DHANASANCHAY NAGRI SAHAKARI PATSANSTHA MARYADIT, THANE (E) V. DCIT, (CIB)-1, PUNE

ITA 2132/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1258 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 12-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 06-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: SUBODH L RATNAPARKHI
• Keywords: Principle of natural justice; Set aside
• Section: 144

Judgement Text

1 ITA NO.2132/MUM/2009 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI R S PADVEKAR, JM & SHRI B RAMAKOTAIAH, AM ITA NO. 2132/MUM/2009 (ASST YEAR 2005-06) DHANASANCHARY NAGARI SAHAKARI PATSANSTHA MARYADIT 7 SHREE RAMAKRISHNA NAGAR CHS LTD, RAMBHAU MHALAGI MARG THANE (E) 400 603 VS THE DY COMMR OF INCOME TAX (CIB) PUNE (APPELLANT) (RESPONDENT) PAN AAAAD3744K ASSESSEE BY: SHRI SUBODH L RATNAPARKHI REVENUE BY: SHRI JITENDRA YADAV O R D E R PER R S PADVEKAR: IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD CIT(A)-I, THANA FOR THE ASSESSMENT YEAR 2005-06 DATED 31.12.2008. 2 THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GR OUNDS IN ITS APPEAL: 1.(A)THE LD CIT(A) ERRED IN NOT APPRECIATING THAT THE ORDER OF ASSESSMENT FRAMED U/S 144 OF THE I T ACT 1961 WAS N OT VALID IN LAW, AS THE SAID ASSESSMENT WAS FRAMED BY AN OFFICER WHO DID NOT HOLD LEGAL JURISDICTION OVER THE APPELLANTS CASE. (B)THE LD CIT(A) ERRED IN NOT APPRECIATING THAT THE ORDER OF ASSESSMENT FRAMED U/S 144 OF THE I T ACT 1961 WAS N OT VALID IN LAW AS NO PROPER NOTICE AS PROVIDED U/S 143(2)/142(1) O F THE ACT WAS VALIDLY ISSUED TO THE APPELLANT BY THE LD AO WHO FR AMED THE ASSESSMENT ORDER. (C)THE LD CIT(A) ERRED IN NOT APPRECIATING THAT THE AO HAD FAILED TO AFFORD THE APPELLANT REASONABLE OPPORTUNITY OF BEIN G HEARD AND 2 ITA NO.2132/MUM/2009 ACCORDINGLY THE PRINCIPLES OF EQUITY, FAIR-PLAY AND NATURAL JUSTICE WERE BREACHED. 2. THE LD CIT(A) ERRED IN NOT ADMITTING THE APPEAL FOR THE REASON THAT THE SAME WAS FILED BEYOND THE TIME PERMITTED U/ 249 (2) OF THE ACT, THEREBY CAUSING GREAT FINANCIAL HARM TO THE APPELLA NT WHO WAS DENIED REASONABLE OPPORTUNITY TO PLEAD HIS CASE AND SECURE JUSTICE. 3. THE LD CIT(A) ERRED IN NOT APPRECIATING THAT THE ADDITION OF RS. 52,67,659/- MADE IN THE HANDS OF THE APPELLANT, ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN SAVING BANK ACCOUNT WA S NOT WARRANTED AS THE SAID DEPOSITS IN THE SAVING BANK A CCOUNTS WERE FROM THE APPELLANTS BUSINESS OF PROVIDING CREDIT FA CILITIES TO ITS MEMBERS AND ACCORDINGLY THE SOURCE OF DEPOSIT WAS F ULLY EXPLAINABLE WITH ADEQUATE EVIDENCE IN THE FORM OF B OOKS OF ACCOUNTS AND OTHER SUPPORTING RECORDS. 4. THE LD CIT(A) FAILED TO APPRECIATE THAT THE APPE LLANT WAS ELIGIBLE FOR THE BENEFIT OF DEDUCTION AS PROVIDED U/S 80P(2) (A)(I) OF THE ACT AND ACCORDINGLY EVEN INCOME REPRESENTED BY THE ADDI TION MADE IN THE HANDS OF THE APPELLANT AS EXEMPT UNDER THE SAID SECTION. 3 WE HAVE HEARD THE PARTIES. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CASE, THE ASSESSMENT ORDER WAS PASSED BY THE DCIT(CIB)-I, PUNE; THOUGH THE JURISDICTION TO ASSESS THE ASSESSE ES INCOME IS WITH AO, THANE. HE FURTHER SUBMITS THAT CERTAIN ENQUIRIES W ERE MADE IN RESPECT OF THE CASH DEPOSITS AND THE ASSESSEE HAS SENT REQUIRE D INFORMATION TO THE ITO (CIB), PUNE. BUT HE HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE BEFORE PASSING EX-PARTE ASSESSMENT ORDER. HE FURTHER SUBM ITS THAT THE ASSESSEE CHALLENGED THE EX-PARTE ASSESSMENT ORDER BEFORE THE LD CIT(A), WHO ALSO PASSED EX-PARTE ORDER WITHOUT GIVING PROPER OPPORTUNITY TO THE ASS ESEES SOCIETY. 3.1 HE FURTHER ARGUES THAT THE FIRST NOTICE CLAIMED TO HAVE BEEN ISSUED BY THE LD CIT(A) WAS NEVER SERVED ON THE ASSESSEE AND SO FAR AS THE NOTICE ISSUED ON 27.11.2008 IS CONCERNED, THE SAID NOTICE WAS RECEIVED BY THE ASSESSEE ONLY ON 31.12.2008 MUCH BEYOND THE DATE O F HEARING. HE, 3 ITA NO.2132/MUM/2009 THEREFORE, PLEADED THAT THE ENTIRE MATTER MAY BE SE T ASIDE TO THE FILE OF THE LD CIT(A). 4 WE HAVE GONE THROUGH THE AFFIDAVIT FILED BY THE C HAIRMAN OF THE ASSESSEES SOCIETY. THOUGH THE LD CIT(A) STATED THA T THE TWO NOTICES WERE ISSUED TO THE ASSESSEE BUT NOTHING IS THERE ON RECO RD TO SHOW THAT NOTICES WERE PROPERLY SERVED ON THE ASSESSEE BEFORE THE DAT ES GIVEN FOR HEARING. MOREOVER, AS PER THE AFFIDAVIT FILED BY THE ASSESSE ES SOCIETY, THE FIRST NOTICE WAS NEVER SERVED ON THE ASSESSEE AND THE SECOND N OTICE SERVED MUCH BEYOND THE DATE OF HEARING FIXED BY THE LD CIT(A). 5 AFTER CONSIDERING THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THERE WAS NO PROPE R OPPORTUNITY TO THE ASSESSEE TO REPRESENT HIS CASE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD CIT(A) AND RESTORE THE ENTIRE MATTER TO HIS FILE FO R FRESH ADJUDICATION. THE CIT(A) IS DIRECTED TO GIVE REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE AS PER PRINCIPLES OF NATURE JUSTICE. 6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 25 TH , DAY OF JUNE 2010. SD/- SD/- ( B RAMAKOTAIAH ) ACCOUNTANT MEMBER (R S PADVEKAR ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 25 TH , JUNE 2010 RAJ* 4 ITA NO.2132/MUM/2009 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI