99 LACS , AFTER BEING QUERIED IN ITS RESPECT (VIDE LETTER DATED 07.01.2013), WHICH AGAIN REMAINED UN-COMPLIED WITH. THERE WAS NO COMPLIANCE TO THE SAID NOTICE AS WELL AS THE SEVERA L (8) OPPORTUNITIES GRANTED SUBSEQUENTLY, INCLUDING 5 PER NOTICES U/S. 142(1), TWO OF WHICH, I.E., DATED ITA NOS. 651&652/ASR/2017 (AY 2010-11) WILLIAM MASIH V. ITO 3 16.05.2014 AND 08.01.2015, WERE SERVED THROUGH AFFI XTURE. EXCLUDING THE CREDIT ENTRIES IN THE BANK ACCOUNT BY WAY OF TRANSFER OF F UNDS (RS.13 LACS), THE CASH DEPOSIT/S, AS WELL AS THE INTEREST CREDITED IN THE BANK ACCOUNT (RS. 2.27 LACS), WAS ACCORDINGLY BROUGHT TO TAX. THE COMPLETE NON-REPRES ENTATION IN THE SAID PROCEEDINGS HAS BEEN EXPLAINED BEFORE US ON THE BAS IS OF THE ABSENCE FROM INDIA OF THE ASSESSEE. WHAT, HOWEVER, REMAINS UNEXPLAINED IS THE ASSESSEES CONDUCT POST THE ASSESSMENT AND PENALTY ORDER, WHICH ARE THEMSEL VES SEPARATED BY SIX MONTHS, BEING DATED 19.01.2015 AND 27.07.2015 RESPECTIVELY, SO THAT REPRESENTATION, POST ASSESSMENT, MAY HAVE LED TO AN ORDER QUA PENALTY ON MERITS OR, IN ANY CASE, ABEYANCE OF THE PENALTY PROCEEDINGS. THE APPEALS BE FORE THE FIRST APPELLATE AUTHORITY WERE IN BOTH CASES FILED IN TIME (INASMUC H AS BOTH THE ORDERS ARE STATED TO BE RECEIVED ONLY ON 21/3/2016 REFER PARA 1 OF THE IMPUGNED ORDERS), APPOINTING A COUNSEL THROUGH WHOM THESE WERE AND, IN FACT, ALSO PAYING TAX (TO THE EXTENT OF RS.5 LACS). NO REASON FOR NON-ATTENDANCE BY OR ON B EHALF OF THE ASSESSEE, TO WHOM SEVERAL (7) NOTICES WERE ISSUED AT THE ADDRESS MENT IONED IN FORM 35 FROM TIME TO TIME, HAS BEEN ADVANCED. THE VISITING BY THE LD. CO UNSEL, SH. BHASIN, THE OFFICE OF THE LD. CIT(A) ON 21.07.2017, AS STATED BEFORE US ( AS WELL AS VIDE GROUND 2 OF THE APPEAL) IS NEITHER HERE NOR THERE. THIS IS AS THE ( NEXT) DATE OF HEARING WAS 24.07.2017, ON WHICH DATE, AS STATED IN THE IMPUGNE D ORDERS, TO NO REBUTTAL, NONE ATTENDED, AS WAS THE CASE ON THE PRIOR DATE OF HEAR ING, I.E., 07.07.2017. IN FACT, THE LEAST ONE WOULD EXPECT, I.E., EVEN ASSUMING THAT TH E COUNSEL FOR SOME VALID REASON COULD NOT APPEAR EARLIER OR WAS NOT AWARE OF THE NE XT DATE OF HEARING, WAS TO ENQUIRE ABOUT THE SAME, AND PUT IN HIS APPEARANCE O N 24.07.2017, I.E., THE NEXT DATE OF HEARING. IN FACT, SH. BHASIN, WHO ATTENDED ON 21 .07.2017, HAS NOT BEEN SHOWN, OR EVEN CONTENDED, TO BE THE COUNSEL IN THE PROCEED INGS BEFORE THE FIRST APPELLATE AUTHORITY; THE LD. CIT(A) RECORDING THE ATTENDANCE OF TWO COUNSELS, SH. SUSHIL SHARMA (ADV.) AND SH. PRABHU SINGH (AR) BEFORE HIM, WHO THOUGH ONLY SOUGHT ITA NOS. 651&652/ASR/2017 (AY 2010-11) WILLIAM MASIH V. ITO 4 ADJOURNMENTS WHICH WERE GRANTED. UNDER THE CIRCUM STANCES, THE INFERENCE DRAWN BY THE LD. CIT(A) THAT THE ASSESSEE HAD NOTHING TO SAY IN THE MATTER, PROCEEDING TO DECIDE THE APPEALS EX PARTE ON THE BASIS OF THE MATERIAL ON RECORD, CANNOT BE FAULTED WITH. WITH REGARD TO THE SAID MATERIAL, THE CASH DE POSITS IN THE ASSESSEES BANK ACCOUNT, PARTICULARLY CONSIDERING THAT THE ASSESSEE HAS NO DISCLOSED SOURCE OF INCOME IN INDIA, IS SURPRISING AND, IN ANY CASE, RE QUIRES BEING EXPLAINED. ADMITTEDLY, NO EXPLANATION WAS FURNISHED SO THAT TH E SAME GETS DEEMED AS THE ASSESSEES INCOME U/S. 69/69A OF THE ACT. THE INTER EST CREDITED TO THE ASSESSEES ACCOUNT (BY THE BANK) IS AGAIN ONLY INCOME AND, THE REFORE, BROUGHT TO TAX. THE NON- RETURNING OF ANY INCOME BY THE ASSESSEE WOULD, UNDE R THE CIRCUMSTANCES, JUSTIFY THE ISSUE OF NOTICE U/S. 148 (REFER EXPLANATION 2(A) BELOW SECTION 147). THE ASSESSMENT CAME TO BE ACCORDINGLY CONFIRMED, AND LIKEWISE FOR THE PENALTY U/S. 271(1)(C), INITIATED ALONG WITH; THERE BEING NO EXPLANATION AD VANCED TOWARD THE NON-RETURNING OR THE NON-DISCLOSURE OF THE SAID INCOMES. WE, ACCO RDINGLY, FIND NO INFIRMITY IN THE IMPUGNED ORDERS, NOR WAS SH. BHASIN ABLE TO POINT O UT ANY DURING HEARING. AS EXPLAINED BY THE HONBLE JURISDICTIONAL HIGH COURT IN CIT V. SAS EDUCATIONAL SOCIETY [2009] 319 ITR 65 (P&H), THE TRIBUNAL (OR ANY OTHE R APPELLATE AUTHORITY FOR THAT MATTER) CANNOT SET ASI DE THE IMPUGNED ORDER UNLESS IT RECORDS A FINDING THAT PROPER OPPORTUNITY OF HEARIN G HAD NOT BEEN ACCORDED TO THE LITIGANT BEFORE PASSING THE ORDER APPEALED AGAINST. WE ARE IN THE INSTANT CASE UNABLE TO RECORD ANY SUCH FINDING, I.E., IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHICH ARE IN FACT ADMITTED AND NOT DISPUTED. NO DOUBT, TH E LD. CIT(A) IS TO PASS AN ORDER ON MERITS, AND THE NON-PROSECUTION OF ITS APPEAL BY AN APPELLANT WOULD NOT ABSOLVE HIM OF HIS OBLIGATION IN LAW TO DO SO. HERE, AGAIN, WE FIND THAT THE MATERIAL ON RECORD JUSTIFIES THE CONFIRMATION BOTH OF THE ASSES SMENT AND THE PENALTY IN-AS-MUCH AS NO EXPLANATION QUA THE NATURE AND SOURCE OF THE CASH DEPOSITS OR THE NON- RETURNING OF THE INTEREST INCOME, IS ON RECORD. THE RE IS, IN FACT, EVEN NO STATEMENT OF ITA NOS. 651&652/ASR/2017 (AY 2010-11) WILLIAM MASIH V. ITO 5 FACTS, AS MAY HAVE BEEN FILED BEFORE THE FIRST APPE LLATE AUTHORITY, WHICH AGAIN WHERE SO, WOULD REQUIRE BEING SUBSTANTIATED, SUGGES TING THE NON-INCLUSION OF THE BANK CREDIT/S AS THE INCOME, WITH THE ASSESSING OFF ICER HAVING ALREADY EXCLUDED THAT ARISING ON THE TRANSFER OF FUNDS, I.E., BY DEE MING THEM AS EXPLAINED. SO, HOWEVER, IT CANNOT BE DENIED THAT FORE-CLOSIN G THE PROCEEDINGS AT THIS STAGE WOULD PRECLUDE THE ASSESSEE, A RESIDENT OF U. K., FROM PRESENTING HIS CASE BEFORE ANY AUTHORITY. ALSO, IT IS APPARENT THAT THE ASSESSEE IS EARNEST IN SETTLING HIS TAX DISPUTE, COMING TO INDIA, VISITING THE TAX DEPA RTMENT AND DEPOSITING RS.5 LACS, FOLLOWED BY RECOURSE TO THE APPELLATE PROCEDURE. TH E BLAME FOR THE NON- PROSECUTION OF THE APPEALS BEFORE THE TAX, AS IT AP PEARS, LIES AT THE DOOR OF THE COUNSELS. IT MAY BE THAT THE COUNSEL/S HIMSELF WAS CONSTRAINED FOR WANT OF INFORMATION/FACTS FROM THE ASSESSEE, WHO SHOULD HAV E MAINTAINED LIAISON WITH THE COUNSEL/S, I.E., ONCE HE DECIDES TO FILE THE APPEAL S. EITHER WAY, IT IS THE ASSESSEE WHO WOULD BE THE AGGRIEVED AND THE AFFECTED PARTY. UNDER THE CIRCUMSTANCES, ON THE BALANCE, IN OUR OPINION, THE INTEREST OF JUSTIC E WOULD BE BEST SERVED, IN THE PECULIAR FACTS OF THE CASE, BY ALLOWING THE ASSESSE E A FINAL OPPORTUNITY TO PRESENT HIS CASE BEFORE THE FIRST APPELLATE AUTHORITY, UPON IMPOSING A NOMINAL COST ON THE ASSESSEE FOR DISREGARDING THE DUE PROCESS OF LAW. S UBJECT, THEREFORE, TO THE PAYMENT OF RS.5,000/- PER APPEAL WITHIN A MONTH OF THE COMM UNICATION OF THIS ORDER, THE IMPUGNED ORDERS ARE SET ASIDE AND THE APPEALS RESTO RED TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATION AFRESH ON MERITS AFTER ALLOWING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, WHO MAY, BEFORE THE FIRST APPELLAT E AUTHORITY, SUBSTANTIATE HIS CASE FOR NON-APPEARANCE BEFORE THE AO RESULTING IN THE F RAMING OF THE EX PARTE ASSESSMENT. FURTHER, NEEDLESS TO ADD, WE MAY NOT BE CONSTRUED AS HAVING ISSUED ANY FINDING QUA THE MERITS OF THE ASSESSMENT AS FRAMED OR THE LEVY OF PENALTY. WE DECIDE ACCORDINGLY. ITA NOS. 651&652/ASR/2017 (AY 2010-11) WILLIAM MASIH V. ITO 6 4. IN THE RESULT, THE ASSESSEES APPEALS ARE ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 20, 20 18 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 20.08.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: WILLIAM MASIH, S/O DAULAT MA SIH, H. NO. 950, ARJUN NAGAR, LADOWALI ROAD, JALANDHAR (2) THE RESPONDENT: I. T. O., WARD IV(1), JALAN DHAR (3) THE CIT(APPEALS)-2, JALANDHAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER