ORIENTAL VENEER PRODUCTS P.LTD, MUMBAI V. DCIT 7(1), MUMBAI

ITA 7604/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3498 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K MOHANDA S
• Keywords: Principle of natural justice; Initiation of penalty proceedings
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J UDICIAL MEMBER AND SRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO .760 4/MUM/2014 (A Y : 2006 - 07 ) ORIENTAL VENEER PRODUCTS P. LTD., 25, MOHAMMEDI LAKDA BAZAR NO.1, MAUL ANA SHAUKAT ALI ROAD, GRANT ROAD, MUMBAI - 08 VS. THE DY. COMMISSIONER OF INCOME TAX - 7 (1), AAYAKAR BHAVAN, M. K. ROAD, MUMBAI PAN:AAACO 0490 M APPELLANT .. RESPONDENT APPELLANT BY .. NONE RESPONDENT BY .. SHRI K.MOHANDAS, DR DATE OF HEARING .. 27 - 07 - 2016 DATE OF PRONOUNCEMENT .. 27 - 07 - 2016 O R D E R PER MAHAVIR SINGH , JM : THIS APPEAL BY THE ASSESSEE IS ARISI N G OUT OF THE ORDER OF CIT (A) - 13 , MUMBAI PASSED IN APPEAL NO.CIT ( A) - 13 / I . T - 20 / 12 - 13 DATED 14 - 10 - 2014 . ASSESSMENT W AS FRAMED BY THE I T O 7 (1) (1) , MUMBAI FOR ASSESSMENT YEAR 2006 - 07 VIDE HIS ORDER DATED 24 - 12 - 2008 U/S 144 OF THE INCOME TAX ACT, 1961 ( HEREINAFTER THE ACT). THE PENALTY UNDER DIS PUTE WAS LEVIED BY THE DCIT, CIRCLE - 7(1) , MUMBAI U/S 271 (1) (C) OF THE ACT VIDE HIS ORDER DA TED 30 - 03 - 2012. 2. AT THE OUTSET, IT IS NOTICED THAT THE PENALTY UNDER DISPUTE LEVIED BY THE AO U/S 271 (1) (C) OF THE ACT, CONFIRMED BY THE CIT (A) WILL NOT SURVIVE FOR THE REASONS THAT THE ASSESSMENT ITSELF HAS BEEN SET ASIDE BY THE TRIBUNAL WHILE HEARI NG THE QUANTUM APPEAL IN ITA NO.5357/M/2011 VIDE ORDER DATED 11 - 03 - 2016 BY OBSERVING IN PARA 4 AS UNDER: - 4. THE PERUSAL OF THE ABOVE REFERRED TO DOCUMENTS REPRODUCTION REVEALS THAT THERE IS A GROSS MISCARRIAGE OF JUSTICE DONE BY THE AO WITH THE ASSESSEE. NEITHER ANY ORDER SHEET HAS BEEN PREPARED /MAINTAINED NOR THE AO HAS GIVEN PROPER OPPORTUNITY TO THE A. R. OF THE ASSESSEE TO REPRESENT HIS CASE. FROM THE AFFIDAVIT OF THE A. R. OF THE ASSESSEE NAMELY SHRI VINOD R. AGARWAL, IT REVEALS THAT HE HAS BEEN VER Y PERTINENT, NOT ONLY TO APPEAR BEFORE THE AO BUT TO FILE THE ITA NO. 760 4 /MUM/20 1 4 2 NECESSARY EXPLANATIONS AND SUBMISSIONS BEFORE THE AO, BUT, DESPITE THAT THE AO PROCEEDED TO PASS EX - PARTE ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT. DESPITE THE LAST LETTER FILED BY THE LD. A. R. OF THE ASSESSEE ON 17.12.08, THE A. O. PASSED ASSESSMENT ORDER ON 24.12.08 EX - PARTE OF THE ASSESSEE. THE LD. A. R. HAS AFFIRMED IN THE AFFIDAVIT THAT HE HAD APPEARED BEFORE THE AO ON 22.12.08 BUT THE AO REFUSED TO ACCEPT HIS SUBMISSIONS AND HEAR HIM. WE FIND THAT THE ACT AND CONDUCT OF THE AO IN THIS CASE IS AGAINST THE PRINCIPLES OF JUSTICE AND FAIR PLAY. EVEN THE LD. CIT (A) HAS ALSO NOT CONSIDERED THE ABOVE FACTS OF NON GRANTING OF PROPER OPPORTUNITY TO THE ASSESSEE BY THE AO WHILE DECIDING THE APP EAL OF THE ASSESSEE. THERE IS A GROSS VIOLATION OF NATURAL JUSTICE, EQUITY AND FAIR PLAY IN THIS CASE BY THE A. O. EVEN THE AO HAS ALSO NOT MAINTAINED THE ORDER SHEET AND HAS FAILED TO PASS THE DATE - WISE ORDERS DURING THE ASSESSMENT PROCEEDINGS WHICH SHOWS THE LACK SLIDE AND NEGLIGENT ATTITUDE OF THE AO WHILE FRAMING THE IMPUGNED ASSESSMENT ORDER IN THIS CASE. SUCH AN ASSESSMENT ORDER, THUS, IS NOT SUSTAINABLE IN THE EYES OF LAW AND THE SAME IS HEREBY SET ASIDE. THE MATTER IS REMANDED BACK TO THE FILE OF TH E AO TO PASS A FRESH ASSESSMENT ORDER IN THIS CASE AFTER GIVING DUE AND PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. THE AO WILL MAINTAIN A PROPER ORDER SHEET WITH DATE - WISE ORDERS MENTIONING THE DETAILS/EVENTS/PROCEEDINGS TAKEN ON EACH DATE. 3. ON QUERY FROM THE BENCH, THE LEARNED SR. DR FAIRLY CONCEDED TO THE POSITION . 4 . AFTER HEARING THE LEARNED SR. DR AND GOING THROUGH THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT ONCE THE QUANTUM ASSESSMENT HAS BEEN SET ASIDE THE MATTER IS REMANDED BA CK TO THE FILE OF THE AO FOR FRESH ADJUDICATION, PENALTY LEVIED BY THE AO U/S 271 (1) (C) OF THE ACT AND CONFIRMED BY THE CIT (A) WILL NOT SURVIVE. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE THE PENALTY. HOWEVER, IN CASE THE AO IS SATISFIED DURING COMPLETION OF SET ASIDE ASSESSMENT PROCEEDINGS, THAT THIS IS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS, HE MAY DO SO AS PER LAW. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT O N 25/07 / 201 6 . SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) ( MAHAVIR SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI , DATED 25/07 / 201 6 LAKSHMIKANTA DEKA/SR.PS ITA NO. 760 4 /MUM/20 1 4 3 C OPY OF THE ORDER FORWAR DED TO : BY ORDER, ASSISTANT REGISTRAR ITAT, M UMBAI DATE INITIAL DICTATION PAD ATTACHED WITH THE DRAFT ORDER YES 1. DRAFT DICTATED ON 27 - 07 - 16 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 27 - 07 - 16 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPR OVED BY SECOND MEMBER. AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT ( A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//