Kailash Bihari Pathak, Buxar V. ITO, Ward-2, Arrah

ITA 16/PAT/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9635 (ITAT-PATNA)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY KUMAR
• Assessee Lawyers: A K RASTOGI RAKESH KUMAR; A K AGRAWAL ADVS
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH SMC , PATNA BEFORE SH. N. K. SAINI, ACCOUNTANT MEMBER ITA NO. 16/PAT./2017 : ASSTT. YEAR : 2008 - 09 KAILASH BIHARI PATHAK, PROP: BHOJPUR UDYOG, DUMRAON RAJ PATH , DUMRAON, BUXAR, BIHAR VS INCOME TAX OFFICER, WARD - 2 , AR R A H , BIHAR (APPELLANT) (RESPONDENT) PAN NO. A HOPP8382R ASSESSEE BY : SH. A. K. RASTOGI, RAKESH KUMAR & SH. A. K. AGRAWAL, ADVS. REVENUE BY : SH. ABHAY KUMAR , SR. DR DAT E OF HEARING : 07 .03 .201 8 DATE OF PRONOUNCEMENT : 08 . 0 3 .201 8 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 12 .09.2016 OF LD. CIT(A) - 1 , PATNA . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT LEARNED CIT(A) HAS ERRED IN BOTH FACTS AND IN LAW WHILE PASSING ORDER CONFIRMING THE ADDITIONS AND DISMISSAL OF APPEAL. 2. THAT LEARNED CIT(A) ERRED WHILE CONFIRMING THE ADDITION MADE ON THE FLAT RATE AT 10% OF TOTAL EXPENSE BASED UPON PRESUMPTION AND SURMISES. 3. THAT LEARNED CIT(A) WAS NOT JUSTIFIED WHILE CONFIRMING THE ADDITION AT RS.737776/ - FOR ENTIRE SUM OF SUNDRY CREDITORS SHOWN IN THE AUDITED BALANCE SHEET. 4. THAT LEARNED CIT(A) HAS ERRED WHILE CONFIRMING ADDITION FOR LOW WITHDRAWAL WHEREAS APPELLANT B ELONGS TO AN AGRICULTURIST FAMILY. 5. THAT LEARNED CIT(A) SHOULD HAVE ALLOWED PROPER OPPORTUNITY OF HEARING BEFORE PASSING ORDER OF CONFIRMATION OF ADDITIONS AND DISMISSAL OF APPEAL. ITA NO. 16 /PAT. /201 7 KAILASH BIHARI PATHAK 2 6. THAT IN THE FACTS OF THE CASE AND ALSO IN THE EYE OF THE LAW THE APPE AL SHOULD HAVE BEEN ALLOWED BY THE LEARNED CIT(A) - 1, PATNA. THE APPELLANT PRAYS THAT THE ADDITIONS/DISALLOWANCE BE DELETED. 7. THAT APPELLANT PRAYS TO ARGUE AND FILE OTHER GROUNDS ON OR BEFORE THE FINAL HEARING. 3. VIDE GROUND NO. 5, THE GRIEVANCE OF T HE ASSESSEE RELATES TO THE EX - PARTE ORDER PASSED BY THE LD. CIT(A) WITHOUT AFFORDING AN OPPORTUNITY OF BEING HEARD. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 28.11.2008 DECLARING AN INCOME OF RS. 2,51,996 / - . LATER O N, THE CASE WAS SELECTED FOR SCRUTINY AND T HE AO MADE THE ADDITION OF RS. 1,07,776 / - BEING 10% OF THE VARIOUS EXPENSES, RS.38,078/ - U/S 43B OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) , RS.7,37,700/ - ON ACCOUNT OF SUNDRY CREDITORS FOR WA NT OF VERIFICATION AND RS.12,000/ - ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS. ACCORDINGLY, INCOME WAS ASSESSED AT RS.11,23,110/ - . 5 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO PASSED THE EX - PARTE ORDER AND SUSTAINED THE ADDITION BY OBSERVING IN PARA 4.4 OF THE IMPUGNED ORDER AS UNDER: 4.4 I HAVE GONE THROUGH THE ASSESSMENT ORDER, FACTS OF THE CASE AND MATERIAL AVAILABLE ON RECORD. IT IS FOUND THAT EITHER THE SUNDRY CREDITOR FOR PURCHASES AS CLAIMED BY THE APPELLANT IS NOT APPEAR ING IN THE I.T. RETURNS OF THE RESPECTIVE SUPPLIERS OR THE APPELLANT WAS NOT IN A POSITION TO SUBSTANTIATE THE GENUINENESS OF SUNDRY CREDITORS WITH PURCHASE INVOICES AND RELEVANT EVIDENCES IN THIS REGARD. SINCE THE SUNDRY CREDITORS AS APPEARING IN THE BOOK S OF ACCOUNT OF THE APPELLANT HAS TO BE JUSTIFIED AND BONAFIDE OF THE SAME HAS TO BE SUBSTANTIATED, THEREFORE THE AO WAS WELL WITHIN HIS RIGHTS TO BRING TO UNSUBSTANTIATED SUNDRY CREDITORS TO TAX IN THE HANDS OF THE APPELLANT AT THE TIME OF ASSESSMENT PROC EEDINGS. ACCORDINGLY THIS ACTION OF THE AO IS BEING UPHELD. ITA NO. 16 /PAT. /201 7 KAILASH BIHARI PATHAK 3 6. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER HAS BEEN PASSED BY THE LD. CIT(A) WITHOUT AFFORDING ANY OPPORTUNITY OF BEING HEARD TO THE AS SESSEE WHICH IS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE . 7. IN HIS RIVAL SUBMISSIONS, THE LD. SR. DR ALTHOUGH SUPPORTED THE ORDER OF THE LD. CIT(A) BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 8. I HAV E CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT THE LD. CIT(A) PASSED THE IMPUGNED ORDER EX - PARTE WHICH IS EVIDENT FROM THE FACE OF THE ORDER WHEREIN IT HAS BEEN MENTIONED THAT NONE WAS PRESENT ON BEHALF OF THE ASSESSEE/APPELLANT AND THE DEPARTMENT. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM. IN THE PRESENT CASE, SINCE, THE LD. CIT(A) PASSED THE IMPUGNED ORDER EX - PARTE WITHOUT AFFORD ING PROPER AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I , THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE PRESENT CASE, DEEM IT APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF THE LD. CIT(A ) TO BE ADJUDICATED AFRESH IN ACCORDA NCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (ORD E R PRONOUNCED IN THE COU RT ON 08 /0 3 /2018 ) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 08 /03 /2018 *SUBODH*