SRI AYUB V. THE JOINT COMMISSIONER

ITA/100082/2016

AI Insights

The case involves an appeal by Sri. Ayub, a transporter, against the order of the Income Tax Appellate Tribunal, which had dismissed his appeal due to the absence of any representative on his behalf. The primary contention was that the Tribunal had erred by proceeding to decide the appeal on merits without providing a sufficient opportunity for the assessee to be heard. The High Court found that the Tribunal's decision to proceed without the assessee's representation violated the principles of natural justice, leading to the setting aside of the Tribunal's order and remitting the case for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 736054 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 22-02-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ROOPA ANVEKAR
• Assessee Lawyers: NARAYAN RASALKAR
• Keywords: Assessment Year 2010-11; Income tax appeal; Natural Justice; Tribunal Decision
• Section: 143(2); 260A; 6DD; 40(A)(3)

Judgement Text

" - 1 - NC: 2024:KHC-D:4377-DB ITA No. 100082 of 2016 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 22ND DAY OF FEBRUARY, 2024 PRESENT THE HON'BLE MR JUSTICE S G PANDIT AND THE HON'BLE MR JUSTICE K V ARAVIND INCOME TAX APPEAL NO. 100082 OF 2016 BETWEEN: SRI. AYUB S/O. SRI. ABDUL KHADAR TAMATGAR, AGE: 50 YEARS, OCC: TRANSPORTER, RES: 1, LINES NEAR MORE PLOT COTTON MARKET, DHARWAD-580001. …APPELLANT (BY SRI. NARAYAN G. RASALKAR, ADVOCATE) AND: 1. THE JOINT COMMISSIONER OF INCOME TAX, RANGE.2, NAVANAGAR, HUBBALLI. 2. COMMISSIONER OF INCOME TAX (APPEALS), NAVANAGAR, HUBBALLI. 3. THE INICOME TAX APPELLATE TRIBUNAL, TRIBUNAL, A BENCH, REP. BY ITS ASSISTANT REGISTRAR, A BENCH, 2ND FLOOR, SILVER JUBILEE BUILDING, KEMPE GOWDA ROAD, BENGALURU-560009. …RESPONDENTS (BY SMT. ROOPA ANVEKAR, ADVOCATE) THIS INCOME TAX APPEAL IS FILED U/S.260A OF THE INCOME TAX ACT, 1961 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE APPELLATE ORDER DATED 27TH JULY, 2016 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH BENGALURU BEARING ITA NO.854/BANG/2015), VIDE ANNEXURE-A, FOR THE ASSESSMENT YEAR 2010.11 (PREVIOUS YEAR 2009.10) IN THE INTEREST OF JUSTICE AND EQUITY AND ETC. Digitally signed by CHANDRASHEKAR LAXMAN KATTIMANI Date: 2024.02.24 10:54:35 +0530 - 2 - NC: 2024:KHC-D:4377-DB ITA No. 100082 of 2016 THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, K V ARAVIND, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the assessee under Section 260-A of the Income tax Act, 1961 against the order dated 27.07.2016 passed by the Income Tax Appellate Tribunal, ‘A’ Bench Bengaluru in ITA No.854/BANG/2015 for the assessment year 2010-11. 2. The appeal is admitted vide order dated 02.04.2018 to consider the following substantial questions of law: i. Whether on the facts and circumstances of the case, the Income Tax Tribunal is erred in interpreting and applying the provisions of Section 40(A)(3) to the facts of the case without reading into the controlling provisions of Section 40.A? ii. Whether on the facts and circumstances of the case, the Income Tax Tribunal has erred in reading into the provisions of Rule 6DD of the Income Tax Rules, as an independent provision and reading it isolation without imposing the conditions - 3 - NC: 2024:KHC-D:4377-DB ITA No. 100082 of 2016 prescribed in the first proviso of Section 40(A) (3) of the Income Tax Act, 1961. 3. The assessee is engaged in the business of transport contract, filed return of income on 12.10.2010. The assessment was selected for scrutiny by issue of notice under Section 143(2) of the Act. The assessing officer completed the assessment by order dated 08.10.2022 by determining the Tax liability. 4. The assessee being aggrieved against order of assessment preferred appeal before the Commissioner of Income Tax Appeals. The Appellate Commissioner by order dated 29.01.2015 dismissed the appeal. The assessee being further aggrieved preferred appeal before the Income Tax Appellate Tribunal. The Tribunal by order dated 27.07.2016 dismissed the appeal by recording absence of assessee/his representative. 5. Heard learned counsel Shri.Narayan G. Rasalkar for appellant and learned counsel Smt. Roopa Anvekar for respondents. - 4 - NC: 2024:KHC-D:4377-DB ITA No. 100082 of 2016 6. Learned counsel for the appellant submits that the assessee is assessed in Hubballi. Appeal was preferred by the assessee before the ITAT Bengaluru Bench through the representative at Hubballi. It is submitted that date of hearing was not notified to the assessee or its representative. Hence, there was no representation on behalf of assessee. The Tribunal has proceeded to decide the matter on merits. It is submitted that the Tribunal committed an error in not granting an opportunity to the assessee. 7. Per contra, learned standing counsel appearing for revenue submits that the appeal was preferred by the assessee, the Tribunal has granted sufficient opportunity to the assessee. The opportunity not being availed, the Tribunal having no other alternative has proceeded to decide the appeal on merits. Thus, prays to dismiss the appeal. 8. We have perused the impugned order and the appeal papers. The Tribunal by recording that no representative has appeared on behalf of the assessee on - 5 - NC: 2024:KHC-D:4377-DB ITA No. 100082 of 2016 12.07.2016 and also on the previous occasions proceeded to decide the matter on merits. The nature of disputes involved for adjudication of the Tribunal are on factual aspects. The Tribunal being final fact finding authority was expected to grant sufficient opportunity to the assessee to submit his case. 9. The Tribunal by proceeding to decide the appeal on merits without granting sufficient opportunity to the assessee, it would prejudice the assessee’s interest. The further appeal under Section 260 A of the Act before this Court would be on substantial questions of law. In the circumstances, we are of the view that the order of the Tribunal is not sustainable and the same needs to be set aside on the ground of violation of principles of natural justice. Hence, the following: ORDER i. Appeal is allowed. ii. Order in ITA No.854/BANG/2015 dated 27.7.2016 is set aside. iii. The appeal is remitted to Tribunal for fresh consideration after - 6 - NC: 2024:KHC-D:4377-DB ITA No. 100082 of 2016 granting opportunity of hearing to the assesee/assesee representative and the revenue in accordance with law. iv. No order as to costs. Sd/- JUDGE Sd/- JUDGE RKM List No.: 1 Sl No.: 47 "