Dayitwa Builders, Raigad V. Income-tax Officer, Raigad

ITA 868/PUN/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7755 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Assessment record
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 868 /P U N/201 7 / ASSESSMENT YEAR : 20 1 2 - 1 3 DAYITWA BUILDERS, C - 103, 1 ST FLOOR, NANDANVAN COMPLEX, MUMBAI - PUNE HIGHWAY, PANVEL, RAIGAD 410206 . / APPELLANT PAN: AAGFD9751R VS. THE INCOME TAX OFFICER, WARD 1, PANVEL, RAIGAD . / RESPONDENT / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : SHRI AJAY MODI / DATE OF HEARING : 0 2 .0 8 . 2017 / DATE OF PRONOUNCEMENT: 0 9 . 0 8 .201 7 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 1 , AURANGABAD , DATED 2 2 .0 3 .201 7 RELATING TO ASSESSMENT YEAR 20 1 2 - 1 3 AGAINST ORDER PASSED UNDER SECTION 250 OF THE INCOME - TAX ACT , 1961 (IN SH ORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A), AURANGABAD WAS NOT JUSTIFIED IN PASSING THE EXPARTE APPEAL ORDER HOLDING THE APPELLANT IN DEFAULT TO AT TEND THE APPEAL PROCEEDINGS AT AURANGABAD. THE APPEAL ORDER BE SET ASIDE. ITA NO. 868 /P U N/20 1 7 DAYITWA BUILDERS 2 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE APPEAL WAS ORIGINALLY FILED BEFORE LD. CIT(A), THANE. THE APPELLANT FOR THE FIRST TIME CAME TO KNOW THAT ITS APPEAL WAS TRANSFERRED TO AURANGABAD CIT(A) - 1 ON READING OF THE APPEAL ORDER ITSELF. NO OPPORTUNITY WAS GIVEN TO APPELLANT BEFORE TRANSFER OF SUCH APPEAL PROCEEDINGS. THEN NOTICES OF HEARING U/S 250 WERE NOT RECEIVED BY THE APPELLANT AT PANVEL. IN THE CIRCUMSTANCES THE EXPARTE APPEAL ORDER IS NOT JUSTIFIED. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW FROM THE APPEAL ORDER OF REVEALS THAT THE ORDER OF TRANSFER OF APPEAL IS DT. 07 - 10 - 2016. AS PER APPEAL ORDER THE DATES OF NOTICES U/S 250 APPEAR AS 22 - 08 - 2 016 AND 15 - 09 - 2016 WHICH ARE PRIOR TO TRANSFER ORDER DT. 07 - 10 - 2016. THIS CAUSED EXTREME PREJUDICE TO THE APPELLANT RESULTING INTO SERIOUS INJUSTICE. THE NATURAL JUSTICE HAS BEEN DENIED. THE APPEAL ORDER BE QUASHED . THE CHART IS WITHOUT ANY MODE OF SERVICE EITHER BY POST OR OTHERWISE. IT MEANS NO SERVICE WAS MADE. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) FAILED TO CONSIDER THE COMPLIANCE MADE BEFORE A. O . IN THE ASSESSMENT PROCEEDINGS JUDICIOUSLY AS THE ASSESSMENT RECORDS WER E NEITHER CALLED FOR NOR VERIFIED BEFORE ADJUDICATING THE MATTER. THE ORDER PASSED BY THE LD.C I T(A) - 1, AURANGABAD IS ILLEGAL, WITHOUT JURISDICTION AND AGAINST THE MANDATE OF S. 250(6) OF THE ACT. THE APPEAL ORDER BE QUASHED AS - IT IS WITHOUT MEETING THE ADJ UDICATOR/ PROCEDURE. 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) - 1, AURANGABAD FAILED TO APPRECIATE THE GROUNDS OF APPEAL RAISED BEFORE HIM. THE MAIN GROUND OF APPEAL WAS THE A. O . COULD NOT RECAST THE TRADING ACCOUNT ONCE HE IN VOKES THE PROVISIONS OF S. 145(3). AFTER THE INVO C ATION THE A.O WAS BOUND TO ESTIMATE THE GP/NP AND COULD NOT HAVE RECASTED THE ACCOUNTS ON THE BASIS OF SOME BOOKS OF ACCOUNT WHICH GOT REJECTED. THE LD. CIT(A) WAS CONFUSED WHEN HE HELD THAT THE ASSESSEE H AD CHALLENGED THE INVO C ATION OF S. 145(3) ITSELF. IT IS THE COMPLETE NON APPLICATION OF MIND OF THE ADJUDICATION. THE APPEAL ORDER IS NOT SUSTAINABLE. IT BE QUASHED. 6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE APPEAL OF THE ASSESSEE WAS T RANSFERRED TO AURANGABAD CIT(A) ORIGINALLY FILED BEFORE LD.CIT(A), THANE WHERE NO REQUEST WAS MADE BY THE APPELLANT FOR SUCH TRANSFER. SUCH TRANSFER OF APPEAL WITHOUT ANY REQUEST FROM THE APPELLANT IS NOT IN CONSONANCE WITH THE PROVISIONS OF S . 246(3) OF T HE ACT WHICH SAYS THE APPEAL CAN BE TRANSFERRED. ON THE REQUEST OF THE APPELLANT OR OTHERWISE. THE TRANSFER OF APPEAL IS PREJUDICIAL TO THE INTERESTS OF THE APPELLANT CAUSING GREAT INJUSTICE. THE TRANSFER ORDER OF THE APPEAL TO AURANGABAD WHICH IS UTTERLY INCONVENIENT BE AND CANCELLED. 7) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE PRECEDENTS RELIED UPON BY THE LD. CIT(A) - AURANGABAD ARE MISNOMER AS NONE OF THEM APPLIES TO THE FACTS OF THE CASE. THE PRECEDENTS HAVE BEEN RELIED UPON JUST FOR TH E SAKE OF RELIANCE WHICH DOES NOT SERVE THE JUDICIAL PURPOSE. THE APPEAL ORDER THEREFORE, BE QUASHED. 8) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE HUGE ADDITION MADE OF RS.2,41,53,959/ - BY THE A. O . AND LD. C I T(A) HAVING CONFIRMED THE SAME WITHOUT FOLLOWING THE DUE PROCESS OF LAW BE DELETED TO DO COMPLETE JUSTICE TO THE ASSESSEE. 9) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE APPEAL ORDER OF THE LD. CIT(A) - AURANGABAD IS NOT SUSTAINABLE IN LAW AS THE SAME HAS BEEN PASSED IN WHI CH THE NATURAL JUSTICE IS A VICTIM. THE COMPLIANCE OF NATURAL JUSTICE IN ANY PROCEEDINGS IS AN CONSTITUTIONAL MANDATE. WITHOUT THIS THE ORDER PASSED BY LD. CIT(A) IS UNCONSTITUTIONAL. IT BE QUASHED. ITA NO. 868 /P U N/20 1 7 DAYITWA BUILDERS 3 3. THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL BUT THE ISSUE RAISED VIDE GROUNDS OF APPEAL NO.1 TO 3 IS AGAINST THE EXERCISE OF JURISDICTION BY THE CIT(A) AT AURANGABAD. BEFORE GOING INTO THE MERITS OF THE ADDITION, WE PROCEED TO DECIDE THE PRELIMINARY ISSUE RAISED IN THE PRESENT APPEAL. 4. BRIEFLY, IN T HE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.6,55,280/ - BEFORE THE ITO, WARD - 1, PANVEL, RAIGAD. THE CASE OF ASSESSEE WAS TAKEN UP FOR SCRUTINY AND THE ADDITION OF RS.2,41,59,046/ - WAS MADE IN THE HANDS OF ASSESSEE. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), THANE. THE ASSESSEE CLAIMS THAT IT NEVER RECEIVED ANY NOTICE OF HEARING FROM CIT(A), THANE. HOWEVER, IT RECEIVED AN EXPARTE ORDER FROM CIT(A), AURANGABAD. THE ASSESSEE FURTHER CLAIMS THAT IT WAS NEVER GIVEN ANY INTIMATION OF TRANSFER OF ITS APPEAL FROM CIT(A), THANE TO CIT(A), AURANGABAD. IN RESPECT OF NOTICES OF HEARING ISSUED BY THE CIT(A), IT WAS POINTED OUT THAT AS MENTIONED IN APPELLATE ORDER, THE APPEAL WAS TRANSFERRED ON 07.10.2016. HOWEVER, THE CIT(A) AT AURANGABAD ISSUED THE FIRST NOTICE ON 15.09.2016 I.E. EVEN BEFORE HE WAS ASSIGNED JURISDICTION. FURTHER, NOTICES WERE ISSUED ON 21.11.2016 AND 16.01.2017. 5. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY STRES SED THAT NONE OF THESE NOTICES WERE RECEIVED BY THE ASSESSEE. HE IS ALSO AGGRIEVED BY THE TRANSFER OF JURISDICTION TO THE CIT(A), AURANGABAD ON THE GROUND THAT THE ASSESSEE STAYS IN PANVEL, WHICH IS MORE THAN 300 KILOMETERS AWAY FROM AURANGABAD. THE LEAR NED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT EXPARTE ORDER PASSED BY THE CIT(A) CANNOT STAND. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, STRESSED THAT NOTICES OF HEARING WERE GIVEN TO THE ASSESSEE, WHO FA ILED TO APPEAR BEFORE THE CIT(A) AT AURANGABAD. ITA NO. 868 /P U N/20 1 7 DAYITWA BUILDERS 4 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PRELIMINARY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST EXPARTE ORDER PASSED BY THE CIT(A) AT AURANGABAD. THE ASSESSEE WAS RESIDING IN PA NVEL, DIST. RAIGAD AND HAD FILED THE RETURN OF INCOME WITH ITO, WARD - 1, PANVEL, WHO IN TURN, HAD PASSED THE SCRUTINY ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT. AGAINST THE SAID ORDER, THE ASSESSEE HAD FILED AN APPEAL BEFORE THE CIT(A), PANVEL. THE JURISDICTION OF ASSESSEE WAS TRANSFERRED FROM CIT(A), PANVEL TO CIT(A), AURANGABAD AND FOR HEARING THE APPEAL, IT IS CLAIMED THAT THREE NOTICES WERE SENT TO THE ASSESSEE. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE AND ACCORDINGLY, THE APPEAL OF ASS ESSEE WAS DECIDED EXPARTE THE ASSESSEE. THE ASSESSEE IS AGGRIEVED BY EXERCISE OF JURISDICTION BY THE CIT(A), AURANGABAD SINCE NO NOTICE OF TRANSFER OF HIS JURISDICTION FROM CIT(A), PANVEL TO CIT(A), AURANGABAD WAS EVER RECEIVED BY THE ASSESSEE AND ALSO NO NOTICES OF HEARING WERE RECEIVED FROM CIT(A), AURANGABAD. 8. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, THE ASSESSEE HAD FILED THE RETURN OF INCOME BEFORE THE ITO, WARD - 1, PANVEL AND HAD PARTICIPATED IN THE ASSESSMENT PROCEEDINGS AND HAD FURTHER FILED AN APPEAL BEFORE THE CIT(A), PANVEL. HOWEVER, BY AN INTERNAL ORDER, THE JURISDICTION OF HANDLING THE APPEAL WAS TRANSFERRED TO THE CIT(A) AT AURANGABAD. THE ASSESSEE CLAIMS THAT NO INTIMATION OF TRANSFER OF JURISDICTION OF CIT(A) WAS EVER R ECEIVED BY THE ASSESSEE. THE ASSESSEE ALSO CLAIMS THAT IT HAD NOT RECEIVED ANY OF THE NOTICES OF HEARING AND HENCE, DEFAULT IN NON - APPEARANCE BEFORE THE CIT(A). HOWEVER, THE ASSESSEE POINTS OUT THAT COMPLETE DETAILS IN RESPECT OF EXPLANATION WERE AVAILAB LE WITH IT AND HENCE, THE SAME SHOULD BE CONSIDERED BEFORE DECIDING THE ISSUE ON MERITS. WE FIND MERIT IN THE PLEA OF ASSESSEE IN THIS REGARD AND CONSEQUENTLY, THE MATTER IS SET ASIDE TO THE FILE OF CIT(A) AT AURANGABAD, WHO SHALL DECIDE THE ISSUE OF JURI SDICTION AND ON MERITS AFTER ITA NO. 868 /P U N/20 1 7 DAYITWA BUILDERS 5 PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE CIT(A) IS DIRECTED TO SERVE NOTICE OF HEARING UPON THE ASSESSEE BEFORE COMPLETING APPELLATE PROCEEDINGS. THE ASSESSEE IS ALSO DIRECTED TO COMPLY WITH THE NOTICE ISSUED BY THE CIT(A) AND FURNISH COMPLETE INFORMATION IN RESPECT OF MERITS OF ADDITION. CONSEQUENTLY, THE MATTER IS SENT BACK TO THE FILE OF CIT(A) TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW. THE GROUNDS OF APPEAL NO.1 TO 3 RAISED BY THE ASSESSEE ARE TH US, ALLOWED FOR STATISTICAL PURPOSES AND OTHER GROUNDS OF APPEAL ON MERITS ARE NOT ADJUDICATED AS THEY BECOME ACADEMIC. 9 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 9 TH DAY OF AUGUST , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 9 TH AUGUST , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I, AURANGABAD ; 4. / THE PR. CIT - 2, THANE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE