Shri Vishal Bhalla, Solan v. ITO, Baddi

ITA 1261/CHANDI/2019 | 2014-2015
Pronouncement Date: 28-05-2021 | Result: Allowed

Appeal Details

RSA Number 126121514 RSA 2019
Assessee PAN AAOPB8415G
Bench Chandigarh
Appeal Number ITA 1261/CHANDI/2019
Duration Of Justice 1 year(s) 8 month(s) 11 day(s)
Appellant Shri Vishal Bhalla, Solan
Respondent ITO, Baddi
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 28-05-2021
Date Of Final Hearing 10-05-2021
Next Hearing Date 10-05-2021
Last Hearing Date 27-10-2020
First Hearing Date 23-06-2020
Assessment Year 2014-2015
Appeal Filed On 17-09-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH SMC CHANDIGARH !' # BEFORE: SMT. DIVA SINGH JM ./ ITA NO. 1261/CHD/2019 / ASSESSMENT YEAR : 2014-15 SHRI VISHAL BHALLA C/O M/S SHIVALIK FIBRES P.LTD. BHARATGARH ROAD RANDUWAL NALAGARH DISTT. SOLAN (HP). VS THE ITO BADDI. ./ PAN NO: AAOPB8415G / APPELLANT / RESPONDENT ./ ITA NO. 1262/CHD/2019 / ASSESSMENT YEAR : 2014-15 SMT. RITU BHALLA C/O M/S SHIVALIK FIBRES P.LTD. BHARATGARH ROAD RANDUWAL NALAGARH DISTT. SOLAN (HP). VS THE ITO BADDI. ./ PAN NO: AAOPB8416F / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI PARIKSHIT AGGARWAL C.A. # ! ' / REVENUE BY : SHRI ASHOK KHANNA ADDL. CIT $ % ! &/ DATE OF HEARING : 10.05.2021 '()* ! &/ D ATE OF PRONOUNCEMENT : 28.05.2021 ITA-1261&1262/CHD/2019 A.Y. 2014-15 PAGE 2 OF 8 HEARING CONDUCTED VIA WEBEX $%/ ORDER THE PRESENT APPEALS HAVE BEEN FILED BY THE DIFFERE NT ASSESSEES ASSAILING THE CORRECTNESS OF THE COMMON ORDER DATED 26.11.2018 OF CIT(A) SHIMLA PERTAINING TO 2014-15 ASSESSMENT YEAR. A COMMON ORDER IS BEING PASSED IN THESE TWO A PPEALS FILED BY DIFFERENT ASSESSEES IN VIEW OF THE FACT TH AT IN BOTH THE APPEALS ON IDENTICAL GROUNDS IN SAME SETS OF FA CTS AND CIRCUMSTANCES THE ARGUMENTS OF THE PARTIES REMAIN SAME. 2. HOWEVER BEFORE ADDRESSING THESE IT MAY BE RELEVA NT TO MENTION THAT AT THE TIME OF HEARING IDENTICAL ADJOU RNMENT APPLICATIONS HAD BEEN MOVED BY THE COUNSEL IN BOTH THE APPEALS SEEKING TIME TO FILE NECESSARY DOCUMENTS. O N ENQUIRING ABOUT THE NATURE AND NEED OF DOCUMENTS T HE LD. COUNSEL ELABORATING THE REQUEST SUBMITTED THAT AGAI NST THE ORDER OF THE AO THE ASSESSEE HAD COME IN APPEAL BEF ORE THE CIT(A) AND FILED WRITTEN SUBMISSIONS AND SINCE OPPO RTUNITY TO FILE FURTHER DOCUMENTS WAS NOT AVAILABLE HENCE TIME WAS SOUGHT. REFERRING TO THE IMPUGNED ORDER IT WAS SUBM ITTED THAT LACK OF FURTHER SUPPORTING DOCUMENTS HAVE BEEN QUESTIONED BY THE CIT(A) HENCE THIS WAS THE REASON FOR ITA-1261&1262/CHD/2019 A.Y. 2014-15 PAGE 3 OF 8 SEEKING TIME. THE REQUEST SEEKING TIME IN BOTH THE APPEALS WAS ACCORDINGLY WITHDRAWN ORALLY AND THE APPEALS WE RE ARGUED. REFERRING TO THE RECORD IT WAS SUBMITTED T HAT WRITTEN SUBMISSIONS HAD BEEN FILED BEFORE THE CIT(A) AND IF FURTHER DOCUMENTS WERE NECESSARY THEN THE OPPORTUNITY TO FI LE THESE SHOULD HAVE BEEN PROVIDED. REFERRING TO THE RECORD IT WAS SUBMITTED NO SUCH OPPORTUNITY WAS PROVIDED. ACCORD INGLY GROUND NO. 1 RAISED IN BOTH THE APPEALS WAS ARGUED. FOR THE SAKE OF COMPLETENESS IT IS BEING REPRODUCED FROM IT A 1261/CHD/2019 : 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) SHIMLA HIMACHAL PRADESH HAS ERRED IN SUSTAINING THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER BADDI AS THE ORDER HAS BEEN PASS ED WITHOUT ANY BASIS AND WITHOUT CONSIDERANT THE FACTS OF THE CASE AND HAS BEEN PASSED WITHOUT GIVING ANY PROPER OPPORTUNITY TO THE APPELLANT. THEREFORE ASSESSMENT ORDER PASSED BY THE LD. ASSESSING OFFICER BADDI AND CONFIRMED BY THE LD . CIT(A) SHIMLA HP IS ILLEGAL UNWARRANTED UNCALLED FOR AND NEEDS TO BE QUASHED. 3. IT WAS STATED THAT SIMILAR GROUND HAS BEEN RAISE D IN ITA 1262/CHD/2019 ALSO. 4. REVERTING TO THE ARGUMENTS AND REFERRING TO THE ORDER IT WAS SUBMITTED THAT THE ASSESSEE HAD ARGUED THAT DED UCTIONS US 57 (III) CLAIMED WERE ALLOWABLE. RELIANCE HAD BE EN PLACED ON THE DECISION OF THE APEX COURT IN THE CASE OF RA JENDRA PRASAD MODI (1979) AIR 373 (S.C) WHICH HAS BEEN REF ERRED TO BEFORE THE CIT(A) AS WELL AS BEFORE THE AO AS FOUND ITA-1261&1262/CHD/2019 A.Y. 2014-15 PAGE 4 OF 8 MENTIONED AT UNNUMBERED PAGE 4 OF THE ASSESSMENT OR DER ALSO. REFERRING TO THE DECISION IT WAS SUBMITTED TH AT THE APEX COURT CLEARLY HELD THAT FOR ALLOWABILITY OF THE EXP ENDITURE IT IS NOT NECESSARY TO DEMONSTRATE THE EARNING OF INCO ME. IT WAS SUBMITTED THAT SIMILAR DEDUCTIONS ON SAME SET OF FA CTS HAVE BEEN ALLOWED IN THE EARLIER YEARS AND SUPPORTING DO CUMENTS WERE QUESTIONED. THE APPLICABILITY OF THE DECISION RELIED UPON REMAINING UNADDRESSED ON FACTS. THUS IN THE CIRCUMS TANCES WHERE ADMITTEDLY FAIR HEARING HAS NOT BEEN GIVEN BY THE CIT(A) AND FURTHER DOCUMENTARY EVIDENCE IS NECESSAR Y THEN IT WAS HIS PRAYER THAT DOCUMENTS FILED SINCE HAVE NOT BEEN CONSIDERED BY THE AO AND THE CIT(A) THUS ALLOWING T HE GROUND THE ORDER MAY BE SET ASIDE AND THE MATTER MA Y BE REMANDED TO THE A.O. FOR VERIFYING THE RECORD PAST HISTORY AND SUPPORTING DOCUMENTS ETC. IN THE LIGHT OF THE D ECISION OF THE APEX COURT. 5. SAID REQUEST ON A CONSIDERATION OF FACTS WAS NOT OPPOSED BY THE SR.DR AS ADMITTEDLY THE ORDER UNDER CHALLENG E IN BOTH THE APPEALS HAD BEEN PASSED CONSIDERING WRITTEN SUBMISSIONS. THE DOCUMENTARY EVIDENCE AND PAST HIS TORY NECESSARILY TO BE CONSIDERED FOR DECIDING THE ISSUE IT WAS AGREED NEEDS TO BE ADDRESSED BY THE A.O. FIRST. ITA-1261&1262/CHD/2019 A.Y. 2014-15 PAGE 5 OF 8 6. I HAVE HEARD THE PARTIES AND PERUSED THE MATERIA L AVAILABLE ON RECORD. IN THE FACTS OF THE PRESENT CA SE. IT IS SEEN THAT IN THE FACTS OF THE PRESENT CASES THE AS SESSEE APPARENTLY WAS NOT HEARD. NO DOUBT THE WRITTEN SUB MISSIONS WERE AVAILABLE ON RECORD HOWEVER THEY WERE NOT CO NSIDERED SUFFICIENT FOR WARRANTING A RELIEF ON MERITS AS PRA YED FOR. IT IS NOT EVIDENT FROM THE BODY OF THE ORDERS THAT THE ASSESSEE WAS CONFRONTED WITH THE FACT THAT THESE WRITTEN SUB MISSIONS WERE NOT SUFFICIENT FOR THE RELIEF PRAYED FOR AND C ONSEQUENTLY ADMITTEDLY NO OPPORTUNITY TO SUPPORT THE CLAIM WAS MADE AVAILABLE AS HELD IN ORDER DATED 29.04.2021 IN ITA NO. 1089/CHD/2019 IN THE CASE OF SHRI AMRIK SINGH BHULL AR VS. ITO : RIGHT TO BE HEARD FORMS THE BED ROCK OF THE PRINCI PLES OF NATURAL JUSTICE. THE WORD NATURAL JUSTICE IS DERIVE D FROM THE ROMAN WORD ' JUS NATURALE' HICH PRESUPPOSES PRINCIPLES OF NATURAL LAW INCLUDING JUSTICE EQUITY FAIR PLAY AND GOOD CONSCIENCE. FAIR PLAY PRE SUPPOSES FA IR NOTICE OF CHARGE AND PLACE OF HEARING OPPORTUNITY OF EFFECTIVE HEARING TO ADDRESS THE CHARGE AND SPEAKIN G ORDER ADDRESSING THE REASONS FOR AGREEING OR DISAGR EEING WITH THE CLAIMS PUT FORTH. AUDI ALTEREM PARTEM WHIC H IS ONE OF THE FOUNDATIONAL AND FUNDAMENTAL BED ROCKS O F NATURAL JUSTICE MEANS THAT NO ONE SHOULD BE CONDEMN ED UN HEARD. THOUGH THESE RULES ARE NOT NECESSARILY CODIFIED HOWEVER THESE HAVE EVOLVED OVER THE YEAR S AND ARE EXPECTED TO BE ADHERED TO NOT ONLY WHEN STATUTO RY PROVISIONS SO PROVIDE BUT HAVE ALSO BEEN IMPLIEDLY READ INTO AND NECESSARILY REQUIRED TO BE ADHERED TO ALSO IN QUASI ADMINISTRATIVE DECISIONS WHEREBY THE RIGHTS / INTERESTS OF THE PARTY ARE ADVERSELY EFFECTED. IN SUCH CIRCUMSTANCES FAIR PLAY AND RULE OF LAW ITA-1261&1262/CHD/2019 A.Y. 2014-15 PAGE 6 OF 8 NECESSITATES THAT THE PROCEDURE REQUIRED TO BE ADHERED NECESSARILY ENVISAGES A RIGHT TO BE HEARD. 7. SIMILARLY A REFERENCE MAY ALSO BE MADE TO ORDER DATED 28.04.2021 IN ITA 1500/CHD/2019 IN THE CASE OF SHRI PARMINDER SINGH GREWAL VS ITO. IT HAS BEEN HELD THAT ONCE WRITTEN SUBMISSIONS MADE AVAILABLE DO NOT WARRANT T HE RELIEF PRAYED FOR THEN THIS FACT SHOULD BE CONVEYED TO TH E ASSESSEE SO AS TO PROVIDE AN OPPORTUNITY TO MAKE GOOD ANY SHORTCOMING ON FACTS AND LAW NOTICED. IN THE SAID DECISION IT HAS BEEN CLEARLY HELD AS UNDER: IN TERMS OF THE DUE PROCESS OF LAW IT GOES WITHOU T SAYING THAT THE ASSESSEE WAS ENTITLED TO BE PUT TO SUCH NOTICE IN ALL FAIRNESS. THE PRINCIPLE THAT NO ONE SHOULD BE CONDEMNED UNHEA RD IS INVIOLATE. IT IS INCUMBENT ON THE TAX AUTHORITIES T O EXERCISE THEIR POWERS FAIRLY AND TRANSPARENTLY. IT IS SEEN THAT THERE IS NO WAIVER GIVEN BY THE ASSESSEE THAT THE RIGHT TO BE H EARD IS BEING WAIVED OFF AND THE WRITTEN SUBMISSIONS INSTEAD BE C ONSIDERED IN SUBSTITUTION THEREOF. RELIANCE PLACED BY A PARTY S OLELY ON THE WRITTEN SUBMISSIONS IN GOOD FAITH MAY EMANATE FROM A SANG FROIS BELIEF THAT THE RELIEF WAS SO PATENTLY ALLOWABLE TH AT NO ARGUMENTS NEED BE ADVANCED TO CONVINCE THE AUTHORIT Y TO GRANT THE SAME. SUCH BELIEF CANNOT BE SO CONSTRUED TO CONCLUDE H OLD AND BELIEVE THAT THE RIGHT TO BE HEARD IS BEING WAI VED OFF. THE WAIVER HAS TO BE CONSCIOUS AND WITH AWARENESS THAT SUCH A RIGHT IS VESTED AND CAN BE WAIVED . THE DECISION TO WAIVE HENCE NEEDS TO BE A CONSCIOUS WAIVER AND NOT IN IGNORANCE OF THE FOUNDATIONAL FACT OF ACTIVE AWARENESS THAT THE RIGHT TO BE HEARD EXISTS AND IS AVAILABLE UNDER LAW. RIGHT TO BE HEA RD FORMS THE BED ROCK OF THE PRINCIPLES OF NATURAL JUSTICE. THE WORD NATURAL JUSTICE IS DERIVED FROM THE ROMAN WORD JUS NATURAL E WHICH PRESUPPOSES THE APPLICATION OF PRINCIPLES OF NATURA L LAW FOR DETERMINATION OF THE DISPUTE. APPLICATION OF NATUR AL LAW AS HAS EVOLVED OVER THE CENTURIES IN COMMON LAW COUNTRIES MEANS AND INCLUDES JUSTICE EQUITY FAIR PLAY AND GOOD CONSCI ENCE. ANY EXERCISE OF POWER WHICH IS IN CONFLICT WITH THESE A IMS IS OPEN TO ITA-1261&1262/CHD/2019 A.Y. 2014-15 PAGE 7 OF 8 THE CHALLENGE OF BEING ARBITRARY AND UNSUSTAINABLE IN LAW. THE ABOVE LIST IT MAY BE MADE CLEAR IS NOT EXHAUSTIVE. ALL ACTIONS WHICH STRIKE AT THE NON NEGOTIABLE AXIOM NAMELY JU STICE SHOULD NOT ONLY BE DONE BUT SEEN TO BE DONE ARE EXPECTED TO BE ADHERED TO WHEN THE STATE ACTS EXERCISING ITS VAST POWERS OVER ITS CITIZENS. THE ACTIONS ARE EXPECTED TO BE CARRIED OUT IN FAIRNESS. THESE ARE THE BARE MINIMUM STANDARDS WHIC H ARE EXPECTED TO BE ADHERED TO. FAIR PLAY PRE SUPPOSES AS HAS BEEN OFT LAID DOWN FAIR NOTICE OF CHARGE AND PLACE OF H EARING OPPORTUNITY OF EFFECTIVE HEARING TO ADDRESS THE CHA RGE AND SPEAKING ORDER ADDRESSING THE REASONS FOR AGREEING OR DISAGREEING WITH THE CLAIMS PUT FORTH. AUDI ALTEREM PARTEM WHICH IS ONE OF THE FOUNDATIONAL AND FUNDAMENTAL BE D ROCKS OF NATURAL JUSTICE MEANS AND INCLUDES THAT NO ONE SHOU LD BE CONDEMNED UN HEARD. THOUGH THESE RULES ARE NOT NECE SSARILY CODIFIED HOWEVER THEY HAVE EVOLVED OVER THE YEARS AND ARE READ INTO NOT ONLY WHEN STATUTORY PROVISIONS SO PROVIDE BUT ALSO IN QUASI ADMINISTRATIVE DECISIONS WHEREBY THE RIGHTS / INTERESTS OF THE PARTY IS ADVERSELY EFFECTED. THUS EVEN IN THE ABSENCE OF A CLEAR LEGISLATIVE MANDATE THE COURTS HAVE REPEATED LY HELD THAT THE PROCEDURE REQUIRED TO BE ADHERED TO ENVISAGE A RIGHT TO BE HEARD. NO DOUBT A PARTY MAY CHOOSE TO WAIVE THE RIG HT TO BE HEARD AND INSTEAD CHOOSE TO RELY ON WRITTEN SUBMISS IONS . HOWEVER IT IS THE DUTY OF THE COURT TO ENSURE THAT THE WAIVER SO MADE IS CONSCIOUSLY MADE WITH FULL KNOWLEDGE AND UNDERSTANDING I.E; WITH THE FOREKNOWLEDGE THAT THE RIGHT TO BE HEARD EXISTS. THE RECORD IS SILENT ON THIS ASPECT. 8. ACCORDINGLY IT IS SEEN THAT SINCE IN THE FACTS THE WRITTEN SUBMISSIONS WERE NOT SUFFICIENT TO GRANT A RELIEF THEN NOTICE TO THE SAID EFFECT NECESSARILY SHOULD HAVE B EEN GIVEN TO THE ASSESSEE. IT IS EVIDENT THAT THE OPPORTUNIT Y OF PLACING SUPPORTING FACTS OR ARGUMENTS ADMITTEDLY HAS NOT BE EN PROVIDED. IN THESE CIRCUMSTANCES CONSIDERING THE PRAYER OF THE PARTIES THE ISSUE IS REMANDED BACK TO THE FILE OF THE AO WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORD ANCE WITH ITA-1261&1262/CHD/2019 A.Y. 2014-15 PAGE 8 OF 8 LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUN ITY OF BEING HEARD. THE ASSESSEE IN ITS OWN INTERESTS IS A DVISED TO MAKE FULL AND PROPER COMPLIANCES BEFORE THE SAID AU THORITY AS FAILING WHICH IT IS MADE CLEAR THAT THE AO SHALL BE AT LIBERTY TO PASS AN ORDER ON THE BASIS OF THE MATERI AL AVAILABLE ON RECORD. SAID ORDER WAS PRONOUNCED AT THE TIME OF VIRTUAL HEARING ITSELF IN THE PRESENCE OF THE PARTIES VIA W EBEX. 9. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH MAY 2021. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. / DR ITAT CHANDIGARH 6. / GUARD FILE / BY ORDER / ASSISTANT REGISTRAR