Bhavya Construction Co vs. ACIT (Bombay High Court)

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INCOME TAX APPEAL NO. 1009 OF 2017
Bhavya Construction Co. … Appellant.
V/s.
Asst. Commissioner of Income Tax
Circle 21(1), Mumbai & Anr. …Respondents.
—
Dr. K. Shivaram, Advocate a/w. Ms. Neelam Jadhav,
Advocate for the Appellant.
Mr. Sham Walve, Advocate a/w. Mr. Pritesh Chatterjee
for Respondents.
—
CORAM : UJJAL BHUYAN AND
MILIND N. JADHAV,JJ.
DATE : JANUARY 30, 2020.
PC :
1 Heard Dr. K. Shivaram, learned senior counsel
for the Appellant / Assessee and Mr. Sham Walve,
learned standing counsel Revenue for the Respondents.
2 This Appeal has been preferred by the
Assessee under section 260A of the Income Tax Act
1961 (briefly, “the Act” hereinafter) against the order
dated 09.12.2016 passed by the Income Tax Appellate
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Tribunal, Bench “B”, Mumbai (“the Tribunal” for short) in
Income Tax Appeal No. 4390/Mum/2014 for the
assessment year 2007-08.
3 The Appeal has been preferred by the
Appellant on the following questions stated to be
substantial questions of law :
(a) Whether on the facts and in the
circumstances of the case and in law, the order
of the Tribunal is perverse inasmuch as it holds
that the projects of the Appellant were
approved much before 1 April 2004 without
adjudicating Ground Nos.1 and 2 as raised by
the Appellant on merit ?.
(b) Whether on the facts and in the
circumstances of the case and in law, the
amendment to section 80-IB(10)(b) vide
Finance (No.2) Act, 2004 that substituted
section 80-IB(10) as it stood then and relaxed
the condition imposed by section 80-IB(10)(b)
by introducing the proviso to section 80-IB(10)
(b) is clarificatory and retrospective in nature
and has retrospective operation ?.
(c) Whether on the facts and in the
circumstances of the case and in law, the order
of the Tribunal is perverse inasmuch as it does
not consider the ratios laid down in the case
laws of the co-ordinate benches of the Income
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Tax Appellate Tribunal, Mumbai against the
doctrine of `stare decisis’?.
(d) Whether on the facts and in the
circumstances of the case and in law, the order
of the Tribunal is perverse inasmuch as it
violates the principles of natural justice by
referring to and relying upon numerous case
laws that were not relied upon by the Revenue
during the course of the hearing and hence the
Appellant was given no opportunity to rebut or
distinguish the same ?.
4 In the proceedings held on 15.10.2019 this
Court, after noting the grievance of the Appellant, was
of the prima-facie view that the manner of disposing of
the Appeal by the Tribunal was not proper.
Accordingly, it was observed that the matter may be
remanded back to the Tribunal for a fresh hearing and
disposal in accordance with law.
5 Having regard to the observations made in
the order dated 15.10.2019 relevant portion of the
same is extracted hereunder :
“2. The basic grievance of the Appellant is
that the impugned order of the Tribunal has
been passed in breach of principles of natural
justice. This for two reasons, one the decisions
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relied upon by the Tribunal of its own (not cited
at the bar) in the impugned order were not
brought to the notice of the Appellant at any
time, before the passing of the impugned order.
This resulted in order adverse to the Appellant
without the Appellant having an opportunity to
address the Tribunal on the inapplicability of
the decisions to the facts of this case. Thus, in
effect an order without hearing. The second
reason is that the Tribunal did not deal with the
decisions relied upon by the Appellant in
support of its case. This even though the
impugned order records the decisions of its Coordinate
Benches relied upon by the Appellant.
This not dealing with the same by pointing out
how the decisions would not apply to the facts
of the case, leads to the order prima facie being
bad as an order without reasons.
4. Prima facie, this manner of disposing
appeals by the Tribunal is not expected of it
and cannot stand to the scrutiny of law and
justice. Thus, if the above contentions are not
shown by the Respondent as incorrect, rather
than admitting the appeal it may be
appropriate to set aside the impugned order
and restore the appeal to the Tribunal for fresh
disposal.”
6 Dr. Shivaram, learned counsel, has taken us
through the impugned order and submitted that the
Tribunal has referred to more than 50 judgments of
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various courts; not relied upon either by the assessee
or by the Revenue, to the great prejudice of the
assessee.
7 Mr. Walve, learned standing counsel Revenue
submitted that on similar issue this court has admitted
Income Tax Appeal No. 653 of 2012 (Ramesh Gunshi
Dedhia vs. Income Tax Officer) vide order dated
08.08.2014.
8 In response Dr. Shivaram, learned counsel for
the Appellant submits that there is a CBDT Notification
No. 2 of 2011 dated 05.01.2011 which clarifies that
projects covered by section 80IB(10) of the Income Tax
Act, 1961 would be eligible for deduction under the said
provision from the assessment year 2005-06 on-wards.
In Ramesh Gunshi Dedhia’s case this notification was
not available before the Tribunal as it was issued
afterwards. That was the reason why the Appeal has
been admitted by this court. He further submits that
in later assessment years Tribunal has relied upon
the said notification of the CBDT and granted relief to
the Appellant.
9 Be that as it may, having heard learned
counsel for the parties and having perused the
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impugned order passed by the Tribunal, we are of the
view that the impugned order is required to be set
aside for re-hearing of the appeal in accordance with
law after giving further opportunity of hearing to the
parties.
10 Accordingly, impugned order dated
09.12.2016 passed by the Tribunal in ITA No.
4390/Mum/2014 for the assessment year 2007-08 is set
aside and the matter is remanded back to the Tribunal
for fresh hearing and decision.
11 It is made clear that we have not expressed
any opinion on merit and all contentions are kept open.
12 Appeal is accordingly disposed of.
(MILIND N. JADHAV, J.) (UJJAL BHUYAN, J.)
…..
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