I.Jaherali, Salem V. ACIT, Salem

ITA 1509/CHNY/2015

• Counselvise Citation: 150921714 RSA 2015
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 25-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-06-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: S SRIDHAR
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL S M C BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.1509/MDS/2015 ' #$' / ASSESSMENT YEAR : 2008-09 SHRI I. JAHEERALI, PROP: J.A. ELECTRICAL ENGINEERING WORKS, 59/O, MEENAKSHI NAGAR, NEAR CENTRAL JAIL, SALEM 636 007. PAN : ADBPA 4307 L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, SALEM. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ()&' * + / RESPONDENT BY : SHRI A.B. KOLI, JCIT , # * -. / DATE OF HEARING : 25.09.2015 /0$ * -. / DATE OF PRONOUNCEMENT : 30.10.2015 / O R D E R THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DATED 30.04.2015 IN ITA NO.26/2015-16. THE APPEAL ARISES OUT OF THE ASSESSMENT 2 I.T.A. NO.1509/MDS/15 COMPLETED U/S 143(3) AND 250 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE ASSESSEE HAS RAISED A SOLE GROUND IN RESPECT OF NON- ACCEPTANCE OF CONFIRMATION LETTER OF CREDITOR M/S S RI NARAYANASAMY LORRY SERVICE, BY THE LD. CIT(APPEALS). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND IN THE BUSINESS OF CIVIL CONTRACTS, FILED THE INCOME-TAX RETURN ON 30.09.2008 ADMITTING TOTAL INCOME OF ` 6,49,037/- AND THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE AC T. FURTHER, THE CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS. ACCORDI NGLY, NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED DETAILS AND THE ASSESSEES REPRESENTATIVE APPEARED BEFORE THE ASSESSING AUTHOR ITY ON VARIOUS DATES AND PRODUCED BOOKS OF ACCOUNT FOR VERIFICATIO N AND EXAMINATION. THE ASSESSING OFFICER, UPON VERIFICAT ION OF BOOKS OF ACCOUNT AND HEARING THE SUBMISSIONS FROM TIME TO TI ME, COMPLETED ASSESSMENT BY ADDITION OF CLOSING STOCK AND ACCOUNT BALANCE OF SUNDRY CREDITOR M/S SRI NARAYANASAMY LORRY SERVICE ` 3,75,700/-. AS THE CREDITORS CONFIRMATION LETTER COULD NOT BE F ILED BEFORE THE ASSESSING OFFICER AND ALSO APPLYING THE PROVISIONS OF SECTION 3 I.T.A. NO.1509/MDS/15 40(A)(IA) OF THE ACT, DISALLOWED EXPENDITURE TOWARD S JCB HIRE CHARGES ` 52,424/- AND COMPLETED ASSESSMENT U/S 143(3) OF THE ACT WITH ASSESSED INCOME OF ` 11,79,086/- AND RAISED THE DEMAND. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(APPEALS), SALE M. THE LD. CIT(APPEALS) CONSIDERED THE INFORMATION ON RECORD, ON THE BASIS OF ASSESSMENT PROCEEDINGS AND DUE TO NON-APPEARANCE OF THE ASSESSEE ON VARIOUS DATES OF HEARING, HAS CONFIRMED THE ORDER OF THE A.O. BY DISMISSING THE APPEAL FOR NON-PROSECUTI ON. MEANWHILE, THE ASSESSEE HAS FILED A WRIT PETITION IN THE HIGH COURT OF JUDICATURE AT MADRAS IN W.P. NO.5637 OF 2015, AGAINST THE COMM ISSIONER OF INCOME TAX (APPEALS) AND THE ASSISTANT COMMISSIONER OF INCOME TAX, FOR QUASHING OF ORDER OF THE CIT(APPEALS) IN I TA NO.284/2010- 11 DATED 30.12.2014 AND TO PROVIDE ONE MORE OPPORTU NITY OF HEARING. IT WAS SUBMITTED BEFORE THE HON'BLE HIGH COURT THAT THE COMMISSIONER, IN EXERCISE OF POWERS CONFERRED ON HI M UNDER SECTION 251 OF THE ACT, MAY CONFIRM, VARY, REDUCE O R ENHANCE THE ORDER OF ASSESSMENT AS CONTEMPLATED UNDER SECTION 2 51(2) OF THE ACT AND LD. CIT(APPEALS) HAS NO POWER TO DISMISS TH E APPEAL FOR NON-PROSECUTION AND PLEADED IN THE INTEREST OF JUST ICE ONE MORE 4 I.T.A. NO.1509/MDS/15 OPPORTUNITY BE PROVIDED BEFORE THE CIT(APPEALS) FOR ADJUDICATION OF THE APPEAL. 5. HON'BLE HIGH COURT AFTER HEARING THE SUBMISSIONS OF THE COUNSELS, DISPOSED OF THE WRIT PETITION BY SETTING ASIDE THE APPELLATE ORDER DATED 30.12.2014 AND DIRECTED THE CIT(APPEALS ) TO TAKE UP HEARING OF THE APPEAL ON 24.04.2015. THE LD. CIT(A PPEALS), AS PER THE DIRECTIONS OF THE HON'BLE HIGH COURT IN WRIT PE TITION NO.5637 OF 2015 DATED 17.03.2015, HEARD THE CASE ON 24.04.2015 AND PASSED THE ORDERS BY PARTLY ALLOWING THE GROUNDS AND CONFI RMING ADDITION OF STOCK OF PURCHASE OF ELECTRICAL MATERIALS AS IT WAS AGREED IN THE COURSE OF ASSESSMENT. A CONFIRMATION LETTER OF CRE DIT BALANCE OF ` 3,75,700/- OF M/S SRI NARAYANASAMY LORRY SERVICE WA S FILED ALONG WITH WRITTEN SUBMISSIONS IN APPELLATE PROCEEDINGS. THE CIT(APPEALS) HAS REJECTED THE CONFIRMATION LETTER O N THE PRESUMPTION THAT THE SAME WAS AVAILABLE WITH THE AS SESSEE AND COULD NOT PRODUCE IN ASSESSMENT PROCEEDINGS AND CON FIRMED THE ADDITION MADE BY THE A.O. 6. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS) IN IT A NO.26/2015-16 DATED 30.04.2015, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL AND LD. AR ARGUED THAT THE CIT( APPEALS) HAS 5 I.T.A. NO.1509/MDS/15 REFUSED TO ACCEPT THE CONFIRMATION LETTER FILED IN THE APPELLATE PROCEEDINGS ON SIMPLE REASON OF FAILURE TO FILE THE SAME BEFORE THE ASSESSING OFFICER IN THE ASSESSMENT PROCEEDINGS. T HE LD.COUNSEL ALSO SUBMITTED, ON THE PRINCIPLE OF NATURAL JUSTICE , ONE MORE OPPORTUNITY BE PROVIDED FOR RECONSIDERATION OF THE ISSUE. 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE RELIED ON THE ORDER OF THE CIT(APPEALS) AND ARGUED FOR DISMISSAL OF THE APPEAL OF THE ASSESSEE. 8. THE TRIBUNAL, ON HEARING THE SUBMISSIONS OF BOTH THE COUNSELS AND ALSO THE INFORMATION FILED, IS OF THE OPINION THAT THE ASSESSEE HAS BEEN FOLLOWING THE LEGAL COURSE FOR SU BMISSION OF THE INFORMATION AND JURISDICTIONAL HIGH COURT HAS SET A SIDE THE ORDER OF THE CIT(APPEALS) AND DIRECTED AN OPPORTUNITY TO BE PROVIDED TO THE ASSESSEE. THE ASSESSEE COMPLIED WITH THE DIRECTIO NS BEFORE THE CIT(A) ON 24.04.2015 AND FILED MATERIAL INFORMATION ALONG WITH CONFIRMATION OF CREDITOR M/S SRI NARAYANASAMY LORRY SERVICE. THE CIT(APPEALS) HAVING PERUSED THE MATERIAL, REJECTED THE CONFIRMATION LETTER AS THE SAME WAS NOT PRODUCED BEFORE THE A.O. IN THE HEARING OF ASSESSMENT PROCEEDINGS. IN THE ABOVE FACTS, THE TRIBUNAL, HAVING CONSIDERED THE GROUNDS OF THE ASSESSEE, IS O F THE CONSIDERED 6 I.T.A. NO.1509/MDS/15 OPINION THAT THE CONFIRMATION LETTER FILED BY THE A SSESSEE SHALL BE EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, TH E ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE MATTER IS R EMITTED BACK TO THE FILE TO THE ASSESSING OFFICER TO CONSIDER THE MATER IAL INFORMATION AND CONFIRMATION LETTER FILED BY THE ASSESSEE. THE A.O . SHALL VERIFY THE GENUINENESS OF THE CONFIRMATION LETTER AFTER PROVID ING AN OPPORTUNITY OF HEARING TO THE ASSESSEE AND THEREAFTER DECIDE TH E ISSUE IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH OCTOBER, 2015 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 30 TH OCTOBER, 2015. KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A), SALEM 4. , 6- /CIT, SALEM 5. 4#7 (- /DR 6. 8' 9 /GF.