JASKARAN SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) This order shall dispose of CWP Nos. 4471 and 4487 of 2014 as according to the learned counsel for the petitioner, the issue involved in both the petitions is identical. However, the facts are being extracted from CWP No. 4471 of 2014. Writ Petitions have been filed by the petitioner under Article 226 of the Constitution of India for quashing the order dated 30.3.2009 passed by the Commissioner of Income Tax (CIT) and order dated 03.12.2013 passed by Commissioner of Income Tax (Appeals) [CIT(A)], Annexures P.4 and P.6 respectively. Direction has also been sought to respondent No. 3 to decide the appeal of the petitioner on merits.

(2.) Briefly, the facts as narrated in CWP No. 4471 of 2014 are that the petitioner is an income tax assessee. For the assessment year 2005-06 the petitioner filed his income tax return declaring income of Rs. 49,886/- which included business income from M/s King International (Marriage Palace) in the shape of salary and interest. In the returns, agricultural income of Rs. 4,68,527/- was also declared. In the earlier years also, returns were filed declaring agricultural income as also professional income which was in the shape of interest and salary received. The said returns had been accepted by the department. The case of the petitioner was taken up for scrutiny. The income tax cases of the petitioner were being handled by Satish Vijay and Company-CA. The petitioner being an agriculturist was not aware of the legal technicalities and hence a manager Mr. Hardial Singh had been employed to look after the affairs of the petitioner. The said notices were either served on the manager or were handed over to him who further handed over the same to the CA. The CA did not attend the proceedings. The manager also never informed the petitioner. Respondent No. 4 passed an ex parte order dated 31.10.2007, Annexure P.1. In the said order, the agricultural income was disallowed and addition of Rs. 5,50,000/- was made to the income. This order was also served upon the manager. The manager never informed the petitioner. Respondent No. 4 vide order dated 16.4.2008 imposed penalty under Section 271(1)(c) of the Act. This order was also served on the manager who did not inform the petitioner. The petitioner came to know about the huge demand created by the ex parte order and penalty when summons were served on him in 2008. As per the advice received, the petitioner moved a revision petition, Annexure P.2 on 1.8.2008 under section 264 of the Act. The petitioner also filed affidavit dated 11.11.2008, Annexure P.3 explaining the position that due to negligence of the CA, the proceedings culminated in an ex parte order. According to the petitioner, he is an agriculturist and own about 25 acres of land. The return of M/s King International was also filed to show that it was a partnership firm and the petitioner was only a partner getting salary and interest whereas the Assessing officer had treated the petitioner as proprietor of M/s King International. Vide order dated 30.3.2009, Annexure P.4, respondent No. 2 dismissed the revision petition. Aggrieved by the order, the petitioner filed appeal against the assessment order alongwith the application for condonation of delay before the Commissioner of income Tax (Appeals) [CIT(A)]. The said appeal was dismissed by CIT(A) vide order dated 3.12.2013, Annexure P.6, holding that since the order of the assessment had merged into order of revision, he had no jurisdiction and hence no appeal lies. Hence the present petitions.

(3.) Learned counsel for the petitioner argued that order dated 30.3.2009 passed by CIT under Section 264 of the Act was unsustainable. It was further submitted that it was on the advice of the counsel that an appeal was filed before the CIT(A) against the order of assessment which was dismissed by him vide order Annexure P.6 dated 03.12.2013 as not maintainable. Relying upon judgment of the Hon'ble Apex Court in Rafiq and another v. Munshilal and another, 1981 AIR(SC) 1400 it was urged that on account of default or inaction of the counsel, the party should not be made to suffer.