Shri. Krishna Sawant, Pune V. Income-tax Officer, Ward - 10(4), Pune

ITA 1252/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1719 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A R SATHYANARAYANAN
• Keywords: Document seized; Opportunity of being heard; Principle of natural justice; Documents seized
• Section: 143(3); 131

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO, AM . / ITA NO.1252/PUN/2018 / ASSESSMENT YEAR : 2009-10 SHRI KRISHNA SAWANT, FLAT NO.14, SIDDHI VILLA, AKURDI PRADHIKARAN, PUNE-411044. PAN : BDBPS6239J . /APPELLANT VS. ITO, WARD-10(4), PUNE. . / RESPONDENT / APPELLANT BY : SHRI A.R. SATHYANARAYANAN / RESPONDENT BY : SHRI RAJESH GAWALI / DATE OF HEARING : 25.02.2019 / DATE OF PRONOUNCEMENT: 18.03.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-8, PUNE DATED 26.04.2018 FOR THE ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THE HONOURABLE COMMISSIONER OF INCOME-TAX (A)-8 PUNE, HAS ERRED IN SAYING THAT THE APPELLANT IS NOT INTERESTED IN PURSUING THE APPEAL ESPECIALLY WHEN NO NOTICE AS MENTIONED BY HIM AS ISSUED ON 05.12.2017 AND 06.04.2018 WAS EVER SERVED ON THE ASSESSEE. 2. THE HONOURABLE COMMISSIONER OF INCOME-TAX (A)-8 HAS NOT DISCUSSED IN HIS ORDER AS TO DATE ON WHICH THE NOTICE SERVED AND THE PROOF OF SERVICE THEREON. 3. THE NOTICE OF FIXING THE APPEAL FOR HEARING SHOULD HAVE BEEN SERVED THROUGH EMAIL ID OF APPELLANT , AS THE APPEAL WAS FILED ONLINE AS PER PROVISION OF LAW AND THE E-MAIL ID OF THE APPELLANT WAS AVAILABLE BEFORE HIM. THE ORDER PASSED BY THE HONOURABLE COMMISSIONER OF INCOME-TAX (A)-8 SUFFERS FROM IMPROPER SERVICE AND THEREFORE IT IS AGAINST THE NATURAL JUSTICE. HENCE THE ORDER PASSED DESERVES TO BE DISMISSED ON THIS GROUND ALONE BEING AGAINST THE PRINCIPLE OF FAIR TRIAL. 4. THE HONOURABLE COMMISSIONER OF INCOME-TAX (APPEAL)-8 HAS ON ERRONEOUS APPRECIATION OF FACTS UP HELD THE ADDITION OF RS.5,44,000/- U/S.69A MADE BY THE ASSESSING OFFICER, BY HOLDING THAT THE APPELLANT CANNOT DEMAND CROSS EXAMINATION OF SHRI RAJKUMAR AGARWAL, AS MATTER OF RIGHT, IS PALPABLY ITA NO.1252/PUN/2018 - 2 - WRONG, ESPECIALLY WHEN THE PERSON WHO DEPOSED THE ADVERSE STATEMENT AGAINST THE APPELLANT, HAS DEPOSED BEFORE DIFFERENT AUTHORITY, UNDER DIFFERENT CIRCUMSTANCES. HE WAS NOT ASSESSING OFFICER AND ALSO THAT STATEMENT MADE BY THIRD PARTY IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. THEREFORE THE ADDITIONS MADE U/S.69A BE QUASHED. 5. THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEAL)-8 OUGHT TO HAVE HELD THAT THE PROCEEDINGS BEFORE THE INVESTIGATING AUTHORITIES AND THE ASSESSING AUTHORITIES ARE DIFFERENT AND THEREFORE THE APPELLANT SHOULD HAVE BEEN ALLOWED TO CROSS EXAMINE THE PERSON RAJKUMAR AGARWAL ON THE BASIS WHOSE STATEMENT THE SAID ADDITION U/S.69A WAS MADE. BESIDES THE ASSESSING OFFICER HAS NOT VERIFIED INDEPENDENTLY THE SEIZED DOCUMENTS TO CONFIRM THE CONTENTS OF THE SEIZED DOCUMENT. 6. THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEAL)-8 OUGHT TO HAVE ASCERTAINED WHETHER THE ASSESSING OFFICER HAS MADE INDEPENDENT SCRUTINY OF BOOKS OF ACCOUNTS SEIZED FROM THE SAID RAJKUMAR AGARWAL, BEFORE RELYING ON THE STATEMENT DEPOSED BY HIM. THE ADDITION WAS MADE BY THE ASSESSING OFFICER UNDER SECTION 69A OF INCOME-TAX ACT RELYING ONLY ON THE THIRD PARTYS STATEMENT WITHOUT ANY CORROBORATIVE EVIDENCE SUFFERS FROM FACTUAL INFIRMITY AND THEREFORE THE SAME SHOULD HAVE BEEN DISMISSED. 7. THE HONOURABLE CIT(A) SHOULD HAVE HELD THAT THE STATEMENT MADE BEFORE THE DDI (UNIT II) BY THE ASSESSEE APPELLANT, BEING A DIFFERENT AUTHORITY AND THAT TOO WITHOUT GIVING ENOUGH TIME TO INSPECT THE RECORDS OF THE DEPOSER DOES AMOUNT TO DENIAL OF FAIR OPPORTUNITY. 8. THE APPELLANT PRAY THAT THE ADDITIONS OF RS.5,44,000/- U/S.69A OF THE INCOME TAX ACT, 1961, MADE BY THE ASSESSING OFFICER AND UPHELD BY THE HONBLE COMMISSIONER OF INCOME-TAX (APPEAL)-8 BE DELETED. 9. SINCE THE HONBLE COMMISSIONER OF INCOME-TAX (A)-8 HAS PASSED THE ORDER CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER, WITHOUT GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE, THE ASSESSEE COULD NOT RAISE ANY ADDITIONAL GROUND DURING THE COURSE OF HEARING . HENCE THE ASSESSEE-APPELLANT SEEK LEAVE OF THE HONBLE TRIBUNAL TO ADD ANY ADDITIONAL GROUND BEFORE IT. 10. THE ASSESSEE-APPELLANT CRAVES PERMISSION TO ADD AND ALTER ANY OF THE GROUNDS OF THE APPEAL AT ANY STAGE BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL. 3. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A SALARIED EMPLOYEE AND FILED HIS RETURN OF INCOME ON 27.07.2009 DECLARING TOTAL INCOME OF RS.3,03,190/-. THIS IS A CASE OF REASSESSMENT MADE U/S 143(3) R.W.S. 147 OF THE ACT. THE ASSESSING OFFICER MADE AN ADDITION OF RS.5,44,000/- ON ACCOUNT OF UNEXPLAINED MONEY U/S 69A OF THE ACT. THE CONTENTS OF PARAS 3 TO 5 OF THE ASSESSMENT ORDER ARE RELEVANT IN THIS REGARD. IN PARA 4 OF THE ASSESSMENT ORDER, THERE IS A DISCUSSION ABOUT THE PRAYER FOR GRANTING OF OPPORTUNITY TO CROSS-EXAMINE SHRI RAJKUMAR AGARWAL AND THE REQUEST OF THE ASSESSEE WAS DENIED ON THE REASONING THAT THE SAID CASH DEPOSIT OF RS.5,44,000/- WAS ADMITTED BY THE ASSESSEE U/S 131 OF THE ACT ON 13.06.2014. THE ASSESSING OFFICER MENTIONED THAT THE ASSESSEE SHOULD HAVE ASKED FOR SUCH CROSS-EXAMINATION, WHEN THE MATTER WAS BEING DEALT ITA NO.1252/PUN/2018 - 3 - WITH BY THE OFFICE OF THE DDIT (INV.), UNIT-II(1), PUNE. EVENTUALLY, NO CROSS- EXAMINATION WAS GIVEN TO THE ASSESSEE AND THE ADDITION WAS MADE AND THE SAME WAS CONFIRMED BY THE CIT(A) AS PER DISCUSSION GIVEN IN PARA 10 OF HIS ORDER. ON THIS ISSUE OF CROSS-EXAMINATION, THE CIT(A) MENTIONED THAT THE ASSESSEE DID NOT ASK FOR THE CROSS-EXAMINATION AT THAT TIME WHEN THE STATEMENT OF SHRI RAJKUMAR AGARWAL WAS SHOWN TO HIM. 4. AGGRIEVED WITH THE SAID ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE ABOVE EXTRACTED GROUNDS. 5. BRINGING OUR ATTENTION TO GROUND NO.9, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROPER OPPORTUNITY WAS NOT GRANTED BY THE CIT(A). FURTHER, REFERRING TO THE ORDERS OF THE AUTHORITIES BELOW, LD. COUNSEL SUBMITTED THAT GRANTING OF OPPORTUNITY OF CROSS-EXAMINATION WITH SHRI RAJKUMAR AGARWAL IS REQUIRED IN THE INTEREST OF JUSTICE. HE ALSO ARGUED THAT THE ENTIRE ADDITION WAS MADE MERELY ON THE BASIS OF STATEMENT OF SHRI RAJKUMAR AGARWAL U/S 131 OF THE ACT. THE ADDITION CANNOT BE MADE BASED ON HIS STATEMENT AT THE BACK OF THE ASSESSEE. FURTHER, HE RELIED ON THE ARGUMENTATIVE GROUNDS EXTRACTED ABOVE. 6. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUBMITTED THAT THE ASSESSEE DID NOT AVAIL THE BENEFIT OF CROSS-EXAMINATION WHEN AN OPPORTUNITY WAS GRANTED TO HIM. 7. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE OF REMANDING THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION OF THE ISSUE AFTER GRANTING THE BENEFIT OF CROSS-EXAMINATION OF SHRI RAJKUMAR AGARWAL AND ALSO A PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS IS AN ADMITTED FACT THAT THE ASSESSEE WAS NOT GIVEN THE BENEFIT OF CROSS- EXAMINATION OF SHRI RAJKUMAR AGARWAL, WHO GIVEN AN ADVERSE STATEMENT/EVIDENCE AGAINST THE ASSESSEE. IN OUR CONSIDERED VIEW, NON- ITA NO.1252/PUN/2018 - 4 - AVAILING OF OPPORTUNITY OF CROSS-EXAMINATION AT A PARTICULAR POINT OF TIME CANNOT DISQUALIFY THE ASSESSEE FROM ASKING FOR THE SAME AT THE LATER TIME. THE STATEMENT OF SHRI RAJKUMAR AGARWAL WAS THE STRONG REASON FOR THE ASSESSING OFFICER FOR MAKING THE IMPUGNED ADDITION. FURTHER, WE FIND THAT THE NOTICES FROM THE OFFICE OF THE CIT(A) WERE NOT PROPERLY SERVED ON THE ASSESSEE. THE SAID LAPSE ON PART OF THE CIT(A) LED TO THE EX-PARTE PROCEEDINGS BEFORE THE CIT(A). WITHOUT GOING TO THE MERITS OF THE ADDITION ON THIS LEGAL ISSUE OF CROSS-EXAMINATION OF SHRI RAJKUMAR AGARWAL AND GRANTING A PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WE ARE OF THE OPINION THAT THE MATTER SHOULD BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THE ASSESSING OFFICER SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO GRANT THE BENEFIT OF CROSS-EXAMINATION OF SHRI RAJKUMAR AGARWAL. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 18 TH DAY OF MARCH, 2019. SD/- SD/- (SUSHMA CHOWLA) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; DATED : 18 TH MARCH, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-8, PUNE; 4. THE PR. CCIT, PUNE; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY SENIOR PRIVATE SECRETARY , / ITAT, PUNE