Subramany v. Assistant Commissioner Of Incometax, Circle

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 12 OF 2019 SALGAOCAR MINING INDUSTRIES PVT.LTD., THR. ITS DIRECTOR, SUBRAMANY ... Appellant Versus ASSISTANT COMMISSIONER OF INCOMETAX, CIRCLE 1, MARGAO ... Respondent Mr. S. R. Rivankar with Mr. Rama Rivonkar, Advocates for the Appellant.Ms. Susan Linhares, Standing Counsel for the Respondent. Coram:- DAMA SESHADRI NAIDU & NUTAN D. SARDESSAI, JJ. Date:- 13th February 2020 Oral Order: On 15[th] October 2010, the appellant, carrying on its mining business,filed its return of income for the assessment year 2010-11, showingRs.46,61,28,327/- as income. It also paid the tax of Rs.16.46 crores. Later,the Assessment Officer (A.O) took up the matter and issued a notice undersection 143(2) and (4) of the Income Tax Act (“the IT Act”). Through thatnotice, the A.O called for certain records from the appellant. Th appellant,however, did not respond. Later, there was a change in the jurisdiction. Thesucceeding A.O issued two more notices under section 124 of the IT Act,the final notice being on 11[th] March 2013. Through that notice, the A.Ofixed 19[th] March 2013 as the date of hearing; the appellant, nevertheless,contends that its agent appeared before the A.O on the next date with TXA No.12 2019 written submissions but was informed that the order was passed on theprevious day itself. 2. Aggrieved, the appellant filed an appeal before the Commissioner(Appeals). On merits, the appellate authority has appreciated the rivalcontentions and secured a remand report from the AO. Then, based on theremand report submitted by the A.O, the Commissioner (Appeals) hasmaintained the assessment under section 14A but scaled down theexpenditure under other heads. Aggrieved, this time, the Departmentapproached the Income Tax Appellate Tribunal. 3. Eventually, on 4[th] February 2019, the Tribunal has found that theappellate authority has acted in haste and allowed the deduction without anymaterial. The Tribunal has specifically recorded that the appellant has notproduced all the records, yet based on the record extracts produced by it, theappellate authority has allowed the deductions. Thus, not satisfied with theapproach adopted by the appellate authority, the Tribunal has remanded thematter to the primary authority for reconsideration. Now, the appellant hasassailed the Tribunal's order, dated 4[th] February 2019. 4. The learned Senior Counsel for the appellant contends that theappellant did not receive the first notice. It has, according to him, receivedonly the notices issued by the A.O after the change of jurisdiction. Aboutthe lack of opportunity for the appellant to defend itself before the AO., thelearned Senior Counsel points out that the very next day to the date ofhearing fixed by AO, the appellant’s representative went with all the records 3 TXA No.12 2019 and written submissions. Yet the appellant was given no opportunity.Instead, he was told that the previous day—that is, the actual date ofhearing—the orders were passed. 5. At any rate, the learned Senior Counsel contends that once theappellant has taken the matter before the appellate authority, that authoritywas satisfied with the arguments advanced by the appellant and remandedthe matter to the A.O to look into certain aspects. Later, based on theremand report, the appellate authority has allowed certain deductions,though that authority has not touched the appellant's substantial claimunder section 14A of the Act. According to the learned Senior Counsel, theTribunal has erroneously observed that the appellant has not produced theentire record before the appellate authority. and written submissions. Yet the appellant was given no opportunity.Instead, he was told that the previous day—that is, the actual date ofhearing—the orders were passed. 5. At any rate, the learned Senior Counsel contends that once theappellant has taken the matter before the appellate authority, that authoritywas satisfied with the arguments advanced by the appellant and remandedthe matter to the A.O to look into certain aspects. Later, based on theremand report, the appellate authority has allowed certain deductions,though that authority has not touched the appellant's substantial claimunder section 14A of the Act. According to the learned Senior Counsel, theTribunal has erroneously observed that the appellant has not produced theentire record before the appellate authority. 6. To a specific query whether the appellant would be prejudiced ifthe matter had to be heard afresh by the A.O, as indicated by the Tribunal,the learned Senior Counsel submitted that it amounted to sheerharassment. He has further stressed that the appellant must again gothrough the remedial hierarchies should the AO’s order be negative. So thelearned Senior Counsel has urged this Court to set aside the Tribunal'sorder and, thus, restore the appellate authority’s order. 7. In the alternative, the learned Senior Counsel has pleaded that if atall the Court is desirous of sending back the matter, it may remand thematter to the Tribunal, which can re-appreciate the facts as well as law. 8. On the other hand, the learned Standing Counsel for theDepartment has taken me through the impugned order and contended thatthe Tribunal has only desired to ensure that the adjudicating authoritieshave gone through all the material evidence before ruling on the appellant’stax liability. It is not for the appellant to pick a particular authority andinsist that only that authority should adjudicate the dispute. In fact, havingthe matter relegated to the primary authority serves the appellant’s purposebetter. To elaborate, the learned Standing Counsel has submitted that nowthe appellant has every opportunity to place all the material before the AOand vindicate its stand. Besides, the appellant gets an additional appellateremedy, too. Thus, she maintains that the remand is justified, and theappellant has not been prejudiced. 9. Heard Shri Rivankar, the learned Senior Counsel for the appellant,and Ms. Linhares, the learned Standing Counsel for therespondent/Department. 10. Indeed, the initial assessment proceedings before the AO were exparte, for the appellant had not chosen to respondent to the statutorynotices. Then, the appellant has approached the Commissioner (Appeals),who secured a remand report from the Assessing Officer. Finally, theappellate authority has confirmed the AO’s disallowance under Section 14Aof the IT Act but deleted the additions. 11. On the Department’s appeal, the Income Tax Appellate Tribunalhas observed that the appellate authority has “displayed haste in deleting the additions without the assessee even agreeing to produce the complete booksof account and the supporting evidence.” Then, the Tribunal has concludedthat it will the interest of justice if the “issue is remitted to the file of theAO.” The appellant was, thus, given one more opportunity to agitate theissue before the AO and justify its contentions. 12. We, therefore, reckon that the impugned order of the Tribunal hascaused no prejudice to the appellant; nor has it suffered from any legalinfirmity for us to interfere. Under these circumstances, we see no substantial question of lawarising for our consideration. Therefore, we decline to interfere with theimpugned order. As a result, the Tax Appeal fails, and the impugned orderremains intact. NUTAN D. SARDESSAI, J. DAMA SESHADRI NAIDU, J.ap/-