M/s. Hirash Hotels P. Ltd., JAMNAGAR V. The Income Tax Officer, Ward-2(1), JAMNAGAR

MA 43/RJT/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0101 (ITAT-RAJKOT)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 20-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Opportunity of being heard; Principle of natural justice
• Section: 143(3)

Judgement Text

I Y : F : IN THE INCOME TAX APPELLATE TRIBU N AL : RAJKOT BENCH : RAJKOT E I.. [ O E .. E O O BEFORE SHRI T. K. SHARM A JM AND SHRI D. K. SRIVASTAVA AM M. A . NO . 4 3 /RJ T/2012 (ARIS ING OUT OF ORDER IN ITA NO. 1 3 65 /RJT/201 0 ) M M/ ASSESSMENT YEAR 200 7 - 08 M/S HIRAS HOTEL PVT. LTD. V. ITO, WARD 2 (1) JAMNAGAR JAMNAGAR PAN: AAACH5333A DATE OF HEARING: 24 .0 1.2013 DATE OF PRONOUNCEMENT: 08. 0 2 . 2013 F OR THE ASSESSEE: J. C. RANPURA, FCA FOR THE REVENUE: AVINASH KUMAR , DR / ORDER .. EO / D. K. SRIVASTAVA : THE PRESENT M ISCELLANEOUS A PPLICATION HAS BEEN FILED BY THE ASSESSEE WITH THE PRAYER THAT THE ORDER PASSED BY THIS TRIBUNAL ON 3 0 - 04 - 2012 IN DEPARTMENTS APPEAL IN THE CASE OF THE ASSESSEE BEARING ITA NO.1365/RJT/2010 BE RECALLED FOR DECIDING THE APPEAL AFRESH AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE READS AS UNDER: - 1.0 THE DEPARTMENT HAD FILED AN APPEAL IN ITA NO.1365/RJT/2010 AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), JAMNAGAR. 2.0 THE HONBLE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT (HEREINAFTER REFERRED TO AS THE ITAT) , VIDE ORDER DATED 30.04.2012 ALLOWED THE APPEAL OF THE REVENUE EX - PARTE QUA THE RESPONDENT ON THE GROUND THAT THE RESPONDENT NEITHER ENTERED APPEARANCE NOR FILED APPLICATION FOR ADJOURNMENT. 3.0 REGARDING THE OBSERVATION OF THE HONBLE ITAT VIDE PARA 5.0 OF ORDER THAT NOTICE OF HEARING WAS SENT BY RPAD FIXING THE APPEAL FOR HEARING ON 20 TH APRIL 2012 AND THE ASSESSEE NEITHER ENTERED APPEARANCE ON 20 TH APRIL 2012 NOR FILED ANY APPLICATION FOR ADJOURNMENT, THE APPLICANT MOST RESPECTFULLY BEGS TO SUBMIT THAT THE APPLICANT, ON RECEIPT OF THE NOTICE OF HEARING FIXED APPROACHED THE FIRM OF CHARTERED ACCOUNTANTS [CA] WHO APPROACHED BEFORE THE LD. CIT (A). THE CA ADVISED TO COMPILE A PAPER BOOK TO BE FILED BEFORE THE HONBLE ITAT. HOWEVER, SINCE THE DATA WAS TO BE GATHERED, IT WAS DECIDED TO GET THE ADJOURNMENT. HOWEVER, DUE TO CONFUSION THAT THE CA WILL TAKE 2 M A 4 3 /RJT/2012 ADJOURNMENT, THE APPLICANT COULD NOT REQUEST FOR ADJOURNMENT AND THE APPEAL WAS DECIDED EX - PARTE. 4.0 IN VIEW OF THE FACTS AND CIRCUMSTANCES AS ABOVE, THE APPLICANT MOST RESPECTFULLY REQUEST THE HONBLE ITAT TO RECALL THE ORDER DATED30.04.2012 IN ITA NO.1365/RJT/2010 AND RE - DECIDE THE APPEAL AFTER ALLOWING OPPORTUNITY OF HEARING AND JUSTICE IS DONE. 5.0 WITHOUT PREJUDICE TO THE ABOVE, FROM THE ORDER OF THE LD. CIT (A), IT MAY KINDLY BE SEEN THAT THE APPLICANT HAD RAISED FOUR GROUNDS OF APPEAL. HOWEVER, THE LD. CIT (A) HAS DECIDED ONLY FIRST GROUND OF APPEAL RELATING TO THE AOS ACTION OF TREATING THE BUSINESS INCOME AS INCOME FROM HOUSE PROPERTY OBSERVED TH AT SINCE GROUND NO.1 IS ALLOWED, OTHER GROUNDS DO NOT SURVIVE FOR ADJUDICATION, HENCE, DISMISSED. IT IS THUS CLEAR THAT THE LD. CIT (A) DID NOT ADJUDICAT E GROUNDS OF APPEAL NOS. 2 TO 4. THE GROUNDS OF APPEAL NO.2 TO 4 WERE RAISED WITHOUT PREJUDICE TO T HE GROUND NO.1, THE ISSUE RELATED TO (A) THE ALLOWABILITY / SET OFF OF BUSINESS LOSS FROM INCOME FROM HOUSE PROPERTY AND (B) DISALLOWANCE OF EXPENSES ELIGIBLE TO BE CLAIMED U/S.57 OF THE ACT FROM RENTAL CHARGES WHICH ARE COVERED U/S.56 OF THE ACT AND SINCE THE FIRST GROUND OF APPEAL IS DECIDED AGAINST THE APPLICANT THESE GROUNDS ARE REQUIRED TO BE CONSIDERED. 6.0 THE HONBLE ITAT, IN CORRECT APPRECIATION OF THE FACTS, THE GRAVITY OF ISSUES INVOLVED AND ALSO IN DUE CONSIDERATION OF MERITS, INSTEAD OF DECIDI NG THE APPEAL EX - PARTE AT A STROKE, OUGHT TO HAVE AFFORDED REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPLICANT SO AS TO HONOUR THE PRINCIPLES OF NATURAL JUSTICE. 2. IN SUPPORT OF THE M.A., AN AFFIDAVIT SIGNED BY SHRI ASHISHBHAI K. KANTARIA AS DIRECTOR IN THE ASSESSEE - COMPANY HAS BEEN FILED, WHICH READS AS UNDER: - 1.0 ASSESSMENT IN THE CASE OF HIRAS HOTEL PVT. LTD. [COMPANY} FOR THE A.Y. 2007 - 09 WAS FINALIZED VIDE ORDER I/S. 143(3) OF THE ACT DATED 22.09.2009 ON TOTAL INCOME AT 9,85,830/ - , WHEREIN THE BUSINESS INCOME OF THE COMPANY WAS TREATED AS INCOME FROM HOUSE PROPERTY. 2.0 BEING AGGRIEVED, AN APPEAL WAS FILED BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS), JAMNAGAR [CIT (A)]. THE LD. CIT (A) VIDE ORDER DATED 27.10.2010 IN APPEAL NO. CIT (A)/JAM /89/09 - 10 DECIDED THE GROUND OF APPEAL RELATED TO THE INCOME FROM BUSINESS IN FAVOUR OF THE COMPANY. HOWEVER, THE ALTERNATE GROUNDS OF APPEAL WERE NOT DECIDED BY HIM. 3 M A 4 3 /RJT/2012 3.0 THE DEPARTMENT FILED THE SECOND APPEAL BEFORE HONBLE INCOME TAX APPELLATE TRIBUNAL , RAJKOT BENCH, RAJKOT [ITAT] IN ITA NO. 1365/RJT/2010. HONBLE ITAT FIXED HEARING IN THE MATTER ON 20.04.2012, NOTICE OF WHICH WAS SERVED ON ME. I HAD FORWARDED THE SAID NOTICE TO THE FIRM OF CHARTERED ACCOUNTANTS VIZ. B. H. VYAS & CO. AT JAMNAGAR [CA], WH O WERE APPEARED BEFORE THE LD. C IT (A). 4.0 IT WAS ADVISED BY THE OFFICE OF THE CA, THAT THE MATTER BE HANDED OVER TO THE FIRM OF CHARTERED ACCOUNTANTS OF RAJKOT AND TO COMPILE A PAPER BOOK TO BE FILED BEFORE THE HONBLE ITAT. MEANWHILE THE COMPANY HA D TO REQUEST THE HONBLE ITAT FOR ADJOURNMENT. HOWEVER UNDER CONFUSION THAT THE OFFICER OF CA AT JAMNAGAR WILL TAKE ADJOURNMENT, THE COMPANY COULD NOT REQUEST FOR ADJOURNMENT AND THE APPEAL WAS DECIDED EX - PARTE. DUE TO THIS REASON THE APPEAL REMAINED UNA TTENDED ON THE DATE OF HEARING. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE APPEA L BEARING ITA NO.1365/RJT/2010 WAS FILED BY THE DEPARTMENT AGAINST THE ORDER PASSED BY THE CIT(A) ON 27 - 10 - 2010 BY WHICH THE LD. CIT (A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT RENT AL INCOME SHOULD BE ASSESSED AS BUSINESS INCOME AS CLAIMED BY THE ASSESSEE AND NOT AS INCOME FROM THE HOUSE PROPERTY AS HELD BY THE ASSESSING OFFICER. NOTICE WAS SENT BY THE REGISTRY BY RPAD FIXING THE AFORESAID APPEAL FOR HEARING ON 20 TH APRIL, 2012. THE SAID NOTICE OF HEARING WAS DULY SERVED ON THE ASSESSEE BY POSTAL AUTHORITIES AS PER ACKNOWLEDGMENT SLIP RECEIVED BACK FROM THE POSTAL AUTHORITIES. THE ASSESSEE HOWEVER NEITHER ENTERED APPEARANCE ON THE DATE FIXED FOR HEARING NOR FILED ANY APPLICATION FOR ADJOURNMENT. THE APPEAL FILED BY THE ASSESSEE WAS THEREFORE HEARD AND DECIDED EX - PARTE QUA THE ASSESSEE ON MERITS. 4. IT IS NOW CONTENDED THAT THE ASSESSEE COULD NOT ENTER APPEARANCE BEFORE THIS TRIBUNAL ON THE DATE FIXED FOR HEAR ING OF THE APPEAL AS THE MATTER HAD BEEN HANDED OVER TO A FIRM OF CHARTERED ACCOUNTANTS. 5. IN SUPPORT OF M.A., THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE RELIED UPON THE CONTENTS OF THE AFFIDAVIT AND THE MISCELLANEOUS APPLICATION. 6. IN REPLY, THE L D. DEPARTMENTAL REPRESENTATIVE OPPOSED THE MISCELLANEOUS APPLICATION. 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS. IT IS NOT IN DISPUTE THAT THE NOTICE FIXING THE APPEAL FOR HEARING ON 20 TH APRIL 2012 WAS DULY SERVED ON T HE ASSESSEE. IT WAS THEREFORE WITHIN THE PERSONAL KNOWLEDGE OF THE ASSESSEE THAT THE APPEAL WAS LISTED FOR HEARING ON 20 TH APRIL, 2012 AND THEREFORE THE ASSESSEE WAS EXPECTED TO BE VIGILANT IN THIS BEHALF. THE ASSESSEE CLAIMS THAT IT HAD HANDED OVER THE N OTICE TO THE C.A. THIS SUBMISSION CANNOT BE ACCEPTED FOR TWO 4 M A 4 3 /RJT/2012 REASONS : (1) T HE ASSESSEE WAS EXPECTED TO FOLLOW UP THE NOTICE OF HEARING ; AND (2) T HE C.A. TO WHOM THE NOTICE IS CLAIMED TO HAVE BE EN HANDED OVER HAS NOT DEPOSED BEFORE US THAT NOTICE WAS HANDED OVER TO HIM AND THAT HE DID NOT ENTER APPEARANCE BEFORE THIS TRIBUNAL IN SPITE OF THE NOTICE BEING HANDED OVER TO HIM . TH E EXPLANATION GIVEN BY THE ASSESSEE DOES NOT THEREFORE INSPIRE CONFIDENCE. 8. APPEAL FILED BY THE DEPARTMENT HAS BEEN DISPOSED OFF BY THIS TRIBUNAL ON 30 - 04 - 2012 ON MERITS AFTER TAKING INTO ACCOUNT ALL THE GROUNDS OF APPEAL RAISED BY THE DEPARTMENT. IT IS NOT THE CASE OF THE ASSESSEE THAT THE ORDER PASSED BY THIS TRIBUNAL SUFFERS FROM ANY MISTAKE APPARENT FROM RECORD. SINCE IT IS NOT EV EN THE ALLEGATION OF THE ASSESSEE THAT THE ORDER PASSED BY THIS TRIBUNAL SUFFERS FROM ANY MISTAKE APPARENT FROM RECORD, IT WOULD NOT BE APPROPRIATE TO RECALL THE SAID ORDER. 9. T HE SUBMISSION OF THE ASSESSEE THAT CERTAIN GROUND S TAKEN BY THE ASSESSEE BEFO RE THE CIT(A) WERE NOT ADJUDICATED UPON BY HIM IS OF NO SIGNIFICANCE TO US. THERE WAS NO GROUND OF APPEAL BEFORE US ALLEGING THAT THE CIT(A) HAS NOT ADJUDICATED UPON CERTAIN GROUNDS OF APPEAL TAKEN BY ASSESSEE BEFORE HIM. IN THE ORDER PASSED BY THIS TRIBU NAL ON 30 - 04 - 2012, ALL THE GROUNDS TAKEN BEFORE US HAVE BEEN DULY ADJUDICATED. THE ASSESSEE HOWEVER, IS AT LIBERTY IF IT IS SO ADVISED TO APPROACH THE CIT(A) TO SEEK ADJUDICATION OF GROUND S OF APPEAL WHICH, ACCORDING TO IT, HAVE NOT BEEN ADJUDICATED UPON BY HIM. HOWEVER, NON - ADJUDICAT ION OF GROUND BY THE CIT(A) DOES NOT MAKE THE ORDER PASSED BY THIS TRIBUNAL AS SUFFERING FROM MISTAKE S APPARENT FROM THE RECORD. 10. IN VIEW OF THE FOREGOING, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED. S T 08 . 0 2 .201 3 S ORDER PRONOUNCED ON 08 . 0 2. 201 3 SD/ - SD/ - ( I.. M / T. K. SHARMA) ( .. N / D. K. SRIVASTAVA) F / JUDICIAL MEMBER .201 / ACCOU NTANT MEMBER /RAJKOT : 08. 0 2 . 2013 NVA/ - J / COPY OF ORDER FORWARDED TO: - 1.D / APPELLANT - THE INCOME - TAX OFFICER, WARD - 2(1), JAMNAGAR 2 VRD /RESPONDENT - M/S. HIRAS HOTEL PVT. LTD., JAMNAGAR 3. Y A / CONCERNED CIT , JAMNAGAR 4. A - / CIT (A ) , JAMNAGAR 5. VY, I Y, / DR, ITAT, RAJKOT 6. M / GUARD FILE / BY ORDER SENIOR PRIVATE SECRETARY, ITAT, RAJKOT