The ITO, Ward-1(1)(2), Ahmedabad V. Ankush FinStock Limited, Ahmedabad

MA 33/AHD/2019

AI Insights

The case involves the Income Tax Officer, Ward-1(1)(2), Ahmedabad as the applicant and M/s. Ankush Finstock Ltd. as the respondent. The Revenue filed a Miscellaneous Application seeking recall of an order that remanded the case back to the CIT(A) for fresh adjudication. The original dispute centered on the carry forward and set-off of speculative business losses from the assessment year 1997-98 to 2005-06. The Tribunal had previously set aside the CIT(A)'s ex-parte order and remanded the case for a fresh hearing, which the Department contested, citing non-compliance with procedural norms and lack of sufficient cause for delay in filing the appeal by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134485 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-04-2023
• Assessment Year: 2005-2006
• Appeal Filed On: 27-01-2019
• Other Referred Cases: PCIT-3 Vs. Ashokji Chanduji Thakor, Mathura Prasad Phool Chand vs Parmanand Thakur Das And Ors., Onkar Bhagwan v. Gamna Lakhaji and Co., Jagdish Narain v. Rasul Ahmad
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Speculation loss; Condonation of delay; Set aside
• Section: 142(1)

Judgement Text

आयकर अपीलीय अिधकरण, अहमदाबाद ायपी ‘A’ अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER MA No. 33/Ahd/2019 (Arising out of ITA No. 688/Ahd/2018) Assessment Year : 2005-06 The Income Tax Officer, Ward-1(1)(2), Ahmedabad Vs M/s. Ankush Finstock Ltd., B-708, Fairdeal House, Opp. Xt. Zavier’s Ladies Hostel, Near Swastik Cross Roads, Navrangpura, Ahmedabad-380009 PAN : AAHCA 7833 R Applicant Respondent Assessee by : None Revenue by : Shri Rakesh Jha, Sr DR सुनवाई क琉 तारीख/Date of Hearing : 21/04/2023 घोषणा क琉 तारीख /Date of Pronouncement: 06/06/2023 आदेश आदेशआदेश आदेश/O R D E R PER MS. MADHUMITA ROY, JUDICIAL MEMBER:- The instant Miscellaneous Application has been filed by the Revenue seeking recall of the order dated 09.07.2018 passed by the Co-ordinate Bench of this Tribunal whereby and whereunder the order impugned passed by the learned CIT(A), which is basically an ex-parte one, was set aside to the file of the learned CIT(A) for fresh adjudication upon giving a reasonable opportunity of being heard to the appellant therein. 2. The brief facts leading to this application filed before us is this that initially the learned Tribunal by and under an order dated 17.04.2015 decided the appeal preferred by the assessee-company with respect to carried forward and set-off of speculative business loss by setting aside the issue to the file of the lower authorities. The learned Assessing Officer was further directed to frame the order afresh and allow the set-off of brought forward speculative business loss in accordance with law. Notice under Section 142(1) r.w.s. 254 of the Act was issued to the assessee-company asking for reply in respect of the direction so passed by MA No. 33/Ahd/2019 ITO Vs. Ankush Finstock Ltd AY : 2005-06 2 the learned Tribunal dated 17.04.2015 and the assessee duly submitted its reply on 30.06.2016 in the following manner:- “We are in receipt of the order from the ITAT, Ahmedabad for the A.Y. 2005-06 in our case. In this regard, we would like to state that the ITAT has considered the business loss of the A.Y. 1997-98 as speculation loss. The same was treated as speculation loss in the assessment proceedings of the A.Y. 1997-98 and we are agree to the same. And accordingly, the assessment order of the A.Y. 2005-06 was passed after giving due set off of the speculation loss by the ld. AO. In view of the ITAT order for the A.Y. 1997-98 treating the loss as speculation loss, you are requested to give the due effect for A.Y. 2005-06, as the same was given by the ld. AO earlier and conclude the matter.” 3. After considering such reply filed by the assessee, the learned Assessing Officer finalized the order dated 29.07.2016 by not allowing the speculation loss for the year 1997-98, inter alia, amounting to Rs.5,26,12,741/- to be carried forward for subsequent years. The total income assessed by the learned Assessing Officer was of Rs.92,15,149/-. 4. Being aggrieved by and/or dissatisfied with the said order dated 29.07.2016, an appeal was preferred before the learned First Appellate Authority. On three occasions, mainly on 05.09.2017, 27.09.2017 and 18.10.2017, notices were issued fixing the date of hearing to the appellant; however, no compliance was made, neither any reply was filed by the appellant. Furthermore, there was a delay of 19 days in filing such appeal before the learned CIT(A) which has been sought to be justified by the assessee in this manner that “the assessee received the order dated 16.08.2016 and the appeal was due to be filed on 15.09.2016; as the Chartered Accountants were busy in Tax Audits and Income Disclosure Scheme work, there was a delay of 18 days in filing the appeal before the learned First Appellate Authority”. The delay was further not being condoned by the First Appellate Authority as there was no reasonable and sufficient cause was found which prevented the assessee to file the appeal within the stipulated time before the First Appellate Authority as also the observations made therein. Relying on many decisions, the learned MA No. 33/Ahd/2019 ITO Vs. Ankush Finstock Ltd AY : 2005-06 3 CIT(A) ultimately rejected the appeal filed by the assessee on the condonation of delay itself. 5. After taking into consideration the entire aspect of the matter, the Co- ordinate Bench on 09.07.2018, after hearing the learned advocate appearing for the assessee and the representative of the Department, passed an order of remand. As practically the impugned order was an ex-parte one, the matter was set aside to the file of the learned CIT(A) for adjudication de novo upon giving reasonable opportunity of being heard to the assessee. The Co-ordinate Bench was pleased to observe that “there was no reason for an Appellate Forum being bypassed and the matter being taken up directly before the Co-ordinate Bench for adjudication on merits”. We note that the learned Departmental Representative agreed to such observations made by the Co-ordinate Bench and the such concession has been duly recorded in paragraph No. 4 of the said order which has been sought to be recalled before us. The contents of such paragraph No.4 of the order is reproduced herein below:- “4. In response to a question from the Bench, learned Departmental Representative fairly agreed that he has no objection to the matter being remitted to the file of learned CIT(A) for adjudication de novo, after giving yet another reasonable opportunity of hearing to the assessee. We think this is a fair approach and since the learned CIT(A) did not have the benefit of assistance from the assessee appellant, the matter should be remitted to the file of learned CIT(A) for adjudication de novo, after giving yet another opportunity of hearing. In any case, there is no reason for an Appellate Forum being bypassed and the matter being taken up directly before us for adjudication on merits.” 6. At the time of hearing the Miscellaneous Application before us, the Sr. DR submitted before us that the order passed by the Co-ordinate bench is not in line with the ratio laid down by the Hon’ble jurisdictional High Court in the case of PCIT-3 Vs. Ashokji Chanduji Thakor (R/TA No.710-714 & 717 of 2018 dated 27.06.2018), wherein the ITAT’s order of setting aside the issue to the file of the learned CIT(A) was quashed as the same did not assign any reason when the appellant had failed to appear before both the authorities below despite several MA No. 33/Ahd/2019 ITO Vs. Ankush Finstock Ltd AY : 2005-06 4 opportunities given. A copy of the said order has also been submitted before us by the learned Sr. DR. 7. We have heard the learned Sr. DR. We have further considered the judgment passed by the Hon’ble jurisdictional High Court in the case of Ashokji Chanduji Thakor (supra). In that particular case, we find that the assessee did not cooperate before the authorities below, neither filed any reply nor sought any adjournment. Considering this particular fact that the assessee being non- cooperative before the learned Assessing Officer and further in the absence of any co-operation by filing reply in support of the case made out by the appellant, the learned CIT(A) therefore affirmed the order passed by the learned Assessing Officer. The appeal, therefore, filed by the assessee fails. However, the Tribunal has set aside the issue to the file of the learned CIT(A) as the same was found to be not reasonable and thus quashed. We find there is glaring differences in the facts of the case placed before the learned jurisdictional High Court in the case of Ashokji Chanduji Thakor (supra) and the facts revealed from the record in the instant case before us. The assessee is found to have filed a reply before the Assessing Officer which is reproduced as follows:- “We are in receipt of the order from the ITAT, Ahmedabad for the AY 2005-06 in our case. In this regard, we would like to state that the ITAT has considered the business loss of the AY 1997-98 as speculation loss. The same was treated as speculation loss in the assessment proceedings of the AY 1997-98 and we are agree to the same. And accordingly, the assessment order of the AY 2005-06 was passed after giving due set off of the speculation loss by the ld. AO. In view of the ITAT order for the AY 1997-98 treating the loss as speculation loss, you are requested to give the due effect for AY 2005-06, as the same was given by the ld. AO earlier and conclude the matter.” 8. However, the contention made by the assessee was not found to be fit and not acceptable and thus the addition was made by the learned Assessing Officer. Before the learned First Appellate Authority, the assessee did not appear in spite of repeated notices served upon him. The learned CIT(A) dismissed the said MA No. 33/Ahd/2019 ITO Vs. Ankush Finstock Ltd AY : 2005-06 5 appeal though mainly rejecting the application for condonation of delay of 19 days in filing the same before the learned First Appellate Authority. But, keeping in view of the reply filed by the assessee before the ld. Assessing Officer, we are not inclined to hold that the assessee was not at all co-operative before the authorities below. Further that, the appeal so preferred by the assessee was out of an order not being an ex-parte one but on merits which to our little understanding needs to be adjudicated by the learned CIT(A) upon considering the merits of the matter be placed by the assessee which is why the order has been remanded to the file of the learned CIT(A) for adjudication de novo upon granting opportunity of being heard to the appellant. More so, we note that the concession has been given by the Departmental Representative in such passing of order by the Co-ordinate Bench. 9. It is a settled principle of law that once the concession is given and recorded in the order, the order cannot be appealed against, so to say the Miscellaneous Application is neither permissible under the present facts and circumstances of the case. In this regard, we have considered very many judgments passed by the and Hon’ble Courts including the judgment of the Hon’ble Madhya Pradesh High Court in the case of Mathura Prasad Phool Chand vs Parmanand Thakur Das And Ors., reported in AIR 1960 MP 161 – contending that the order recording the compromise was a consent order and as such no appeal lies. This judgment took reliance of another judgment passed by the Bombay High Court in the case of Onkar Bhagwan v. Gamna Lakhaji and Co., reported in AIR 1933 Bom 205. Another judgment passed by the Hon’ble Allahabad High Court in the matter of Jagdish Narain v. Rasul Ahmad, AIR 1952 All 29, has also been duly taken care of the observation made therein as follows:- "When the consent upon the basis of which a decree has been passed by the Court is itself challenged in the Court of appeal it cannot be taken for granted that the decree was a consent decree. A consent decree must mean a decree validly consented to either by the party himself or by his duly authorized agent. If the question raised is that the agent who consented to the decree was not duly authorized, the question has to be decided and it cannot be prejudged by holding that because on the fact of it there was a consent decree, no appeal lies to the appellate Court." MA No. 33/Ahd/2019 ITO Vs. Ankush Finstock Ltd AY : 2005-06 6 10. We note that the consent has been given by the learned DR who was duly authorized on behalf of the Revenue to represent the case before the Co-ordinate Bench. When a compromise has been put in and is recorded and a decree is passed in its terms, no appeal lies either against the decree itself, an appeal there from being barred under Section 96(3) of the Code of Civil Procedure too. We are inspired and encouraged from the essence of such ratios laid down by the different High Courts and thus we do not find any reason to interfere with the order passed by the Co-ordinate Bench which has been passed upon recording of concession given by the learned Departmental Representative. More so, the facts are also not similar to that of the facts recorded in the order passed by the Hon’ble Jurisdictional High Court which has been relied upon by the Department. Hence, with these observations, we dismiss this Miscellaneous Application filed by the Department. 11. In the result, the Miscellaneous Application is dismissed. Order pronounced in the open Court on 6 th June, 2023 at Ahmedabad. Sd/- Sd/- (WASEEM AHMED) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad, Dated 06/06/2023 *Bt आदेश क琉 灹ितिलिप अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴)अपील (/ The CIT(A)- 5. िवभागीय 灹ितिनिध ,आयकर अपीलीय अिधकरण/DR,ITAT, Ahmedabad, 6. गाड榁 फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Ahmedabad