SAIMANGAL INVESTRADE LTD., MUMBAI V. ACIT CENT CIR. 40, MUMBAI

MA 289/MUM/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5253 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 22-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P DANIEL
• Assessee Lawyers: RAVI KHANDELWAL
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER MA NO. 289/MUM/2016 (ARISING OUT OF ITA NO. 6874/MUM/2008) (ASSESSMENT YEAR: 2005-06) M/S. SAIMANGAL INVESTRADE LTD. VS. ACIT, CENTRAL CIRCLE - 40 RADHA BHAVAN, 1 ST FLOOR 121, NAGINDAS MASTER ROAD MUMBAI 400023 MUMBAI PAN AABCS4255R APPLICANT RESPONDENT APPLICANT BY: SMT. RAVI KHANDELWAL RESPONDENT BY: SHRI DR. P. DANIEL DATE OF HEARING: 20.01.2017 DATE OF PRONOUNCEMENT: 25.01.2017 O R D E R PER JASON P. BOAZ, A.M. THIS MISCELLANEOUS APPLICATION (MA) BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE TRIBUNAL IN ITA NO. 6874/MUM/2008 DATE D 13.04.2016 FOR A.Y. 2005-06, DISMISSING THE ASSESSEES APPEAL EX-P ARTE ON MERITS DUE TO NON-PROSECUTION BY THE ASSESSEE. 2. THE FACTS OF THE CASE, BRIEFLY STATED, ARE AS UNDER : - 2.1 THE ASSESSEES APPEAL BEFORE THE TRIBUNAL WAS D IRECTED AGAINST THE ORDER OF THE CIT(A, CENTRAL-VII, MUMBAI DATED 17.09 .2018 FOR A.Y. 2005-06. THE RECORD INDICATES THAT THE ASSESSEE WAS AFFORDED MANY OPPORTUNITIES AND IT WAS OBSERVED THAT EITHER NONE WAS PRESENT FOR TH E ASSESSEE OR ADJOURNMENTS WERE SOUGHT. WHENEVER THE BENCH DID NO T FUNCTION, THE CASE WAS ADJOURNED BY DISPLAY ON THE NOTICE BOARD. ON 05 .04.2016 WHEN THE CASE WAS CALLED FOR HEARING, NONE WAS PRESENT FOR T HE ASSESSEE BUT A LETTER SEEKING ADJOURNMENT WAS FILED ON BEHALF OF THE LEAR NED A.R. OF THE ASSESSEE WHICH WAS SIGNED BY A PERSON WHO WAS NOT AUTHORISED BY THE ASSESSEE TO REPRESENT THE CASE. THE BENCH REJECTED THIS ADJOURN MENT APPLICATION NOTING MA NO. 289/MUM/2016 M/S. SAIMANGAL INVESTRADE LTD. 2 THAT INSPITE OF THIS CASE BEING ONE HAVING BEEN DIS POSED OFF EX-PARTE EARLIER BY THE BENCH VIDE ORDER OF EVEN NUMBER DATED 03.04. 2013 AND SUBSEQUENTLY RECALLED VIDE ORDER DATED 20.09.2013 A ND HEARINGS SINCE 2013 HAVING BEEN AFFORDED TO THE ASSESSEE, THE ASSESSEE/ AR WAS EITHER NOT BEING PRESENT OR SEEKING ADJOURNMENTS. IN THIS FACTUAL SI TUATION, THE BENCH WAS OF THE OPINION THAT THE ASSESSEE WAS NOT SERIOUS ABOUT PURSUING THIS APPEAL AND THEREFORE PROCEEDED TO DISPOSE OFF THE CASE EX- PARTE WITH ASSISTANCE OF THE LEARNED D.R. FOR REVENUE AND THE MATERIAL ON RE CORD, AND DISMISSING THE ASSESSEES APPEAL. 3. AGGRIEVED BY THIS ORDER DATED 13.04.2016 FOR A.Y. 5 -06, DISMISSING THE ASSESSEES APPEAL EXPARTE, THE ASSESSEE HAS PRE FERRED THAT PRESENT MISCELLANEOUS APPLICATION UNDER SECTION 254(2) OF T HE ACT. IN THIS MA THE ASSESSEE HAS SUBMITTED AS UNDER: - 1. THE ABOVE APPEAL FOR INCOME-TAX ASSESSMENT YEAR 2005-06 CAME UP FOR HEARING BEFORE THE HONOURABLE TRIBUNAL. F BENCH, MUMBAI ON 5 APRIL, 2016 AND HAS BEEN DISPOSED OF BY ITS ORDER D ATED 13.04.2016, SERVED ON THE APPLICANTS ON 7 TH JUNE, 2016. THIS IS AN EX-PARTE ORDER WHEREIN THE HONOURABLE TRIBUNAL HAS DISMISSED THE A PPEAL OF THE APPLICANTS FOR THE REASONS MENTIONED THEREIN. THE A PPLICANTS BEG TO PRESENT THIS APPLICATION TO BRING BEFORE THE HONOUR ABLE BENCH CERTAIN MATTERS AND RELEVANT FACTS WHICH, IT IS SUBMITTED, SHOW THAT THE ORDER OF THE TRIBUNAL CONTAINS A MISTAKE APPARENT FROM RE CORD.\ 2. ON 5 TH APRIL, 2016. BEING THE DATE OF HEARING, MR RAJIV KH ANDELWAL, AUTHORISED REPRESENTATIVE OF THE APPLICANTS COULD N OT ATTEND, BEING UNWELL AND HENCE, A LETTER FOR ADJOURNMENT ON THIS GROUND WAS SUBMITTED TO THE HONOURABLE BENCH. HOWEVER, THE HON OURABLE BENCH REJECTED THE REQUEST AND HEARD THE APPEAL EX-PARTE QUA THE APPLICANTS. 3. THE HONOURABLE TRIBUNAL IN THE IMPUGNED ORDER HA S MENTIONED IN PARAGRAPH 4 THAT 'WE ARE OF THE VIEW THAT THE ASSES SEE IS NOT SERIOUS ABOUT PURSUING THIS APPEAL AND WE, THEREFORE, REJEC T THE ADJOURNMENT APPLICATION FILED, DT 05.04.2016 AND PROCEED TO DIS POSE OFF THE APPEAL WITH THE ASSISTANCE OF THE LD. DR FOR THE REVENUE . .....' 3.1 IT IS IMPERATIVE TO MENTION THAT A PAPER BOOK C ONTAINING PAGE NOS 1 TO 92 HAS BEEN FILED ON 5 TH APRIL, 2010 AND HENCE, THE APPLICANTS ARE SERIOUS IN PURSUING THE APPEAL. THE SAID PAPER BOOK CONTAINS ALL THE RELEVANT MATERIALS AND DOCUMENTS REQUIRED TO DISPOS E OF THE GROUNDS OF APPEAL. THE RELEVANCE OF THE SAID PAPER BOOK COU LD NOT BE ADDRESSED AS MR. RAJIV KHANDELWAL, AUTHORISED REPRE SENTATIVE WAS NOT PRESENT ON THE DATE OF HEARING, BEING UNWELL. T HE APPLICANTS REQUEST FOR JUSTICE INASMUCH AS THERE OUGHT NOT TO BE MISCARRIAGE OF JUSTICE OWING TO THE ABSENCE OF AUTHORISED REPRESEN TATIVE. MA NO. 289/MUM/2016 M/S. SAIMANGAL INVESTRADE LTD. 3 4. THE HONOURABLE TRIBUNAL HAS ON MERITS, DISMISSED ALL THE GROUNDS OF APPEAL. 4.1 AT THE OUTSET, IT IS IMPERATIVE TO MENTION THAT THE FIRST TWO GROUNDS OF APPEAL ARE COVERED IN FAVOUR OF THE APPLICANTS B Y THE ORDER OF THE CO-ORDINATE BENCH OF THE HONOURABLE TRIBUNAL IN THE IR OWN CASE FOR INCOME-TAX ASSESSMENT YEARS 2001-02 (ITA NO. 4229/M UM/2007), 2002-03 (ITA NO. 848/MUM/2008), 2003-04 AND 2004-05 (ITA NOS. 975 & 976/MUM/2008 - CONSOLIDATED ORDER). THIS COUL D BE GATHERED FROM THE ORDER OF THE CIT(A) AS HE MENTIONS IN PARA GRAPH 4 OF HIS ORDER, REPRODUCED BY THE HONOURABLE TRIBUNAL IN PAR AGRAPH 5.3 OF THEIR ORDER, THAT 'IT IS STATED BY THE ASSESSING OF FICER THAT IN ITS OWN CASE, THE LOSS ARRIVED AT ON THESE SHARES HAD BEEN DISALLOWED ON THE SAME REASON AS STATED ABOVE FOR AY 2002-03, 2003-04 & 2004-05 AND THE EARLIER ASSESSMENT YEARS. THERE WAS NO CHAN GE IN THE . FACTS AND CIRCUMSTANCES OF THE CASE. IT IS A FACT THAT TH ESE SHARES ARE SHARES INVOLVED IN THE STOCK SCAM OF 2001 IN THE KE TAN PAREKH GROUP OF CASES AND THIS IS AN EXTENSION OF THE PERIOD AND OF THE SAME SCRIPTS.' 4.2 FURTHER, ON 17 TH SEPTEMBER, 2012, THE AUTHORISED REPRESENTATIVE HAS FILED WITH THE HONOURABLE BENCH, DURING THE COU RSE OF HEARING, ORDERS OF THE HONOURABLE TRIBUNAL IN THE APPLICANTS ' OWN CASE FOR INCOME-TAX ASSESSMENT YEARS 2001-02 (ITA NO. 4229/M UM/2007), 2002-03 (1TA NO. 848/MUM/2008). 2003-04 AND 2004-05 (ITA NOS. 975 & 976/MUM/2008 CONSOLIDATED ORDER) TO SUBMIT THAT THE GROUND OF APPEAL NO 1 IS COVERED. THE AUTHORISED REPRESENT ATIVE FURTHER, FILED LEAD ORDER IN THE CASE OF KNP SECURITIES PVT. LTD. FOR INCOME-TAX ASSESSMENT YEARS 2003-04 AND 2004-05 (ITA NOS 5008 AND 5009/MUM/2007 - CONSOLIDATED ORDER). VN PAREKH SECU RITIES LTD. (ITA NO. 5243/MUM/2011) AND KNP SECURITIES PVT. LTD. (IT A NO. 5245/MUM/2011), BOTH FOR INCOME-TAX ASSESSMENT YEAR 2007-08, FOR THE CONTENTION THAT THE APPLICANTS HAVE CONTINUED I N BUSINESS DURING THE YEAR UNDER REFERENCE, AND HENCE, COVERED. ALL T HE ABOVE COMPANIES ARE ASSOCIATE CONCERNS OF THE APPLICANTS AND THE FA CTS AND GROUNDS ARE ABSOLUTELY SIMILAR TO THAT OF THE APPLICANT-COM PANY. THUS, THERE IS NO REASON FOR THE APPLICANTS NOT TO PURSUE WITH THE APPEAL. 4.3 THERE IS NO MENTION OF THE AFORESAID ORDERS OF THE HONOURABLE TRIBUNAL IN THE IMPUGNED ORDER AND HENCE, A MISTAKE APPARENT ON RECORD. 5. IN VIEW OF THE ABOVE, THE APPLICANTS SUBMIT THAT THERE IS A MISTAKE APPARENT ON RECORD IN THE IMPUGNED ORDER OF THE HONOURABLE TRIBUNAL, WHICH IS NOT IN CONFORMITY WITH THE DECIS IONS OF THE CO- ORDINATE BENCHES OF THE TRIBUNAL DELIVERED IN RESPE CT OF THE EARLIER YEARS AND WHICH WERE IN EXISTENCE ON THE DATE OF TH E IMPUGNED ORDER; THUS, THE IMPUGNED ORDER SURFERS FROM A MISTAKE APP ARENT ON RECORD WHICH CAN BE RECTIFIED UNDER SECTION 254(2) OF THE ACT. 6. IN VIEW OF THE ABOVE, THE APPLICANTS PRAY THAT - (A) THE ORDER OF THE . TRIBUNAL DATED 13.04.2016 BE RECALLED. MA NO. 289/MUM/2016 M/S. SAIMANGAL INVESTRADE LTD. 4 (B) THE TRIBUNAL MAY GRANT SUCH FURTHER AND / OR OTHER RELIEFS AS IT DEEMS FIT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. ON A CAREFUL PER USAL OF THE ASSESSEES SUBMISSIONS (SUPRA), WE ARE OF THE VIEW THAT THE AS SESSEE HAS FAILED TO POINT OUT ANY MISTAKE APPARENT FROM THE FACE OF OUR ORDER IN ITA NO. 6874/MUM/2016 DATED 13.04.2016 THAT WOULD REQUIRE R ECTIFICATION. THE AVERMENTS OF THE ASSESSEE IN PARAS 4.1 TO 4.3 OF TH E SUBMISSIONS THAT GROUNDS 1 & 2 OF ASSESSEES APPEAL ARE COVERED BY T HE ORDERS OF COORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FO R A.Y. 2001-02 (ITA NO. 4229/MUM/2007), 2002-03 (ITA NO. 848/MUM/2008), 200 3-04 AND 2004- 05 (ITA NOS. 975 & 976/MUM/2008-09) WERE NOT MADE A VAILABLE TO US AS CONTENDED. IF IT WAS FILED ON 17.09.2012, AS CONTEN DED BY THE ASSESSEE, THE SAME SHOULD HAVE FOUND MENTION IN (I) ITAT ORDER DI SMISSING THE ASSESSEES APPEAL EX-PARTE ON 03.04.2013, WHICH IT DOES NOT, A ND (II) THE RECORDINGS OF THE PROCEEDINGS ON 17.09.2012; WHICH SHOWS THAT THE LEARNED A.R. OF THE ASSESSEE SOUGHT ADJOURNMENT TO FILE SOME DETAILS. T HE SAID ITAT ORDERS ALSO DO NOT FORM PART OF THE PAPER BOOK (PAGES 1 TO 92) FILED ON 05.04.2013 WHICH WAS BEFORE US. 5. IN THE CASE ON HAND, IT IS EVIDENT THAT BOTH PARTIE S HAVE BEEN PROVIDED ADEQUATE OPPORTUNITY OF BEING HEARD, WHICH THE ASSESSEE HAS FAILED TO AVAIL. BE THAT AS IT MAY, THE OBJECT OF I NCOME TAX PROCEEDINGS IS PRIMARILY THAT THE CORRECT INCOME OF THE ASSESSEE B E BROUGHT TO TAX. NATURAL JUSTICE REQUIRES THAT THE LIS BETWEEN THE P ARTIES SHOULD BE DECIDED ON MERITS, AFTER PROVIDING DUE AND ADEQUATE OPPORTU NITY OF BEING HEARD TO BOTH PARTIES. THE PROVISO TO RULE 24 OF THE I.T. RU LES, 1962 (IN SHORT THE RULES) STATES THAT WHERE AN APPEAL HAS BEEN DISPOS ED OFF EXPARTE FOR THE DEFAULT BY THE APPELLANT, IN THIS CASE THE ASSESSEE , IF THE ASSESSEE APPEARS AFTERWARDS AND SATISFIES THE TRIBUNAL THAT THERE WA S SUFFICIENT CAUSE FOR HERE NON-APPEARANCE WHEN THE APPEAL WAS CALLED FOR HEARING, THE TRIBUNAL SHALL MAKE AN ORDER SETTING ASIDE THE EXPARTE ORDER AND RESTORE THE APPEAL. 6. IN THE FACTUAL MATRIX AND CIRCUMSTANCES OF THE CASE , ON HAND, WE ARE OF THE CONSIDERED VIEW THAT IN TERMS OF THE PROVISO TO RULE 24 OF THE RULES, MA NO. 289/MUM/2016 M/S. SAIMANGAL INVESTRADE LTD. 5 THE ENDS OF JUSTICE WOULD BE MET IF THE ASSESSEE IS PROVIDED WITH ONE MORE OPPORTUNITY OF HEARING, SO THAT THIS CASE BE DISPOS ED OFF ON MERITS AND ALSO TO EXAMINE THE VERACITY OF ITS CLAIMS THAT THE FIRS T TWO GROUNDS OF ITS APPEAL ARE COVERED IN ITS FAVOUR BY THE DECISIONS OF THE C OORDINATE BENCH IN ITS OWN CASE FOR A.Y. 2001-02 TO 2004-05; CITED IN THE MA AT PARAS 4.1 AND 4.2 THEREOF (EXTRACTED SUPRA AT PARA 3 OF THIS ORDER). IN OUR VIEW, IF THIS MA IS ALLOWED AND THE APPEAL OF THE ASSESSEE IS RESTORED, NO PREJUDICE WOULD BE CAUSED TO THE INTEREST OF REVENUE, AS LEGITIMATE TA XES DUE ON THE ASSESSEES CORRECT INCOME WILL BE COLLECTED. WHEREAS, IF THE C ONTRARY VIEW IS TAKEN THE ASSESSEE MAY BE PUT TO HARDSHIP AND DIFFICULTY. KEE PING IN VIEW THE DISCUSSION ABOVE, WE ALLOW THE ASSESSEES MA, INVOK ING THE PROVISIONS OF THE PROVISO TO RULE 24 OF THE RULES AND ACCORDINGLY SET ASIDE OUR EXPARTE ORDER IN ITA NO. 6874/MUM/2008 DATED 13.04.2016 AND RESTORE THE APPEAL TO BE HEARD ON MERITS. 7. THE APPEAL IS TO BE FIXED FOR HEARING ON MERITS IN THE NORMAL COURSE BY THE REGISTRY WHO WILL ISSUE NOTICE TO BOTH PARTI ES FOR HEARING ACCORDINGLY. 8. IN THE RESULT, THE M.A. FILED BY THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2017. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 25 TH JANUARY, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -52, MUMBAI 4. THE CIT, CENTRAL-II MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.