IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 16/BANG/2011 ASSESSMENT YEAR : 2007-08 SMT. R. SUGUNA, 9/1, CLASSIC COURT, 2 ND FLOOR, RICHMOND ROAD, BANGALORE 560 025. PAN : AHCPS 1946A VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S. PARTHASARATHI, ADVOCATE RESPONDENT BY : SHRI KUMAR AJEET, JT.CIT(DR) DATE OF HEARING : 12.10.2011 DATE OF PRONOUNCEMENT : 12.10.2011 O R D E R PER N.K. SAINI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 02.12.2010 OF THE CIT(APPEALS) VI, BANGALORE FOR THE ASSESSM ENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL NOS. 1 & 7 ARE GENERAL IN NATURE AND DO NOT REQUIRE ADJUDICATION. THE OTHER GROUNDS THAT HAVE BEEN RAISED IN THIS APPEAL READ AS UNDER: ITA NO.16/BANG/2011 PAGE 2 OF 5 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER (A) OUGHT TO HAVE CONSIDERED T HE SUBMISSIONS MADE IN THE RECTIFICATION APPLICATION F ILED BY THE APPELLANT U/S. 154 OF THE ACT ON 19.11.2010 AND WITHDRAWN THE EX-PARTE ORDER AND HEARD THE APPELLAN T AND DISPOSED OF THE APPEAL ON MERITS. 3. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIA TED THAT THE ADMITTED TAX HAD BEEN FULLY PAID BY THE AP PELLANT AND THE INTEREST LEVIED IS BEING CHALLENGED, THAT W AS NOT PART OF THE ADMITTED TAX AND THE NON-PAYMENT OF INT EREST CANNOT BE HELD TO BE NON-PAYMENT OF ADMITTED TAX AN D CONSEQUENTLY HE OUGHT TO HAVE CONSIDERED THE 154 APPLICATION AND DISPOSED OF THE SAME BY WITHDRAWING THE EX-PARTE ORDER. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER (A) ERRED IN RELYING UPON THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF UNION HOME PRODUCTS LTD. REPORTED IN 215 IT R 759 AND HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. M.H. GHASWALA AND OTHERS 252 ITR 1. 5. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE GIVEN ADEQUATE OPPORTUNITY TO THE APPELLANT TO EXPLAIN IN DETAIL AS TO HOW THE INTEREST WAS NOT LEVAIBLE. 6. THE LEARNED COMMISSIONER (A) ERRED IN CONFIRMING TH E INTEREST U/S. 234A, 234B AND 234C OF THE ACT. 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEA L IS THAT THE LD. CIT(APPEALS) HAD NOT GIVEN ADEQUATE OPPORTUNITY TO EXPLAIN HER CASE IN DETAIL. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE CASE OF SHRI REDDY VEERANNA AN D GROUP ON 26/6/2007. DURING THE SEARCH, MANY INCRIMINATING D OCUMENTS AND RECORDS WERE SEIZED AND THE PROCEEDINGS WERE INITIATED U/S. 153A R.W. SEC. 153C OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S THE ACT IN SHORT]. ITA NO.16/BANG/2011 PAGE 3 OF 5 THE ASSESSEE FILED RETURN ON 1.4.2008 DECLARING A T OTAL INCOME AT RS.3,95,68,280 AND AGRICULTURAL INCOME OF RS.98,600 . DURING THE ASSESSMENT PROCEEDINGS, CERTAIN ADDITIONS WERE MADE AND PENALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED. THE ASS ESSEE, AGAINST THE SAID ACTION OF THE ASSESSING OFFICER, PREFERRED AN APPEA L BEFORE THE LD. CIT(APPEALS) WHO DISMISSED THE SAME EX PARTE VIDE ORDER DATED 27.10.07 BY OBSERVING THAT THE APPEAL WAS NOT MAINTAINABLE I N VIEW OF THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT, SINCE THE ASSESSEE DID NOT PAY TAX DUE ON THE RETURNED INCOME BEFORE FILING APPEAL U/S. 246A OF THE ACT. THE ASSESSEE MOVED AN APPLICATION U/S. 154 OF THE ACT S TATING THEREIN THAT THE ASSESSEE HAD PAID TAXES ON THE RETURNED INCOME, EXC EPT INTEREST U/S. 234A, 234B & 234C OF THE ACT WHICH CANNOT BE SAID AS TAXE S TO BE PAYABLE ON THE RETURNED INCOME AND THEREFORE THERE WAS A MISTAKE I N THE ORDER VIDE WHICH THE APPEAL HAS BEEN TREATED AS NOT MAINTAINABLE. H OWEVER, THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE APPLICATION FILED BY THE ASSESSEE U/S. 154 OF THE ACT AND REJECTED THE SAME . NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ASSESSEE FURNISHED THE EXPLANATION WHICH WAS NOT CONSIDERED BY THE LD. CIT(A) AND EVEN PROPER OPPORTUNITY OF BEING HEARD WAS NOT GIVE N. HE REQUESTED THAT THE MATTER BE SENT BACK TO THE LD. CIT(A), TO BE DE CIDED ON MERITS AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. ITA NO.16/BANG/2011 PAGE 4 OF 5 6. IN HIS RIVAL SUBMISSIONS, THE LD. DR ALTHOUGH SU PPORTED THE ORDER OF THE LD. CIT(APPEALS), BUT DID NOT REBUTT THE AFORES AID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 7. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND THE MATERIAL ON RECORD, IT APPEARS THAT THE LD. CIT(APP EALS) DECIDED THE MAIN APPEAL AS WELL AS THE APPLICATION U/S. 154 OF THE A CT EX PARTE AND EVEN DID NOT CONSIDER THE EXPLANATION GIVEN BY THE ASSESSEE. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM . IN THE PRESENT CASE, IN OUR OPINION, PROPER OPPO RTUNITY OF BEING HEARD WAS NOT GIVEN TO THE ASSESSEE. WE THEREFORE DEEM IT APPROPRIATE TO REMIT THIS CASE BACK TO THE FILE OF THE LD. CIT(APP EALS), TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH THE LAW AFTER PROVIDING D UE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE A SSESSEE IS ALSO DIRECTED TO COOPERATE AND NOT TO SEEK UNJUSTIFIED AND UNWARR ANTED ADJOURNMENTS. 8. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF OCTOBER, 2011. SD/- SD/- ( SMT. P. MADHAVI DEVI ) ( N.K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 12 TH OCTOBER, 2011. DS/- ITA NO.16/BANG/2011 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.