Princple Commissioner of Income Tax-2, Jabalpur V. Khanna Properties & Infrastructure Private Limited , Jabalpur

MA 10/JAB/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4965 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 22-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 263; 143(3); 254(2)

Judgement Text

MA No. 10/Jab/2019 (AY 2013-14) Pr. CIT v. Khanna Properties & Infrastructure (P.) Ltd. 1 IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR (through Virtual Hearing) BEFORE SH. SANJAY ARORA, HON'BLE ACCOUNTANT MEMBER & SH. MANOMOHAN DAS, HON’BLE JUDICIAL MEMBER MA No.10/JAB/2019 A/o ITA No. 116/JAB/2018 Assessment Year: 2013-14 Principal Commissioner of Income Tax- 2, Jabalpur vs. Khanna Properties & Infrastructure Private Limited Jabalpur [PAN: AACCK 9029J] (Applicant) (Respondent) Appellant by Sh. S.K. Halder, Sr. DR Respondent by Sh. Anil Gupta, FCA Date of hearing 18/02/2022 Date of pronouncement 17/03/2022 ORDER Per Bench This is a Miscellaneous Application under section 254(2) of the Income Tax Act, 1961 (‘the Act’ hereinafter) by the Revenue directed against the Order u/s. 254(1) dated 04/04/2019 by the Tribunal disposing the Assessee’s captioned appeal against the order u/s. 263 dated 31/03/2018, in respect of its’ assessment u/s. 143(3) dated 02/03/2016 for Assessment Year (AY) 2013-14. 2. The Tribunal, vide the impugned order, set aside the said revision order (u/s. 263) for adjudication afresh inasmuch as the assessee was not allowed reasonable opportunity of hearing before passing of the said order by the revisionary authority, being the Pr. CIT, Jabalpur. The Revenue per its instant petition states that an assessment pursuant to the revision order had already been completed on 12/12/2018, i.e., much before the order by the Tribunal under MA No. 10/Jab/2019 (AY 2013-14) Pr. CIT v. Khanna Properties & Infrastructure (P.) Ltd. 2 reference, upon allowing proper opportunity of hearing to the assessee, as directed by the revision order. In fact, the assessee had even appealed against the said order to the first appellate authority on 25/12/2018, i.e., before the hearing of the assessee’s by the Tribunal. In view of the fact that therefore the assessee’s grievance of not being allowed proper opportunity of being heard, which formed the basis of the impugned order, stood thus allowed, there had occurred a mistake by the Tribunal per the impugned order, which may therefore be recalled and decided afresh, i.e., in light of the given facts and circumstances. The assessee’s case, on the other hand, is that an opportunity of hearing before the revisionary authority, who is a much higher ranking authority than the assessing authority (Dy. CIT), cannot be compared with that before the latter. No indulgence in the matter by the Tribunal is as such called for. 3. We have heard the parties, and perused the material on record. To begin with, we depreciate the conduct of both the parties in not informing the Tribunal at the time of hearing of the appeal under reference, that the impugned order had already been given effect to (at the time of the said hearing), an aspect of which there is no whisper in its order. This is particularly so as the revision order itself had, in effect, directed the Assessing Officer (AO) to consider the issues/aspects (of assessment), specified therein, that had remained to be examined in assessment, and decide the same on merits after allowing proper opportunity of hearing to the assessee. Nothing more, and nothing less. Thus, as it appears, it is a zero-sum game, and a notice of this fact might have altered or in any case influenced the Tribunal’s mind. That is, is a fact which could be relevant and, therefore, ought to have been disclosed to the Tribunal hearing the appeal against section 263 order. Rather, given that an assessment pursuant to the revision order is subject to time limitation under the Act, the Tribunal itself ought to have enquired in the matter, rendering a considered decision. As we discern, the assessee was hopeful of the impugned order being quashed by the Tribunal, i.e., as argued before it, and therefore did not risk divulging full facts MA No. 10/Jab/2019 (AY 2013-14) Pr. CIT v. Khanna Properties & Infrastructure (P.) Ltd. 3 to the Tribunal, which is unfortunate indeed. It is, however, wholly impermissible for us to, in the instant proceedings, speculate on what would have been its’ decision when possessed of all the relevant facts, or even otherwise be influenced by the conduct of the parties before the Tribunal on an earlier occasion, except of course where the same is germane in deciding the issue/s arising in the said proceedings. The whole import of the foregoing is to highlight the conduct of the parties, which is in disregard of the basic premise of hearing, i.e., to assist the court or tribunal to arrive at the correct decision, i.e., in light of the facts and circumstances, and consistent with the justice, of the case. 4. We, next, proceed to decide the Revenue’s instant petition on merits. In our view, both the Revenue’s case and the assessee’s reply thereto, are misconceived. How could, one may ask, a fact not borne out by the record, i.e. that the assessment pursuant to the revision order had been already completed at the time of hearing the appeal there-against, howsoever relevant it may be, taken into account in deciding whether (or not) the Tribunal had committed a mistake apparent from record? It would be a different matter though if the said fact was a vital fact, i.e., without which a decision – one way or the other, could not have been taken by the Tribunal, so that not considering the same was itself a serious mistake on the part of the Tribunal as it could not have possibly decided without considering the same. Refer Honda Siel Power Products Ltd. v. CIT [2007] 295 ITR 466 (SC), wherein non-consideration of a decision cited before it was held by the Apex Court to be a mistake by the Tribunal, rectifiable u/s. 254(2), inasmuch as serious prejudice stands caused by the said non- consideration. It is nobody’s case in the instant case the said fact is a vital fact, nor do we consider it as so, and this was stated for the sake of completeness of this order. Two, the Revenue, when it argues of the assessee’s grievance (of having not been allowed proper opportunity of being heard) having been in effect met, or when the assessee responds thereto by distinguishing with MA No. 10/Jab/2019 (AY 2013-14) Pr. CIT v. Khanna Properties & Infrastructure (P.) Ltd. 4 reference to the difference in the rank of the authorities before whom the said opportunity stands granted, are missing the point. While the hearing before the assessing authority is qua the merits of the relevant issues, that before the revisionary authority, to which the assessee becomes entitled by virtue of the impugned order, is qua the factum of a consideration (or otherwise) of the said issue/s by the assessing authority in original assessment. This is as non- consideration or non-verification of those issues, and which forms the basis of the revision order dated 31/03/2018, itself, i.e., per se, renders the order under reference as erroneous insofar as it is prejudicial to the interest of the Revenue irrespective of the outcome of the verification thereof (refer: Malabar Industries Co. vs. CIT 243 ITR 83 (SC); CIT vs. Deepak Kumar Garg [2008] 299 ITR 435 (MP); Gee Vee Enterprises 99 ITR 75 (Del), to cite some). That is, the domain and the subject matter of the two hearings is totally different, and one is no substitute for the other. All that one needs to do, to arrive at an unmistakable conclusion, i.e., on facts, in the instant case, is to read the penultimate para (# 4) of the revision order, also specifying those issues (with reference to the show- cause notice u/s. 263, duly reproduced in the revision order), on which the revisionary authority finds absence or lack of inquiry, justifying revision. It is this finding as to non-consideration/verification of those issues, i.e., as a fact, that the assessee shall, in set aside proceedings, be required to meet. The Revenue’s argument is, thus, wholly untenable, and we decline interference. 5. Before parting, we may however touch another aspect of the matter, i.e., as clarified by the Apex Court in CIT v. Electro House [1971] 82 ITR 824 (SC), and recently in ACIT v. Amitabh Bachchan [2016] 384 ITR 200 (SC), that a show-cause notice u/s. 263 is not a jurisdictional notice and, therefore, non- mention of an issue or aspect of assessment therein would not preclude the revisionary authority to include the same in his adjudication, which is to be by following the due process of hearing. We may though hasten to add that we may not be, when we state so, construed as having in any manner enhanced the scope MA No. 10/Jab/2019 (AY 2013-14) Pr. CIT v. Khanna Properties & Infrastructure (P.) Ltd. 5 of the set-aside proceedings, which is to be as set out at and by para 4.1 (pg. 5) of the impugned order. We decide accordingly. 6. In the result, the Revenue’s MA is dismissed. Order pronounced in the Open Court on March 17, 2022 Sd/- sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 17/03/2022 Copy of the Order forwarded to: 1. The Appellant: Principal Commissioner of Income Tax- 2, Jabalpur (M.P.) 2. The Respondent: Khanna Properties & Infrastructure Private Limited, 18 Naya Bazar, Jabalpur (M.P.) 3. Deputy Commissioner of Income Tax -2(1) Jabalpur 4. The Senior DR, ITAT, Jabalpur(M.P) 5. Guard File