Kamal Sharma, Delhi V. ITO, New Delhi

ITA 1440/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6857 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 10-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER I.T.A .NO.-1668/DE L/2015 (ASSESSMENT YEAR-2004- 05) OM SHUBHAM INV. & FINANCE (P.) LTD., 109, GUPTA TOWER, AZADPUR, NEW DELHI-110033. PAN-AAACO1541K (APPELLANT) VS ITO, WARD-13(4), NEW DELHI (RESPONDENT) APPELLANT BY SH. SALIL AGARWAL, & SH.SHAILESH GUPTA, CA RESPONDENT BY MS. RISHPAL BEDI, SR.DR ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 23.01.2015 OF CIT(A) -7, DELHI PERTAINING TO 2004-05 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND AS PER THE CIRCUMSTANC ES OF THE CASE, BOTH THE LOWER AUTHORITIES I.E. AO & CIT(A), HAVE ERRED IN ASSESSING THE INCOME OF THE APPELLANT AT RS.11,14,060/- AS AGAINS T RETURNED INCOME OF RS.1,14,060/-. AS SUCH THE AGGREGATE ADDITIONS M ADE OF RS.10,00,000/- MAY PLEASE BE DELETED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE LD CIT(A) HAVE ERRED IN CONFIRMING THE ADDITION AGGREGATING TO RS.10,00,000/- MADE BY THE AO TO THE RETURNED INCOM E OF THE APPELLANT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO HAD IGNORED THE MATERIAL ON RECORD AND THE LD. CIT (A) HAS ERRED IN WRONGLY UPHOLDING THE ASSESSMENT ORDER. AS SUCH ADD ITION OF RS.10,00,000/- MAY PLEASE BE DELETED. DATE OF HEARING 11.01.2016 DATE OF PRONOUNCEMENT 10.02.2016 I.T.A .NO.-1668/DEL/2015 PAGE 2 OF 4 3. THAT THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN MAKING THE ABOVE ADDITION INSPITE OF THE FACT THAT ALL THE DETAILS R EGARDING THE IDENTITY, CREDIT-WORTHINESS & GENUINENESS OF TRANSACTION WAS FILED DURING THE COURSE OF PROCEEDINGS. AS SUCH, THE PROCEEDINGS MAY KINDLY BE HELD BAD IN LAW. 4. THAT THE ADDITION MADE OF RS.10,00,000/- IS AR BITRARY AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND PROVIS IONS OF LAW. THEREFORE, ALL ADDITIONS MADE MAY KINDLY BE DELETED IN ORDER TO AVOID CONTRAVENTION TO PRINCIPLE OF NATURAL JUSTICE. 5. THAT THE PROCEEDINGS INITIATED U/S 148 OF THE AC T SUFFERED FROM LEGAL AND TECHNICAL INFIRMITIES AND NO PROPER OPPOR TUNITY, MUCH LESS A REASONABLE OPPORTUNITY WAS PERMITTED. THE OBSERVA TIONS CONTAINED IN THE ASSESSMENT ORDER ARE AVERSE TO FACT POSITION AND ARE CONTRARY TO MATERIAL ON RECORD. AS SUCH, THE ASSESSMENT MAY BE HELD BAD IN LAW. 6. WE CRAVE TO ADD, ALTER, DELETE OR MODIFY OR WI THDRAW ANY OF ABOVE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. THE LD.AR AT THE TIME OF HEARING REQUESTED A PAS S OVER STATING THAT THE SENIOR COUNSEL IS BEFORE THE HONBLE HIGH COURT. H OWEVER, CONSIDERING THE FACTS THAT THE IMPUGNED ORDER IS AN EX-PARTE ORDER AND BY GROUND NO.5 THE ASSESSEE IS AGGRIEVED BY THE LACK OF OPPORTUNITY TH E LD. AR WAS REQUIRED TO ARGUE. 2.1. THE RECORD SHOWS THAT THE CIT(A) AFTER RECORDI NG THE VARIOUS DATES FOR WHICH NOTICES HAD BEEN SENT WHEREIN AT TIMES APPEAR ANCE WAS PUT IN BY MERELY SEEKING ADJOURNMENTS AND EFFECTIVE COMPLIANCE WAS N OT MADE THE LD. CIT(A) RECORDS THAT HE IS NOT GIVING ANY FURTHER OPPORTUNI TY AND COMPLETING THE CASE EX-PARTE ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. 2.2. THE LD. AR ON GOING THROUGH THE RELEVANT FINDI NG STATED THAT IN THE ABSENCE OF HIS SENIOR COUNSEL HE MAY NOT BE ABLE TO ASSIST AS TO WHY THE ASSESSEE REMAINED UNREPRESENTED BUT AN OPPORTUNITY TO ADDRESS THE ISSUES WAS SOUGHT. IT IS SEEN THAT THE ASSESSEE RETURNED AN INCOME OF RS.1,14,060/- BY WAY OF FILING ITS RETURN ON 29.10.2004. BY ISSU ANCE OF NOTICE U/S 148 DATED I.T.A .NO.-1668/DEL/2015 PAGE 3 OF 4 25.03.2011 IT WAS SELECTED FOR SCRUTINY ASSESSMENT AS A RESULT OF SEARCH ON THE PREMISES OF SH.TARUN GOYAL, CA. ACCORDINGLY AN AD DITION OF RS.10,00,000/- WAS MADE IN THE CASE AT HAND BY THE ASSESSMENT ORD ER PASSED U/S 147/143(3). THE ISSUE WAS CHALLENGED IN APPEAL BEFO RE THE CIT(A). THE RECORD SHOWS THAT THE OPPORTUNITIES PROVIDED WERE NOT AVAI LED OF. CONSIDERING THE FACT THAT THE GRIEVANCE STILL PERSISTS AND TAKING NOTE O F THE FACT THAT RIGHT TO BE HEARD IS AN IMPORTANT RIGHT TO WHICH A PARTY WHO IS FACED WITH AN ADVERSE VIEW IS ENTITLED WE DEEM IT APPROPRIATE TO PROVIDE AN OP PORTUNITY AUDI ALTERAM PARTEM IS ONE OF THE MOST FAMOUS AND CELEBRATED RULE OF N ATURAL JUSTICE. THE PRINCIPLES OF NATURAL JUSTICE ARE THOSE WHICH HAVE BEEN LAID OUT BY THE COURTS AS BEING THE MINIMUM PROTECTION OF THE RIGHTS OF AN INDIVIDUAL AGAINST THE ARBITRARY PROCEDURE THAT MAY BE ADOPTED BY A JUDICI AL, QUASI-JUDICIAL AND ADMINISTRATIVE AUTHORITY WHILE MAKING AN ORDER AFFE CTING THOSE RIGHTS. A CAREFUL PERUSAL OF THE CONSISTENT JUDGEMENTS OF THE APEX COURT WOULD SHOW THAT IT HAS CONSISTENTLY BEEN HELD THAT THE RULES O F NATURAL JUSTICE ARE NOT EMBODIED RULES AND THE SAID PHRASE IS NOT AND CANNO T BE CAPABLE OF A PRECISE DEFINITION. THE UNDERLYING PRINCIPLE BEING THAT NO ONE SHOULD BE CONDEMNED UNHEARD. ACCORDINGLY AFTER HEARING THE PARTIES BEF ORE THE BENCH, IT IS CONSIDERED APPROPRIATE TO SET ASIDE THE IMPUGNED OR DER AND RESTORE THE ISSUE BACK TO THE FILE OF THE LD.CIT(A) DIRECTING HIM TO DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD. 3. WHILE SO RESTORING WE HASTEN TO ADD THAT IT IS H OPED THAT THE OPPORTUNITY SO PROVIDED IS NOT ABUSED BY THE ASSESSEE AS ON FAI LURE TO MAKE EFFECTIVE I.T.A .NO.-1668/DEL/2015 PAGE 4 OF 4 REPRESENTATION WE MAKE IT CLEAR THAT THE LD. CIT(A) WOULD BE AT LIBERTY TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD. AR IN THE FACTS OF THE PRESENT CAS E HAS SUBMITTED THAT THE ASSESSEE SHALL FULLY PARTICIPATE IN THE PROCEEDINGS BEFORE THE CIT(A) IF THE OPPORTUNITY IS SO PROVIDED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 OF FEBRUARY, 2016. SD/- SD/- (L.P.SAHU) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10/02/2016 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI