M/s Huma Knitwears, Ludhiana V. ITO, Ludhiana

ITA 1142/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2463 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 23-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Gift; Opportunity of being heard; Principle of natural justice; Assessment record; Right to appeal
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 1142/CHD/2014 ASSESSMENT YEAR: 2007-08 M/S HUMA KNITWEARS, VS. THE ITO, WARD III(2), LUDHIANA LUDHIANA PAN NO. AAEFH1215Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. GAURAV SHARMA RESPONDENT BY : SH. S.K.MITTAL DATE OF HEARING : 04.01.2016 DATE OF PRONOUNCEMENT : 07.01.2016 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- II, LUDHIANA DATED 9.10.2014 RELATING TO ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT ON THE FACTS AND THE CIRCUMSTANCES O F THE CASE, THE ORDER OF LEARNED CIT(A) IS BAD IN LAW. 2. THAT THE WORTHY COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFF ICER IN CONFIRMING THE ADDITION OF RS. 16,90,000/- MADE BY HIM ON ARB ITRARY AND ESTIMATED BASIS WITHOUT GIVING ANY EVIDENCE AND WIT HOUT CONSIDERING 2 THE WRITTEN AND ORAL SUBMISSIONS MADE BY THE APPELL ANT FIRM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. THAT THE WORTHY COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED IN DECIDING THAT THE GENUINENESS OF THE ADDITIONS M ADE TO PARTNERS' CAPITAL ACCOUNT DURING THE YEAR, AMOUNTING TO 16,70,000/-, HAS NOT BEEN PROVED, EVEN WHEN THE GIFT DEEDS AND THE SETTLEMENT CERTIFICATES ARE ON ASSESSMENT RECORDS. 4. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE WORTH Y COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DECIDIN G THAT UNEXPLAINED ADDITIONS TO PARTNERS' CAPITAL ACCOUNTS AMOUNTING TO 16,70,000/- CAN BE ADDED TO THE TOTAL INCOME OF THE APPELLANT FIRM. 5. THAT THE WORTHY COMMISSIONER OF INCOME TA X (APPEALS) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 20.000/- ON ACCOUNT OF THE REASON THAT THE ASSESSING OFFICER COULD NOT BE ABLE TO VERIFY THE CLOSING STOCK ON ACCOUNT OF NON-MAINTENANCE OF THE STOCK RE GISTER BY THE APPELLANT COMPANY. 3. IN THIS CASE, THE ASSESSING OFFICER FRAMED THE A SSESSMENT ORDER U/S 143(3) OF THE ACT ON 31.12.2009. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER MADE CERTAIN ADDITIONS / DISALLOWANCES. THE ASSESSING OF FICER CHALLENGED THE ORDER OF THE ASSESSING OFFICER BY WAY OF APPEAL BEFORE THE C IT(A). THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY PASSING AN EX-PARTE ORDER. THE RELEVANT OBSERVATIONS OF THE CIT(A) ARE AS UNDER:- 3. NOTICE FOR HEARING IN THIS CASE WAS ISSUE D ON 18.12.2013 AND THE CASE WAS FIXED FOR HEARING ON 15.01.2014. NONE ATTENDED. ANOTHER NOTICE WAS ISSUED ON 20.01.2014 AND CASE WAS FIXED FOR HEARING ON 04.02.2014. ON APPELLANT'S REQUEST THE CASE WAS ADJ OURNED TO 13.02.2014 AND THEN TO 26.02.2014. ON 26.02.2014 N ONE ATTENDED. ANOTHER NOTICE WAS ISSUED ON 05.03.2014 FIXING TH E CASE FOR HEARING ON 19.03.2014. ON THE REQUEST OF THE AR OF THE APPE LLANT, THE CASE WAS ADJOURNED TO 09.04.2014, 29.09.2014, 04.06.2014 AND FINALLY TO 20.06.2014. ON 18.06.2014 LETTER WAS RECEIVED FROM THE AR OF THE 3 APPELLANT WITHDRAWING THE POWER OF ATTORNEY. ACCORD INGLY ANOTHER NOTICE WAS ISSUED ON 23.06.2014 WHICH WAS DULY SERV ED ON THE APPELLANT IN PERSON THROUGH NOTICE SERVER ON 24.06. 2014. THE CASE WAS FIXED FOR HEARING ON 21.07.2014. NONE ATTENDED. ANO THER NOTICE WAS ISSUED ON 08.09.2014 FIXING THE CASE FOR HEARING ON 17.09.2014. ONCE AGAIN NONE ATTENDED. ANOTHER NOTICE GIVING OPPORTUN ITY WAS ISSUED ON 18.09.2014. THE NOTICE WAS DULY SERVED IN PERSON TH ROUGH NOTICE SERVER ON 18.09.2014, THE CASE WAS FIXED FOR HEARING ON 07 .10.2014. ONCE AGAIN NONE ATTENDED. IN THE ABSENCE OF ANY REPLY FR OM THE APPELLANT, THE MATTER IS BEING DECIDED EX-PARTY. THE MAXIM VIG ILANTIBUS NON- DERMIENTIBUS JURA SUBVENUNT I.E. ''THE LAW ASSIST THIS WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIGHTS' IS APPLI CABLE IN THIS CASE. 4. FIRSTLY, WE WILL DECIDE GROUND NO.2 OF THE APPEA L, WHICH GOES TO THE ROOT OF THE MATTER. AFTER CONSIDERING THE ASSESSEES SU BMISSIONS, WE ARE OF THE CONSIDERED OPINION THAT LD. CIT(A) HAS NOT AFFORDED AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE AP PEAL OF THE ASSESSEE FILED BEFORE HIM. IN THE CASE OF RADHIKA CHARAN BANERJEE V SAMBALPUR MUNICIPALITY, AIR 1979 ORI 69, WHEREIN THE HON'BLE ORISSA HIGH COURT HELD THAT A RIGHT OF APPEAL WHEREVER CONFERRED INCLUDES A RIG HT OF BEING AFFORDED AN OPPORTUNITY OF BEING HEARD, IRRESPECTIV E OF THE LANGUAGE CONFERRING SUCH RIGHT. THAT IS A PART AND PARCEL OF THE PRINCI PLE OF NATURAL JUSTICE. WHERE AN AUTHORITY IS REQUIRED TO ACT IN A QUASI-JUDICIAL CAPACITY, IT IS IMPERATIVE TO GIVE THE APPELLANT AN ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE APPEAL. OPPORTUNITY OF HEARING DOES NOT ALWAYS NECE SSARILY MEAN GIVING A PERSONAL HEARING. A WRITTEN REPRESENTATION, IF COMP LETE AND ELABORATE IN ALL RESPECTS FULLY EXPLAINING THE POINTS OF VIEW OF THE APPELLANT, WHEN ACCEPTED MAY, IN SOME CASES, AMOUNT TO AFFORDING OPPORTUNITY OF H EARING. WHAT PARTICULAR RULE OF NATURAL JUSTICE SHOULD APPLY TO A GIVEN CASE MUS T ALSO DEPEND TO A GREAT EXTENT ON THE FACTS AND CIRCUMSTANCES OF THAT CAS E. IN THAT VIEW OF THE MATTER, IT WAS HELD THAT WHERE NO EFFECTIVE OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE 4 APPELLANT IN DISPOSING OF HIS APPEAL INSPITE OF HIS EXPRESS REQUEST THAT HIS COUNSEL SHOULD BE HEARD, THE ORDER MUST BE QUASHED. 5. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE, AND ALSO THE SETTLED LEGAL POSITION, WE THINK IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER IN TOTO AND REMAND THE MATTER TO THE LEARNED CIT (APPEALS) WITH THE DIRECTION TO DECIDE THE APP EAL OF THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE A ND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LE ARNED CIT (APPEALS) IS DIRECTED TO DECIDE THE APPEAL OF THE ASSESSEE P REFERABLY WITHIN FOUR MONTHS FROM THE DATE OF RECEIPT OF COPY OF THIS ORD ER. 6. AT THIS STAGE, WE ARE NOT OFFERING ANY COMMENTS ON THE MERITS OF THE CASE. 7. FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSE SSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.01.2016 SD/- SD/- ANNAPURNA MEHROTRA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 07 TH JANUARY, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR