DCIT, New Delhi V. Sh. Niranjan Koirala, New Delhi

MA 732/DEL/2018

AI Insights

The case involves the Income Tax Department (Revenue) and Niranjan Koirala, concerning the non-decision on additional grounds raised by the Revenue in an appeal. The Revenue filed a Miscellaneous Application under section 254(2) of the Income Tax Act, 1961, claiming that additional grounds raised in 2014 were not decided by the Income Tax Appellate Tribunal (ITAT). The High Court had previously directed the Revenue to clarify whether these additional grounds were pressed and if any orders were obtained from the ITAT regarding them. The Revenue's affidavit and the ITAT's records indicated that the additional grounds were not considered due to procedural oversights, including non-service of documents to the respondent and non-compliance with the Tribunal's Office Manual. The ITAT acknowledged these oversights and allowed the Revenue's application, thereby recalling the earlier order to address the additional grounds.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300691 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-07-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 22-06-2023
• Assessment Year: 2006-2007
• Appeal Filed On: 28-11-2018
• Other Referred Cases: Maruti Udhyog Ltd vs. 244 ITR 308(Del), Jyotsna Suri vs. 179 CTR 265(SC), Gharda Chemicals Ltd vs. (2011) 10 taxmann.com 55(Mum)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 2; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI BEFORE DR. B.R.R. KUMAR, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER M. A NO. 732 /Del/2018 (A.Y 2006-07) in (Arising out of I.T.A.No. 2253/Del/2010) ACIT, Circle-52(1), New Delhi (APPLICANT) vs Niranjan Koirala 2, Akbar Road, New Delhi 110001 (RESPONDENT) Applicant by Sh. Taran Deep Singh, Adv. Respondent by Sh. Kanav Bali, Sr. DR ORDER PER ANUBHAV SHARMA, JUDICIAL MEMBER : Heard and perused the record. 2. The application in hand has been moved on behalf of the Revenue u/s 254(2) of the Income Tax Act, 1961 submitting that the additional ground raised vide application dated 13/8/2014, in the appeal left undecided. 3. It can be appreciated from the record that Revenue had also approached Hon’ble High Court where that issue was raised and Hon’ble High Court having taken into consideration the issue of non-decision of the additional grounds of the Revenue called for an affidavit from the revenue that whether the said application in form 36 raising additional ground was ever pressed and if any orders were obtained from the Tribunal in that regard. It comes up that subsequently that Date of Hearing 23.06.2023 Date of Pronouncement 10.07.2023 2 M.A No. 732/Del/2018 Niranjan Koirala petition before Hon’ble High Court has been withdrawn by the Revenue and an affidavit was also filed and copy of which has been placed before the Bench also. It will be convenient to reproduce the affidavit filed for the Revenue: “COMPLIANCE AFFIDAVIT ON BEHALF OF THE APPELLANT I Dheeraj, aged about 35 years, currently posted as Deputy Commissioner of Income Tax, Circle 52(1), New Delhi having office at Room No 1404, 14 th Floor, E 2 Block, S. P. Mukheijee Civic Centre, Minto Road, New Delhi-110002, have read and understood the contents of the appeal and having gone through the records of the case do hereby solemnly affirm and state as under:- 1. That I am authorized on behalf of the Appellant in the present matter and as such I am well conversant with the facts and circumstances of the case and authorized to file the present affidavit. 2. That the present Income Tax Appeal has been filed by the Appellant against the order dated 20.07.2018, passed by the Ld. IT AT in ITA No. 2253/Del/2010, inter alia on the ground that the Ld..IT AT did not give any finding on the additional grounds of appeal raised before it by the department vide letter dated 13.08.2014. A True Copy of the letter/application dated 13.08.2014 filed by the Revenue raising additional grounds is annexed herewith and marked as Annexure A-l. 3. That vide order dated 15.11.2019, this Hon’ble Court was pleased to direct the appellant herein, "to place on record the order sheets of the Tribunal, if any, dealing with the said application moved by the Appellant to raise additional grounds in Form No. 36. The Appellant should also clearly state on affidavit 3 M.A No. 732/Del/2018 Niranjan Koirala whether the said application in Form No. 36 was ever pressed and if any orders obtained from the Tribunal in that regard. ” 4. That in this regard, a letter dated 20.11.2019 was sent to office of the Assistant Registrar, Income Tax Appellate Tribunal, New Delhi (“ITAT/Tribunal”) from the office of the appellant herein, regarding providing copies of the order sheets of the Tribunal, in the case of Niranjam Koirala for AY 2006-07 (ITA No. 2253/Del/2010). A True Copy of the letter dated 20.11.2019 is annexed herewith and marked as Annexure A-2. 5. That thereafter, a reminder was also sent on 21.05.2020 to the IT AT, in this regard. Moreover emails were also forwarded to the office of the Assistant Registrar. Further, officials have also gone physically to the office of the Assistant Registrar, IT AT to collect the said order sheets, but till date the said documents have not been received from the office of the Assistant Registrar, IT AT. A True Copy of the reminder letter dated 21.05.2020 is annexed herewith and marked as Annexure A-3. 6. That further letter/email has also been sent in this regard to the Assistant Registrar, ITAT on 18.11.2020 and further the officials will again visit the office of the Assistant Registrar, ITAT physically, to collect the said order sheets. A True Copy of the letter/email dated 18.11.2020 is annexed herewith and marked as Annexure A-4. 4 M.A No. 732/Del/2018 Niranjan Koirala 7. In light of the above, it is submitted that attempts have been made to comply with the directions of this Hon’ble Court. 8. That further, the appellant herein states that the said application in Form No. 36 dated 13.08.2014 was filed and pressed before the Ld. ITAT and the Ld. ITAT erred in not giving any finding on the said additional grounds of appeal raised before it by the department vide the said application. Sd/- DEPONENT ” 4. Ld. AR has opposed the application with following submissions; 1. During the course of virtual hearing of MA on 07-01-2022 Ld DR stated that he has placed on record of this court a copy of letter dated 13-08-2014 addressed by the AO to Deputy Registrar ITAT and a copy of letter dated 07-02- 2018 addressed by CIT(DR) to the AO. Since there was no service of these documents on the undersigned, a request was made for adjournment and post conclusion of virtual hearing copies of these letters were provided to us by the DR office. Copies of these document are also enclosed in the paper book filed by the undersigned before this court during the course of least MA hearing on 15- 07-2022. 2. From documents provided by Ld DR it appears that though in letter dated 13- 08-2014 there is no acknowledgement stamp of Registry, however, from rough jottings made on top it appears that the Registry staff has received this letter on 14-08-2014. From the rough jottings it is also apparent that the Registry had marked this document to the “F” Bench for hearings on 27-10- 2014 and 31-03-2015. An inspection of case records in ITA depicts that on 27- 10-2014 and 31-03-2015 the Hon’ble “F” Bench was not functioning. 5 M.A No. 732/Del/2018 Niranjan Koirala 3. Post 31-03-2015 the hearing of ITA was adjourned 6 times at request of DR and 3 times at request of AR. On 07-02-2018 the Hon’ble Bench Directed the DR to revise its Paper Book and then finally on 24-04-2018 the matter was heard . 4. The undersigned is instructed to submit that copies of letter dated 13-08- 2014 and 07-02-2018 were never served upon the assessee or its then AR prior to order dated 20-07-2018 passed in ITA. Revenue has also not placed on record of ITAT (in MA proceedings) any proof of such service. 5. Even if it is presumed that copy of letter dated 13-08-2014 was filed by revenue with registry, then too, the case records would show that from 13-08- 2014 to 24-04- 2018 the additional grounds were never pressed by the DR before Hon’ble Bench. There is no record of any hearing on the issue of admission of such additional grounds. It is settled law that issue of admission of additional grounds / evidences have to be decided first (by recording reasons allowing / refusing admission) before the appeal is heard on merits {Refer Maruti Udhyog Ltd reported in 244 ITR 308(Del) and Jyotsna Suri reported in 179 CTR 265(SC)}. 6. During the course of final hearing on 24-04-2018 revenue was represented only by Smt Deepali Chandra, CIT-DR. From appearances noted in order dated 20-07-2018 it is also seen that the AO was not present in court. Revenue has not placed on record any evidence in form of an affidavit of Smt Deepali Chandra that she had pressed the admission of additional grounds before ITAT. 7. Kind reference is invited to the decision of Hon’ble ITAT in case of Gharda Chemicals Ltd reported in (2011) 10 taxmann.com 55(Mum) where in in an identical situation it was held by Hon’ble ITAT as under: “5. However, it is paramount to note that, the position discussed in the foregoing para is qua the grounds, which are taken up in the memorandum of appeal in Form No. 36. It is possible that the appellant may realize later on that, apart from the grounds taken in 6 M.A No. 732/Del/2018 Niranjan Koirala the memo of appeal, some other ground was/is also required to be raised. Such a position may prevail in variety of situations, such as, the earlier omission or some subsequent legal advice or certain later development of law. In these situations the appellant is entitled to apply for the admission of an additional ground during the pendency of appeal before the Tribunal. Relevant part of Rule 11 of Appellate Tribunal Rules, 1963 provides that: ‘The appellant shall not, except by the leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal,....’. On going through the prescription of this rule it is mandated that the right of the appellant to be heard is confined to the grounds taken up in the memorandum of appeal. There is no vested right to the appellant to argue on any ground, not raised in the memo of appeal. If the party in appeal wants to take up any ground, other than those not mentioned in the appeal memo, it needs to seek the leave of the Tribunal. It, therefore, transpires that before any additional ground qualifies to be dealt with par with those taken in memo of appeal, it has to necessarily cross the hurdle of its admission. Thus it becomes vivid that the additional ground raised by the appellant is firstly taken up for admission. The appellant has to demonstrate the reasons for which it could not be taken up earlier. If the additional ground satisfies the tests laid down by the Hon’ble Courts, such as, the ground involving only a question of law or any other question not requiring investigation of fresh facts etc., then such ground is admitted after considering the objections of the respondent. Only when such an additional ground is admitted, it comes on the same platform as the grounds taken up in the memo of appeal, requiring disposal by the Tribunal and its non-disposal constituting an error apparent from record. If, however, such an additional ground is not admitted by the Tribunal, the right of the appellant to its adjudication is lost. In such a situation, there cannot be any 7 M.A No. 732/Del/2018 Niranjan Koirala question of its parity with the grounds taken in the memo of appeal. The natural consequence of the non-admission of an additional ground, either after hearing both the sides or in the absence of any argument put up by the appellant in support of its admission, is that there is no obligation on the Tribunal to take it up for disposal on merits. If the Tribunal straightway proceeds to dispose of an additional ground without crossing the impediment of its admission, the order will become erroneous to that extent, giving every right to the respondent to apply for rectification. 6. Adverting to the facts of the instant case, it is noticed that there is no recording in order sheet entry admitting the above extracted additional ground. Apart from no argument recorded in our log book from both the sides on the merits of this ground, there is not even any mention of the prayer for the admission of additional ground or the objections of the Id. DR to its admission. in the backdrop of such facts, the picture is clear that the so called additional ground, was never argued for. its admission. In the absence of its admission, there is no scope for contending that there is a mistake, much less the mistake apparent from record, in not adjudicating the same in the order of the Tribunal, warranting any rectification under section 254(2) of the Act.” 5. The bench has considered the matter on record and submissions and what comes up is that Revenue had filed application in Form No. 36 dated 13.08.2014 with additional grounds. There are endorsements by the Registry of receiving and assigning the same to the Bench hearing the appeal. The clause 24, 27 and 29 of CHAPTER V of OFFICE MANUAL, of the Tribunal, under heading INTIMATION OF FILING OF APPEAL/ APPLICATION TO THE RESPONDENT are relevant which provide that; 8 M.A No. 732/Del/2018 Niranjan Koirala “ 24. If any affidavit, Miscellaneous Application or other documents or additional grounds of appeal are filed, the same are to be placed before the Bench for order for placing them on record and for sending a copy thereof to the opposite party for information. If the Bench so directs, copy thereof is endorsed to the opposite party. 27. In case, any affidavit or other document is received and a copy thereof is to be sent to the opposite party after obtaining the order of the Bench to place it on the record, a note to that effect is to be recorded in the Order Sheet. 29. Additional grounds of appeal. Under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963, the appellant is not, except by leave of the Tribunal, to urge or be heard in support of any ground not set out in the Memo of Appeal. In case any additional ground is preferred, it is to be put up before the Bench for order and will be kept on the file subject to all just exceptions which may be taken at the time of hearing regarding its admissibility etc., and a copy thereof is to be sent to the respondent for information. It should be preferred in triplicate.” 6. It appears that though endorsement was made to assign the application to the Bench by the Registry there was no compliance in terms of Clause 27 read with 29, which provides that in case any additional ground is preferred, it is to be put up before the Bench for order and will be kept on the file subject to all just exceptions which may be taken at the time of hearing regarding its admissibility etc., and a copy thereof is to be sent to the respondent for information. No copy was supplied to the Respondent. So when the appeal came up for hearing on 24/4/2018, the additional grounds raised were not brought into the knowledge of the Bench. Certainly it was duty of the Ld. DR, but noticing the limitations of Departmental Representatives in contesting the 9 M.A No. 732/Del/2018 Niranjan Koirala appeals with change of batton, at least the Bench clerks needed to apprise the Bench of pending application of additional grounds. 7. In the light of aforesaid, the Bench is of considered opinion that the non compliance of Clauses 27 and 29 have to be considered to be an error apparent on record, as either way, the admission or rejection of the application raising additional ground or any other issue should be part of the proceedings of record of appeal. In the absence of finding, either way, the presumption is that the same was left out of consideration by the Bench. Non-consideration or disposal of the pending applications, touching merits of issue, is certainly an error apparent on record for which powers u/s 254(2) of the Income Tax Act can be exercised. Thus, the Miscellaneous Application of the Revenue has merit. The same is allowed. The Order dated 20/7/2018 is recalled to the extent of consideration of application dated 13/9/2014 of Appellant for admission of additional grounds and decision upon it, if admitted. Order pronounced in the open court on 10 th July, 2023. Sd/- Sd/- (B.R.R.KUMAR) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 10.07.2023 *Binita, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi