Case Law Details
Karnataka Sangha Vs ITO (ITAT Mumbai)
Introduction: The case of Karnataka Sangha Vs ITO saw the Income Tax Appellate Tribunal (ITAT), Mumbai, making a noteworthy ruling that the National Faceless Appeal Centre (NFAC) cannot adjudicate appeals that have been previously disposed of by the Commissioner of Income Tax (Appeals) (CIT(A)). In addition, the ITAT ordered the Department to pay the cost incurred by the appellant due to the duplication of appeals.
Analysis: In this case, the appellant, Karnataka Sangha, had previously had its appeal for Assessment Year 2013-14 adjudicated and allowed by the CIT(A). Despite this, the appeal was taken up once more by the CIT(A) in an ex-parte proceeding. The ITAT noted that this duplication of proceedings not only caused unnecessary inconvenience but also imposed a financial burden on the appellant. Recognising this as an example of the Department’s negligence, the ITAT ruled in favour of Karnataka Sangha, stating that there was no cause for a second order in the same appeal. As a remedy, it ordered the Department to cover the appellant’s litigation costs amounting to Rs. 10,000/-.
Conclusion: The ITAT Mumbai’s ruling in the case of Karnataka Sangha Vs ITO sends a strong message about the importance of ensuring efficient and fair handling of appeals. By ruling that the NFAC cannot adjudicate appeals already disposed of by the CIT(A), and by ordering the Department to pay the cost due to the duplication of proceedings, the tribunal has set a significant precedent for future cases.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 08/02/2023, for the Assessment Year 2013-14.
2. Shri Bhupendra Shah appearing on behalf of the assessee submitted that this appeal by the assessee is against the order of CIT(A) dismissing appeal of the assessee in an ex-parte proceedings. Narrating sequence of events the ld. Authorized Representative for the assessee submitted that against the addition made in assessment order dated 09/02/2016 passed u/s. 143(3) Income Tax Act,1961 [in short ‘the Act’] for assessment year 2013-14, the assessee had filed an appeal before the CIT(A)-7. The said appeal was decided by the Commissioner of Income Tax (Appeals)-7 [in short CIT(A) -7] vide composite order dated 22/01/2018 for the Assessment Years 2011-12, 2012-13, 2013-14 and 2014-15. The said appeal of assessee for Assessment Year 2013-14 was allowed by the CIT(A). The ld. Authorized Representative for the assessee furnished copy of the order by CIT(A)-7. The ld. Authorized Representative for the assessee pointed that CIT(A) has erred in again taking up the appeal that was already decided and pass second order in an ex-parte proceedings. Once the appeal of the assessee for Assessment Year 2013-14 has been decided by the CIT(A) -7, there was no occasion for the CIT(A) to pass the second order in the same appeal. The ld. Authorized Representative for the assessee submitted that because of negligence of the Department the assessee is forced into litigation and pay Rs.10,000/- towards filing fee of an appeal before the Tribunal, apart from engaging a Counsel. The ld. Authorized Representative for the assessee prayed for imposing cost on the Department.
3. Shri Shambhu Yadav representing the Department fairly admitted that the appeal of the assessee for Assessment Year 2013-14 was earlier decided by the CIT(A) -7 vide order dated 23/01/2018. The second order in same appeal has been passed inadvertently. The confusion occurred for the reason that the first appeal was decided in physical mode, subsequently, Faceless System was introduced for deciding the appeals and the second order in the case of assessee for Assessment Year 2013-14 was passed in faceless regime.
4. Both sides heard. The short contention of the assessee is that appeal of the assessee for Assessment Year 2013-14 was adjudicated by the CIT(A) -7 vide order dated 22/01/2018 the same appeal of the assessee was again taken up for adjudication in faceless mode by National Faceless Appeal Centre and was decided in an ex-parte proceedings against the assessee. It is absolute slackness on the part of Department to fix an appeal for hearing that has already been disposed of. The assessee has been forced into litigation causing inconvenience and financial burden. It is a fit case for levy of cost on the Department. We direct the Department to pay cost Rs.10,000/- i.e. equivalent to the fee paid by the assessee for filing appeal before the Tribunal. The cost be paid in accordance with Rule 32A(2) of the Income Tax (Appellate Tribunal) Rules, 1963, within three months from the date of receipt of order.
5. In the result, impugned order is set-aside and appeal of the assessee is allowed.
Order pronounced in the open court on Wednesday the 31st day of May, 2023.
