Case Law Details
H.P. Agro Industries Corp. Ltd. Vs ITO (ITAT Chandigarh)
Government Corporation is like any other assessee before the tax authority and cannot be allowed to plead that on this count it be given a preferential treatment and be allowed to escape the responsibilities of representing their case before the other governmental authorities including the tax authorities.
Facts-
The assessee, a Government Corporation of the H.P. Government. The assessee is stated to be engaged in trading of items like Tractor, Iron and Steel, Tyres and Tubes, Insecticides and Pesticides etc. It is also seen to be carrying on manufacturing activities such as formulation of animal feed, insecticides and pesticides, processing honey and fabrication of agricultural implements road and forest tolls etc .
The assessee’s representation before the AO has been an abuse of the process of law as effectively there was no participation and that It is seen that after affording opportunities the Assessing Officer ultimately passed the order u/s 144 as the claims in the return remained unsubstantiated despite opportunity. Hence the AO dismissed the plea of the assessee. The CIT confirmed the order of AO. Aggrieved by the said order the assessee approached the Tribunal.
Conclusion-
The assessee admittedly did not participate in the proceedings before the AO either fairly or completely. However, while so holding we are also live to the submissions of the assessee in as much as for want of proper representation/ shortcomings etc. by a duly appointed Representative the assessee should not be made to suffer. It is seen that ld. CIT(A) noticing that the submission was unsupported by an Affidavit of the AR appointed has dismissed the bald argument. Considering the same, we hold that while the First Appellate Authority was justified to dismiss the bald plea, at the same time, being live to the practical difficulties of the assessee also in obtaining such an affidavit from its counsel, we deem it appropriate presently to dispense with such a requirement. However, the said observation, it is hoped is treated by the assessee with full knowledge and awareness of the seriousness of the consequences if the filing of the affidavit of its earlier A.R. is insisted upon by an adjudicating authority. Such a requirement can put the assessee to all the possible perils of being made answerable to a counter submission by its representative that full facts were never made available by the assessee for effective representation. We would like to make it clear that the assessees, even though it is a government authority cannot be permitted to abuse the process of law. Bald unsupported excuses of blaming its AR without first satisfying the adjudicating authority that all necessary details for compliances were always provided to the counsel is a requirement which cannot be summarily overlooked. It is obvious that a counsel can make representation on behalf of an assessee only if all details are made available by the assessee to its C.A./counsel. Infact ideally an affidavit to the said extent would be the foremost primary fact on which we would first insist to be demonstrated.
We are of the firm view that the responsibility of the assessee does not end by merely appointing a Counsel. The assessee necessarily needs to ensure and make available all necessary informations to its counsel for enabling him to participate effectively in the hearing. However, in view of the peculiar facts of the present case, considering the oral undertaking given we do not insist on an affidavit of the assessee. Having expressed our displeasure on the lax attitude evident on record, accepting the oral undertaking given, we deem it appropriate to direct a remand. At the same time at this stage we deem it necessary to highlight that a Government Corporation is like any other assessee before the tax authority and cannot be allowed to plead that on this count it be given a preferential treatment and be allowed to escape the responsibilities of representing their case before the other governmental authorities including the tax authorities. The rigors of non-compliances with the requirements of the Statute are same for all assessees. We make it clear that merely because the assessee is a Government authority, it itself is no reason for the authority to act in an irresponsible and negligent manner. Participation in the proceedings before the Tax Authorities, it is expected, be given a high priority always, specially so by the Government authorities which exist and function for the benefit of the State.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
By the present appeal the assessee assails the correctness of the order dated 28.03.2019 of CIT(A) Shimla pertaining to 2013-14 assessment year on the following grounds :
1. On the facts and circumstances of the case, the Ld. A.O. has grossly erred in framing the assessment order on best judgment basis, without affording an opportunity of being heard to the appellant.
2. On the facts and circumstances of the case, the Ld. CIT(A) has grossly erred by not calling the remand report on the basis of record of the appellant.
3. The appellant reserves its right to add, amend or alter grounds of appeal during the course of appellate proceedings.
2. Before addressing the specific grievance of the assessee, it is necessary to address the delay of 4 days pointed out by the Registry in the filing of the present appeal by the assessee.
3. The ld. AR addressing the delay of 4 days drew attention to the application filed u/s 5 of the Limitation Act. Relying on the same, it was submitted that the documents were sent well in advance, however, the minor delay has occurred on account of postal authorities possibly due to some holidays etc. Accordingly, it was his prayer that it may kindly be condoned.
4. Considering the record, the ld. Sr.DR did not oppose the prayer for condonation of delay of the assessee.
5. We have heard the rival submissions and perused the material available on record. In the light of the submissions of the parties before the Bench, being satisfied by the explanation offered, we are of the view that the delay of four days deserves to be condoned. We have seen that no undue advantage has been gained by the assessee on account of this minor delay and no vested right of the Revenue is upset if the delay is condoned. Accordingly, delay is directed to be condoned. Ordered accordingly.
6. The ld. AR inviting attention to the impugned order as well as the assessment order made a prayer that since the assessment order has been passed u/s 144 by the AO, the issues may be remanded back as necessary facts which are required to be considered by the AO need to be taken on record. Inviting attention to the impugned order, it was submitted that the appeal of the assessee was dismissed by the CIT(A) as the assessment was made u/s 144 of the Income Tax Act. In the said background, it was his prayer that the appeal may be remanded back to the AO for a fair appraisal of facts and appropriate relief maintainable under law.
7. A perusal of the record shows that the AO had provided sufficient opportunity to the assessee. Thus, in the face of the speaking record, the ld. AR was required to justify why still a remand back should be directed as the assessee failed to address this issue even before the CIT(A).
8. The ld. AR on a reading of the assessment order agreed that more than sufficient opportunities had been provided to the assessee. However, in assessee’s defense it was submitted that on these dates, the assessee had been represented by his AR before the AO. This fact, it was submitted, had been noticed in para 3.1 of the assessment order which has been extracted in the impugned order in para 5. 1. Referring to the same, it was conceded that admittedly on these occasions effective participation was not there. In the said factual background it was argued that possibly the AR appointed by the assessee Shri Anil Sood did not make proper compliances. Referring to the order it was submitted that the assessee has pleaded this fact before the CIT(A) also. It has been argued that the assessee was unaware that the concerned representative was not making proper compliances. Relying on the said pleading available in the impugned order itself, it was his prayer that for the shortcomings etc. if any of the counsel representing the assessee, the assessee should not be made to suffer. Hence, the issue, it was his prayer may be remanded. It was his submission that the ld. Commissioner Appeals has dismissed this prayer on the ground that no affidavit of the said representative was filed. It was his prayer that it may be difficult to file his affidavit today as a counsel he was ready to offer his oral undertaking instead praying that in case remand is directed, the assessee shall participate in the proceedings fully and fairly. It was also pleaded that the assessee is a Government Authority and hence, the prayer for remand may be considered fairly.
9. Considering the submissions, the ld. Sr.DR highlighting the opportunity wasted before the AO and absence of any supporting affidavit of the earlier counsel ultimately agreed that accepting the oral undertaking of the counsel remand may be directed.
10. Accordingly, the parties were required to address their submissions on the fact whether the remand back be directed to the AO or the CIT(A).
10.1 Considering the factual background of the case, both the parties were in agreement that remand be made to the AO as evidences will need to be brought on record by the assessee and these need to be considered by the AO first.
11. We have heard the rival submissions and perused the material available on record. In the facts of the present case, it is seen that the assessee is stated to be a Government Corporation of the H.P. Government. The assessee is stated to be engaged in trading of items’ like Tractor, Power Tiller , Iron and Steel, Tyres and Tubes, Insecticides and Pesticides, Agricultural implements, Batteries, Cements, Vatnary Medicines, Computer, Bitumen etc. It is also seen to be carrying on manufacturing activities such as formulation of animal feed, insecticides and pesticides, processing honey and fabrication of agricultural implements road and forest tolls etc.
11. 1 We have also seen that as per record that the assessee’s representation before the AO has been an abuse of the process of law as effectively there was no participation. We take strong exception to this lax attitude. It is seen that after affording opportunities the Assessing Officer ultimately passed the order u/s 144 as the claims in the return remained unsubstantiated despite opportunity. Consequently the business loss claimed of Rs. 1,72,14,072/- and claim of depreciation of Rs. 6,63,915/- was added to the income of the assessee. The ld. Commissioner considering the arguments advanced in the appeal has noticed that the assessee is claiming to have 25 units and the assessee had claimed before him that decentralized accounts of 25 places were maintained and separate balance sheet of each unit was prepared and subsequently consolidated. The assessee on the other hand is seen to have argued before the ld. CIT(A) that no query was raised by the AO with respect to the branch/unit for which the assessee was required to produce the books. These arguments we notice have no relevance as the assessee did not cooperate before the AO hence, these we find were rightly dismissed by the CIT(A) considering the record.
12. On a consideration of the record and the submissions, we find ourselves in agreement and concur with the finding of the CIT(A) and hold that the assessee admittedly did not participate in the proceedings before the AO either fairly or completely. However, while so holding we are also live to the submissions of the assessee in as much as for want of proper representation/ shortcomings etc. by a duly appointed Representative the assessee should not be made to suffer. It is seen that ld. CIT(A) noticing that the submission was unsupported by an Affidavit of the AR appointed has dismissed the bald argument. Considering the same, we hold that while the First Appellate Authority was justified to dismiss the bald plea, at the same time, being live to the practical difficulties of the assessee also in obtaining such an affidavit from its counsel, we deem it appropriate presently to dispense with such a requirement. However, the said observation, it is hoped is treated by the assessee with full knowledge and awareness of the seriousness of the consequences if the filing of the affidavit of its earlier A.R. is insisted upon by an adjudicating authority. Such a requirement can put the assessee to all the possible perils of being made answerable to a counter submission by its representative that full facts were never made available by the assessee for effective representation. We would like to make it clear that the assessees, even though it is a government authority cannot be permitted to abuse the process of law. Bald unsupported excuses of blaming its AR without first satisfying the adjudicating authority that all necessary details for compliances were always provided to the counsel is a requirement which cannot be summarily overlooked. It is obvious that a counsel can make representation on behalf of an assessee only if all details are made available by the assessee to its C.A./counsel. Infact ideally an affidavit to the said extent would be the foremost primary fact on which we would first insist to be demonstrated. We are of the firm view that the responsibility of the assessee does not end by merely appointing a Counsel. The assessee necessarily needs to ensure and make available all necessary informations to its counsel for enabling him to participate effectively in the hearing. However, in view of the peculiar facts of the present case, considering the oral undertaking given we do not insist on an affidavit of the assessee. Having expressed our displeasure on the lax attitude evident on record, accepting the oral undertaking given, we deem it appropriate to direct a remand. At the same time at this stage we deem it necessary to highlight that a Government Corporation is like any other assessee before the tax authority and cannot be allowed to plead that on this count it be given a preferential treatment and be allowed to escape the responsibilities of representing their case before the other governmental authorities including the tax authorities. The rigors of non-compliances with the requirements of the Statute are same for all assessees. We make it clear that merely because the assessee is a Government authority, it itself is no reason for the authority to act in an irresponsible and negligent manner. Participation in the proceedings before the Tax Authorities, it is expected, be given a high priority always, specially so by the Government authorities which exist and function for the benefit of the State. Accordingly, with the said observations, the issue is restored back to the Assessing Officer. Said order was pronounced in the Open Court in the presence of the parties.
14. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 24th May,2022.
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