Ram Babu Sah, Rohtas V. ITO, Ward-3(4), Sasaram

ITA 189/PAT/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6288 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 12-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 271(1)(c); 144; 143(2)

Judgement Text

1 ITA Nos. 189/Pat/18 A.Y 2014-15 & 190/Pat/18 A.Y 2014-15 Ram Babu Sah IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH VIRTUAL HEARING AT KOLKATA Before: Shri A. T. Varkey, Judicial Member and Shri Girish Agrawal, Accountant Member I.T.A. No. 189/Pat/18 Assessment Year: 2014-15 And I.T.A. No. 190/Pat/18 Assessment Year: 2014-15 Ram Babu Sah (PAN: CCUPS2770R Vs. Income-tax Officer, Ward-3(4), Sasaram Appellant Respondent Date of Hearing 22.03.2022 Date of Pronouncement 22.03.2022 For the Appellant Shri Raghwendra Kr. Mishra,Advocate, Ld.AR For the Respondent Shri Sanjay Mukherjee, CIT, DR ORDER Per Bench: These appeals preferred by the assessee are against the order of the Ld. CIT(A)-1, Patna dated 15.05.2018 for AY 2014-15 as well as against the order of the Ld.CIT(A)-1,Patna dated 15.05.2018 for AY 2014-15 for confirmation of penalty levied u/s. 271(1) ( c ) of the Income-tax Act, 1961 ( hereinafter, referred to as the ‘Act.’). 2. Since these appeal heard together and facts of the issue are common, we dispose of the same by this consolidated order for the sake of convenience. 2 ITA Nos. 189/Pat/18 A.Y 2014-15 & 190/Pat/18 A.Y 2014-15 Ram Babu Sah First we will deal with the quantum appeal-ITA No. 189/Pat/18 for AY 2014-15 ITA No. 189/Pat/18 for AY 2014-15 3. At the outset, Raghwendra Kr. Mishra the Ld.AR of the assessee brought to our notice that impugned assessment order is an ex parte order passed by the Assessing Officer ( in short, the ‘ AO’ u/s. 144 of the Act). According to the Ld.AR the assessee is engaged in the business of rice and other such materials. According to him, the assessment of the assessee was selected for scrutiny based on some information that the assessee had deposited an amount of Rs. 59,91,023/- in his saving bank account. The AO asked the assessee to give details of the deposits, which the assessee could not provide for reasons beyond his control, which prevented him from appearing. Pursuant thereto, the AO had made the entire addition of Rs.59,91,023/-. Aggrieved by the aforesaid order of the AO, the assessee preferred an appeal before the Ld. CIT(A), who confirmed the same. Aggrieved, assessee is before us. 4. According to the Ld.AR the amount of Rs.59,91,023/- is more than the turnover of the assessee. Therefore, per se, according to the Ld.AR the addition was not warranted. According to him since the assessee could not appear before the AO for justifiable reasons, which prevented him from appearing and furnishing the details, the AO has taken the impugned action. As per the Ld.AR, if proper opportunity was given to assessee, then the assessee could have provided all details of the SB deposit. According to the Ld.AR, since proper opportunity has not been given to assessee, the assessee could not file the details. Therefore, the Ld. AR prays before us for giving an opportunity to the assessee to furnish all the details in respect of said deposits made in the saving bank account. 5. Per contra, Shri Sanjay Mukherjee, Ld. CIT/DR submitted that the assessee had been given sufficient opportunity. However, for the reasons he has not preferred to appear before the Ld. AO and even during the appellate proceedings the assessee failed 3 ITA Nos. 189/Pat/18 A.Y 2014-15 & 190/Pat/18 A.Y 2014-15 Ram Babu Sah to furnish the details of the deposits made in the said saving bank account. Therefore, according to him, no second innings should be given to the assessee. 6. Having heard both the parties and after perusal of the records, we note that the AO has given opportunity to the assessee to appear by issuing notices u/s. 143(2) and 142(1) of the Act for compliance on various dates and directed him to appear on 18/9/2015 and thereafter, again notice was issued on 16-05-2016 for compliance. Since there was no compliance on the part of the assessee on both the occasions the AO initiated the penalty proceedings u/s. 271(1)(b) of the Act and thereafter, as per ex parte assessment order passed u/s. 144 of the Act making addition of Rs.59,91,023/-. On appeal, the Ld. CIT(A) has confirmed the action of the AO. Before the Ld. CIT(A) also the assessee pleaded that the assessee had not been given proper opportunity. Since it has been brought to our notice that assessee could not appear before the AO because of justifiable reasons, we are of the opinion the assessee be given one more opportunity to produce the evidences to substantiate the deposit of Rs.59,91,023/- in his SB account. For doing that we rely on the decision of the Hon’ble Supreme Court in the case of Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC), wherein the Hon’ble Supreme Court has held as under: “It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus : “We will straightaway agree with the assessee’s submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard.” That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of setting out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard. 4 ITA Nos. 189/Pat/18 A.Y 2014-15 & 190/Pat/18 A.Y 2014-15 Ram Babu Sah Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus : “1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income-tax Officer had not given a proper opportunity of hearing to the assessee ?” In our opinion, there can only be one answer to this question which is inherent in the question itself : in the negative and in favour of the assessee. The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated.” 7. In the light of the aforesaid decision of the Hon’ble Supreme Court and the facts discussed (supra), we remand the assessment back to the file of the AO. Since we have found that the assessee did not get proper opportunity before the AO, we set aside the impugned order of the Ld. CIT(A) and restore the assessment back to the file of the AO and direct the Ld. AO to frame the assessment afresh. Before us the Ld.AR undertakes that the assessee will appear before the AO and furnish the evidences regarding deposits made in saving bank account in question and participate in the assessment proceedings. The AO after hearing the assessee and after conducting enquiries in accordance to law may frame the assessment afresh as per law. 8. Coming to penalty order u/s. 271(1)(c) of the Act (Appeal No.190/Pat/18 for the AY 2014-15) confirmed by Ld. CIT(A), we note that since the quantum appeal (ITA No. 189/Pat/18 for the AY 2014-15) has been set aside to the file of the AO to frame the assessment afresh, consequently penalty order passed u/s. 271(1) (c) of the Act also does not survive. The AO after framing the fresh assessment has liberty to initiate the penalty proceedings as per law. 5 ITA Nos. 189/Pat/18 A.Y 2014-15 & 190/Pat/18 A.Y 2014-15 Ram Babu Sah 9. In the result, both the appeals of the assessee are allowed for statistical purposes. Order is pronounced in the open court on 22nd March, 2022 Sd/- Sd/- (Aby. T. Varkey) (Girish Agrawal) Judicial Member Accountant Member Dated : 22nd March, 2022 **PP(Sr.P.S.) Copy of the order forwarded to: 1. Appellant – Ram Babu Sah S/o Bhola Sah, Vill + P.O Natar, Rohtas-802218(Bihar). 2 Respondent – ITO, Ward-3(4), Sasaram. 3. 4. CIT(A)- CIT-, 5. DR, ITAT, Patna /True Copy, By order, Senior P.S