EIH Associated Hotels Limited, CHENNAI V. DCIT Company Circle 2(1), CHENNAI

ITA 934/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6812 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 19-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G N RAGAVENDRA RAO
• Assessee Lawyers: ASIM CHOUDURY
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3); 143(1); 147; 148

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A. NO. 933/CHNY/2018 / ASSESSMENT YEAR: 2004-05 M/S. EIH ASSOCIATED HOTELS LTD., 1/24, GST ROAD, MEENAMBAKKAM, CHENNAI 600 027. [PAN:AAACE2125M] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 2(1), CHENNAI. ( /APPELLANT) ( /RESPONDENT) ./ I.T.A. NO. 934/CHNY/2018 / ASSESSMENT YEAR: 2004-05 M/S. EIH ASSOCIATED HOTELS LTD. (SUCCESSOR IN INTEREST TO INDUS HOTELS CORPORATION LTD.),1/24, GST ROAD, MEENAMBAKKAM, CHENNAI 600 027. [PAN:AAACE2125M] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE 2(1), CHENNAI. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI ASIM CHOUDURY, ADVOCATE / RESPONDENT BY : SHRI G.N. RAGAVENDRA RAO, JCIT / DATE OF HEARING : 23.07.2019 /DATE OF PRONOUNCEMENT : 25.07.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 13, CHENNAI, DATED 15.12.2017 RELEVANT TO THE ASSESSMENT YEAR 2004-05. I.T.A. NOS. 933 & 934/CHNY/18 2 BESIDES CHALLENGING THE ISSUES ON MERITS IN BOTH THE APPEALS, THE ASSESSEE HAS MAINLY CHALLENGED THE EX-PARTE ORDERS PASSED BY THE LD. CIT(A). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 25.10.2004 DECLARING LOSS OF . 11,92,31,315/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. SUBSEQUENTLY, THE ASSESSING OFFICER NOTICED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND PROCEEDINGS UNDER SECTION 147 OF THE ACT WAS INITIATED BY SERVING NOTICE UNDER SECTION 148 OF THE ACT. AS REQUESTED, THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WAS COMMUNICATED TO THE ASSESSEE. AFTER CONSIDERING THE OBJECTIONS AS WELL AS DETAILS FILED AGAINST STATUTORY NOTICES, THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DATED 27.12.2011 WAS COMPLETED BY ASSESSING THE LOSS AT . 10,87,99,439/- AFTER MAKING VARIOUS DISALLOWANCES. 2.1 SIMILARLY, IN THE CASE OF M/S. INDUS HOTELS CORPORATION LIMITED NOW MERGED WITH M/S. EIH ASSOCIATED HOTELS LIMITED, THE RETURN OF INCOME WAS FILED ON 26.10.2004 DECLARING LOSS OF .14,57,94,920/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON I.T.A. NOS. 933 & 934/CHNY/18 3 28.12.2006 BY DETERMINING THE LOSS AT .11,53,61,661/-. THEREAFTER, AFTER FOLLOWING DUE PROCEDURES, THE ASSESSMENT WAS REOPENED UNDER SECTION 147 OF THE ACT AND THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DATED 23.12.2011 WAS COMPLETED BY ASSESSING THE LOSS AT .8,98,71,513/-. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AGAINST BOTH THE ASSESSMENT ORDERS. BY CONSIDERING THE FACTS AND MATERIALS AVAILABLE ON RECORD INCLUDING WRITTEN SUBMISSIONS, THE LD. CIT(A) DISMISSED BOTH THE APPEALS. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST BOTH THE APPELLATE ORDERS. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE FILED THE ADJOURNMENT APPLICATION BEFORE THE LD. CIT(A) MUCH BEFORE THE DATE OF HEARING BESIDES THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CAUSED APPEARANCE BEFORE THE LD. CIT(A) PRIOR TO THE DATE OF PASSING OF ORDER, WHEREIN THE LD. CIT(A) WITHOUT EVEN CONSIDERING THE SAID APPLICATION AND/ OR GRANTING A NEXT DATE FOR APPEARANCE, ERRONEOUSLY DISMISSED THE APPEALS SUO MOTO , WITHOUT AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WHICH ARE TOTALLY AGAINST THE LAW OF NATURAL JUSTICES. THUS, THE LD. COUNSEL FOR THE ASSESSEE PRAYED FOR DIRECTING THE LD. CIT(A) TO AFFORD AN OPPORTUNITY OF BEING HEARD I.T.A. NOS. 933 & 934/CHNY/18 4 TO THE ASSESSEE AND ADJUDICATE THE ISSUES AFTER CONSIDERING THE SUBMISSIONS IN BOTH CASES. 5. ON THE OTHER HAND, THE LD. DR FAIRLY CONCEDED THAT THE APPEALS MAY BE REMITTED BACK TO THE FILE OF THE LD. CIT(A) TO AFFORD AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ADJUDICATE THE ISSUES FOR ADJUDICATION OF THE ISSUES ON MERITS AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN BOTH THE APPELLATE ORDERS, ADMITTEDLY, THERE IS NO MENTION OF SERVICE OF NOTICE OR REASONS FOR REJECTING THE ADJOURNMENT PETITION OF THE ASSESSEE. THE MATERIAL AVAILABLE ON RECORD AND THE WRITTEN SUBMISSIONS FILED ALONG WITH THE APPEALS WERE TAKEN INTO ACCOUNT AND THE LD. CIT(A) PROCEEDED TO ADJUDICATE THE ISSUES ON MERITS WITHOUT AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WHICH IS TOTALLY AGAINST THE PRINCIPLES OF NATURAL JUSTICE. UNDER THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) AND REMIT BOTH THE APPEALS TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ISSUES AFRESH IN ACCORDANCE WITH LAW AFTER GIVING SUFFICIENT OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR I.T.A. NOS. 933 & 934/CHNY/18 5 STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 25 TH JULY, 2019 IN CHENNAI. SD/- SD/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 25.07.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.