Sh. Ranjit Singh Aulakh, Chandigarh V. Pr. Commissioner of Income Tax - 1, Chandigarh

ITA 260/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9863 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 23-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Principle of natural justice
• Section: 143(3); 54; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER SHRI GEORGE GEORGE K. JUDICIAL MEMBER ITA NO.260 /CHD/2016 (ASSESSMENT YEAR: 2011-12) SHRI RANJIT SINGH AULAKH, VS. THE PR. COMMISSIONE R OF # 567, SECTOR 10-D, INCOME TAX-I, CHANHDIGARH. CHANDIGARH. PAN NO. AASPA1112D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VISHAL MOHAN FOR SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 22.06.2016 DATE OF PRONOUNCEMENT : 22.06.2016 O R D E R THIS APPEAL AT THE INSTANCE OF THE ASSESS EE IS DIRECTED AGAINST THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX, CHANDIGARH DATED 2.3.2016, PASSED UNDER SECTIO N 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), THE RELEVANT ASSESSMENT YEAR IS 2011-12. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER : 1. THAT THE LD. COMMISSIONER OF INCOME TAX HAS ERR ED IN LAW IN PASSING THE ORDER UNDER SECTION 263 WITHOUT SERVICE OF 2 ANY NOTICE ON THE ASSESSEE AND AS SUCH THE ORDER PA SSED IS ILLEGAL, ARBITRARY UNJUSTIFIED WHICH MERITS ANNULMENT. 2. THAT THE LD. COMMISSIONER OF INCOME TAX HAS ERRE D IN LAW IN PASSING AN EX-PARTE ORDER WITHOUT AFFORDING AN OPPORTU NITY OF HEARING WHICH IS AGAINST THE PRINCIPALS OF NATURAL JU STICE AND AS SUCH THE ORDER PASSED IS ILLEGAL, ARBITRARY AND UNJUSTIFIE D. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSI ONER OF INCOME TAX HAS WRONGLY ASSUMED JURISDICTION UNDER SECTION 263 OF THE ACT TO SET-ASIDE THE ASSESSMENT ORDER DATED 09.01.2014 PASSED BY THE ASSESSING OFFICER IN AS MUCH AS THE ORDER IS NEITHER ERRONEOUS NOR PREJUDIC IAL TO THE INTEREST OF REVENUE AND AS SUCH THE ASSUMPTION OF JURISDICTION UNDER SECTION 263 OF THE ACT IS BEYOND HIS COMPETENCE. 4. THAT THE ASSESSMENT ORDER HAVING BEEN PASSED BY T HE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND AND TAKING INTO CONSIDERATION THE VARIOUS REPLIES AND MATERIAL O N RECORD, THE ACTION RESORTED TO BY THE COMMISSIONER OF INC OME TAX IS UNWARRANTED AND UNCALLED FOR. 5. THAT THE REASONS MENTIONED IN THE NOTICE ISSUED BY THE COMMISSIONER OF INCOME TAX FOR INITIATION OF PROCEED INGS UNDER SECTION 263 ARE BASED ON SUSPICION, CONJECTURE S AND SURMISES WITH NO MATERIAL WHATSOEVER 1 ON RECORD TO SUBSTANTIATE THE ACTION SO INITIATED WHICH, IN ANY CASE, HAS DULY BEEN COUNTERED DURING THE COURSE OF PROCEEDINGS- BEFORE HER CLEARLY ESTABLISHING THAT THE ORDER SOUGHT TO BE REVISED IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE IN TEREST OF REVENUE. 6. THAT THE ORDER OF COMMISSIONER OF INCOME TAX IS ERRONEOUS, ARBITRARY, OPPOSED TO THE FACTS OF THE CASE AND IS UNSUSTAINABLE IN LAW. 3 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE RELEVANT ASSESSMENT YEAR, RETU RN OF INCOME WAS FILED ON 27.3.2013 DECLARING TOTAL INCOM E OF RS.97,093/- AND AGRICULTURAL INCOME OF RS.6,75,000/ -. THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMP LETED ON 9.1.2014 ACCEPTING THE RETURNED INCOME. 4. SUBSEQUENTLY, THE PR. COMMISSIONER OF INCOME TA X ISSUED NOTICE UNDER SECTION 263 OF THE ACT. ACCORD ING TO THE PR. COMMISSIONER OF INCOME TAX, THE ASSESSMENT ORDE R COMPLETED ON 9.1.2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, SINCE A WRONG DEDUCTION CL AIMED UNDER SECTION 54 OF THE ACT WAS ALLOWED BY THE ASSE SSING OFFICER. FURTHER THE PR. COMMISSIONER OF INCOME TA X HELD THAT THE ASSESSEE HAD RECEIVED INTEREST FROM SAVING BANK ACCOUNT AMOUNTING TO RS.30,731/-, WHICH WAS NOT DIS CLOSED IN THE INCOME-TAX RETURN . THE PR. COMMISSIONER OF INCOME TAX FURTHER OPINED THAT THE CASH DEPOSIT AMOUNTING TO RS.17 LACS IN ASSESSEES BANK ACCOUNT WAS NOT VERIFIED IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE SHOW CAUSE NOTICE I SSUED POSTING THE CASE FOR HEARING ON 9.2.2016, WAS RETUR NED AS UN- SERVED. AGAIN, A SHOW CAUSE NOTICE WAS ISSUED AND SERVED ON THE ASSESSEE ON 10.2.2016, FOR WHICH THERE WAS NO APPEARANCE. THE PR. COMMISSIONER OF INCOME TAX PAS SED EX- PARTE ORDER UNDER SECTION 263 OF THE ACT BY SETTING ASIDE THE ASSESSMENT DATED 9.1.2014. THE PR. COMMISSIONER OF INCOME TAX DIRECTED THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT DE-NOVO. THE PR. COMMISSIONER OF INCOME TAX DIRE CTED THE 4 ASSESSING OFFICER TO EXAMINE AND CROSS-VERIFY THE E VIDENCES SUBMITTED BY THE ASSESSEE. 5. THE ASSESSEE BEING AGGRIEVED, IS IN APPEAL BEFO RE US. AT THE VERY OUTSET, THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE PR. COMMISSIONER OF INCOME TAX H AS PASSED EX-PARTE ORDER WITHOUT AFFORDING THE OPPORTU NITY OF HEARING, WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. IT WAS SUBMITTED THAT NO SHOW CAUSE NOTICE WAS SERVED ON THE ASSESSEE. 6. THE LEARNED D.R. WAS DULY HEARD. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, IN T HIS CASE THE PR. COMMISSIONER OF INCOME TAX HAS PASSED AN EX-PAR TE REVISIONERY ORDER UNDER SECTION 263 OF THE ACT. TH E SHOW CAUSE NOTICE FIXING THE DATE OF HEARING ON 9.2.2016 WAS RETURNED UN-SERVED. AGAIN A SHOW CAUSE NOTICE WAS ISSUED ON 10.2.2016, FIXING THE DATE OF HEARING ON 17.2.2016, WHICH ALSO REMAINED UN-ATTENDED BY THE ASSESSEE. WE ARE OF TH E VIEW THAT IN THE INTEREST OF JUSTICE AND EQUITY ONE MORE OPPORTUNITY NEEDS TO BE GRANTED TO THE ASSESSEE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX PAS SED UNDER SECTION 263 OF THE ACT. THE PR. COMMISSIONER OF IN COME TAX IS DIRECTED TO PASS A FRESH ORDER AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESS EE SHALL COOPERATE WITH THE PR. COMMISSIONER OF INCOME TAX F OR THE EXPEDITIOUS DISPOSAL OF THE REVISIONERY ORDER. IT IS ORDERED 5 ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JUNE, 2016 SD/- SD/- (SHAMIM YAHYA) (GEORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND JUNE, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH