IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `F' NEW DELHI
BEFORE SMT DIVA SINGH, JUDICIAL MEMBER
AND
SHRI T.S.KAPOOR, ACCOUNTANT MEMBER
I.T.A .No.-3261/Del/2013
(ASSESSMENT YEAR-2008-09)
Raman Kumar Kapur, vs ACIT,
Prop. Ramtex Overseas Corp., Circle-20(1),
9, Raj Niwas Marg, Delhi New Delhi.
PAN-AAJPK1989M
(APPELLANT) (RESPONDENT)
Appellant by None
Respondent by Sh. Neehar Ranjan Pandey, Sr. DR
ORDER
PER DIVA SINGH, JM
This is an appeal filed by the assessee against the order dated 19.12.2012
of CIT(A)-XXII, New Delhi pertaining to 2008-09 assessment year wherein
various grounds have been raised by the assessee however the hearing was
confined to Grounds No-1 & 2 which read as under :-
1. Because the action is being challenged on facts and law since having
dismissed summarily, in violation to the Provisions of Section 250 of the Act
& therein neither granting the opportunity of hearing nor the decision on
merits, thus defeating the cause of justice.
2. Because the action is under challenge on facts and law for upholding
the assessment at an amount of Rs.1,23,23,870/- which is a patent breach to
the principles of natural justice whereas the prayer for adjournment on the
date of hearing has been duly received in dak of Ld. CIT(A)."
2. No one was present at the time of hearing on behalf of the assessee
however considering the material available on record in the above mentioned
2 I.T.A .No.-3261/Del/2013
grounds it was considered appropriate to proceed with the hearing ex-parte qua
the assessee appellant on merit.
3. The relevant facts of the case are that the assessee is stated to be engaged
in the business of export of home fabrics and sold house property at Garden
Estate for a consideration of 2,26,00,000/-. Income of Rs.37,33,520/- was
returned which was processed u/s 143(1)(a) and the case was selected for
scrutiny under CASS. Consequently notice u/s 143(2) was issued and served
upon the assessee and in compliance thereto and subsequent notice the assessee
was represented through AR.
3.1. The AO required the assessee to explain the improvement cost qua the
property sold which was claimed by the assessee to the extent of Rs.53,98,500/-
and also transfer expenses of Rs.2,00,000/-. Since the assessee could not
produce documentary evidence, the AO concluded that improvement cost
expenses had been claimed just to reduce taxable income from income.
Consequently addition of Rs.55,98,500/- was made in the hands of the assessee.
3.2. Apart from this the AO further qua the sale of house Pinnacle on
20.09.2007 for Rs.1,56,28,246/- made addition of Rs.25,30,650/- disallowing
the claim made while calculating capital gain wherein the interest paid on house
loan was claimed as cost of acquisition. Herein also he found that the
documentary evidence qua the claim of transfer expenses could not be
substantiated. Apart from that certain disallowance on account of vehicle
expenses, telephone expenses and Diwali expenses etc was made.
4. Aggrieved by this, the assessee went in appeal before the CIT(A). The
CIT(A) taking into consideration the opportunity provided to the assessee in
para 8 to 8.15 confirmed the action of the AO. The relevant finding is
reproduced for ready reference:-
3 I.T.A .No.-3261/Del/2013
8. "Decision
8.1 Notice dated 16.08,11 was issued to the Assessee fixing date for
30.08.11 at the address specified in the Form No.35 as the address to which
notices may be sent to the Appellant. A letter was filed on 30.08.11 by Sh.
Bhardwaj Tajender, CA, requesting for adjournment on which the case was
adjourned to 15.09.11. A letter dated 16.09.11 was filed requesting that the
date be adjourned to the mid of October 2011. The case was adjourned to
05.10.11 on this application, on which there was no compliance.
Subsequently another notice dated 14.10,11 was issued, requiring
compliance on 25.10.11. As no compliance was made on 25.10.11, another
notice was issued on 25.10.11, on the address specified for correspondence
in Form No. 35, for compliance on 11.11.11. No compliance was made
again on this date also. Another notice dated 13.12.11 was sent for
compliance on 22.12.11. In response to this notice, nobody attended nor any
submissions were filed, but a letter dated 19.12.11 was received in Dak on
20.12.11 in which the Assessee has claimed as under :-
"In response to the notices issued for fixing the date of hearing on
22.12.11 it is submitted that the undersigned is busy in completing
time barring cases for the A,Y, 2009-10.
Hence you are requested to adjourn the date and allow the date in
the
third week of January 2012."
8.2 In view of the specific request for the case to be fixed in the third
week of January 2012, a notice dated 27.12.11 was issued from this office
fixing the date of hearing as 20.01.2012. This notice also mentioned "Final
Notice' on top of the notice. However, despite the fact that the Assessee had
specifically requested for the case to be fixed for the third week of January
2012, and it was done so by this office, still no representation was made nor
any written submissions were filed on that date on the merits of the case and
a letter was filed stating that ;-
"This is to inform you that please kind give the adjournment for
today and give the next date in a week of Feb."
8.3. On this application, the case was adjourned to 15.02.12, Meanwhile
there was a change in the incumbent in this office and the undersigned
joined the office. A notice dated 02.02.12 was issued fixing the date for
hearing on 13.02.12, in view of the fact that the Assessee had requested for
the hearing to be fixed in February. No compliance was made on 13.02.12,
but on 15.02.12, (the date fixed by my predecessor), Sh. Bharat Sehgal,
Power of Attorney holder appeared and requested for adjournment to the
first week of March and also filed a letter dated 15.02.12 signed by Sh.
Bhardwaj Tajender, CA in which it was specifically stated as under :-
"You are requested to adjourn the date and allow the date to some
other day conveniently in the 1st week of March, 12."
8.4 On the specific request of the Power of Attorney holder Sh. Bharat
Sehgal and Sh. Bhardwaj Tajender, CA (though his letter dated 15.02.12)
the case was adjourned to 06.03.12. However, on this date, there was no
4 I.T.A .No.-3261/Del/2013
compliance at all.
8.5 Subsequently on 20.07.12 a notice was issued for compliance on
01.08.12, in response to which Sh. Bharat Sehgal attended and submitted a
letter in which it was stated as under :-
"With reference to your Notice I want to state that the accountant of
the assessee is not available for furnish required details so I
requested kindly adjourn the date to the Third week of August 2012."
8.6 Once again, on the specific request of the Power of Attorney holder,
the case was adjourned as requested to the third week of August and was
fixed for 16.08,12. However, once again, despite the case being fixed in the
third week of August on the specific request, there was no compliance on
16.08.12 and nobody even attended for seeking adjournment
8.7 Subsequently notice dated 18.09.12 was issued fixing date of hearing
for 26.09.12. In response to this notice a letter dated 24.09.12, signed by Sh.
Bhardwaj Tajender was filed in Dak on 25.09.12 as per which further
adjournments were sought claiming that the Ld. Counsel is busy in filing the
time barring Returns. This letter has stated as under :-
"In response to your notice for fixing the date of hearing on
26.09.2012, it is submitted that the undersigned is busy in Filling the
time barring return till 30.09.2012 A/Y 2012-13. Hence you are
requested to adjourn the date to some other day preferably in the
month of November 2012."
8.8. Perusal of the above letter shows that it has been claimed that the Ld.
Counsel was busy till 30.09.2012 in filing the Returns and if this was a
genuine reason to seek adjournments then the adjournment of the case
should have been sought for the month of October. However, the
adjournment was sought not for October but for November. With a view to
give some more time for preparation of the case, the notice was issued on
30.11.12 and the date for compliance was fixed for 14.12.12. No compliance
was made to the notice dated 30.11.12 and neither any body attended nor
any written submissions etc. were filed on 14.12.12.
8.9 Subsequently on 18.12.12 a letter, signed by Sh. Bhardwaj Tajender,
CA, was received in Dak on 18 12.12. It has been stated in this letter as
under :-
"In response to the date fixed for hearing on 14,12.2012 it is
submitted that our client is out of India and in his absence
documents cannot be signed. You are requested kindly to adjourn the
date to the 2nd week of Feb. 2013."
8.10 Thus it is seen that even after so many adjournments and non
compliances, the Appellant is still asking for further adjournment. This is
despite the fact that the first notice in the case had been issued as long back
as on 16.08.2011 and the Appellant has held much more than fair number of
opportunities for preparing and presenting in his case. However, as seen
from the earlier conduct of the Assessee it is clear that the Assessee is
avoiding compliance before this office. Perusal of the above letter received
on 18.12.12 further proves that the Assessee is deliberately avoiding making
5 I.T.A .No.-3261/Del/2013
compliance before the office of Commissioner (Appeals). It is seen that this
letter claims that ".... client is out of India and in his absence documents
cannot be signed."
8.11 However, perusal of the file shows that there is a Power of Attorney
on file by Sh. Raman Kumar Kapur in favour of Bhardwaj Tajender, CA and
Sh. Bharat Sehgal, regarding the Appeal against the assessment for A.Y.
2008-09 as per which they have their right to appear on behalf of the
Appellant and to file documents and to represent the Appellant and also that
their actions and statements will be binding on the Appellant and will be
considered as having been made by the Appellant. The Power of Attorney
specifically states as under ;-
"I, RAMAN KUMAR KAPOOR do hereby authorise CA Bhardwaj
Tajender, Chartered Accountant, S/O (Late) Sh. I.J.K. Bhardwaj
AND Bharat Sehgal, B-519, Nehru Ground, Faridabad, to examine
my Income Tax Case, forward statements prepared by us. render
explanations as instructed orally or in writing from time to time and
generally to represent me in connection with my Income tax Appeal
and appellate proceedings for the A/Y.... 08-09... and to produce my
accounts books and documents as desired by the authorities from
time to time. All their actions and statements will be binding on me
and will be considered as have been made by me."
8.12 Thus it is clear that the Power of Attorney holders Sh. Bhardwaj
Tajender, CA and Sh, Bharat Sehgal were fully authorized to represent the
Assessee and also to produce his Books of Account and documents, and also
explanations etc. In fact the Power of Attorney clearly states that all their
actions and statements will be binding on the Appellant and will be
considered as have been made by the Appellant.
8.13 In view of the above situation it is clear that there was no reason to
wait for the client to sign the documents and both the Counsels could very
well have done the same, Thus it is clear that the Appellant and also his
representatives are not interested in prosecuting the Appeal as they have
repeatedly either been seeking adjournment or non compliance is being
made to the notices issued or on the adjourned dates, some of which were
fixed on the specific request of the Appellant, still non compliance was
made.
8.14 In CIT vs B.N, Bhattacharya (1977) 118 ITR 461 (SC), the IIon'ble
Supreme Court while dealing with the issue of prosecution of appeal has
stated that "preferring an appeal means more than formally filing it but
effectively pursuing it". The Hon'ble ITAT, Delhi, in CIT vs Multiplan
India Pvt. Ltd., as reported in 38 ITD 320 (Delhi), when faced with a similar
situation of non prosecution of appeal dismissed the appeal of Revenue,
8 15 In view of the above situation as discussed above, it is clear that the
Appellant is not interested in prosecuting the Appeal and in fact is avoiding
compliance to the notices issued by this office and is avoiding submitting of
any explanations, documents etc before the Commissioner (Appeals). The
provisions of Section 251(1) provide that the Commissioner (Appeals)
6 I.T.A .No.-3261/Del/2013
cannot only confirm, reduce or annul the assessment, but also can enhance
the same, It appears that the Appellant is afraid that on examination of the
case by the Commissioner (Appeals), enhancement may result or the case
may be further strengthened against the Assessee as the Commissioner
(Appeals) has all the powers of the Assessing Officer and further facts may
be brought to light which may be further confirmatory of the action of the
Assessing Officer. This impression is drawn by the undersigned in view of
the continuous and deliberate seeking of adjournments and non compliance
over a very long period of time during which the appellate proceedings have
continued."
5. Aggrieved by this the assessee is in appeal before the Tribunal agitating
the opportunity of being heard and on merit. No one was present on behalf of
the assessee at the time of hearing however considering the material available
on record and after hearing the Ld. Sr. DR, it was considered appropriate to
restore the issue back to the file to the CIT(A). It is seen that the right to be
heard is an important right to which a party who is faced with an adverse view
is entitled to. "Audi alteram partem" is one of the most famous and celebrated
Rule of Natural Justice. The principles of natural justice are those which have
been laid out by the Courts as being the minimum protection of the rights of an
individual against the arbitrary procedure that may be adopted by a judicial,
quasi-judicial and administrative authority while making an order affecting
those rights. The underlying principle of natural justice evolved under the
common law is to check arbitrary exercise of power by the State or its
functionaries. Accordingly, the principle by its very nature implies the duty to
act fairly i.e. fair play in action must be evident at every stage. Fair play
demands that nobody shall be condemned unheard.
5.1. In the celebrated judgement of the Apex Court in the case of
A.K.Kraipak vs- Union of India (1969) 2 SCC 262, it is observed that the aim
of rules of natural justice is to secure justice or to put it negatively to prevent
miscarriage of justice. The said rules are means to an end and not an end in
7 I.T.A .No.-3261/Del/2013
themselves and though it is not possible to make an exhaustive catalogue of
such rules however it can be readily said that there are two basic maxims of
natural justice namely "audi alteram partem" and "nemo judex in re sua". In
the present facts of the case we are concerned with the maxim audi alterm
partem which again may have many facets two of them (a) notice of the case to
be met; and (b) opportunity to explain. Their Lordships have cautioned that
these rules cannot be sacrificed at the altar of the administrative convenience or
celebrity.
5.2. Having thus addressed the legal position qua the right to be heard we are
necessarily required to address the corresponding duty of the party invoking the
said right. It is necessary to bear in mind as a caution that it cannot be over-
emphasized that the Right to be heard has a corresponding duty that the party
invoking the discretion of the Court has to itself ensure that it does not abuse
the exercise of discretion in its favour. It is seen that in the facts of the present
case the assessee who has been represented through his counsel has repeatedly
sought an adjournment which is evident from the above quoted paras. However
being of the view that the assessee should not suffer on account of the fault of
the counsel and considering the plea raised by the assessee before the Tribunal
by way of the present appeal we deem it appropriate to restore the issue back to
the file to the CIT(A) with the direction to decide the same in accordance with
law after giving the assessee a reasonable opportunity of being heard. It is
hoped that the opportunity so provided to the assessee is not abused and lost
and the assessee should ensure that full and proper compliance is made in
support of its grounds before the CIT(A) by ensuring a proper representation in
letter and spirit as the doors of justice are closed to the party who abuses the
process of law. It may be further clarified that in the eventuality the assessee
does not fully participate in the proceedings and ensures that the hearing is
8 I.T.A .No.-3261/Del/2013
concluded and in the eventuality the assessee does not show full compliance the
Ld. CIT(A) would be at liberty to decide the appeal on the basis of the material
available on record.
6. In the result the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open court on 03rd of January 2014.
Sd/- Sd/-
(T.S.KAPOOR) (DIVA SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated:- 03/01/2014
*Amit Kumar*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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