Deputy Commissioner of Income tax Circle 2(1), Jabalpur V. GSB Constuctions (p) Ltd., Jabalpur

MA 14/JAB/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4974 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-03-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 15-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ASHEESH TERNAIN
• Keywords: Audit objection
• Section: 263; 154; 143(3)

Judgement Text

MA No. 14/Jab/2019 (AY 2010-11) Dy. CIT v. GSB Construction Pvt. 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.14/JAB/2019 A/O ITA No. 250/JAB/2018 Assessment Year: 2010-11 Deputy Commissioner of Income Tax Circle-2(1), Jabalpur vs. G.S.B. Construction Pvt. Ltd., Jabalpur [PAN: AACCG 2158G] (Applicant) (Respondent) Appellant by Sh. S.K. Halder, Sr. DR Respondent by Sh. Asheesh Ternain, FCA Date of hearing 18/02/2022 Date of pronouncement 16/03/2022 ORDER Per Bench This is a Miscellaneous Application (MA) by the Revenue directed against the Order under section 254(1) of the Income Tax Act, 1961 (‘the Act’ hereinafter) dated 23.8.2019 qua the captioned appeal whereby it had contested the allowance of the assessee’s appeal agitating the rectification of its’ assessment u/s. 143(3) r/w s. 263 dated 14.3.2017 for Assessment year (AY) 2010-11 vide order u/s. 154 dated 14/8/2017 by the first appellate authority vide his order dated 24.9.2018. 2. The case of the Revenue is that the fact that its’ appeal under reference has been filed in pursuance to the exception specified in para 10(c) of the Board Instruction 3/2018, dated 11.7.2018, stands duly mentioned in the order issued u/s. 253(2) accompanying Form-36, i.e. the Memorandum of Appeal before the Tribunal, regard of which therefore ought to had by the Tribunal while MA No. 14/Jab/2019 (AY 2010-11) Dy. CIT v. GSB Construction Pvt. Ltd. 2 disposing its’ said appeal. The assessee, on the other hand, places reliance on the decisions by the Hon'ble jurisdictional High Court (Indore Bench) in CIT vs. Krishna Warehouse (in ITA No. 75/2019, dated 16.1.2020) and Kalimuddin Badnawarwala (RP 73/2020, dated 23/1/2020), rejecting a similar contention raised by the Revenue. 3. We have heard the parties, and perused the material on record, including the cited judgment by the Hon'ble jurisdictional High Court. Even as pointed out by the Bench during hearing, the impugned order suffers from a fundamental vice of violation of principle of natural justice inasmuch as opportunity of hearing, much less fair and reasonable opportunity, was not allowed by the Tribunal before passing it. The said condition, besides being required to be read as a prerequisite for passing a judicial order (refer Sahara India Firm v. CIT [2008] 300 ITR 403 (SC)), is also an ingredient of s. 254(1) (to which attention of ld. counsel, Shri Ternain, to no response; rather, an acceptance, was drawn by the Bench during hearing), which stands grossly violated in the instant case (i.e. ITA No. 250/Jab/2020). It is only where a reasonable opportunity of hearing is allowed, that the Revenue could clarify or inform the status of its appeal vis-a-vis s. 268A(1). It is for this reason that the Tribunal, conscious of this violation, saved all cases where a prejudice is shown to have been caused thus. The cited decisions are thus distinguishable on facts, and, thus, also in law. Coming to the facts of the case, it is observed that the Assessing Officer (AO), vide reply dated - to the audit objection/s dated 12/6/2014, stated that the objection/s be dropped. So, however, revision order stands passed by the Administrative Commissioner u/s. 263 of the Act on 27/2/2015 on the ground that the AO had failed to make the necessary verification, i.e. qua the relevant ground. The assessment pursuant to the revision order (dated 14/3/2017), making the impugned additions, was not challenged by the assessee, which thus became final, even as noted by the ld. CIT(A) at para 7.1.2 of his order dated MA No. 14/Jab/2019 (AY 2010-11) Dy. CIT v. GSB Construction Pvt. Ltd. 3 24/9/2018. The assessee, however, moved an application u/s. 154 which, though rejected by the AO, was accepted in further appeal, discussing the matter on merits. Further still, we observe that while the audit objection was for two additions, i.e., for Rs. 36,00,000 and Rs. 18,61,867, the addition in assessment is also for another sum of Rs.25,01,000, deletion of which is also contested by the Revenue. It is extremely unfortunate that all these facts were not brought to our notice during hearing by either party. Under the circumstances, we only consider it fit and proper that the Revenue’s appeal be restored for a decision on merits, with a liberty to the assessee to contest, on merits, the maintainability of the Revenue’s appeal u/s. 268A as well, i.e., restore status ante. We decide accordingly. 4. In the result, the MA of the Revenue is allowed on the aforesaid terms. Order pronounced in the Open Court on March 16, 2022 Sd/- sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 16/03/2022 Copy of the Order forwarded to: 1. The Applicant: Deputy Commissioner of Income Tax, Circle 2(1) Jabalpur (M.P.) 2. The Respondent: G.S.B. Construction Private Limited, 635, Napier Town, Jabalpur 482 001 (M.P.) 3. CIT(Appeals)-1, Jabalpur(M.P.) 4. Pr. Commissioner of Income Tax -2, Jabalpur 5. The Senior DR, ITAT, Jabalpur(M.P) 6. Guard File