2014 (1) TMI 1054 - AT - Income Tax

Appellate Tribunal restores case for fresh decision, stresses fair opportunity for assessee.

M/s. Godawari Housing Private Ltd. Versus ACIT, Central Circle-II, New Delhi

The Appellate Tribunal allowed the appeal for statistical purposes, directing the issue to be restored back to the file of the Commissioner of Income Tax ... Opportunity of being heard – Order passed on presumptions – Procedure to be followed by the CIT(A) in appellate proceedings - Held that:- It has consistently been held that the Rules of natural justice are not embodied rules and the said phrase is not and cannot be capable of a precise definition - 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 – Relying upon Apex Court in the case of A.K.Kraipak – vs- Union of India [1969 (4) TMI 103 - SUPREME COURT] - the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice - The rules are means to an end and not an end in 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” - the sole issue agitated is pertaining to granting of opportunity of being heard which admittedly has not been made available to the assessee – the prayer of the assessee is accepted - the issue is remitted back to the CIT(A) for fresh adjudication – Decided in favour of Assessee. Issues:Appeal against CIT(A) order on various grounds - Opportunity of being heard - Principles of natural justice.Analysis:1. The appeal was filed against the CIT(A) order for the assessment year 2009-10 on various grounds. During the hearing, the main issue raised was regarding the arbitrary actions of the Commissioner of Income Tax (Appeals) and the violation of principles of natural justice and provisions of law.2. The Appellate Tribunal noted that the assessee had sought multiple adjournments before the CIT(A), which were granted in the past. However, on 26.09.2012, the adjournment was not accepted, leading to an ex-parte order. The Tribunal observed that seeking adjournments repeatedly can't be a ground to deny the opportunity of being heard, especially in a case resulting from a search & seizure operation under section 132. The right to be heard is fundamental under the Rule of law.3. Referring to the principle of 'Audi alteram partem' (hear the other side), the Tribunal emphasized the importance of natural justice in preventing miscarriage of justice. Citing the case of A.K.Kraipak vs Union of India, it highlighted the maxims of natural justice, including the right to notice and an opportunity to explain. The Tribunal concluded that the assessee was not given a fair opportunity to be heard, which is a violation of natural justice principles.4. Consequently, the Tribunal allowed the appeal for statistical purposes and directed the issue to be restored back to the file of the CIT(A) for a fresh decision in accordance with law, ensuring the assessee is given a reasonable opportunity to present their case. The Tribunal stressed the importance of responsible participation by the assessee in the proceedings to avoid misuse of opportunities granted by the Court, emphasizing the restoration of justice in the case.5. In summary, the Tribunal's judgment focused on upholding the principles of natural justice, particularly the right to be heard, and ensuring a fair and just decision-making process in line with legal provisions. The decision highlighted the significance of granting a reasonable opportunity to all parties involved in legal proceedings to maintain the integrity and fairness of the judicial system.