North India Securities Pvt. Ltd.,, New ... vs Assessee

North India Securities Pvt. Ltd., vs ACIT, H-108, IInd Floor, Central Circle-9, New Asiatic Bldg., New Delhi. Connaught Place, New Delhi. (PAN: AAACN9408N) (Appellant) (Respondent) Appellant by: S/Shri K. Sampath Adv., Raj Kumar Adv. Respondent by: Shri Vivek Kumar, Sr. DR

PER CHANDRAMOHAN GARG, J.M.

This appeal has been filed by the assessee against the order of the

CIT(A)-XXXII, New Delhi dated 12.11.2012 in Appeal No. 139/11-12(A)32

dated 12.11.20-12 for AY 2009-10.

2. We have heard arguments of both the sides and carefully perused the

relevant material placed on record. Ld. Counsel of the assessee, at the very

outset, has drawn our attention towards operative paragraph 8 and 9 of the

impugned order and submitted that the CIT(A) passed ex parte order without

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affording due opportunity of hearing for the assessee and placing reliance on the

decision of Hon'ble High Court of Madhya Pradesh in the case of Estate of

Late Tukojirao Holkar vs CWT 223 ITR 480(MP). Ld. Counsel further

contended that as per service of notice as noted by the CIT(A) in para 4.1, a

notice dated 15.10.12 was issued to the assessee fixing the date of hearing on

6.11.2012 and CIT(A) in the remarks column mentioned that "none attended

nor any submissions filed nor any request for adjournment made" and placing

reliance on the decision of Hon'ble High Court of Madhya Pradesh (supra), the

CIT(A) dismissed the appeal of the assessee by passing an ex parte order. Ld.

Counsel further contended that even if the assessee does not appear before the

CIT(A) despite due service of notice, then also the CIT(A) is duty bound to

adjudicate all the grounds raised by the assessee before him on merits. Ld.

Counsel vehemently contended that as per Form 35, the assessee raised six

grounds before the CIT(A) which were not adjudicated as per requirement of

provisions of the Act, therefore, the case may kindly be remitted to the file of

CIT(A) for fresh adjudication.

3. Replying to the above, ld. CIT(A) contended that if despite due service of

notice, neither the assessee nor its representative appear before the first

appellate authority i.e. CIT(A), then there is no alternative but to decide the

appeal ex parte. However, ld. DR fairly accepted that if it is found just and

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proper, then the department has no serious objection in restoring entire first

appeal to the file of CIT(A) for fresh adjudication on merits.

4. On careful consideration of above submissions of both the sides, from

Form No. 35, we observe that the assessee raised six grounds before the

CIT(A). From the details of notices and date of hearing as emanated from para

4.5 of the impugned order, we observe that on 6.9.2012 on the written request of

the assessee's representative, the case was adjourned sine die and subsequently

another notice was issued on 15.10.12 fixing the date of hearing on 6.11.12 and

CIT(A) observed that none attended nor any submission filed nor any request

for adjournment was made and the CIT(A) decided the appeal ex parte with

following brief, cryptic and slipshod observations and conclusion:-

"8. From the above, it can be seen that the additions/disallowances made by the ld. AO are well reasoned out and are on sound footing. It is further seen that the appellant was duly confronted by the ld. AO during the assessment proceedings on the issues under consideration and its failure to furnish the information/evidences called for led to the additions which have been made in accordance with the law. I, therefore, do not find any infirmity in the action of the AO in making such additions/disallowances.

9. Under these circumstances, the fact that the appellant is not interested in pursuing the appeal is a clear indicator that the appellant does not have any material evidence in its possession to challenge the decision of the AO as per the impugned order. There is nothing on record to substantiate the grounds of appeal and as held supra, the additions made by the ld. AO are as per law. Therefore, the appeal filed by the appellant against the impugned assessment order is liable to be rejected in view of the reasons recorded in the preceding paras and the additions made under various heads by the AO 3 ITA No.1075/Del/2013 Asstt.Year: 2009-10

are accordingly confirmed. The ground nos. 2 to 5 of the appellant are accordingly rejected."

5. Ld. Counsel of the assessee during the argument before us submitted

copies of the decision of ITAT, Ahmadabad Bench 'C' in the case of Gujarat

Themis Biosyn Ltd. vs JCIT 74 ITD 339 (Ahmedabad) wherein Coordinate

Bench of this Tribunal on the similar issue has held as under:-

"3. We have carefully considered the facts and circumstances of the case as well as submissions made before us. The impugned order passed by the CIT(A) is clearly violative of the express provisions of section 250(6), which provides that the appellate orders of the CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decision. The underlying rationale of the provision is that such orders are subject to further appeal to the appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Absence of the formulation of the point for decision for want of clarity in a decision undoubtedly puts a party in quandary. Section 250(6) expressly embodies the principles of natural justice and such a provision is clearly mandatory in nature. The impugned order passed by the Commissioner (Appeals) in violation of the provisions of section 250(6) cannot, therefore, be sustained. Regarding the decisions of the Delhi Bench of the Tribunal in Multiplan India (p.) Ltd.'s case (supra) cited by the ld. CIT(A), we find that the said decision is clearly distinguishable. Section 254 referring to the orders of the Tribunal confers plenary jurisdiction on the Tribunal in the matter of passing orders under section 254(1). There is no such express stipulation in section 254 as contained under the provisions of section 250(6) relating to the orders of first appellate authority. Therefore, reliance placed by the CIT(A) on Multiplan India (P.) Ltd.'s case (supra) is entirely misplaced. Similarly, the case of Estate of Late Tukojirao Holkar (supra) cited by the ld. CIT(A) is distinguishable and does not support the view taken by the CIT(A).

4 ITA No.1075/Del/2013 Asstt.Year: 2009-10 4. For the reasons indicated above, we hereby set aside the impugned order of the CIT(A) and direct the CIT(A) to dispose of the appeal of the assessee afresh after allowing proper opportunity in accordance with law."

6. In the light of facts and circumstances of the present case, we observe that

in a similar situation, it was held that reliance placed by the CIT(A) on

Mulitplan India Pvt. Ltd. 38 ITD 320 (Del) is entirely misplaced and the case of

the case of Estate of Late Tukojirao Holkar (supra) cited by the ld. CIT(A) is

distinguishable and does not support the view taken by the CIT(A). In the

present case, we are unable to see any observation or conclusion of the CIT(A)

that the notice issued to the assessee on 15.10.2012 for the date of hearing on

6.11.2012 was duly served upon the assessee and despite due service, neither

the assessee nor his representative attended the proceedings nor any request for

adjournment was made on behalf of the assessee. In this situation, it can safely

be presumed that the CIT(A) ignored to appreciate this fact whether the last

notice dated 15.10.12 was really served upon the assessee or not. In this

situation, ex parte order passed by the CIT(A) is clearly violative of principles

of natural justice. We further hold that the reliance placed by the CIT(A) on the

case of Estate of Late Tukojirao Holkar (supra) does not support the view taken

by the CIT(A). The present case is squarely covered in favour of the assessee

by the order of the ITAT Ahmedabad Bench 'C' in the case of Gujarat Themis

Biosyn Ltd. vs JCIT (supra), hence, appeal of the assessee on this legal issue is

allowed and thus, we hereby set aside the impugned order of the

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CIT(A) and direct the CIT(A) to dispose of the appeal of the assessee afresh

after allowing proper opportunity of hearing in accordance with law.

7. In the result, the appeal of the assessee is deemed to be allowed for

statistical purposes restoring the first appeal to the file of CIT(A) in the manner

as indicate above.

Order pronounced in the open court on 14.1.15.

Sd/- Sd/-

(S.V. MEHROTRA) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER

DT. 14th JANUARY 2015 'GS'

Copy forwarded to:-

1. Appellant 2. Respondent 3. C.I.T.(A) 4. C.I.T. 5. DR By Order

Asstt. Registrar

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