Sh. R.P. Dhiman, Kangra V. Addl. CIT, Mandi

ITA 176/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5454 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 176/CHD/2011 ASSESSMENT YEAR: 2005-06 SHRI R.P. DHIMAN, VS. THE ADDL. CIT, GOVT. CONTRACTOR MANDI C/O RAVINDER SOOD ADVOCATES, KANGRA PAN NO. ABVP0836B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY: SHRI N.K.SAINI ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), SHIMLA DATED 13.12.2010 RELATING TO ASSESSMENT YEAR 2005-0 6 AGAINST THE PENALTY LEVIED UNDER SECTION 271E OF THE I.T. ACT, 1961. 2. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINS T THE PENALTY LEVIED U/S 271E OF THE ACT. THE ASSESSEE IS A GOVERNMENT CONTRACTOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER NOTED THE ASSESSEE TO HAVE SHOWN AN OPENING CREDIT BALANCE OF RS. 1,55,000/- IN THE NAME OF SHRI NANAK CHAND, BROTHER OF THE ASSESSEE. DURING THE YEAR UNDER CONSIDERATION, REPAYMENT OF RS. 1 LAKH WAS M ADE TO SHRI NANAK CHAND ON 27.1.2005 VIDE CHEQUE NO.622716 FROM CASH CREDIT LIMIT 2 ACCOUNT NO. 182, PUNJAB NATIONAL BANK, KARSOG, DIST RICT MANDI, HIMACHAL PRADESH DATED 27.1.2005. THE ASSESSING OF FICER ON THE PERUSAL OF THE SAID BANK STATEMENT RECEIVED FORM PNB, KARSO G BRANCH REVEALS THAT SUCH PAYMENT WAS MADE THROUGH BEARER CHEQUE. A CER TIFICATE WAS ISSUED BY THE BANK MANAGER IN THIS REGARD. THE ASSESSEE WA S SHOW CAUSED TO EXPLAIN WHY PENALTY U/S 271E OF THE ACT BE NOT LEVI ED BECAUSE OF VIOLATION OF PROVISIONS OF SECTION 269T OF THE INCO ME TAX ACT. THE EXPLANATION OF THE ASSESSEE WAS THAT THE LOAN WAS N EVER REPAID IN CASH BUT THROUGH A BEARER CHEQUE AS SHRI NANAK CHAND WAS IN URGENT NEED OF MONEY. THE ASSESSING OFFICER IN THE ABSENCE OF ANY EVIDENCE BEING PRODUCED BY THE ASSESSEE THAT SHRI NANAK CHAND HAD NO BANK ACCOUNT IN KARSOG BRANCH WAS OF THE VIEW THAT THERE WAS NO EXC EPTIONAL CIRCUMSTANCES FORCING THE ASSESSEE TO ISSUE A BEARE R CHEQUE. THE ASSESSEE WAS HELD TO HAVE VIOLATED THE PROVISIONS OF SECTION 269T OF THE ACT. ACCORDINGLY, A PENALTY OF RS. 1 LAC WAS LEVIED U/S 271E OF THE ACT. THE CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE R EJECTING THE ADJOURNMENT APPLICATION MOVED BY THE ASSESSEE WITHO UT GOING INTO THE MERITS OF THE CASE. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ASSESSEE HAS RAISED THE ISSUE THAT THE CIT(A) HAS W RONGLY DISMISSED THE APPEAL FOR WANT OF PROSECUTION AND ALSO ERRED BY NO T DECIDING THE ISSUES ON MERIT WITHOUT APPRECIATING THE FACT THAT ALL ADD ITIONS HAVE BEEN MADE BY ASSESSING OFFICER WITHOUT ANY EVIDENCE OR MATERI AL ON RECORD. THE GRIEVANCE OF THE ASSESSEE IS THAT NO PROPER OPPORTU NITY WAS AFFORDED. THE ORDER PASSED BY CIT(A) IS A NON-SPEAKING ORDER. 3 4. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER OF CIT(A). THE PRINCIPLE OF NATURAL JUSTICE REQUIRES A REASONA BLE OPPORTUNITY OF HEARING TO BE ALLOWED TO THE ASSESSEE BEFORE PASSIN G AN ORDER. WE FIND THAT CIT(A) HAS NOT PASSED A SPEAKING ORDER IN THE CASE. UNDER THE PROVISIONS OF SECTION 250(6) OF THE INCOME TAX ACT, THE CIT(A) HAS TO PASS A SPEAKING ORDER IN RESPECT OF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AFTER HEARING THE ASSESSEE. WE FIND THAT CIT(A) IN THE PRESENT CASE HAS FAILED TO FOLLOW THE PROCEDURE IN APPEAL P ROCEEDINGS AS LAID DOWN IN SECTION 250 OF THE INCOME TAX ACT. IN THE INTER EST OF JUSTICE, WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF CIT (A) TO DECIDE THE ISSUE RAISED BY THE ASSESSEE VIDE SPEAKING ORDER. A REA SONABLE OPPORTUNITY OF HEARING SHALL BE AFFORDED TO THE ASSESSEE. THE GRO UNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS ALLOWED FOR STATISTICAL PU RPOSES. WE ARE NOT ADDRESSING THE ISSUE ON MERITS IN VIEW OF OUR SETTI NG ASIDE THE ISSUE TO THE FILE OF CIT(A). 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF MAY, 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH MAY, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 4