Income Tax Appellate Tribunal - Mumbai
Nitco Tiles Ltd, Mumbai vs Assessee on 20 February, 2015
आयकर अपील य अ धकरण "जे" यायपीठ मुंबई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "J" BENCH, MUMBAI ी डी. म मोहन, उपा य एवं ी संजय अरोड़ा, लेखा सद य के सम ।
BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM आयकर अपील (तला शयां और अ भ"हण)/ IT(SS)A No. 21/Mum/2011 (Block Period: 01.04.1987 to 05.08.1997) Nitco Tiles Ltd. Dy. CIT, Central Circle-34, 85-96, Maker Chambers III, बनाम/ Mumbai Nariman Point, Mumbai-400 021 Vs. थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AAACN 1674 N (अपीलाथ& /Appellant) : ('(यथ& / Respondent) अपीलाथ& क) ओर से / Appellant by : Shri Vimal Punmiya '(यथ& क) ओर से/Respondent by : Shri S. D. Srivastava सनु वाई क) तार.ख / : 10.02.2015 Date of Hearing घोषणा क) तार.ख / : 20.02.2015 Date of Pronouncement आदे श / O R D E R Per Sanjay Arora, A. M.:
This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-41, Mumbai ('CIT(A)' for short) dated 03.02.2011, dismissing the assessee's appeal contesting its assessment u/s.158BFA(2) of the Income Tax Act, 1961 ('the Act' hereinafter) for the block period 01.04.1987 to 05.08.1997 vide order dated 07.10.2009.
2. The appeal raises the following grounds:
'1. The ld. Commissioner of Income Tax (A) erred in passing an ex- party order without serving notice of hearing on the assessee.2
IT(SS)A No. 21/Mum/2011 (B.P. 01.04.87 to 05.08.97) Nitco Tiles Ltd. vs. Dy. CIT
2. The ld. Commissioner of Income Tax (A) erred in confirming the penalty of Rs.28,82,723/- u/s.158BFA(2) of the Income Tat Act, 1961.' 3.1 Addressing Ground no. 1, and drawing our attention to para 2.1 of the impugned order, which reads as under, it was submitted by the ld. Authorized Representative (AR), the assessee's counsel, that the ld. CIT(A) was incorrect in stating that the assessee had not appeared before him, so that he was constrained to decide the assessee's appeal on merits, i.e., ex parte:
'2.1 The case of the appellant was fixed on 24.12.2009, 07.01.2010, 16.02.2010, 24.03.2010, 05.04.2010, 21.10.2010, 05.01.2011, 14.01.2011, 02.02.2011, but nobody attended nor submitted any written reply except few adjournment applications, therefore, the case is decided on merits.' In fact, on each of the earlier occasions, adjournment had been applied for. As both the assessee and the Revenue had moved rectification petitions against the order by the Tribunal in the quantum proceedings, the same were therefore allowed, i.e., on that basis. The mention of the several dates of adjournment in fact itself proves that the assessee, in conscious regard of its obligations, followed the proceedings before the first appellate authority from the time to time. The adjournment application on the next date of hearing could only be on the applicant being aware thereof, i.e., the date to which the hearing stood adjourned on the last occasion. It was in fact perhaps for this reason that the ld. CIT(A) has faithfully recorded the presence of the counsel at column no. 9 of the cause title, which requires mention of the name of the person present for and on behalf of the appellant. In a way, thus, the same contradicts the observation as made at para 2.1 of the order. In fairness, however, he would further add, that none had attended on the last date of the hearing, i.e., 02.02.2011, as the assessee received the notice of hearing for that date only later. On being required to therefore produce the proof of the service of notice for that date, so as to justify his claim of the impugned order being an ex parte order, he expressed his inability to produce the same, being not at hand. He had, in fact, on the receipt of the notice presented himself before the ld. CIT(A), who would though state that 3 IT(SS)A No. 21/Mum/2011 (B.P. 01.04.87 to 05.08.97) Nitco Tiles Ltd. vs. Dy. CIT he had already passed the order. The matter, however, it was apparent, had not been heard on merits and, therefore, the proper course would only be to restore it back to the file of the ld. CIT(A) for passing an order in accordance with law after hearing the assessee. The matter, however, is legal, as has been decided in the appellants' favour by the order by the hon'ble jurisdictional high court in the case of CIT vs. Nayan Builders & Developers (in ITA No. 415 of 2012 dated 08.07.2014/PB pgs. 3 & 4), placing on record written submissions, citing several orders by the tribunal.
3.2 The ld. Departmental Representative (DR), on the other hand, would also express his inability to contradict the statement at bar by the assessee's counsel, i.e., of the notice of hearing for 02.02.2011 having not been served in time, and only subsequent to the date of the hearing, being constrained for want of the appeal folder from the office of the ld.
CIT(A). He would, however, fairly state of his no objection to what stands stated by the ld. AR at bar and, further, also agreeable to the matter being accordingly restored back to the file of the ld. CIT(A) for an adjudication afresh in accordance with law after hearing the parties. The matter, however, he would emphasize, cannot be considered as covered by the decision in the case of Nayan Builders & Developers (supra), drawing our attention to the decision by the hon'ble Gujarat high court in the case of CIT vs. Dharamshi B. Shah [2014] 366 ITR 140 (Guj). In fact, the hon'ble Delhi high court in the case of Splender Construction had also taken a similar view, though the citation for the same was not readily available with him.
4. We have heard the parties, and perused the material on record.
The appeal on merits raises a legal issue, i.e., whether the admission of an appeal raising a substantial of law in the quantum proceedings would itself result in the ouster of the case for the levy of penalty for concealment or furnishing inaccurate particulars of income u/s.271(1)(c) of the Act. That is, in respect of the income qua which the quantum proceedings are outstanding in the appellate proceedings before the hon'ble high court inasmuch it shows the issue leading thereto to be debatable. The issue is purely legal. A 4 IT(SS)A No. 21/Mum/2011 (B.P. 01.04.87 to 05.08.97) Nitco Tiles Ltd. vs. Dy. CIT reading of the decision by the hon'ble jurisdictional high court in the case of Nayan Builders & Developers (supra) cannot, at least prima facie, in our view, be said to have answered the said issue conclusively. A decision, it is trite law, is an authority for what it actually decides [refer: CIT v. Sun Engineering Works (P.) Ltd. (1992) 198 ITR 297 (SC); Blue Star Ltd. v. CIT [1996] 217 ITR 514 (Bom.); and Lachman Dass Bhatia Hingwala (P.) Ltd. vs. Asstt. CIT [2011] 330 ITR 243 (Del.) (FB)]. And not even for what may remotely or even logically flow from it (Goodyear India Ltd. v. State of Haryana [1991] 188 ITR 402 (SC)). The impugned order has been, as apparent from the fore-going narration of the events at the first appellate stage in the instant proceedings, passed without allowing proper opportunity to the assessee to present its case. Justice must not only be done but also appear to have been done.
Under the circumstances, we only consider it fit and proper, as is also the common contention of the parties before us, to restore the matter back to the file of the ld. CIT(A) to decide the same on merits after hearing the parties. We decide accordingly.
5. As we have accepted the assessee's ground no. 1, restoring the appeal back to the file of the ld. CIT(A) for fresh adjudication, ground no. 2, raising the issue on merits, i.e., as delineated above, would not survive for adjudication. The same is accordingly dismissed as not maintainable under the circumstances of the case.
6. In the result, the assessee's appeal is allowed for statistical purposes.
प1रणामतः 3नधा51रती क) अपील सां6यक)य उ7े8य के लए वीकृत क) जाती है ।
Order pronounced in the open court on February 20, 2015 Sd/- Sd/-
(D. Manmohan) (Sanjay Arora)
उपा य / Vice President लेखा सद य / Accountant Member
मुंबई Mumbai; =दनांक Dated : 20.02.2015
व.3न.स./Roshani, Sr. PS
5
IT(SS)A No. 21/Mum/2011 (B.P. 01.04.87 to 05.08.97) Nitco Tiles Ltd. vs. Dy. CIT आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to :
1. अपीलाथ& / The Appellant
2. '(यथ& / The Respondent
3. आयकर आयु>त(अपील) / The CIT(A)
4. आयकर आयु>त / CIT - concerned
5. ?वभागीय '3त3नAध, आयकर अपील.य अAधकरण, मंब ु ई / DR, ITAT, Mumbai
6. गाड5 फाईल / Guard File आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai