Sureshbhai Chhaganbhai Patel, Ahmedabad V. DCIT, Circle-3(1)(1), Ahmedabad

ITA 774/AHD/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8326 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P SRIVASTAVA
• Assessee Lawyers: S N DIVETIA

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.774/AHD/2018 / ASSTT. YEAR: 2013-14 SURESHBHAI CHHAGANBHAI PATEL A-1, NANDESWAR APARTMENT NR. SUN-N-STEP CLUB SOLA ROAD AHMEDABAD. PAN : AASPP 5973 D VS. DCIT, CIR.3(1)(1) AMBAWADI, AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVETIA, AR REVENUE BY : SHRI B.P. SRIVASTAVA, SR.DR ! / DATE OF HEARING : 11/09/2018 '#$ ! / DATE OF PRONOUNCEMENT: 4/10/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-9, AHMEDABAD DATED 1.3.2018 PASSED FOR TH E ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE HAS TAKEN FIVE GROUNDS OF APPEAL AL ONG WITH SUB- GROUNDS. HOWEVER, IN BRIEF, HIS GRIEVANCE IS THAT THE LD.CIT(A) HAS ERRED IN UPHOLDING ADDITIONS/DISALLOWANCES OF RS.10 ,22,10,43/- BY AN ORDER PASSED EX PARTE WITHOUT PROVIDING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.774/AHD/2018 2 3. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT THE LD.CIT(A) HAS DISMISSED THE APPEAL OF THE ASSES SEE EX PARTE WITHOUT PROVIDING PROPER OPPORTUNITY OF HEARING, HENCE ON T HIS SHORT GROUND, IMPUGNED ORDER DESERVES TO BE SET ASIDE. HE FURTHER CONTENDED THAT EVEN THE AO HAS NOT PROVIDED FULL OPPORTUNITY TO TH E ASSESSEE AND STARTED PROCEEDINGS WHEN THE ASSESSMENT IS GOING TO BE TIME BARRED. THEREFORE, PROCEEDINGS DESERVE TO BE RE-INSTITUTED AT THE LEVEL OF THE AO. 4. ON THE OTHER HAND, THE LD.DR ON THE STRENGTH OF HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF PR.CIT VS. ASHOK JI CHANDUJI THAKOR AND OTHERS RENDERED IN TAX APPEAL NOS.710 TO 717 OF 2018 CONTENDED THAT THE TRIBUNAL SHOULD NOT SET ASIDE ORDERS OF TH E REVENUE AUTHORITIES AND REMIT ISSUES FOR RE-ADJUDICATION IN A ROUTINE M ANNER. HE POINTED OUT THAT IN THIS CASE, THE TRIBUNAL HAS REMITTED TH E ISSUE BACK TO THE FILE OF THE LD.CIT(A) FOR RE-ADJUDICATION. HONBLE HIGH COURT HAS REVERSED THE ORDER OF THE TRIBUNAL AND RESTORED THE ADDITION S. HE CONTENDED THAT PERUSAL OF CIT(A)S ORDER WOULD INDICATE THAT NOTIC ES TO THE ASSESSEE WERE ISSUED ON THREE OCCASIONS, BUT HE FAILED TO AP PEAR BEFORE THE LD.CIT(A). THEREFORE, THERE IS NO REASON TO SET AS IDE WELL REASONED ORDER OF THE LD.CIT(A). HE FURTHER CONTENDED THAT EVEN BEFORE THE AO, THE ASSESSEE DID NOT PROSECUTE HIS INCOME-TAX PROCE EDINGS IN AN APPROPRIATE MANNER, AND THE LD.AO HAS RIGHTLY MADE THE ADDITION. ON OUR DIRECTION, THE LD.DR PLACED ON RECORD COPY OF O RDER SHEET PASSED BY THE AO DURING THE ASSESSMENT PROCEEDINGS. 5. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS FILED HIS RETUR N OF INCOME ON 14.10.2013 DECLARING TOTAL INCOME AT RS.10,27,930/- . AN ASSESSMENT ORDER PASSED ON 31.3.2016 WHEREBY INCOME OF THE ASS ESSEE HAS BEEN DETERMINED AT RS.10,32,38,360/-. THE LD.AO HAS MAD E ADDITION OF RS.10,22,10,434/-. IN OTHER WORDS, INCOME OF THE A SSESSEE HAS BEEN ITA NO.774/AHD/2018 3 DETERMINED AT HUNDRED TIMES MORE THAN THE ONE DECLA RED BY HIM. SECTION 143(2) AUTHORIZES THE AO TO ISSUE A NOTICE PROVIDING OPPORTUNITY TO THE ASSESSEE AS TO WHAT HE WANTS TO SUBMIT IN SUPPORT OF RETURN. THIS SECTION INFUSES JURISDICTION IN THE A O FOR SCRUTINISING THE RETURN FILED BY THE ASSESSEE. TIME LIMIT PROVIDED IN THE PROVISO APPENDED TO THIS SECTION AUTHORIZES HIM TO ISSUE SU CH NOTICE WITHIN SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH RETURN WAS FILED. IN THE PRESENT CASE, RETURN WAS FILED ON 14.10.2013. IT MEANS NOTICE UNDER SECTION 143(2) COULD BE ISSUED BEFORE THE END OF SEPTEMBER, 2014. THE NOTICE WAS ISSUED ON 3.90.2014 I.E. WELL IN TIME. THEREAFTER, PROCEEDINGS REMAINED DORMANT FOR ONE YEAR. THEREAF TER, NOTICE WAS ISSUED ON 24.9.2015 I.E. EXACTLY AFTER ONE YEAR AND 21 DAYS. THE AO THEN TOOK THE PROCEEDINGS SERIOUSLY AND ISSUED QUES TIONNAIRE ON 27.11.2015. IN COMPLIANCE TO THE ORDER OF THE AO, T HE ASSESSEE HAS PUT HIS APPEARANCE AND SUBMITTED PART DETAILS ON 9.12.2 015. AFTER 31.12.2015, THE AO HAS NOT GIVEN NEXT DATE. HE AGA IN ISSUED NOTICE ON 14.3.2016. ALL OF A SUDDEN ON 18.3.2016 HE CALLED FOR CERTAIN DETAILS, WHICH WERE ROUTINELY MENTIONED IN THE FIRST NOTICE ISSUED ON 27.11.2015. HE PASSED ASSESSMENT ORDER ON 31.3.201 6. WE HAVE PERUSED THIS ORDER SHEET AND IN OUR OPINION, THE LD .AO HAS SERIOUSLY APPLIED HIS MIND ONLY FOR LAST 10 TO 15 DAYS. HE H AD ALLOWED THE ASSESSMENT PROCEEDINGS TO REMAIN DORMANT FOR MORE T HAN ONE YEAR, THEN AT A FAG END STARTED INVESTIGATION AND EXPECTE D THE ASSESSEE TO SUBMIT VOLUMINOUS DETAILS WHICH COULD NOT BE SUBMIT TED IN SUCH A SHORT PERIOD OF TIME. TO OUR MIND, THIS IS NOT A PROPER MANNER IN WHICH THE ASSESSMENT ORDER OUGHT TO BE CONDUCTED. ON APPEAL, NO DOUBT THE LD.CIT(A) HAS ISSUED NOTICE ON 19.7.2017, WHICH ACC ORDING TO HIM NOT RESPONDED BY THE ASSESSEE. THEREAFTER ON 31.8.2017 , AND LASTLY ON 26.9.2017. THE VERSION OF THE ASSESSEE WAS THAT HE BECAME LITTLE LATE ON THE LAST DATE OF HEARING. HE APPROACHED THE LD. CIT(A) FOR ENTERTAINING OF THE WRITTEN SUBMISSIONS AND OTHER D ETAILS, BUT THE LD.CIT(A) INFORMED HIM THAT ACCORDING TO THE STANDA RD NORMS APPLIED BY ITA NO.774/AHD/2018 4 HIM UNIVERSALLY ON ALL APPEALS, HE DID NOT GRANT MO RE THAN FOUR OPPORTUNITIES. IF THE ASSESSEE FAILED TO APPEAR, T HEN HE WOULD DECIDE THE APPEAL EX PARTE . THE ASSESSEE HAS SUBMITTED DETAILS ON THE RECEIP T COUNTER OF THE DEPARTMENT. THESE DETAILS HAVE BEEN RECOGNIZED BY THE LD.CIT(A) IN HIS ORDER (PARA-3), BUT DID NOT TAKE C OGNIZANCE OF THE DETAILS. WE HAVE VISUALIZED ALL THESE CIRCUMSTANCE S. SUB-SECTION(6) OF SECTION 250 OF THE INCOME TAX ACT CONTEMPLATES THAT THE LD.CIT(A) WOULD STATE POINT IN DISPUTE, AND THEREAFTER RECORD REASONS IN SUPPORT HIS CONCLUSIONS. THE IMPUGNED ORDER WAS PASSED ON 1.3.2018 I.E. ALMOST AFTER FIVE MONTHS FROM THE LAST DATE OF HEAR ING. IT MEANS, THE APPEAL REMAINED PENDING BEFORE THE LD.CIT(A) FOR OR DERS FOR MORE THAN 5 MONTHS. WE FAILED TO APPRECIATE THIS APPROACH AT THE END OF THE LD.CIT(A). IF IT HAS NO TIME TO ADJUDICATE THE APP EAL AND DICTATE THE ORDER, THEN ATLEAST IN THE INTEREST OF JUSTICE, HE SHOULD HAVE GRANTED ONE OR TWO MORE OPPORTUNITIES TO THE ASSESSEE. IT SHOU LD HAVE TAKEN COGNIZANCE OF THE DETAILS FILED BY THE ASSESSEE. Q UASI-JUDICIAL AUTHORITIES ARE NOT BEING RESPECTED ON ACCOUNT OF T HEIR POWERS TO LEGALISE INJUSTICE ON TECHNICAL GROUNDS, BUT BECAUS E THEY ARE CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. LET U S FOR ARGUMENTS SAKE ASSUME THAT THE ASSESSEE WAS NEGLIGENT IN PROSECUTI NG HIS INCOME TAX PROCEEDINGS BEFORE THE LD.REVENUE AUTHORITIES, THEN ALSO IT IS TO BE KEPT IN MIND THAT RETURN DECLARING INCOME OF RS.10,27,93 0/- WAS SUBMITTED WHEREAS ADDITION TO THE EXTENT OF RS.10.22 CRORES H AS BEEN MADE TO HIS INCOME. PUNISHMENT IN THE SHAPE OF TAX LIABILITY O N THIS ADDITION OF RS.10.20 CRORES IS DISPROPORTIONATE TO THE NEGLIGEN CE, WHICH OTHERWISE APPEARS TO BE A CONTRIBUTORY NEGLIGENCE. THE AO CO ULD IMPOSE PENALTY UNDER SECTION 271(B) FOR NOT FURNISHING THE DETAILS . INTEREST WOULD BE CHARGEABLE UPON THE ASSESSEE ON THE ADDITIONAL INCO ME ASSESSED IN HIS HAND. BUT THE AUTHORITIES OUGHT TO BE LITTLE LIVE TO THE EXPECTATION AND CONCERN OF THE LITIGANTS. THEY CANNOT FRAME ASSESSM ENT ORDER IN ROUTINE MANNER WITHOUT TAKING COGNIZANCE TO THE DIFFICULTIE S FACED BY AN ASSESSEE. AS FAR AS JUDGMENT OF THE HONBLE GUJARA T HIGH COURT RELIED ITA NO.774/AHD/2018 5 UPON THE LD.DR IS CONCERNED, WE ARE OF THE VIEW THA T IT IS A DECISION ON THE FACTS OF THAT CASE. IT DOES NOT LAY DOWN ANY P ROPOSITION THAT TRIBUNAL CANNOT RESTORE ISSUES TO THE FILE OF THE C IT(A) OR AO FOR RE- ADJUDICATION. WHENEVER CIRCUMSTANCES DEMAND THAT S OME INJUSTICE HAS BEEN DONE TO AN ASSESSEE BY NOT PROVIDING PROPER OP PORTUNITY, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN REMITTING ISSUE TO T HE FILE OF LOWER AUTHORITIES FOR RE-ADJUDICATION. THEREFORE, TAKING INTO CONSIDERATION ALL THESE ASPECTS, WE ARE OF THE VIEW THAT ORDERS OF TH E REVENUE AUTHORITIES DESERVE TO BE SET ASIDE. WE REMIT ALL THESE ISSUES TO THE FILE OF THE AO FOR RE-ADJUDICATION. THE LD.AO SHALL TAKE UP THE P ROCEEDINGS WITHIN 15 DAYS FROM THE RECEIPT OF OUR ORDER, FIX THE DATE AN D CONDUCT THE PROCEEDINGS AT AN INTERVAL OF FIFTEEN DAYS OR EARLI ER TO THEM, ACCORDING TO HIS CONVENIENCE. WE FURTHER DIRECT THE ASSESSEE TO COOPERATE WITH THE AO AND SUBMIT REQUISITE DETAILS. HE SHOULD RES TRAIN HIMSELF FROM LINGERING THE PROCEEDINGS BEFORE THE LD.AO. WITH T HE ABOVE OBSERVATIONS, THIS APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. OUR OBSERVATIONS WILL NOT IMPACT OR IMPAIR THE EXPLANATION/DEFENCE OF THE ASSESSEE AND WILL NOT CA USE ANY PREJUDICE TO THE STAND OF THE AO. HE SHALL PASS THE ORDER IN AC CORDANCE WITH LAW. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 4THOCTOBER, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 4/10/2018