DEPUTY COMMISSIONER OF INCOME TAX , 3(3)(2), MUMBAI V. WARBURG PINCUS INDIA PRIVATE LIMITED, MUMBAI

MA 258/MUM/2017

• Counselvise Citation: [2018] 111 COUNSELVISE.COM (IT) 1488 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: K
• Assessment Year: 2010-2011
• Appeal Filed On: 18-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PORUS KAKA SHRI MANISH KANTH
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HON'BLE ACCOUNTANT MEMBER M.A.NO. 258 / MUM /2017 (ARISING OUT OF ITA.NO. 1612 /MUM/2015 (A. Y : 2010 - 11 ) D.C.I.T, CIRCLE 3(3)(2) ROOM NO . 609, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V. M/S. WARBURG PINCUS INDIA (P.) LTD. 7 TH FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI 400 021 PAN NO: AA A CW 5205 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PORUS KAKA SHRI MANISH KANTH REVENUE BY : SHRI MANOJ KUMAR SINGH DATE OF HEARING : 10.08.2018 DATE OF PRONOUNCEMENT : 08 .11 .2018 O R D E R PER C. N. PRASAD (JM) 1. THROUGH THIS MISCELLANEOUS APPLICATION THE REVENUE IS SEEKING TO RECALL AN ORDER IN ITA.NO. 1612/MUM/2015 DATED 29.03.2017 FOR THE ASSESSMENT YEAR 2010 - 11, ON THE GROUND THAT THE WRITTEN SUBMISSIONS FILED BY THE LD. DR WITHIN THE TIME ALLOWED BY THE TRIBUNAL WERE NOT CONSIDERED AND THE TRIBUNAL DISPOSED OFF THE APPEAL BY AN ORDER DATED 29.03.2017. THEREFORE, IT IS THE SUBMISSION OF THE REVENUE THAT SINCE AN 2 M.A.NO. 258/MUM/2017 M/S. WARBURG PINCUS INDIA (P.) LTD. ORDER WAS PASSED BY THE TRIBUNAL ON 29.03.2017 WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS FILED BY THE LD. DR THE SAME BE RECALLED. 2. IN THE COURSE OF HEARING , AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT THE ORDER DATED 29.03.2017 WHICH WAS REFERRED TO BY THE REVENUE IS NOT THE FINAL ORDER OF THE TRIBUNAL AND THE ORDER PASSED BY THE TRIBUNAL ON 12.04.2017 IS THE FINAL ORDER WHICH WAS SIGNED AND DISPATCHE D TO THE PARTIES INCLUDING THE REVENUE . LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ORDER DATED 29.03.2017 APPEARS TO BE DRAFT ORDER AND NOT THE FINAL ORDER. HE FURTHER BROUGHT TO OUR NOTICE THAT IN THE FINAL ORDER DATED 12.04.2017 THE TRIBUNAL V IDE PARA NO. 4 AT PAGE NO.4 CONSIDERED THE DETAILED SUBMISSIONS AND EXHAUSTIVE ARGUMENTS MADE BY THE LD. DR AND DISPOSED OFF THE APPEAL ON 12.04.2017 AND T HEREFORE THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE STATING THAT THE WRITTEN SUBMISSIONS WERE NOT CONSIDERED IS FACTUALLY INCORRECT. LD. COUNSEL FOR THE ASSESSEE FURTHER INVITED OUR ATTENTION TO THE SNAP SHOT OF THE JUDICIAL INFORMATION PORTAL OF THE ITAT AND SUBMITTED THAT THE TRIBUNAL S WEBSITE CLEARLY STATED THAT THE FINAL ORDER WAS PASSED ON 12.04.2017 AND IT WAS PRONOUNCED ON THE SAME DATE. 3. LD. COUNSEL FOR THE ASSESSEE FURTHER REFERRING TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ITAT V. V.K. AGARWAL AND ANOTHER 3 M.A.NO. 258/MUM/2017 M/S. WARBURG PINCUS INDIA (P.) LTD. [ (19 99 ) 1 S CC 16] SUBMITTED THAT UNLESS THE ORDER IS SIG N ED BY BOTH THE MEMBERS IT IS NOT A VALID ORDER. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT SINCE FINAL ORDER OF THE TRIBUNAL WAS SIGNED ON 12.04.2017 BY BO TH THE MEMBERS OF THE TRIBUNAL AND THIS ORDER WAS COMMUNICATED TO ALL THE PARTIES, THIS IS THE FINAL ORDER AND NOT THE ORDER DATED 29.03.2017 REFERRED TO BY THE REVENUE, AND T HEREFORE THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDER DATED 12.04.2017 PAS SED BY THE TRIBUNAL, HENCE THE M.A. SHOULD BE DISMISSED. 4. LD. DR REFERRING TO THE ORDER DATED 29.03.2017 SUBMITTED THAT THE TRIBUNAL APPEARS TO HAVE PASSED THIS ORDER WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS OF THE LD.CIT - DR, THEREFORE THERE IS A MISTAKE APPARENT ON RECORD IN PASSING THE SAID ORDER . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE COORDINATE BENCH DATED 29.03.2017 AND 12.04.2017 AND ALSO THE RECORD BEFORE THE TRIBUNAL. A S PER THE RECORD BEFORE THE TRIBUNAL , IN THIS CASE THE FINAL ORDER WAS PASSED ON 12.04.2017 AND THE SAME WAS SIGNED AND PRONOUNCED BY BOTH THE MEMBERS ON 12.04.2017 AND THIS FINAL ORDER WAS COMMUNICATED TO ALL THE PARTIES INCLUDING THE RESPONDENT/REVENUE. EVEN THE ITAT JUDICIAL INFORMATION PORTAL ALSO REV EALS THAT THE FINAL ORDER IN THIS CASE WAS PASSED ON 12.04.2017 AND WAS PRONOUNCED ON THE SAME DATE. 4 M.A.NO. 258/MUM/2017 M/S. WARBURG PINCUS INDIA (P.) LTD. THE ORDER DATED 29.03.2017 WHICH THE REVENUE WAS REFERRING TO APPEARS TO BE THE DRAFT ORDER AND THIS ORDER WAS NEVER COMMUNICATED TO THE PARTIES BY THE RE GISTRY . 6. THE HON'BLE SUPREME COURT IN THE CASE OF ITAT V. V.K. AGARWAL AND ANOTHER (SUPRA) HELD AS UNDER: - 22. THE ENTIRE CONDUCT OF THE FIRST RESPONDENT LEAVES MUCH TO BE DESIRED. HE CLAIMS TO HAVE RECEIVED A PSEUDONYMOUS COMPLAINT DATED 15TH OF NOVEMBER, 1997 FROM ONE K. PRASA D WITH WHICH COPIES OF 'TWO SEPARATE AND CONFLICTING ORDERS PASSED BY THE ITAT MUM BAI BENCH A, IN ITA NO.9013/BOM ./1995' WERE ENCLOSED. THE PSEUDONYMOUS COMPLAINT STATED THAT WHILE ONE ORDER WAS DICTATED AND SIGNED BY THE JU DICIAL MEMBER IN AUGUST, 1997, THE OTHER ORDER WAS PER PRO THE ACCOUNTANT MEMBER AND SIGNED BY BOTH. THE LETTER SAYS, 'THE AFORESAID CIRCUMSTANCES DISCLOSE JUDICIAL IMPROPRIETY OF THE HIGHEST DEGREE'. ON THE BASIS OF THIS PSEUDONYMOUS COMPLAINT, AND THE RE CEIPT OF COPIES OF TWO SEPARATE ORDERS, THE FIRST RESPONDENT CLAIMS TO HAVE WRITTEN THE LETTER OF 30TH OF DECEMBER, 1997. BEFORE DOING SO, HE DID NOT CHECK WHETHER THERE WAS ANY PERSON OF THE NAME K. PRASAD EXISTING AT THE ADDRESS GIVEN IN THE LETTER AND W HETHER WHAT HAD BEEN STATED IN THE LETTER HAD ANY FACTUAL BASIS. HE DID NOT EVEN CHECK WHETHER B OTH THE ORDERS OR ANY OF THEM HAD BEEN PRONOUNCED BY THE BENCH OR NOT. HE SHOULD HAVE BEEN AWARE OF AN OFFICE MEMORANDUM DATED 29TH OF SEPTEMBER, 1992 ISSUED BY THE DEPARTMENT OF PERSONNEL AND TRAINING, GOVERNMENT OF INDIA TO ALL DEPARTMENTS, GIVING INSTRUCTIONS ABOUT DEALING WITH ANONYMOUS AND PSEUDONYMOUS COMPLAINTS. THE MEMORANDUM STATES THAT BEFORE TAKING COGNIZANCE OF SUCH COMPLAINTS THE CHIEF VIGILANCE OFFI CER OF THE DEPARTMENT OR ORGANISATION CONCERNED SHOULD OBTAIN SPECIFIC ORDERS FROM THE HEAD OF THE DEPARTMENT. A COPY OF ALL SUCH COMPLAINTS SHA L L FIRST BE MADE AVAILABLE TO THE OFFICER CONCERNED FOR HIS COMMENTS, AND ONLY THEREAFTER FURTHER ACTION SHOULD BE TAKEN. PRECAUTION SHOULD BE TAKEN TO TAKE INTO CUSTODY ALL RELEVANT DOCUMENTS. IN THE PRESENT CASE THE FIRST RESPONDENT DID NOT SEND A COPY OF THE COMPLAINT WHICH HE HAD RECEIVED TO THE PRESIDENT OF THE TRIBUNAL FOR INVESTIGATION. ALTHOUGH HE WAS THE LA W SECRETARY, HE SEEMS TO BE UNAWARE OF RULES 34 AND 35 OF THE INCOME TAX APPELLATE TRIBUNAL RULES OF 1961 WHICH REGULATE THE PROCEDURE OF THE APPELLATE TRIBUNAL. UNDER RULE 34 WHICH DEALS WITH FINAL ORDERS TO BE PASSED, IT IS PROVIDED AS FOLLOWS: - '34( 1): THE ORDER OF THE BENCH SHALL BE IN WRITING AND SHALL BE SIGNED AND DATED BY THE MEMBERS CONSTITUTING IT.' RULE 35 PROVIDES AS FOLLOWS: '35: THE TRIBUNAL SHALL, AFTER THE ORDER IS SIGNED, CAUSE IT TO BE COMMUNICATED TO THE ASSESSES AND TO THE COMMISSIONER.' THEREFORE, UNLESS THE ORDER OF A BENCH IS SIGNED BY ALL MEMBERS CONSTITUTING IT AND IS DATED, IT IS NOT AN ORDER OF THE APPELLATE TRIBUNAL. SECONDLY, THIS SIGNED AND DATED ORDER HAS TO BE COMMUNICATED BOTH TO THE ASSESSEE AND TO THE COMMISSI ONER. THE FIRST RESPONDENT HAS NOTED IN THE LETTER OF 30TH DECEMBER 1997, THAT THE FIRST SO - CALLED 'ORDER' ONLY BEARS THE SIGNATURE ONE MEMBER. IT IS NOT SIGNED BY THE SECOND MEMBER, NOR DOES IT BEAR ANY DATE. HE OUGHT TO HAVE VERIFIED WHETHER THIS SO CALL ED FIRST 'ORDER' HAD BEEN COMMUNICATED TO THE ASSESSEE OR TO 5 M.A.NO. 258/MUM/2017 M/S. WARBURG PINCUS INDIA (P.) LTD. THE COMMISSIONER. HAD HE DONE SO, SO HE WOULD HAVE FOUND THAT SUCH AN 'ORDER' DOES NOT EXIST AND NO SUCH ORDER HAS BEEN COMMUNICATED EITHER TO THE ASSESSEE OR TO THE COMMISSIONER. HAD HE BEEN AWA RE OF RULE 34, HE WOULD HAVE REALISED THAT IF THE COPIES WHICH WERE SENT TO HIM WERE AUTHENTIC, THEN THE ONLY ORDER WHICH COULD BE CONSTRUED AS AN ORDER OF THE TRIBUNAL WAS THE SECOND ORDER WHICH WAS SIGNED BY BOTH THE MEMBERS AND BORE A DATE. HAD HE ASCER TAINED FROM THE COMMISSIONER OF INCOME TAX OR THE ASSESSEE WHICH ORDER HAD BEEN COMMUNICATED TO THEM, HE WOULD HAVE FOUND THAT THE ONLY ORDER WHICH HAD BEEN COMMUNICATED WAS THE ORDER SIGNED BY BOTH THE MEMBERS AND BEARING THE DATE 23RD OF OCTOBER, 1997. T HEREFORE, HE SHOULD HAVE REALISED THAT THERE COULD NOT POSSIBLY HAVE BEEN ANY MISUNDERSTANDING ABOUT THE ORDER PASSED. WHAT APPEARS FROM THE LETTER IS THAT THE FIRST RESPONDENT SEEMS HAVE TAKEN UMBRAGE AT THE FACT THAT THE JUDICIAL MEMBER, WHOSE INITIAL DR AFT ORDER WAS IN FAVOUR OF THE ASSESSEE, WAS CHANGED AND THE JUDICIAL MEMBER, AFTER DISCUSSION WITH THE ACCOUNTANT MEMBER, ULTIMATELY AGREED WITH THE VIEW TAKEN BY THE ACCOUNTANT MEMBER AND DECIDED THE APPEAL IN FAVOUR OF THE REVENUE. CERTAINLY, THE LANGUA GE OF THE LETTER OF 30TH OF DECEMBER, 1997 IS WHOLLY UNWARRAN TED. CURIOUSLY, THE STATEMENT IN TH E LETTER THAT, THE AFORESAID CI RCUMSTANCES DISCLOSE JUDICIAL IMPROPRIETY OF HIGHEST DEGREE IS REMINISCENT OF THE LANGUAGE USED IN THE PSEUDONYMOUS COMPLAINT. IN STEAD OF EVEN WAITING FOR AN EXPLANATION, H E HAS STRAIGHTWAY ASKED THE PRESIDENT TO ENQUIRE INTO THE MATTER AND SEND A REPORT TO THE GOVERNMENT, AND THAT TOO PEREMPTORILY WITHIN TEN DAYS. ALL THIS IS WHOLLY UNBECOMING OF A PERSON HOLDING THE RANK OF TH E LA W SECRETARY. MOREOVER, WITHOUT WAITING FOR SOME TIME FOR A RESPONSE FROM THE PRESIDENT, IMMEDIATELY ON THE LAPSE OF A MONTH, HE WROTE A SECOND LETTER OF 3RD OF FEBRUARY, 1998 IN AN EQUALLY PEREMPTORY FASHION POINTING OUT THAT ALTHOUGH THE PRESIDENT WAS REQ UESTED TO REPLY WITHIN TEN DAYS, HE HAD NOT RECEIVED ANY REPORT EVEN AFTER A MONTH! HE ADMONISHED THE PRESIDENT, POINTING OUT THAT THE PRESIDENT HAD THE RESPONSIBILITY TO ENSURE THAT THE JUDICIAL FUNCTIONS ARE DISCHARGED PROPERLY, HE REFERRED TO THE SO CAL LED IRREGULARITY, AND EVEN WENT TO THE EXTENT OF SAYING THAT SILENCE ON THE PART OF THE PRESIDENT MAY INVITE ADVERSE INFERENCES IN THE MATTER! HE DEMANDED A REPORT FROM THE PRESIDENT NOT LATER THAN 6TH OF FEBRUARY, 1998, WHEN HIS LETTER WAS DATED 3RD OF FE BRUARY, 1998. THE ENTIRE TONE OF THE LETTER IS HIGHLY UNWARRANTED, OFFENSIVE AND TENDS TO UNDERMINE THE DIGNITY OF THE POST OF THE PRESIDENT OF THE APPELLATE TRIBUNAL. IT IS UNBECOMING OF THE LAW SECRETARY TO ISSUE SUCH 'COMMANDS' TO THE PRESIDENT OF THE I NCOME TAX APPELLATE TRIBUNAL ORDERING HIM TO SEND REPORTS WITHIN A FEW DAYS AND THREATENING THAT ADVERSE INFERENCES WOULD BE DRAWN IF THE REPORT IS NOT SO SENT - AND ALL THIS WITHOUT EVEN BOTHERING TO CHECK WHETHER THE COMPLAINT RECEIVED BY HIM WAS A GENUI NE COMPLAINT OR NOT . ! 7. AS COULD BE OBSERVED FROM THE ABOVE , THE HON'BLE SUPREME COURT HAS CLEARLY HELD THAT UNLESS THE ORDER OF THE BENCH IS SIGNED BY ALL THE MEMBERS CONSTITUTING IT AND IS DATED , IT IS NOT THE ORDER OF THE TRIBUNAL. IT WAS ALSO FURTHER HELD THAT THIS SIGNED AND DATED ORDER HAS TO BE COMMUNICATED BOTH TO THE ASSESSEE AND TO THE COMMISSIONER. 8. IN THE CASE ON HAND , AS PER THE RECORDS OF THE TRIBUNAL FINAL ORDER WAS PASSED ON 12.04.2017 AND THIS ORDER WAS SIGNED BY BOTH THE 6 M.A.NO. 258/MUM/2017 M/S. WARBURG PINCUS INDIA (P.) LTD. MEMBERS AND ONLY T HIS ORDER WAS COMMUNICATED TO THE PARTIES. THEREFORE, WE HOLD THAT THE FINAL ORDER PASSED BY THE TRIBUNAL IS THE ORDER DATED 12.04.2017 AND NOT THE ORDER DATED 29.03.2017 WHICH IS A DRAFT ORDER. IN THE CIRCUMSTANCES, THE M.A FILED BY THE REVENUE AGAINST THE ORDER OF THE TRIBUNAL DATED 29.03.2017 DOES NOT LIE AND THE SAME IS LIABLE TO BE DISMISSED. 9. WE FURTHER NOTICE THAT T HE TRIBUNAL WHILE PASSING THE FINAL ORDER AT PARA NO.4 OF THE ORDER IT HAS BEEN OBSERVED AS UNDER: - 4. PER CONTRA, LD. CIT (DR) VEHEME NTLY OPPOSED THE SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE AND REITERATED ALL THE ARGUMENTS WHICH WERE MADE BEFORE THE DRP. LD. CIT - DR SUBSEQUENTLY, FILED DETAILED SUBMISSIONS WHEREIN EXHAUSTIVE ARGUMENTS HAVE BEEN MADE TO OPPOSE THE SUBMISSIONS OF THE ASSESSEE. IT IS NOTED BY US THAT THESE VERY ARGUMENTS WERE MADE IN THE CASES RELIED UPON BY LD. COUNSEL AND THESE HAVE BEEN CONSIDERED THEREIN BY RESPECTIVE BENCHES. FURTHER, WE FIND THAT SIMILAR ARGUMENTS WERE ALSO MADE BY THE LD. CIT(DR) BEFORE TH E TRIBUNAL IN APPEALS FOR AY 2008 - 09 & 2009 - 10. IT IS NOTED THAT REPRESENTATION WAS DONE FOR AY 2008 - 09 & 2009 - 10 BEFORE THE TRIBUNAL BY THE SAME COUNSEL OF THE ASSESSEE AND LD. CIT(DR) WAS ALSO SAME. 10. AS COULD BE SEEN FROM THE ABOVE OBSERVATIONS OF THE TRIBUNAL THE EXHAUSTIVE ARGUMENTS AND ALSO THE DETAILED SUBMISSIONS FILED SUBSEQUENTLY BY THE LD. DR HAVE BEEN CONSIDERED BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEAL. IN THE CIRCUMSTANCES, WE DO NOT F IND ANY MISTAKE APPARENT ON RECORD , EVEN IN PASSING THE FINAL ORDER BY THE TRIBUNAL ON 12.04.2017. THUS , THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE HAS NO MERIT. 7 M.A.NO. 258/MUM/2017 M/S. WARBURG PINCUS INDIA (P.) LTD. 11. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 08 TH NOVEMBER , 2018 . SD/ - SD/ - ( RAJESH KUMAR ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 08 / 11 / 201 8 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM