K.Ravindran Nair, Trivandrum v. ITO, Trivandrum

MA 36/COCH/2011 | 2007-2008
Pronouncement Date: 10-02-2012

Appeal Details

RSA Number 3621924 RSA 2011
Assessee PAN AEMPP5020R
Bench Cochin
Appeal Number MA 36/COCH/2011
Duration Of Justice 2 month(s) 29 day(s)
Appellant K.Ravindran Nair, Trivandrum
Respondent ITO, Trivandrum
Appeal Type Miscellaneous Application
Pronouncement Date 10-02-2012
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 10-02-2012
Assessment Year 2007-2008
Appeal Filed On 11-11-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND SANJAY AROR A AM M.P. NO. 36/COCH/2011 (ARSG. OUT OF I.T.A NO. 636/COCH/2010) ASSESSMENT YEAR: 2007-08 SHRI K.RAVINDRAN NAIR PROPRIETOR RDR AUDITORIUM T.C. 16/494-12 EDAPAZHANJI JN. VAZHUTHACAUD THIRUVANANTHAPURAM-695 014. [PAN:AEMPP 5020R] VS. THE INCOME TAX OFFICER WARD-1(2) TRIVANDRUM. (ASSESSEE-APPLICANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI T.M.SREEDHARAN SR.ADV.-AR REVENUE BY MS. S. VIJAYAPRABHA JR. DR DATE OF HEARING 09/12/2011 DATE OF PRONOUNCEMENT 10/02/2012 O R D E R PER SANJAY ARORA AM: THIS MISCELLANEOUS PETITION BY THE ASSESSEE DIREC TED AGAINST THE ORDER BY THE TRIBUNAL IN ITS CASE FOR THE ASSESSMENT YEAR (A.Y. 2007-08) DECIDING THE ISSUES ARISING IN ITS ASSESSMENT FOR THAT YEAR VIDE ORDER DATED 31-05 -2011. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEES CASE 3. THE ASSESSEES GRIEVANCE AS PROJECTED IN THE MI SCELLANEOUS APPLICATION AS WELL AS THE ARGUMENTS ADVANCED BY THE LD. AR DURING HEARING IS THAT ONCE THE TRIBUNAL HAD ENTERED A FINDING THAT HE HAD NOT BEEN ALLOWED A PR OPER OPPORTUNITY TO REPRESENT HIS CASE BEFORE THE REVENUE AND ACCORDINGLY DECIDED THAT T HE PROPER COURSE IN THE MATTER WAS A M.P. NO.36 /COCH/2011 K. RAVINDRAN NAIR V. ITO TRIVANDRUM 2 RESTORATION BACK TO THE FILE OF THE ASSESSING OFFIC ER (A.O.) IT OUGHT NOT TO HAVE CURTAILED HIS LIBERTY TO DO SO BEFORE THE LATTER. THIS IS AS ITS ENSUING FINDING AS TO THE NON- APPLICABILITY OF THE STATE PWD RATES IN THE MATTER OF DETERMINATION OF CONSTRUCTION COST AMOUNTS TO JUST THAT. THIS IS ALL THE MORE SO AS TH E AO IS IN ANY CASE OBLIGED TO DECIDE ON HIS OBJECTIONS AND FRAME THE ASSESSMENT ONLY IN AC CORDANCE WITH THE LAW SO THAT NO FURTHER FETTERS ON HIS DISCRETION OUGHT TO HAVE BEE N PUT BY THE TRIBUNAL. FURTHER THE VIEW THAT THE STATE PWD RATES ARE ONLY FOR THE PURPOSE O F FIXING RENT IS NOT CORRECT AND THE TRIBUNAL (COCHIN BENCH) HAD BEEN CONSISTENTLY TAKIN G THE VIEW THAT THE SAME ARE MORE RELEVANT THAN THE CPWD RATES. IN FACT THE TRIBUNAL HAS IN SO DECIDING SUO MOTU RELIED ON ITS EARLIER DECISION IN THE CASE OF MEDICAL TRUST HOSPITAL (IN ITA NO. 306 TO 308/COCH/2003 DATED 01/2/2011) WHICH HAD BEEN NEIT HER ADVANCED BY THE REVENUE NOR CONFRONTED TO THE ASSESSEE SO THAT THE ISSUE IN A WAY HAS BEEN DECIDED ON ITS BACK. AGAIN THE SAID DECISION IS IN ANY CASE DISTINGUISHABLE ON FACTS INASMUCH AS IN THAT CASE ADOPTION OF THE STATE PWD RATES LED TO A COST LOWER THAN THA T DISCLOSED BY THE ASSESSEE ITSELF. THE FINDINGS 4.1 THE WORDS `OUGHT NOT AND `OUGHT USED/EMPL OYED BY US IN EXPRESSING OR DESCRIBING THE ASSESSEES CASE ARE IMPORTANT INASM UCH THEY SIGNIFY NOT WHAT THE TRIBUNAL SHOULD NOT (OR SHOULD HAVE) DONE PREFERABLY - FOR OR TOWARD WHICH ANYONE COULD HAVE HIS OWN CHOICE OR PREFERENCE OR OPINION - BUT ONLY MAND ATORILY. THIS IS AS IT IS ONLY IN THAT CASE THAT IT WOULD CONSTITUTE A `MISTAKE LIABLE F OR RECTIFICATION. EXAMINING THE ASSESSEES CONTENTION FROM THIS STAND POINT WE FIND THE TRIBU NAL TO HAVE HELD IN FAVOUR OF THE ADOPTION OF THE CPWD RATES AS AGAINST STATE PWD RA TES AS BEING CANVASSED BY THE ASSESSE VIDE PARA 4.4 OF ITS ORDER FOR THE FOLLO WING REASONS: A) THE ASSESSEE HAD ALREADY RAISED THIS ASPECT BEFORE THE DVO WHO HAD GIVEN HIS REASONS FOR NOT ACCEPTING THE ASSESSEES CLAIM PER HIS REPORT. THE SAME HAVE NOT BEEN MET BY THE ASSESSE WHO HAD NOT RAISED THIS IS SUE BEFORE THE AO PER HIS LETTER DATED 07/12/2009 THE NON-CONSIDERATION OF WHICH IT PLEADS BEFORE IT; B) THE VALUATION ADOPTED BY THE ASSESSEE ITSELF DRAWS FROM BOTH THE CPWD AS WELL AS STATE PWD RATES ADOPTING THE VALUE AT THE SIMPLE A VERAGE OF THE VALUATION ARRIVED M.P. NO.36 /COCH/2011 K. RAVINDRAN NAIR V. ITO TRIVANDRUM 3 AT ON THE BASIS OF THE TWO. THAT IS THE PRIMACY AN D RELEVANCY OF THE CPWD RATES HAS ITSELF BEEN ACCEPTED BY THE ASSESSE; C) THE KERALA STATE PWD RATES ARE PRIMARILY FOR FIXING THE STANDARD RENT AND ARE NOT SUITABLE FOR VALUING CERTAIN STRUCTURES EVEN AS CL ARIFIED BY THE TRIBUNAL ALSO IN AN EARLIER CASE SPECIFYING IT; AND D) THE CASE LAW RELIED UPON BY THE ASSESSEE IN CANVASS ING ITS CASE FOR ADOPTION OF THE STATE PWD RATES ITSELF CLARIFIES - IN RATIO - THAT NO FIXED FORMULA IN THE MATTER COULD HOLD SO THAT THOUGH THE STATE PWD RATES MIGH T HAVE BEEN ACCEPTED OR CONSIDERED AS PREFERABLE IN THOSE CASES THEY DO NO T LAY DOWN ANY RULE IN THE MATTER WHICH HAS TO BE DECIDED IN THE FACTS AND CI RCUMSTANCES OF EACH CASE. WE ARE UNABLE TO UNDER THE GIVEN FACTS AND CIRCUMS TANCES OF THE CASE WHICH HAVE NOT BEEN DENIED OR REBUTTED BY THE ASSESSEE IN ANY MANN ER BEFORE US SUBSCRIBE TO THE VIEW THAT THE NON-ACCEPTANCE OF HIS CONTENTION FOR ADOPT ION OF THE STATE PWD RATES; THE MATTER HAVING BEEN ALREADY REMANDED BACK TO THE FILE OF TH E AO IS IN THE NATURE OF AN OMISSION OR COMMISSION WARRANTING AN INFERENCE OF A `MISTAK E. MUCH LESS THE ASSESSE HAS BEEN EVEN UNABLE TO SHOW AS TO HOW IT IS IN THE UNDISPU TED FACTS AND CIRCUMSTANCES OF THE CASE INFIRM. IT IS EQUALLY INCORRECT TO SAY AS WOULD BE APPARENT FROM THE FOREGOING THAT THE ISSUE STANDS DECIDED BY THE TRIBUNAL BY PLACING REL IANCE ON AN EARLIER DECISION BY IT AND OF WHICH IT HAD NO NOTICE. THE ISSUE STANDS DECIDED BY THE TRIBUNAL EVEN DE HORS THE SAME AND THE REFERENCE TO AN EARLIER DECISION IS ONLY BY WAY OF COMMUNICATING THAT SUCH A VIEW HAD EARLIER ALSO FOUND FAVOUR WITH AND EXPRESSION IN AN EARLIER ORDER BY THE TRIBUNAL (COCHIN BENCH). THIS (COMMUNICATION) IS IN FACT GUI DED MORE BY THE REASON THAT THE TRIBUNAL IS EXPECTED TO BE CONSISTENT IN ITS STAND UNLESS OF COURSE SOME NEW MATERIAL COMES TO OR IS BROUGHT TO ITS NOTICE AND BY ITSELF NOT DETERMINATIVE OF OR THE BASIS OF THE IMPUGNED DECISION. AS WOULD BE PATENT THE REASONS OR CONSIDERATION LISTED AT SUB-PARA (A) (B) AND (D) ABOVE HAVE NO REFERENCE TO THE EAR LIER DECISION AND THAT AT SUB-PARA (C) ABOVE WOULD HOLD IRRESPECTIVE OF THE EARLIER DECISI ON. REFERENCE TO AN EARLIER DECISION CANNOT BY ITSELF BE CONSIDERED AS A MISTAKE PARTIC ULARLY WHEN THE ORDER UNDER REFERENCE ARTICULATES THE SAME VIEW I.E. IN RESULT AND IS BY ALL MEANS AND STANDARDS ONLY DESIRABLE. M.P. NO.36 /COCH/2011 K. RAVINDRAN NAIR V. ITO TRIVANDRUM 4 4.2 CONTINUING FURTHER IT MAY BE APPRECIATED THAT THE ASSESSING AUTHORITY OR EVEN THE TRIBUNAL CANNOT DECIDE ON TECHNICAL ISSUES DE HORS ANY MATERIAL. WE MAY REFER TO THE DECISIONS BY THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. BHARAT CELLULAR LTD. (2011) 330 ITR 239 (SC) AND SARASWATI INDUSTRIAL SYNDICATE LTD. VS. COMMISSIONER OF INCOME-TAX (1999) 237 ITR 1 (SC). THE SAME HAVE THEREFORE PER FORCE THE CIRCUMSTANCES TO BE DECIDED BASED ON THE OPINIO N OF THE TECHNICAL EXPERTS ON WHICH RELIANCE IS BEING PLACED BY BOTH THE PARTIES. THE P URVIEW AND THE DUTY OF THE AUTHORITY ADJUDICATING SUCH AN ISSUE IS ONLY TO STATE THE OPI NION WHICH IT PREFERS AND ITS REASON/S FOR THE SAME. THIS IS PRECISELY WHAT THE TRIBUNAL DOES IN THE PRESENT CASE AS WELL. IN FACT IT DOES NOT RECORD A FINDING TO THE EFFECT THAT THE AS SESSEE HAD NOT BEEN ALLOWED PROPER OPPORTUNITY TO STATE ITS CASE AS STATED BY THE LD. AR. RATHER IT OBSERVES THAT THE DVOS REPORT IS DATED 31/12/2008 WHILE THE ASSESSEE SUBM ITS ITS OBJECTIONS BEFORE THE AO ONLY PER ITS LETTER DATED 07/12/2009 AND EVEN AS IT IS WELL AWARE OF THE ASSESSMENT PROCEEDINGS ARE GETTING TIME BARRED ON 31/12/2009 SO THAT THER E WAS NO TIME TO CONSIDER THE SAME. IN FACT THE SAID REPORT BY THE DVO HAS ONLY BEEN ISSU ED AFTER VISITING THE SITE ON 26/10/2008 AND CONSIDERING THE ASSESSEES EXPLANAT IONS AND OBJECTIONS BY THE DVO BEFORE WHOM THE PROCEEDINGS CONTINUED FOR OVER AN E XTENDED PERIOD OF TIME. HOWEVER EVEN SO THE TRIBUNAL WAS OF THE VIEW THAT THE A.O. OUGHT TO HAVE REFERRED THE MATTER TO THE DVO FOR HIS COMMENTS OR IF OF THE VIEW THAT THE AS SESSEES OBJECTION/S STANDS ALREADY DEALT WITH BY THE DVO WITH THE ASSESSE RAISING NO ADDITIONAL POINT IN REBUTTAL SPECIFICALLY STATED HIS REASON/S FOR NOT ACCEPTING THE ASSESSEES CASE QUA THAT OBJECTION. THAT ALONE WOULD MEET THE PRESCRIPTION OF A FAIR AN D PROPER ADJUDICATION WITH THE REVIEWING AUTHORITY BEING ON A CHALLENGE DULY INF ORMED THE BASIS OF THE ASSESSEES CASE AND THAT OF THE REVENUE. THIS DEFICIENCY IN THE ADJ UDICATION PROCESS WAS AGAIN NOT MADE GOOD AT THE FIRST APPELLATE STAGE. UNDER SUCH CIRCU MSTANCES THE TRIBUNAL WAS THEREFORE OF THE VIEW THAT THE INCIDENTS OF A FAIR PROCEDURE HAD NOT BEEN MET - AND NOT THAT THE ASSESSEE HAD NOT PER SE BEEN EXTENDED A FAIR OPPORTUNITY OF HEARING - THAT IT CONSIDERED IT FIT AND PROPER THAT THE MATTER SHOULD BE RESTORED BACK TO T HE FILE OF THE AO FOR A CONSIDERATION ON MERITS THE ASSESSEES FINAL OBJECTIONS TO THE DVOS REPORT ON THE BASIS OF WHICH THE AO HAD FRAMED THE ASSESSMENT. ACCORDINGLY IT DID SO SO THAT THE ASSESSMENT WAS TO BE M.P. NO.36 /COCH/2011 K. RAVINDRAN NAIR V. ITO TRIVANDRUM 5 CONSIDERED AS OPEN INSOFAR AS THE ASSESSEES OBJECT IONS ADVANCED PER ITS LETTER DATED 07/12/2009 WERE CONCERNED. THE STATED OBJECTION OF THE ADOPTION OF THE STATE P WD RATES NOT FORMING PART OF THE ASSESSEES SAID OBJECTIONS THERE IS NO CONFLICT OR INCONSISTENCY BETWEEN THE TRIBUNALS DECISION FOR A REMAND TO THE AO FOR CONSIDERING THOSE OBJECTIONS AND ITS DECISION APPROVING THE ADOPTION OF THE CPWD RATES BY THE REVENUE . THE WORDS `OUGHT NOT AND `OUGHT THUS DO NOT CORRECTLY DESCR IBE THE FACTUAL POSITION OF THE MATTER. ACCORDINGLY NO CASE FOR `MISTAKE STANDS MADE OUT. CONCLUSION 5. WE MAY ALSO BEFORE PARTING WITH THE ORDER CL ARIFY THAT EVEN THOUGH NO CLAIM IN ITS RESPECT WAS MADE DURING THE HEARING; RATHER CONFIRM ED THEREAT BY GOING THROUGH THE RELEVANT PART OF THE ORDER WE HAVE NEVERTHELESS AS A MATTER OF ABUNDANT CAUTION WITH A VIEW TO ENSURE THE VERACITY OF THE FINDING/S ISSUED AFORESAID AND CONSEQUENTLY OF THIS ORDER ONCE AGAIN GONE THROUGH THE RECORD TO FIND THE SAID FINDING/S AS CORRECT. THAT IS THAT NO OBJECTION WITH REGARD TO THE ADOPTION OF TH E CPWD RATES STANDS TAKEN BY THE ASSESSEE PER HIS OBJECTION LETTER DATED 07/12/2009 TO THE AO; RATHER HAS HIMSELF RELIED THEREON INASMUCH AS THE VALUATION ADOPTED IS AT THE AVERAGE OF THE CPWD AND KERALA STATE PWD RATES AS STATED IN THE IMPUGNED ORDER. N O DOUBT PARAGRAPH 1 OF THE SAID LETTER (PB PGS. 75 TO 79) DOES MAKE A MENTION FOR THE ADOP TION OF STATE PWD RATES FOR VALUATION BUT THE SAME IS ONLY WITH REFERENCE TO T HE PLEA THAT THE COURTS HAVE FOUND THE SAME AS MORE RELIABLE. NOW THIS IS PRECISELY THE ISSUE DECIDED BY THE TRIB UNAL PER PARA 4.4 OF ITS ORDER HAVING BEEN RAISED AND AGITATED SEPAR ATELY BEFORE IT ? THAT IS THE REFRAIN BEFORE THE AO (WHO IS OBLIGED TO DECIDE THE MATTER ARISING FOR HIS CONSIDERATION ON THE BASIS OF THE MATERIALS ADDUCED IN SUPPORT) BEING O NLY IN RELATION TO THE OPINION OF THE COURTS STANDS VALIDLY ASSUMED BEFORE THE TRIBUNAL ON THE SAME NOT FINDING FAVOUR WITH THE AO AND CONFIRMED BY THE FIRST APPELLATE AUTHORITY AND DECIDED BY IT (TRIBUNAL). AS ALSO POINTED OUT HEREINBEFORE (REFER PARA NOS. 4.1 & 4.2 OF THIS ORDER) THE ASSESSEE DID NOT RAISE ANY TECHNICAL ISSUE/OBJECTION TO THE REPORT B EING CHALLENGED BY HIM PER THE SAID LETTER. MERE ALLUDING TO THE OPINION OF THE COURTS /TRIBUNAL (AND WHICH IS IN RESPECT OF STATE PWD RATES IN GENERAL) WOULD NOT BY ITSELF BECOME AN `OBJECTION TO THE DVOS REPORT M.P. NO.36 /COCH/2011 K. RAVINDRAN NAIR V. ITO TRIVANDRUM 6 PARTICULARLY IN VIEW OF THE FACT AS AFORE-STATED THAT THE OBJECTION/S RAISED IN ITS RESPECT STAND/S ALREADY CONSIDERED AND MET BY THE DVO STAT ING HIS REASONS FOR NEVERTHELESS ADOPTING THE CPWD RATES IN PREFERENCE TO THE KERALA STATE PWD RATES. IN FACT IF IT WERE NOT SO THERE WAS NO QUESTION OF RAISING A SEPARATE GROUND IN ITS RESPECT BY THE ASSESSEE BEFORE THE TRIBUNAL (GD. # 5) AND PRESSING THE SAM E; THE MATTER BEING COVERED BY THE GROUND AS TO THE NON-CONSIDERATION OF HIS LETTER DA TED 07/12/2009. IT IS THE FUNCTION NAY DUTY OF THE COURT/TRIBUNAL TO UNDER SUCH CIRCUMSTA NCES DECIDE THE ISSUES BEING RAISED ON THE BASIS OF THE MATERIALS BEFORE IT I.E. AS TO T HE VALIDITY OF THE OPPOSING CLAIMS BEING RAISED GIVING THE BASIS FOR ITS DECISIONS AND WHI CH THE TRIBUNAL HAS DONE IN THE PRESENT CASE FURTHER STATING IT TO BE A PURE MATTER OF FAC T EVEN AS AFFIRMED BY THE HIGHER COURTS OF LAW INCLUDING THE DECISION/S RELIED UPON BY THE AS SESSEE IN THE MATTER. THERE IS AS SUCH NO INCONSISTENCY IN THE IMPUGNED ORDER BY THE TRIBU NAL AS CONTENDED. THE ASSESSEE IF AGGRIEVED COULD DEFINITELY CHALLENGE THE SAME BEFO RE THE HIGHER APPELLATE FORUM UNDER ITS REVIEW JURISDICTION CONTESTING THE SAID FINDI NG/S BY THE TRIBUNAL. HOWEVER THE CHARGE OF THE SAME BEARING A `MISTAKE BY CLAIMING THAT TH E TRIBUNAL `SHOULD HAVE OR `SHOULD NOT HAVE DONE WHAT THE ASSESSEE STATES IT OUGHT TO OR OUGHT NOT TO HAVE DONE IS CLEARLY UNWARRANTED AND MISCONCEIVED. THE ASSESSEE HAS IN T HE INSTANT PROCEEDINGS ALSO PLACED ON FILE A COPY OF A VALUATION REPORT DTD. 06/12/201 1 I.E. AFTER THE DATE OF HEARING OF HIS APPEAL. WE ARE UNABLE TO UNDERSTAND ITS PURPORT IN THE PRESENT PROCEEDINGS EVEN AS NEITHER ANY REFERENCE THERE-TO WAS MADE DURING HEAR ING NOR THE LEAVE OF THE COURT OBTAINED FOR TAKING THE SAME ON RECORD. IF AND TO T HE EXTENT THE SAID REPORT IS RELEVANT IN ADVANCING ITS CASE QUA ITS OBJECTIONS PER ITS LETTER DATED 07/12/2009 TH E SAME COULD IN ANY CASE BE TAKEN UP BEFORE THE ASSESSING AUTHORITY . WE DECIDE ACCORDINGLY. 6. IN THE RESULT THE ASSESSEES MISCELLANEOUS APP LICATION IS DISMISSED. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 10TH FEBRUARY 2012 M.P. NO.36 /COCH/2011 K. RAVINDRAN NAIR V. ITO TRIVANDRUM 7 GJ COPY TO: 1. SHRI K.RAVINDRAN NAIR PROPRIETOR RDR AUDITORIU M T.C. 16/494-12 EDAPAZHANJI JN. VAZHUTHACAUD THIRUVANANTHAPURAM-695 014. 2. THE INCOME TAX OFFICER WARD-1(2) TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE . BY ORDER (AS SISTANT REGISTRAR) ITAT COCHIN BENCH