NITCO TILES LTD, MUMBAI V. D.C.I.T.-34, MUMBAI

ITSSA 21/MUM/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0643 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 04-02-2015
• Assessment Year: misc
• Appeal Filed On: 09-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUM BAI . , , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM ( !'# )/ IT(SS)A NO. 21/MUM/2011 (BLOCK PERIOD: 01.04.1987 TO 05.08.1997) NITCO TILES LTD. 85-96, MAKER CHAMBERS III, NARIMAN POINT, MUMBAI-400 021 / VS. DY. CIT, CENTRAL CIRCLE-34, MUMBAI $ ./ % ./PAN/GIR NO. AAACN 1674 N ( $& /APPELLANT ) : ( '( $& / RESPONDENT ) $& ) * / APPELLANT BY : SHRI VIMAL PUNMIYA '( $& ) * / RESPONDENT BY : SHRI S. D. SRIVASTAVA + , - ) . / DATE OF HEARING : 10.02.2015 /0# ) . / DATE OF PRONOUNCEMENT : 20.02.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-41, MUMBAI (CIT(A) FOR SH ORT) DATED 03.02.2011, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .158BFA(2) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE BLOCK PERIOD 0 1.04.1987 TO 05.08.1997 VIDE ORDER DATED 07.10.2009. 2. THE APPEAL RAISES THE FOLLOWING GROUNDS: 1. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN PASSING AN EX- PARTY ORDER WITHOUT SERVING NOTICE OF HEARING ON TH E ASSESSEE. 2 IT(SS)A NO. 21/MUM/2011 (B.P. 01.04.87 TO 05.08.97) NITCO TILES LTD. VS. DY. CIT 2. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CONFIRMING THE PENALTY OF RS.28,82,723/- U/S.158BFA(2) OF THE INCO ME TAT ACT, 1961. 3.1 ADDRESSING GROUND NO. 1, AND DRAWING OUR ATTENT ION TO PARA 2.1 OF THE IMPUGNED ORDER, WHICH READS AS UNDER, IT WAS SUBMITTED BY TH E LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, THAT THE LD. CIT(A) WAS INC ORRECT IN STATING THAT THE ASSESSEE HAD NOT APPEARED BEFORE HIM, SO THAT HE WAS CONSTRAINED TO DECIDE THE ASSESSEES APPEAL ON MERITS, I.E., EX PARTE : 2.1 THE CASE OF THE APPELLANT WAS FIXED ON 24.12.2 009, 07.01.2010, 16.02.2010, 24.03.2010, 05.04.2010, 21.10.2010, 05. 01.2011, 14.01.2011, 02.02.2011, BUT NOBODY ATTENDED NOR SUBMITTED ANY W RITTEN REPLY EXCEPT FEW ADJOURNMENT APPLICATIONS, THEREFORE, THE CASE I S DECIDED ON MERITS. IN FACT, ON EACH OF THE EARLIER OCCASIONS, ADJOURNM ENT HAD BEEN APPLIED FOR. AS BOTH THE ASSESSEE AND THE REVENUE HAD MOVED RECTIFI CATION PETITIONS AGAINST THE ORDER BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS, THE SAME W ERE THEREFORE ALLOWED, I.E., ON THAT BASIS. THE MENTION OF THE SEVERAL DATES OF ADJOURNM ENT IN FACT ITSELF PROVES THAT THE ASSESSEE, IN CONSCIOUS REGARD OF ITS OBLIGATIONS, F OLLOWED THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY FROM THE TIME TO TIME. THE ADJO URNMENT APPLICATION ON THE NEXT DATE OF HEARING COULD ONLY BE ON THE APPLICANT BEING AWARE THEREOF, I.E., THE DATE TO WHICH THE HEARING STOOD ADJOURNED ON THE LAST OCCASION. IT WA S IN FACT PERHAPS FOR THIS REASON THAT THE LD. CIT(A) HAS FAITHFULLY RECORDED THE PRESENCE OF THE COUNSEL AT COLUMN NO. 9 OF THE CAUSE TITLE, WHICH REQUIRES MENTION OF THE NAME OF THE PERSON PRESENT FOR AND ON BEHALF OF THE APPELLANT. IN A WAY, THUS, THE SAME CONTRADICTS THE OBSERVATION AS MADE AT PARA 2.1 OF THE ORDER. IN FAIRNESS, HOWEVER, HE WOULD FURTHER A DD, THAT NONE HAD ATTENDED ON THE LAST DATE OF THE HEARING, I.E., 02.02.2011, AS THE ASSES SEE RECEIVED THE NOTICE OF HEARING FOR THAT DATE ONLY LATER. ON BEING REQUIRED TO THEREFORE PRO DUCE THE PROOF OF THE SERVICE OF NOTICE FOR THAT DATE, SO AS TO JUSTIFY HIS CLAIM OF THE IM PUGNED ORDER BEING AN EX PARTE ORDER, HE EXPRESSED HIS INABILITY TO PRODUCE THE SAME, BEING NOT AT HAND. HE HAD, IN FACT, ON THE RECEIPT OF THE NOTICE PRESENTED HIMSELF BEFORE THE LD. CIT(A), WHO WOULD THOUGH STATE THAT 3 IT(SS)A NO. 21/MUM/2011 (B.P. 01.04.87 TO 05.08.97) NITCO TILES LTD. VS. DY. CIT HE HAD ALREADY PASSED THE ORDER. THE MATTER, HOWEVE R, IT WAS APPARENT, HAD NOT BEEN HEARD ON MERITS AND, THEREFORE, THE PROPER COURSE W OULD ONLY BE TO RESTORE IT BACK TO THE FILE OF THE LD. CIT(A) FOR PASSING AN ORDER IN ACCO RDANCE WITH LAW AFTER HEARING THE ASSESSEE. THE MATTER, HOWEVER, IS LEGAL, AS HAS BEE N DECIDED IN THE APPELLANTS FAVOUR BY THE ORDER BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NAYAN BUILDERS & DEVELOPERS (IN ITA NO. 415 OF 2012 DATED 08.07.2014/PB PGS. 3 & 4), PLACING ON RECORD WRITTEN SUBMISSIONS, CITING SEVERAL ORDERS BY THE T RIBUNAL. 3.2 THE LD. DEPARTMENTAL REPRESENTATIVE (DR), ON TH E OTHER HAND, WOULD ALSO EXPRESS HIS INABILITY TO CONTRADICT THE STATEMENT AT BAR BY THE ASSESSEES COUNSEL, I.E., OF THE NOTICE OF HEARING FOR 02.02.2011 HAVING NOT BEEN SERVED IN TIME, AND ONLY SUBSEQUENT TO THE DATE OF THE HEARING, BEING CONSTRAINED FOR WANT OF THE A PPEAL FOLDER FROM THE OFFICE OF THE LD. CIT(A). HE WOULD, HOWEVER, FAIRLY STATE OF HIS NO O BJECTION TO WHAT STANDS STATED BY THE LD. AR AT BAR AND, FURTHER, ALSO AGREEABLE TO THE M ATTER BEING ACCORDINGLY RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR AN ADJUDICATION AFRE SH IN ACCORDANCE WITH LAW AFTER HEARING THE PARTIES. THE MATTER, HOWEVER, HE WOULD EMPHASIZ E, CANNOT BE CONSIDERED AS COVERED BY THE DECISION IN THE CASE OF NAYAN BUILDERS & DEVELOPERS (SUPRA), DRAWING OUR ATTENTION TO THE DECISION BY THE HONBLE GUJARAT HI GH COURT IN THE CASE OF CIT VS. DHARAMSHI B. SHAH [2014] 366 ITR 140 (GUJ). IN FACT, THE HONBLE DELH I HIGH COURT IN THE CASE OF SPLENDER CONSTRUCTION HAD ALSO TAKEN A SIMILAR VIEW, THOUGH THE CITATION FOR THE SAME WAS NOT READILY AVAILABLE WITH HIM. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE APPEAL ON MERITS RAISES A LEGAL ISSUE, I.E., WH ETHER THE ADMISSION OF AN APPEAL RAISING A SUBSTANTIAL OF LAW IN THE QUANTUM PROCEED INGS WOULD ITSELF RESULT IN THE OUSTER OF THE CASE FOR THE LEVY OF PENALTY FOR CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME U/S.271(1)(C) OF THE ACT. THAT IS, IN RESPEC T OF THE INCOME QUA WHICH THE QUANTUM PROCEEDINGS ARE OUTSTANDING IN THE APPELLATE PROCEE DINGS BEFORE THE HONBLE HIGH COURT INASMUCH IT SHOWS THE ISSUE LEADING THERETO TO BE D EBATABLE. THE ISSUE IS PURELY LEGAL. A 4 IT(SS)A NO. 21/MUM/2011 (B.P. 01.04.87 TO 05.08.97) NITCO TILES LTD. VS. DY. CIT READING OF THE DECISION BY THE HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF NAYAN BUILDERS & DEVELOPERS (SUPRA) CANNOT, AT LEAST PRIMA FACIE , IN OUR VIEW, BE SAID TO HAVE ANSWERED THE SAID ISSUE CONCLUSIVELY. A DECISION, I T IS TRITE LAW, IS AN AUTHORITY FOR WHAT IT ACTUALLY DECIDES [REFER: CIT V. SUN ENGINEERING WORKS (P.) LTD . (1992) 198 ITR 297 (SC); BLUE STAR LTD. V. CIT [1996] 217 ITR 514 (BOM.); AND LACHMAN DASS BHATIA HINGWALA (P.) LTD. VS. ASSTT. CIT [2011] 330 ITR 243 (DEL.) (FB)]. AND NOT EVEN FOR W HAT MAY REMOTELY OR EVEN LOGICALLY FLOW FROM IT ( GOODYEAR INDIA LTD. V. STATE OF HARYANA [1991] 188 ITR 402 (SC)). THE IMPUGNED ORDER HAS BEEN, AS APPARENT FROM THE FORE-GOING NARRATION OF THE EVENTS AT THE FIRST APPELLATE STAG E IN THE INSTANT PROCEEDINGS, PASSED WITHOUT ALLOWING PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. JUSTICE MUST NOT ONLY BE DONE BUT ALSO APPEAR TO HAVE BEEN DONE. UNDER THE CIRCUMSTANCES, WE ONLY CONSIDER IT FIT AN D PROPER, AS IS ALSO THE COMMON CONTENTION OF THE PARTIES BEFORE US, TO RESTORE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME ON MERITS AFTER HEARING THE PART IES. WE DECIDE ACCORDINGLY. 5. AS WE HAVE ACCEPTED THE ASSESSEES GROUND NO. 1, RESTORING THE APPEAL BACK TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION, GROU ND NO. 2, RAISING THE ISSUE ON MERITS, I.E., AS DELINEATED ABOVE, WOULD NOT SURVIVE FOR ADJUDICA TION. THE SAME IS ACCORDINGLY DISMISSED AS NOT MAINTAINABLE UNDER THE CIRCUMSTANC ES OF THE CASE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 1# 2 34 51 ) 6 ) 78 9 , : ) ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 20, 2015 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER + <- MUMBAI; = DATED : 20.02.2015 , . 3 . ./ROSHANI , SR. PS 5 IT(SS)A NO. 21/MUM/2011 (B.P. 01.04.87 TO 05.08.97) NITCO TILES LTD. VS. DY. CIT !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '( $& / THE RESPONDENT 3. + > ( ) / THE CIT(A) 4. + > / CIT - CONCERNED 5. ?,! @ '33A4 , . A4# , + <- / DR, ITAT, MUMBAI 6. @ 5 B - / GUARD FILE & / BY ORDER, ' / &( (DY./ASSTT. REGISTRAR) , + <- / ITAT, MUMBAI