ROOP CHAND NAHAR, JAIPUR V. CIT(APPEAL), NFAC, DELHI

ITA 92/JPR/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2982 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 19-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA
• Assessee Lawyers: M L BORAD
• Keywords: Rectification of order; Principle of natural justice; TDS; Set aside
• Section: 40(a)(ia); 194A; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 92/JP/2021 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 ROOP CHAND NAHAR E-8, E-9 PROP. RAHUL MEDICAL AND SURGICAL AGENCY, NULITE COLONY, TONK ROAD, JAIPUR. CUKE VS. THE CIT(A), NFAC, DELHI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAHPN 4593 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI M. L. BORAD (ADV.) & SHRI DHEERAJ BORAD (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI A.S. NEHRA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 26/10/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 26/10/2021 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 28.07.2021 OF LD. CIT(A), DELHI (NFAC) ARISING FROM RECTIFICATION ORDER DATED 12.02.2020 PASSED U/S 154 OF THE INCOME TAX A CT FOR THE ASSESSMENT ORDER 2012-13. THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS:- ITA NO. 92/JP/2021 ROOP CHAND NAHAR VS. CIT(A) 2 1. THAT THE IMPUGNED ORDER PASSED BY THE LEARNED C IT(APPEAL) UPHOLDING REJECTION OF THE ASSESSEE'S APPLICATION U /S 154 BY THE AO IS MOST ARBITRARY, UNJUST AND UNTENABLE IN FACT AND IN LAW AND LIABLE TO BE CANCELLED. 2. THAT THE LEARNED CIT(APPEAL) ERRED IN SUSTAINING THE ORDER OF THE AO REJECTING ASSESSEE'S APPLICATION U/S 154 AGA INST INVOKING OF PROVISIONS OF SECTION 40(A)(IA) MAKING DISALLOWA NCE/ADDITIONS OF RS. 3,06,692/- AND RS. 4,29,062/- FOR ALLEGED NO N DEDUCTION OF TDS ON INTEREST PAYMENT MADE TO CERTAIN LOAN CRE DITORS AND NBFCS RESPECTIVELY, WHICH SUSTENANCE BY THE LEARNED CIT(APPEALS) OF ORDER OF THE AO IS MOST ARBITRARY, UNJUST AND UNTENABLE IN FACT AND IN LAW AND LIABLE TO BE CANCE LLED. 3. THAT IN REGARD TO TDS ON INTEREST PAYMENT OF RS. 3,06,692/- TO LOAN CREDITORS THE LEARNED CIT (APPEAL) FAILED TO A PPRECIATE THAT THE ASSESSEE HAD FULLY COMPLIED WITH PROVISIONS OF SECTION 194A BY DEDUCTING TDS WHEREVER APPLICABLE AND BY FILING FORM 15G/15H WHERE THE DEDUCTEE HAD ASKED THE ASSESSEE T O NOT TO DEDUCT TDS FROM INTEREST PAYMENT IN VIEW OF PROVISI ONS OF SECTION 197A OF THE IT ACT. 4. THAT THE OBSERVATION OF THE LEARNED CIT(APPEAL) THAT THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE HIS CLAIM THAT HE HAD MADE FULL COMPLI ANCE OF TDS PROVISIONS IN REGARD TO PAYMENT OF INTEREST MADE TO LOAN CREDITORS IS UNFOUNDED AND FAR AWAY FROM TRUTH BECAUSE THE FA CT REMAINS IS THAT OUT OF 10 CASES SPECIFIED BY THE THEN A.O. IN THE ASSTT. ORDER THE ASSESSEE HAD DULY DEDUCTED AND DEPOSITED TDS IN REGARD TO AS MANY AS 8 DEDUCTEES AS PER DETAILS GIVEN IN THE APPLICATION ITA NO. 92/JP/2021 ROOP CHAND NAHAR VS. CIT(A) 3 U/S.154 ITSELF AND IN REMAINING TWO CASES HE( THE A SSESSEE) HAD FILED FORM 15G WITH THE CONCERNED I.T. AUTHORITIES WELL IN TIME. 5. THAT BOTH THE AO AS WELL AS LEARNED CIT(APPEAL) FAILED TO TAKE INTO CONSIDERATION THE FACTS THAT ALL THE THREE NBF C'S TO WHOM INTEREST PAYMENT TOTALING TO RS. 4,29,062/- WAS PAI D ARE ONE OF THE TOP MOST NBFC'S WORKING ACROSS THE COUNTRY AND REGULARLY DEPOSITING THEIR DUE TAXES AND ALSO FILING THEIR RE TURN OF INCOME AND HE(THE LEARNED A.O.) COULD HAVE VERIFIED THESE FACTS ON INCOME TAX PORTAL. 6. THAT THE IMPUGNED ORDER PASSED BY THE LEARNED CI T(APPEAL) IS VOID AB INITO BECAUSE NO NOTICE OF HEARING WAS ISSU ED NOR SERVED ON THE ASSESSEE BEFORE PASSING THE IMPUGNED ORDER. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR SUBSTITUTE ONE OR MORE GROUNDS OF APPEAL AS AND WHEN NECESSARY . 2. DUE TO PREVAILING COVID-19 PANDEMIC CONDITION TH E HEARING OF THE APPEAL IS CONCLUDED THROUGH VIDEO CONFERENCE. 3. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE HAS SUBMITTED THAT THE ASSESSEE HAS RAISED THE ISSUES OF VIOLATIO N OF PRINCIPLES OF NATURAL JUSTICE IN GROUND NOS. 1 AND 6 OF THE GROUN DS OF APPEAL, THEREFORE, THIS ISSUE MAY BE TAKEN UP FIRST. HAVING CONSIDERED THIS FACT THAT THE ASSESSEE HAS RAISED THE ISSUE OF NOT GRANT ING AN OPPORTUNITY OF HEARING BY LD. CIT(A) BEFORE PASSING THE IMPUGNED O RDER WE TAKE UP ITA NO. 92/JP/2021 ROOP CHAND NAHAR VS. CIT(A) 4 THIS ISSUE IN GROUND NOS. 1 AND 6 TO BE DISPOSED OF F BEFORE GOING TO THE OTHER GROUNDS OF APPEAL. 4. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT T HE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT ISSUING A NOT ICE OF HEARING TO THE ASSESSEE, THEREFORE, THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) WITHOUT ISSUING A NOTICE AND GRANTING AN OPPORTUNIT Y OF HEARING TO THE ASSESSEE IS A GROSS VIOLATION OF PRINCIPLES OF NATU RAL JUSTICE AND CONSEQUENTLY THE IMPUGNED ORDER IS VOID-AB-INITIO A ND LIABLE TO BE QUASHED/SET ASIDE. 5. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT THE PROCEEDINGS BEFORE THE LD. CIT(A) WERE CONDUCTED UNDER FACELESS PROCEEDINGS OF APPEALS BY THE LD. CIT(A), THEREFORE, THERE WAS NO REQUIREMENT OF APPEARANCE OF THE ASSESSEE BEFORE THE LD. CIT(A). H E HAS RELIED UPON THE IMPUGNED ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS CAREFULLY PERUSED THE IMPUGNED ORDER OF THE LD. CIT(A). THER E IS NO DISPUTE THAT THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOU T ISSUING A NOTICE OF HEARING TO THE ASSESSEE THEREFORE, IT IS A CLEAR CASE OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THOUGH UNDER THE NEW SCHEME OF FACELESS PROCEEDINGS BEFORE THE LD. CIT(A), THERE IS NO REQU IREMENT OF PHYSICAL ITA NO. 92/JP/2021 ROOP CHAND NAHAR VS. CIT(A) 5 HEARING UNLESS AND UNTIL IT IS CONSIDERED AS NECESS ARY BUT THAT DOES NOT MEAN THAT THE RIGHT TO HAVE A PROPER OPPORTUNITY OF HEARING IS EITHER FORFEITED OR OBLITERATED. IT IS PERTINENT TO NOTE T HAT THE LD. CIT(A) HAS STATED IN THE CAPTION OF THE IMPUGNED ORDER IN THE COLUMN OF PRESENCE OF APPELLANT AS WELL AS PRESENCE OF DEPARTMENT AS N OT APPLICABLE. THERE IS NO MENTION ABOUT ANY NOTICE ISSUED BY THE LD. CI T(A) BEFORE PASSING THE IMPUGNED ORDER. EVEN OTHERWISE THE IMPUGNED ORD ER WAS PASSED BY THE LD. CIT(A) WITHOUT CONSIDERING ANY SUBMISSIONS INCLUDING WRITTEN SUBMISSIONS OF THE ASSESSEE. THEREFORE, IT IS MANIF EST FROM THE RECORD THAT THE LD. CIT(A) HAS NOT GRANTED EVEN AN OPPORTU NITY TO THE ASSESSEE TO FILE THE WRITTEN SUBMISSIONS AS WELL AS A DOCUME NTARY EVIDENCE IN SUPPORT OF ITS CLAIM. ACCORDINGLY IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNE D ORDER IS PASSED BY THE LD. CIT(A) WITHOUT GIVING AN OPPORTUNITY OF HEARING MUCH LESS A SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE WHICH HAS RESULTED VIOLATION OF PRINCIPLES OF NATURAL JUSTICE RENDERIN G THE IMPUGNED ORDER AS NOT SUSTAINABLE IN LAW. HENCE, THE IMPUGNED ORDER I S SET ASIDE AND MATTER IS REMANDED TO THE RECORD OF THE LD. CIT(A) FOR DECIDING THE SAME AFRESH AFTER GRANTING SUFFICIENT OPPORTUNITY O F HEARING TO THE ASSESSEE. SINCE, THE IMPUGNED ORDER IS SET ASIDE ON THE GROUND OF ITA NO. 92/JP/2021 ROOP CHAND NAHAR VS. CIT(A) 6 VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND THE MATTER IS REMANDED TO THE RECORD OF THE LD. CIT(A) FOR FRESH ADJUDICATION THEREFORE, THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL BECOM E INFRUCTUOUS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 26/10/2021. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26/10/2021. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ROOP CHAND NAHAR, JAIPUR.. 2. IZR;FKHZ@ THE RESPONDENT- CIT(A), NFAC, DELHI 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 92/JP/2021} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR