Income Tax Officer- Ward-1(1), Jabalpur V. M/s Mishra Builders, Jabalpur

MA 23/JAB/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4103 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 30-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Right to appeal; Tax effect
• Section: 268A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR (Through web-based video conferencing platform) BEFORE SHRI SANJAY ARORA, HON’BLE ACCOUNTANT MEMBER & SHRI MANOMOHAN DAS, HON'BLE JUDICIAL MEMBER M.A. Nos. 23 to 25/JAB/2019 (Arising out of ITA Nos. 190 to 192/JAB/2018) (Asst. Years: 2004-05 to 2006-07) Assessee by : None. Department by : Shri S.K. Halder, Sr.DR Date of hearing : 11/03/2022. Date of pronouncement : 31/05/2022. O R D E R Per Bench: This is a set of three Miscellaneous Applications (MAs) by the Revenue in respect of the dismissal of its’ appeals in the assessee’s case for three consecutive years, being Assessment Years (AYs.) 2004-05 to 2006-07, dismissed in limine by the Tribunal under section 268A of the Income Tax Act, 1961 (‘the Act’, hereinafter) vide it’s consolidated order u/s. 254(1) of the Act, dated 23/08/2019. 2. The applications were listed for hearing on 23/10/2020, whereat appearance for and on behalf of the assessee-respondent was put in by Shri Manish Sharma, Advocate, vakalatnama in whose favour (along with Shri L.L. Sharma, Advocate) is on record. The matter was adjourned sine die in view of the ITO, Ward-1(1), Jabalpur. vs. Mishra Builders, Chiranjeev Anand Colony, Baldeobagh, Jabalpur. (Applicant) [PAN: AAHFM 5089 J] (Respondent) MA Nos. 23-25/JAB/2019 (AYs. 2004-05 to 2006-07) ITO vs. Mishra Builders 2 adjournment application by Shri L.L. Sharma. None appeared on the next date, i.e., 25/02/2022, nor was there any adjournment motion. And whereat, as indeed on the earlier occasion, it was pleaded for and on behalf of the Revenue that its’ instant petitions were covered by the order by the Tribunal in Asst. CIT vs. Anurag Shrivastava & Ors. (in MA Nos. 3 to 7/ JAB/2020, dated 07/09/2020), placing a copy of the same on record. However, in view of the non-representation by the assessee, hearing was adjourned to 11/03/2022, also asking the Revenue to ensure, despite confirmation to that effect by the ld. Sr. DR, Shri Halder, that a copy of the said order is made available to the assessee to enable it to respond on the next date of hearing, i.e., 11/3/2022. None, however, appeared for the assessee on that date, nor any adjournment application received, despite service, as earlier, of the notice of hearing. The matter was accordingly taken as heard. The same also explains the reason/s and the circumstances leading to the instant applications being heard ex parte qua the assessee-respondent. 3. We have heard the party before us, as well as perused the material on record. The Revenue per its’ instant petitions seeks restoration of its’ appeals for a decision on merits, as the same stand, in it’s view, wrongly dismissed by the Tribunal, i.e., without regard to the fact that the appeals were, despite entailing a low tax-effect, excepted (from the purview of sec. 268A(1)) by the exceptional clause per para 10 of the Board Instruction 03/2018, dated 11/07/2018. The said fact, as explained by the ld. Sr. DR during hearing, finds clear mention in the Grounds of Appeal (GoA), forming part of the Memorandum/s of Appeal (MoA). The said fact stands confirmed by us for each of the three appeals under reference; the relevant Ground, in each appeal, reading as under: ‘The appeal in this case is being filed under exceptional clause of para 10 of Board’s Circular 03/2018, dated 11/7/2018.’ There has, accordingly, been a gross error on the part of the Tribunal in not having regard of the said fact and proceeding de hors the same, causing thus a MA Nos. 23-25/JAB/2019 (AYs. 2004-05 to 2006-07) ITO vs. Mishra Builders 3 serious prejudice to the Revenue in denying it it’s statutory right to appeal, duly exercised. It’s abrogation must therefore be strictly in terms of it’s non-exercise, as provided by the statute. If only the Tribunal had, at the time of hearing the instant appeals, perused the ‘Grounds of Appeal’ (of the relevant appeals), which it ought to have, it would have been, in view of s. 268A(4), obliged to give regard thereto. Of course, it could have required the Revenue to satisfy it in the matter, as indeed afforded an opportunity of being heard in the matter to the assessee. Rather, apart from, thus, a clear violation of s. 268A(4), constituting a ‘mistake’ in terms of s. 254(2), which includes both – a mistake of fact or of law, the non- consideration of the GoA, forming the basis of the appeal, itself causes a serious prejudice in negating the Revenue’s right to appeal. That no court or Tribunal can, by it’s action or non-action, cause prejudice to any party before it, represents a well settled legal proposition (signified by the legal maxim i.e., actus curiae neminem gravabit) and, as explained in Honda Siel Power Products Ltd. v. CIT [2007] 295 ITR 466 (SC), makes it obligatory on the Tribunal to redress the prejudice caused by it u/s. 254(2), and which is independent of and has nothing to do with the inherent power of review. The Tribunal in that case omitting to consider the reliance by the assessee in the appellate proceedings on a decision, the rectification petition moved by it before the Tribunal was, for that reason, held as valid by the Apex Court, so that the impugned order was liable to be recalled for being decided afresh after considering the said decision. In fact, even as explained in detail in Anurag Shrivastava & Ors. (supra), the impugned order is as en masse order, whereat over 200 appeals of the Revenue were dismissed in two tranches (i.e., per two – including the impugned order, identically worded orders) by the Tribunal summarily, i.e., on account of the Revenue’s appeals not qualifying for being heard and a decision on merits in view of the latest Board Instruction 17/2019, dated 08/08/2019, enhancing the existing threshold monetary limit u/s. 268A(1) of the Act for appeals before the Tribunal to Rs. 50 lacs. It, however, conscious of the fact that it may, in doing so, MA Nos. 23-25/JAB/2019 (AYs. 2004-05 to 2006-07) ITO vs. Mishra Builders 4 be committing a mistake inasmuch as an appeal excepted by any of the clauses of the relevant Board Instruction/Circular may get inadvertently dismissed, or there may occur a mistake in working the tax-effect of an appeal, etc., it provided a saving for all such appeals (as indeed Cross Objections (COs) by the assessee- respondents, which were, presuming the same as supportive, were also simultaneously dismissed) vide para 7 of it’s order, which reads as under:- ‘7. It may be clarified that though every care has been taken by the Registry of the Tribunal in identifying the listed appeals, it may yet be that some error in working the tax effect may have occurred. It may also be that an appeal/s is otherwise saved by the exceptions listed at para 10 (scope of which stands widened vide amendment dated 20/8/2018) or para 11 of the Circular. Similarly, it may be that a CO/s bears an independent ground/s, raised for adjudication. Accordingly, liberty is hereby granted to the parties to, where so, move the Tribunal in this regard, in which case it shall, where satisfied on merits, recall an appeal/s or, as the case may be, a CO/s, for being heard on merits. Further, the recall of an appeal would be accompanied by the recall of the assessee’s corresponding CO, if any, dismissed along with. Needless to add, the Tribunal shall, while doing so, which shall be per a speaking order, grant an opportunity of hearing to the other side.’ (emphasis, ours) In fact, but for the same, as again explained in Anurag Shrivastava & Ors. (supra), as also per it’s later orders by the Tribunal, as in Dy. CIT v. TDP & Associates (M.A. 19/JAB/2019, dated 27/04/2022) and ITO v. Sudhir Kumar Rawat (M.A. 16/JAB/2019, dated 22/04/2022), the Tribunal’s impugned order would not qualify to be an order u/s. 254(1) of the Act, which specifically provides for grant of an opportunity of hearing to the parties before it before passing an order. The same, i.e., audi alteram partem, it would be noted, is, rather, a cardinal principle of jurisprudence, violated in the instant case. 4. Under the circumstances, we, therefore, have no hesitation in, accepting the Revenue’s MAs, recall the Revenue’s appeal for being decided on merits. However, inasmuch as the assessee did not participate in the proceedings, as also the fact that the Revenue has also not placed on record the relevant audit objection/s, we provide a liberty to the assessee to raise an objection, if so advised, on the applicability of para 10 of the Board Instruction 03/2018, dated 11/07/2018, in the said appellate proceedings, in which case the Tribunal shall MA Nos. 23-25/JAB/2019 (AYs. 2004-05 to 2006-07) ITO vs. Mishra Builders 5 decide the same after hearing the parties. This would also satisfy the mandate of para 7 of the impugned order, which specifically obliges the Tribunal to examine the applicability of the excepting paras 10 & 11 of the said Board Instruction. 5. In the result, the Revenue’s instant MAs are allowed on the aforesaid terms. Order pronounced in open Court on May 31, 2022 sd/- sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 31/05/2022 vr/- Copy to: 1. The Applicant: Inco me Tax Office r, Ward-1(1), Jabalpur. 2. The Respondent: M/s. Mishra Builders, Chiranjeev Anand Colony, Baldeobagh, Jabalpur 3. The Principal CI T-1, Jabalpur (MP) 4. The CI T( Appeals)-1, Jabalpur 5. The Sr . D.R., I TAT, Jabalpur 6. Guard File By order (VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur.