ARUN RANGACHARI, Mumbai V. JCIT (IT) (OSD)-4(1)(2), Mumbai

MA 427/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0194 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 17-08-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 08-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Permanent establishment
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI B R BASKARAN, AM AND MS. KAVITHA RAJAGOPAL, JM M A N o . 4 27/ M u m/ 20 2 3 (A ri s i n g ou t o f IT A N o. 23 93/ M u m/ 2 01 9) ( A s s e ss me nt Y ea r: 20 0 9- 10 ) Shri Arun Rangachari C/O M/s. Shah & Taparia 203, Center Point Building, 100, Dr. B. A. Road, Lalbaug, Parel, Mumbai-400 012 V s. Jt. CIT, International Taxation (OSD)-4(1)(2) Mumbai P A N / G I R N o. AM D P R 874 6 F (Assessee) : (Revenue) & M A N o . 1 16/ M u m/ 20 2 3 (A ri s i n g ou t o f IT A N o. 23 93/ M u m/ 2 01 9) ( A s s e ss me nt Y ea r: 20 0 9- 10 ) Jt. CIT, International Taxation (OSD)- 4(1)(2) Mumbai V s. Shri Arun Rangachari C/O M/s. Shah & Taparia 203, Center Point Building, 100, Dr. B. A. Road, Lalbaug, Parel, Mumbai-400 012 P A N / G I R N o. AM D P R 874 6 F (Revenue) : (Assessee) Applicant by : Shri Gaurav Kabra Respondent by : Shri H. M. Bhatt D a te o f H e a r i n g : 18.08.2023 D ate of P ro n ou n ce me n t : 03.11.2023 O R D E R Per Kavitha Rajagopal, J M: These are Miscellaneous Applications filed by the assessee/applicant and the Revenue u/s. 254(2) of the Income Tax Act, 1961 (‘the Act' for short), challenging the Tribunal’s order dated 22.04.2022 and relevant to Assessment Year (A.Y. for short) 2009-10. 2 MA Nos. 4 2 7 / M u m / 2 0 2 3 & 1 1 6 / M u m / 2 0 2 3 ( A . Y . 2 0 0 9 - 1 0 ) Shri Arun Rangachari 2. The assessee/applicant had filed the present miscellaneous application to recall the ex parte order dated 22.04.20222 of the Tribunal. 3. The brief facts are that the assessee is an Indian citizen and an NRI based in Dubai. The assessee’s case was reopened based on the information received from DDIT, Investigation pursuant to the search carried out at valuable group at Mumbai and M/s. Dar Media Pvt. Ltd. and statements u/s. 132A of the Act was recorded from the assessee in the capacity of Director of these entities which disclosed that the assessee has rendered consultancy service to two nonresident entities i.e., Gulf Finance House (GFH) and Khaleej Bank of Commerce (KBHC) which had undertaken certain projects in India in association with the valuable group and based on the said consultation GFH and KBHC had made investment in India in collaboration with the valuable group. 4. The Assessing Officer ('A.O.' for short) had made a addition of Rs.325 crores as business income in the hands of the assessee for the credits in the bank account of DAR Capital Ltd., Mauritius, Thurles International Ltd. and an addition of Rs.94.4 crores u/s. 69 of the Act on the investment made by DAR Group of companies, Mauritius and Thurles International Ltd., Mauritius. 5. In an appeal before the ld. CIT(A), the impugned additions was deleted by the ld. CIT(A) on the ground that there was no permanent establishment in India and that there was no seized material in assessee’s case and that there was no documentary evidence to substantiate the addition made by the A.O. The Revenue had filed an appeal in ITA No. 3 MA Nos. 4 2 7 / M u m / 2 0 2 3 & 1 1 6 / M u m / 2 0 2 3 ( A . Y . 2 0 0 9 - 1 0 ) Shri Arun Rangachari 2393/Mum/2019 for A.Y. 2009-10 challenging the order of the ld. CIT(A) on various grounds. 6. In an appeal preferred by the Revenue before the Tribunal, vide an ex parte order, the Tribunal had upheld the additions made by the A.O. by relying on the co-ordinate bench order in the assessee’s case for A.Y. 2008-09 in ITA No. 676/Mum/2018 vide order dated 9.02.2020. The assessee/applicant has filed the present miscellaneous application to recall the impugned order passed by the Tribunal. The Revenue has also challenged the order of the tribunal for the reason that the Tribunal has relied on the order for A.Y. 2008-09 which was factually different from that of the year under consideration, thereby contending that there was mistake of fact apparent from the record in the order of the Tribunal. The Revenue had sought for amending the said order vide its miscellaneous application. The ld. AR for the assessee contended that the assessee did not have a permanent address in India and that notice could not be served upon the assessee and, hence, the assessee remained ex parte before the Tribunal. The ld. AR further stated that the email id of the assessee specified in Form No. 36 is also no longer used by the assessee and, hence, there was sufficient cause for non appearance during the appellate proceeding. 7. The learned Departmental Representative ('ld.DR' for short), on the other hand, controverted the said facts and vehemently opposed the contention of the ld. AR. Further the ld. DR in the MA filed by the Revenue had stated that there was mistake crept in the order of the Tribunal and prayed that the said order may be recalled. 4 MA Nos. 4 2 7 / M u m / 2 0 2 3 & 1 1 6 / M u m / 2 0 2 3 ( A . Y . 2 0 0 9 - 1 0 ) Shri Arun Rangachari 8. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee had not appeared during the appellate proceeding before the Tribunal on several occasions and the Tribunal vide order dated 22.04.2022 passed an ex parte order by relying on the decision of the Tribunal in assessee’s case for earlier years. The ld. AR had stated that the assessee was not aware of the receipt of the order until the Chartered Accountant of the assessee received a mail communication of the recovery notice. It is also evident from the letter dated 04.02.2021 issued by the department that the whereabouts of the assessee was unknown, thereby confirming that notice was not duly served upon the assessee. Inorder to give a fair opportunity to the assessee to represent his case before the Tribunal, we deem it fit to recall the ex parte order passed by the Tribunal vide order dated 22.04.2022by adhering to the principles of natural justice and also as per the provisions of Rule 24 of the ITAT Rules. As the Revenue has also filed an MA to amend the order of the Tribunal and since we have already made an observation to recall the said order, the MA filed by the Revenue becomes infructuous. 9. In the result, the MA filed by the assessee is allowed and the MA filed by the Revenue is dismissed as infructuous. Order pronounced in the open court on 03.11.2023. Sd/- Sd/- (B R Baskaran) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 03.11.2023 Roshani , Sr. PS 5 MA Nos. 4 2 7 / M u m / 2 0 2 3 & 1 1 6 / M u m / 2 0 2 3 ( A . Y . 2 0 0 9 - 1 0 ) Shri Arun Rangachari Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai