GLOBAL HOSPITALITY LICENSING COMPANY SARL, MUMBAI V. ASST DIT (IT) 3(1), MUMBAI

ITA 7620/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2275 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 06-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 22-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Period of limitation; Condonation of delay
• Section: 143(3); 27

Judgement Text

ITA NO.7620-21/M/2014 FOR AY 2010-11 GLOBAL HOSPITALITY LICENSING CO. SARL 1 IN THE INCOME TAX APPELLATE TRIBUNAL,MUMBAI BENCH G, MUMBAI BEFORE SH. R.C SHARMA, ACCOUNTANT MEMBER AND SH. PA WAN SINGH, JUDICIAL MEMBER ITA NO.7621/MUM/2014 FOR ASSESSMENT YEAR: 2010-11 AND ITA NO.7620/MUM/2014 FOR ASSESSMENT YEAR: 2010-11 GLOBAL HOSPITALITY LICENCING COMPANY SARL C/O BMR & ASSOCIATE LLP 36 B,DR RK SIRODKAR MARG, PAREL MUMBAI -400012 PAN AADCG5657K THE ASSISTANT DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-3(1) 1ST FLOOR, SCINDIA HOUSE, BALLARD ESTATE, MUMBAI -400038 (APPELLANT) (RESPONDENT) ASSESSEE BY SH. NIRAJ SHETH -AR REVENUE BY SH. JEEVANLAL LAVEDIA- DR DATE OF HEARING 04.10.2016 DATE OF PRONOUNCEMENT 26.10.2016 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH JUDICIAL MEMBER 1. THESE TWO APPEALS U/S 253 OF INCOME TAX ACT(ACT) ARE DIRECTED BY THE ASSESSEE AGAINST THE TWO SEPARATE ORDERS OF CIT(A)-10 MUMBAI FOR AY 2010-11.APPEAL ITA NO. 7621/M/2014 IS AGAINST THE ADDITIONS IN QUA NTUM ASSESSMENT AND ITA NO.7620/M/2014 IS AGAINST THE PENALTY LEVIED U/S 27 1(1)(C) OF THE ACT. AS BOTH THE APPEALS ARE ARISING OUT OF THE ADDITIONS IN THE QUA NTUM ASSESSMENT, THUS BOTH THE APPEAL WERE CLUBBED TOGETHER, HEARD AND ARE DECIDED BY COMMON ORDER. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RET URN OF INCOME FOR RELEVANT ASSESSMENT YEAR ON 30.10.2009. THE CASE WAS SELECTE D FOR SCRUTINY. THE AO COMPLETED THE ASSESSMENT U/S 144/144C/143(3) OF THE ACT, HOLDING THAT IN RESPONSES TO THE NOTICES NOBODY APPEARED ON BEHALF OF ASSESSEE NOR FILED DETAILS OR INFORMATION. THE AO PASSED EX-PARTY ASSESSMENT ORDE R ON 14.05.2013. WHILE PASSING ORDER OF ASSESSMENT THE AO INITIATED PENALT Y U/S 271(1)(C). THE ASSESSMENT PROCEEDINGS WERE COMPLETED UNDER CIRCLE 1(2) (INTER NATIONAL TAXATION) NEW DELHI. AFTER COMPLETION OF ASSESSMENT THE AO ISSUED NOTICE U/S 274 RWS 271(1) ( C) FOR INITIATING PENALTY PROCEEDINGS. SUBSEQUENTL Y, THE CASE WAS TRANSFER FROM ITA NO.7620-21/M/2014 FOR AY 2010-11 GLOBAL HOSPITALITY LICENSING CO. SARL 2 NEW DELHI TO MUMBAI.THE ASSESSEE FILED APPEAL BEFO RE FIRST APPELLATE AUTHORITY / CIT(A) MUMBAI ON 2 ND DEC 2013. THE APPEAL OF THE ASSESSEE WAS DISMISSED FOR THE REASONS THAT THE ASSESSEE FAILED TO FILE ORIGIN AL DEMAND NOTICE U/S156 DESPITE DIRECTION OF THE CIT(A) VIDE LETTER DATED 17/12/201 3. THE LD CIT(A) ALSO HOLD THAT THE APPEAL WAS FILED BEYOND THE PRESCRIBED PERIOD O F LIMITATION AND NO APPLICATION FOR CONDONATION OF DELAY WAS FILED BY THE ASSESSEE. 3. AS THE PENALTY U/S 271(1) (C ) WAS INITIATED BY AO WHILE PASSING THE ASSESSMENT ORDER, AND THE SHOW CAUSE NOTICE U/S 274 RWS 271 WA S ALREADY ISSUED TO THE ASSESSEE, THUS ON RECEIVING THE CASE AFTER TRANSFER FROM NEW DELHI TO MUMBAI THE ADIT (INTERNATIONAL TAXATION) AGAIN SERVED A NOTICE U/S 274 RWS 271(1) (C ) DATED 19.11.2013. THE ASSESSEE FILED ITS REPLY DATED 27. 11.2013 AND MADE REQUEST THAT ASSESSEE IS FILING APPEAL AGAINST THE ASSESSMENT OR DER, HENCE THE PENALTY PROCEEDINGS MAY BE KEPT IN ABEYANCE. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY AO HOLDING THAT THE ASSESSEE FAILED TO GIVE ANY DETAILS AND SUBSTANTIATE ABOUT FURNISHING INACCURATE PARTICULAR OF INCOME OF RS.1,80,15,540/-. AND FURTHER HOLD THAT ASSESSEE CONCEALED THE INCOME OF RS.1,80,15,540/- WHILE FILING THE RETURN OF INCOME. THE AO LEVIED THE MINI MUM PENALTY OF RS.76,07962/- WHICH IS @100% OF TAX SOUGHT TO BE EVADED VIDE OR DER DATED 29/11/2013. AGGRIEVED BY THE ORDER OF PENALTY THE ASSESSEE FILE D APPEAL BEFORE LD CIT(A). THE APPEAL OF THE ASSESSEE WAS DISMISSED BY LD CIT(A) H OLDING THAT APPEAL AGAINST THE ADDITIONS IN THE QUANTUM ASSESSMENT HAS ALREADY BEE N DISMISSED. THUS WITH THIS BACK GROUND THE ASSESSEE FILED THESE TWO SEPARATE APPEAL AGAINST THE TWO SEPARATE ORDER OF LD CIT(A) BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE AR FOR ASSESSEE AND THE DR FOR RE VENUE AND PERUSED THE RECORD OF THE CASE. THE AR FOR ASSESSEE ARGUED THAT THE AO CONCLUDED THE PROCEEDINGS EX-PARTY WITHOUT GIVING ANY OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ORDER OF ASSESSMENT DATED 14/05/2013 WAS PASSED U/S 144/144C / 143(3) OF THE ACT. THE ASSESSMENT WAS COMPLETED AT NEW DELHI, THE ASSESSEE HAS FILED APPLICATION FOR TRANSFER OF CASE TO THE MUMBAI IN THE OFFICE OF DIR ECTOR / ADDITIONAL DIRECTOR ITA NO.7620-21/M/2014 FOR AY 2010-11 GLOBAL HOSPITALITY LICENSING CO. SARL 3 (INTERNATIONAL TAXATION) MUMBAI / NEW DELHI, AND CO PIES OF THOSE LETTERS / APPLICATIONS ARE FILED ON RECORD. IT WAS FURTHER AR GUED THAT THE LD CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE FOR TECHNICAL REASONS WITHOUT GIVING HEARINGS. IN RESPECT OF APPEAL AGAINST THE PENALTY ORDER IT W AS ARGUED THAT APPEAL OF THE ASSESSEE WAS DISMISSED HOLDING THAT THE APPEAL AGAI NST THE ADDITIONS IN THE QUANTUM ASSESSMENT HAS BEEN DISMISSED. IT WAS PRAYE D THAT THE MATTER(S) MAY BE RESTORED TO THE FILE OF AO FOR FRESH HEARING. ON TH E OTHER HAND, THE LD DR FOR THE REVENUE ARGUED THAT THE AR FOR THE ASSESSEE WERE NO T PURSUING THE CASES DILIGENTLY AND NOT APPEARED BEFORE THE AO INTENTIONALLY. THE A PPEAL BEFORE THE LD CIT(A) AGAINST THE QUANTUM ASSESSMENT WAS FILED BEYOND THE PERIOD OF LIMITATION. NO CONDONATION OF DELAY WAS FILED WITH THE APPEAL. THE ORDERS OF THE LD CIT(A) ARE BASED ON THE MATERIAL AVAILABLE ON RECORD. IT WAS P RAYED BY DR THAT THE ORDERS OF AUTHORITIES BELOW DO NOT REQUIRE ANY INTERFERENCE. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND FURTHER GONE THROUGH THE RECORD OF BOTH THE CASE FILE BEFORE US. THE ASS ESSEE HAS REFERRED IN ITS TRANSFER APPLICATION DATED 23 MAY 2012 THAT THE JURISDICTION ASSIGNED TO ASSESSEE IN ITS RETURN OF INCOME WAS WITH ADIT (IT) CIRCLE (1) (2) NEW DELHI. THE GROUND FOR TRANSFERRING THE PROCEEDINGS WAS THAT THE OFFICE O F TAX ADVISOR IS BASED IN MUMBAI. THE AR OF ASSESSEE NOT DISCLOSED IF THEY EVER TRIED TO KNOW THE STATUS OF ASSESSMENT PROCEEDINGS. THERE IS NO COMMUNICATIO N ON BEHALF OF ASSESSEE THAT ANY CORRESPONDENCE IN CASE OF ASSESSEE MAY BE MADE AT ANY OTHER ADDRESS/ MUMBAI ADDRESS. SIMILARLY, THERE IS NO MATERIAL ON RECORD WHICH MAY SUGGEST THAT REVENUE RESPONDED ON THE APPLICATIONS MADE ON BEHAL F OF ASSESSEE, INFORMING THE ASSESSEE TO ATTEND THE PROCEEDINGS BEFORE AO/ADIT(I T) NEW DELHI. WE FURTHER OBSERVED THAT THE AR OF ASSESSEE AT TIME OF INSTITU TION OF FIRST APPEAL BEFORE CIT(A) HAS NOT FILE APPLICATION FOR CONDONATION OF DELAY IN FILING THE APPEAL NOR ANY APPLICATION FOR EXEMPTION FOR FILING THE ORIGIN AL DEMAND NOTICE U/S 156. EVEN THE APPEALS FILED BEFORE US ARE SIGNED AND VERIFIED BY AUTHORISED SIGNATORY WHOSE ORIGINAL AUTHORITY LETTER IS NOT ON RECORD IN ANY O F THE APPEAL FILE. THE CONTENTS OF ITA NO.7620-21/M/2014 FOR AY 2010-11 GLOBAL HOSPITALITY LICENSING CO. SARL 4 THE AUTHORITY LETTER ARE VAGUE. THE CONTENTS OF AUT HORITY LATTER LETTER DO NOT SPECIFY WHO HAD APPOINTED SHEFALI GARODIA OF BMR ASSOCIATE S LLP. THE AR FOR ASSESSEE INSTEAD OF PURSUING THE ASSESSMENT PROCEED INGS AT NEW DELHI WERE FILING THE APPLICATION FOR TRANSFER OF CASE TO MUMBAI. WE INSTEAD OF GOING INTO FURTHER LEGAL TECHNICALITIES OBSERVED THAT THE ASSESSEE WAS EX-PARTY DURING THE ASSESSMENT PROCEEDINGS. THE ORDER OF AO DOES NOT SPECIFY AS TO HOW THE NOTICE OF HEARING DATED 09.01.2012 AND 23.11.2012 DURING THE ASSESSME NT PROCEEDINGS WERE SERVED UPON THE ASSESSEE. INTERESTINGLY, THE FINAL NOTICE DATED 07.02.2013 WAS ISSUED FOR THE HEARING FOR 18.02.2013. NO SATISFACTION WAS RE CORDED BY AO, IF NOTICE DATED 07.02.2013 FOR HEARING ON 18.02.2013 WAS SERVED. LI KEWISE, THE ORDER OF LD CIT(A) IS SILENT IF ANY OPPORTUNITY OF HEARING WAS OFFERED TO THE ASSESSEE BEFORE DISMISSING THE APPEAL ON TECHNICAL GROUND. THE ORDE R OF LD CIT(A) IS NOT IN CONSONANCE WITH THE MANDATE OF SECTION 250 OF THE A CT. KEEPING IN VIEW THE PRINCIPAL OF NATURAL JUSTICE, WE DEEM IT APPROPRIAT E TO SET-ASIDE THE ASSESSMENT ORDER DATED 14.03.2013 AND THE ORDER OF LD CIT(A) D ATED 19/09/2014 AND RESTORE THE CASE TO THE FILE OF AO TO RECONSIDER THE SAME A FRESH AND PASS ORDER IN ACCORDANCE WITH LAW. THE AO SHALL GRANT ADEQUATE OP PORTUNITY TO THE ASSESSEE. THE ASSESSEE SHALL NOT SEEK ADJOURNMENT WITHOUT ANY VALID REASONS AND WOULD PROVIDE ALL NECESSARY DOCUMENTS AND THE INFORMATION REQUIRED BY AO. WITH THESE OBSERVATIONS THE APPEAL ITA NO.7621/M/2014 IS ALLOW ED FOR STATICAL PURPOSE. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED STATICALLY. APPEAL ITA NO. 7620/M/2014 . 7. AS WE HAVE ALREADY RESTORED THE APPEAL OF THE ASSES SEE IN RESPECT OF ADDITIONS IN THE QUANTUM ASSESSMENT TO THE FILE OF AO, THUS THE PENALTY LEVIED U/S 271(1) (A) ON THE SAME ADDITIONS WOULD NOT SURVIVE. HENCE THE AP PEAL OF THE ASSESSEE AGAINST THE LEVY OF PENALTY IS SUCCEEDED AUTOMATICALLY. HOW EVER, IT IS MADE CLEAR THAT THE AO WILL BE AT LIBERTY TO INITIATE PENALTY PROCEEDIN G AFRESH AT THE TIME OF RE- ASSESSMENT IN ACCORDANCE WITH LAW. 8. IN THE RESULT THIS APPEAL OF THE ASSESSEE IS ALLOW ED. ITA NO.7620-21/M/2014 FOR AY 2010-11 GLOBAL HOSPITALITY LICENSING CO. SARL 5 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH OCTOBER, 2016 SD/- SD/- (R. C. SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI; DATED 26/10/2016 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/