Mohd.mujahid Pasha , Bangalore V. The Income Tax Officer Ward-4(3)(3), Bangalore

ITA 2729/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2434 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K R NARAYAN
• Assessee Lawyers: PARESH S SHAH
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - B BENCH : BANGALORE BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO. 2729 /BANG/201 8 ASSESSMENT YEAR : 20 14 - 15 SHRI. MOHD. MUJAHID PASHA, PROP: M/S. ZAIN ELECTRICALS, 324/A1, 2 ND FLOOR, 100 FT RING ROAD, IIYASNAGAR, J P NAGAR POST, BANGALORE 560 078. PAN : AKXPP 6030 G VS. THE INCOME TAX OFFICER, WARD 4(3)(3), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI. PARESH S. SHAH, CA REVENUE BY : SHRI. K. R. NARAYAN, JCIT DATE OF HEARING : 0 7 . 11 .2018 DATE OF PRONOUNCEMENT : 14 .1 1 .2018 O R D E R PER JASON P BOAZ, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE EX-PARTE ORDER OF CIT(A)-4, BANGALORE DATED 30.7.2018 FOR ASSESSMENT YEAR 2014-15. 2. BRIEFLY STATED, THE FACTS OF THE CASE RELEVANT FOR DISPOSAL OF THIS APPEAL, ARE AS UNDER: 2.1 THE ASSESSEE, PROP: ZAIN ELECTRICALS, FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 8.12.2015 DECLARING INCOME OF RS.24,33,840/-. THE CASE WAS TAKEN ITA NO.2729/BANG/2018 PAGE 2 OF 5 UP FOR SCRUTINY AND THE ASSESSMENT CONCLUDED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 28.12.2016 WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.27,33,840/-; IN VIEW OF AN ADDITION OF RS.3,00,000/- MADE BY THE ASSESSING OFFICER (AO) IN RESPECT OF UNEXPLAINED CASH DEPOSITS IN THE ASSESSEES BANK ACCOUNT. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 28.12.2016 FOR ASSESSMENT YEAR 2014-15, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A)-4, BANGALORE WHICH WAS DISMISSED EX-PARTE FOR NON-PROSECUTION ON ACCOUNT OF NON-COMPLIANCE TO THE TWO NOTICES ISSUED FOR HEARINGS ON 5.7.2018 AND 19.7.2018. 3.0 THE ASSESSEE, BEING AGGRIEVED BY THE EX-PARTE ORDER OF CIT(A)-4, BANGALORE DATED 30.07.2018 FOR ASSESSMENT YEAR 2014-15 HAS FILED THIS APPEAL BEFORE THE TRIBUNAL, RAISING THE FOLLOWING GROUNDS: 1. THE IMPUGNED ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) DISMISSING THE APPEAL EXPARTE IS BAD IN LAW, AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND THEREFORE LIABLE TO BE QUASHED. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONCLUDING THAT THE APPELLANT IS NOT INTERESTED IN PURSUING THE APPEAL AND IN DISMISSING THE APPEAL AS SUCH. 3. THE APPELLANT HAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FOR NOT APPEARING BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). ON THE FACTS AND CIRCUMSTANCES OF THE CASE, DISMISSAL OF APPEAL EXPARTE BY COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AND LIABLE TO BE QUASHED. 4. IN ANY CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE DECIDED THE APPEAL ON MERITS AND THE NON CONSIDERATION OF THE APPEAL ON MERITS BY THE COMMISSIONER OF INCOME TAX (APPEALS) MAKES IMPUGNED ORDER BAD IN LAW AND LIABLE TO BE QUASHED. 5. IN ANY CASE AND WITHOUT PREJUDICE THERE ARE NO UNEXPLAINED INVESTMENTS AT ALL. THE ADDITION MADE BY THE ERRONEOUS IS TO BE DELETED. ITA NO.2729/BANG/2018 PAGE 3 OF 5 6. IN VIEW OF THE ABOVE AND ON OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE IMPUGNED ORDER PASSED BY COMMISSIONER OF INCOME TAX (APPEALS) BE QUASHED OR AT LEAST THE ADDITION AS MADE BY THE ASSESSING OFFICER BE DELETED. 4. GROUND NOS. 1 TO 4 4.1 IN THESE GROUNDS (SUPRA), THE ASSESSEE ASSAILS THE IMPUGNED EX-PARTE ORDER OF THE CIT(A) FOR ASSESSMENT YEAR 2014-15 AS BEING BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. IT IS CONTENDED THAT THE CIT(A) ERRED IN CONCLUDING THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL AND DISMISSING THE APPEAL FOR NON-PROSECUTION. EVEN OTHERWISE, THE CIT(A) OUGHT TO HAVE DISPOSED OFF THE APPEAL ON MERITS. ACCORDING TO THE LEARNED AR, THE ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FOR NOT APPEARING BEFORE THE CIT(A) IN THE TWO HEARINGS FIXED, AS THE NOTICES SAID TO BE ISSUED WERE NOT RECEIVED BY THE ASSESSEE. THE LEARNED AR PRAYED THAT IN VIEW OF THE ABOVE, THE TRIBUNAL, IN THE INTEREST OF JUSTICE AND EQUITY, SET ASIDE THE IMPUGNED EX-PARTE ORDER OF THE CIT(A) AND DIRECTED THE CIT(A) TO RE-HEAR THE ASSESSEES APPEAL AND DISPOSE OFF THE GROUNDS RAISED ON MERITS. IT WAS ALSO PRAYED THAT NOTICES FOR HEARINGS BE ISSUED AND SENT BY THE CIT(A) AT THE NEW ADDRESS OF THE ASSESSEE AS MENTIONED IN THE REVISED FORM NO. 36. 4.2 PER CONTRA, THE LEARNED DR SUPPORTED THE IMPUGNED ORDER OF THE CIT(A). 4.3.1 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT IS NOT DISPUTED THAT THE IMPUGNED ORDER OF THE CIT(A) DATED 30.07.2018 FOR ASSESSMENT YEAR 2014-15 HAS BEEN PASSED EX-PARTE FOR NON- PROSECUTION; FOR THE REASON THAT THE ASSESSEE DID NOT ATTEND THE TWO HEARINGS FIXED BY HIM BY ISSUE OF TWO NOTICES DATED 05.07.2018 AND 19.07.2018 IN THIS REGARD. ACCORDING TO THE LEARNED AR OF THE ASSESSEE, THE REASON FOR NON-APPEARANCE BY THE ASSESSEE FOR THE HEARINGS WAS BECAUSE THE AFORESAID NOTICES WERE NEVER RECEIVED BY ITA NO.2729/BANG/2018 PAGE 4 OF 5 THE ASSESSEE. ON THE OTHER HAND, THE CIT(A) IN THE IMPUGNED ORDER ASSUMES THAT THE TWO NOTICES WERE SERVED ON THE ASSESSEE SINCE THE NOTICES WERE NOT RECEIVED BACK BY HIS OFFICE. BEFORE ME, NO PROOF COULD BE ADDUCED BY THE LEARNED DR TO ESTABLISH THAT THE AFORESAID TWO NOTICES DATED 05.07.2018 AND 19.07.2018 WERE SERVED ON THE ASSESSEE. BE THAT AS IT MAY, THE FACT OF THE MATTER IS THAT NEITHER HAS ANY PROOF BEEN PLACED ON RECORD TO ESTABLISH SERVICE OF THE AFORESAID NOTICES ON THE ASSESSEE NOR HAS THE ISSUE OF DISPUTE VIZ., AN ADDITION, UNEXPLAINED CASH DEPOSITS OF RS.3,00,000/- BEEN DECIDED ON MERITS. 4.3.2 IN THESE CIRCUMSTANCES, AS NARRATED ABOVE, I AM OF THE OPINION THAT SINCE NO PROOF WAS PLACED BEFORE ME BY REVENUE TO ESTABLISH THAT THE NOTICES DATED 05.07.2018 AND 19.07.2018 WERE SERVED BY THE O/O CIT(A) ON THE ASSESSEE, THE ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FOR NOT APPEARING FOR HEARINGS BEFORE THE CIT(A). IN THIS FACTUAL MATRIX OF THE CASE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, I SET ASIDE THE IMPUGNED EX-PARTE ORDER OF THE CIT(A) DATED 30.07.2018 FOR ASSESSMENT YEAR 2014-15 AND RESTORE THE MATTER TO THE FILE OF THE CIT(A) TO HEAR AND DECIDE THE ASSESSEES APPEAL AFRESH ON MERITS, AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS / SUBMISSIONS REQUIRED; WHICH SHALL BE DULY CONSIDERED BEFORE DECIDING THE ISSUES IN APPEAL. I HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, GROUNDS 1 TO 4 OF ASSESSEES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN VIEW OF MY SETTING ASIDE OF THE IMPUGNED EX-PARTE ORDER OF CIT(A)-4 DATED 30.07.2018 FOR ASSESSMENT YEAR 2014-015, GROUND NOS. 5 AND 6 (SUPRA) RAISED ON MERITS OF THE ADDITION OF RS.3,00,000/- AS UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNTS ARE NOT ADJUDICATED UPON. 6. IN THE RESULT, ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2729/BANG/2018 PAGE 5 OF 5 PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF NOVEMBER, 2018. SD/- SD/- BANGALORE. DATED:14 TH NOVEMBER, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE. (SUNIL KUMAR YADAV) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER