M/s. Prithvi Hitex Creations Pvt. Ltd., Ahmedabad V. The Income tax Officer, Ward-3(1)(4), Ahmedabad

ITA 826/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8048 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD LOZJH LOZJH LOZJH LOZJH OLHE OLHE OLHE OLHE VGEN VGEN VGEN VGEN] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; ,OA OAOA OA EK/ EK/EK/ EK/KQFERK KQFERK KQFERK KQFERK JKW; JKW;JKW; JKW;] U; ] U;] U; ] U;KF KFKF KF;D LNL; ;D LNL; ;D LNL; ;D LNL; DS LE{KA DS LE{KA DS LE{KA DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.826/AHD/2017 ( / ASSESSMENT YEAR : 2009-10) PRITHVI HITEX CREATIONS PVT. LTD., 35 & 36, GIDC APPAREL PARK, KHOKHRA, AHMEDABAD 380 002 / VS. ITO, WARD 3(1)(4), AHMEDABAD 380 015 ./ ./ PAN/GIR NO. : AABCK 7617 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SANJAY R. SHAH, A.R. / RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. / DATE OF HEARING 26/06/2018 !'# / DATE OF PRONOUNCEMENT 28/06/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-9, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)- 9/187/ITO WD.3(1)(4)/15-16 DATED 13.12.2016 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 26.03.2015 RELEVAN T TO ASSESSMENT YEAR (AY) 2009.10 ITA NO.826/AHD/2017 PRITHVI HITEX CREATION PVT. LTD. VS. ITO ASST.YEAR 2009-10 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER:- YOUR APPELLANT BEING AGGRIEVED BY THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-9, AHMEDABAD [ HEREINAFTER REFERRED TO AS 'LEARNED CIT(APPEALS)'] DATED 13/12/ 2016, PRESENTS THIS APPEAL AGAINST THE SAME ON THE FOLLOWING AMONGST OT HER GROUNDS OF APPEAL. THE GROUNDS OF APPEAL SET OUT HEREUNDER ARE INDEPENDENT OF AND WITHOUT PREJUDICE TO EACH OTHER: 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DISMISSING APPEAL OF THE APPELLANT EX-PARTE. 2. THE LEARNED C1T(A} FAILED TO APPRECIATE THAT TH E AUTHORIZED REPRESENTATIVE (AR) OF THE APPELLANT ATTENDED HIS O FFICE WHERE THE LEARNED CIT(A) WAS NOT AVAILABLE AND HENCE THE HEARING COULD NOT TAKE PLACE. IT IS SUBMITTED THAT UNDER TH E CIRCUMSTANCES, THE LEARNED CIT(A) IS NOT JUSTIFIED IN DECIDING THE APPEAL EX-PARTE. 3. WITHOUT PREJUDICE TO ABOVE AND ON THE MERITS OF THE CASE, THE ISSUE REGARDING GENUINENESS OF THE BROKERAGE WAS RE STORED TO THE FILE TO A.O. BY HON'BLE ITAT IN THE FIRST ROUND OF LITIGATION WHEREIN THE LEARNED A.O. WAS SUPPOSED TO ENSURE ATT ENDANCE OF PAYEES OF THE BROKERAGE FOR THE PURPOSE OF CROSS EX AMINATION BY THE APPELLANT. THUS, THE PAYEES OF THE BROKERAGE WE RE WITNESSES OF THE DEPARTMENT AND HENCE TO ENSURE THEIR PRESENC E FOR THE PURPOSE OF ENABLING THEIR CROSS EXAMINATION WAS THE ONUS OF THE A.O. THE LEARNED A.O. HAVING NOT DISCHARGED THIS ON US WAS NOT JUSTIFIED IN ONCE AGAIN DISALLOWING THE BROKERAGE P AYMENT IN THE SECOND ROUND OF LITIGATION. THE LEARNED CIT(A) ERRE D IN LAW AND ON FACTS IN CONFIRMING SUCH DISALLOWANCE OF BROKERA GE EXPENSE FOR RS.24,78,499/- BY THE LEARNED A.O. IN THE SECON D ROUND OF LITIGATION IT IS SUBMITTED THAT IT BE SO HELD NOW A ND DISALLOWANCE MADE IN THIS REGARD BE DELETED, PARTICULARLY WHEN A PPELLANT HAS CORROBORATED GENUINENESS OF SUCH PAYMENT WITH EVIDE NCES BEFORE LEARNED A.O. YOUR APPELLANT PRAYS FOR LEAVE TO ADD. ALTER AND/OR AMEND ALL OR ANY OF THE GROUNDS BEFORE THE FINAL HEARING OF APPE AL. ITA NO.826/AHD/2017 PRITHVI HITEX CREATION PVT. LTD. VS. ITO ASST.YEAR 2009-10 - 3 - 3. AT THE OUTSET, IT WAS OBSERVED FROM THE ORDER OF LD. CIT(A) THAT THE LAST DATE OF HEARING OF THE APPEAL WAS FIXED ON 10.11.2016 BUT NONE- APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) PASSED EX PARTE ORDER DUE TO NONAPPEARANCE OF THE ASSESSEE. AGAINS T THE IMPUGNED EX PARTE ORDER OF LD. CIT(A) ASSESSEE FILED AN APPE AL BEFORE US AND SUBMITTED THAT THE ASSESSEE HAS APPEARED BEFORE THE LD. CIT-A ON THE DATE OF HEARING, I.E. 10-11-2016. THE LD. AR FOR THE ASS ESSEE ALSO CLAIMED TO HAVE FILED THE SUBMISSION, BUT THE LD CIT-A WITHOUT CONSIDERING THE SAME. AS SUCH IT WAS PLEADED IN THE GROUNDS OF APPE AL THAT THE IMPUGNED ORDER HAD BEEN PASSED WITHOUT GIVING THE OPPORTUNIT Y TO THE ASSESSEE. THE LD. AR ACCORDINGLY REQUESTED TO RESTORE THE APPEAL TO THE LD. CIT-A FOR FRESH ADJUDICATION ACCORDING TO THE LAW. ON THE OTHER HAND THE LD. DR DID NOT OBJECT IF THE MATTER IS RESTORED BACK TO THE LD. CIT-A FOR FRESH ADJUDICATION ACCORDING T O THE LAW. 4. ON PERUSAL OF APPELLATE ORDER, WE FIND THAT LD. CIT(A) AFFIRMED THE ACTION OF ASSESSING OFFICER ON EX PARTE ORDER. THE PROVISIONS OF SECTION 250(6) OF THE ACT REQUIRE THE COMMISSIONER (APPEAL) TO DISPOSE OF THE APPEAL IN WRITING WITH REASONING. BUT WE FIN D FROM THE IMPUGNED ORDER OF LD. CIT(A) WHO CONFIRMED THE ORDER OF AO W ITHOUT DECIDING THE SAME ON MERIT. WE ALSO NOTE THAT THE LD. CIT (A) HA S NOT ALLOWED THE PROPER OPPORTUNITY OF BEING HEARD. THE PRINCIPLE OF AUDI ALTERAM PARTEM ITA NO.826/AHD/2017 PRITHVI HITEX CREATION PVT. LTD. VS. ITO ASST.YEAR 2009-10 - 4 - IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRES SION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN AN OPPORTUNIT Y TO DEFEND HIMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVIDENCE , RIGHT TO REBUT ADVERSE EVIDENCE, RIGHT TO CROSS-EXAMINATION, RIGHT TO LEGA L REPRESENTATION, THE DISCLOSURE OF EVIDENCE TO THE PARTY, REPORT OF INQU IRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDE RS. WE TOOK THIS GUIDANCE FOR THE RIGHT OF HEARING, FROM THE RATIO A S IS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MANEKA GANDHI V. UNION OF INDIA IN 1978 SCR (2) 621 , WHEREIN HON'BLE SUPREME COURT HAS LAID DOWN THAT RULE OF FAIR HEARING IS NECESSARY BEFORE PASSING AN Y ORDER. WE FIND THAT IT IS THE PRE-DECISION HEARING STANDARD OF THE NORM OF THE RULE OF AUDI ALTERAM PARTEM. WE FIND THAT IN THIS INSTANT CASE, THE ASSESSEE WAS NOT GIVEN A PROPER HEARING. THEREFORE, WE ARE OF THE VI EW THAT THE ASSESSEE MUST BE GIVEN ONE MORE OPPORTUNITY OF HEARING AND T O REPRESENT HIS CASE. THEREFORE, IN EXERCISE OF THE POWER CONFERRED UNDER RULE 28 OF TRIBUNAL RULES, WE RESTORE THIS APPEAL TO THE FILE OF LD. CI T (A) FOR RECONSIDERATION ALL GROUNDS OF APPEAL AFTER ALLOWIN G THE PROPER OPPORTUNITY OF BEING HEARD BY LAW. NEVERTHELESS, TO MENTION THAT THE ASSESSEE WILL COOPERATE IN THE APPEAL PROCEEDINGS A ND HIS FAILURE WILL ENTAIL CONFIRMATION OF THE IMPUGNED ADDITION MADE B Y THE AO. THE ASSESSEE WILL FILE NECESSARY EVIDENCE ON WHICH HE W ANTS TO RELY UPON. HENCE, THIS GROUND OF ASSESSEES APPEAL STANDS ALLO WED FOR STATISTICAL PURPOSE. ITA NO.826/AHD/2017 PRITHVI HITEX CREATION PVT. LTD. VS. ITO ASST.YEAR 2009-10 - 5 - 5. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/06/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 28/06/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-9, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 27/06/2018 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/06/2018. 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S .. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER