Bana Bihari Rath, Bhubaneswar V. ACIT, Bhubaneswar

ITA 308/CTK/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52386 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 03-06-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P C MISHRA
• Keywords: Salary income; Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 3 08/CTK/2011 (ASSESSMENT YEAR 2007 - 08) SRI BANA BIHARI RATH, S/O. BANNCHHANIDHI RATH, PLOT NO.LB 48, KAPILA PRASAD HB COLONY , BHIMTANGI, BHUBANESWAR 751 002 PAN: AAWPR 6941 D VERSUS ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.C.MISHRA, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 12.08.2011 DATE OF PRONOUNCEMENT : 25.08.2011 ORDER SHRI K.S.S.PRASAD RAO, JM : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT. 31.3.2011 FOR THE ASSESSMENT YEAR 2007 - 08 IN THE CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES. 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) II, BHUBANESWAR IS NOT JUSTIFIED IN PASSING THE ORDER EX PARTE ON THE GROUND OF NON - SERVICE OF NOTICE U/S.250 AS THE APPELLANT HAD NEITHER SHIFTED HIS RESIDENCE NOR DID HE AVOID SERVICE OF NOTICE. MOREOVER THE APPELLATE ORDER WAS DULY RECEIVED BY THE APPELLANT AT THE SAME ADDRESS GIVEN IN FORM 35. HENCE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) II IS ILLEGAL AND A RBITRARY. 2. THAT THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) II, BHUBANESWAR SHOULD HAVE GIVEN ANOTHER OPPO0RTUNITY AS THE APPELLANT WAS OUT OF STATION FOR FEW DAYS FOR AN URGENT SOCIAL OBLIGATION. 3. THAT THE LEARNED COMMISSIONER OF INCOME - TAX (AP PEALS) II, BHUBANESWAR IS NOT JUSTIFIED IN ACCEPTING THE ASSESSING OFFICERS ORDER U/S.147 AS THE A.O. HAS NOT FOUND ANY REASON OF ESCAPEMENT OF INCOME FOR INITIATING PROCEEDING U/S.147 AFTER PROCESSING U/S.143(1)(A). 4. THAT THE LEARNED COMMISSIONER OF I NCOME - TAX (APPEALS) II, BHUBANESWAR IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF A.O. WITHOUT GOING TO THE GROUNDS OF APPEAL FOR WHICH THE APPELLANT DEPOSITED FEES IN GOVT. ACCOUNT. ITA NO.308/CTK/2011 2 5. THAT THE RELIEF CLAIMED U/S.89(1) OF THE INCOME - TAX ACT,1961 SHOULD HAVE BEEN ALLOWED BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) II, BHUBANESWAR TREATING THE VOLUNTARY RETIREMENT BENEFIT UNDER EXIST OPTION SCHEME OF THE BANK AS INCOME FROM SALARY AND NOT AS INCOME FROM OTHER SOURCES. 6. THAT THE LEARNED COMMISSIO NER OF INCOME - TAX (APPEALS) II, BHUBANESWAR SHOULD NOT HAVE DISALLOWED 50,000 BEING THE CLAIM OF DEDUCTION/S.80DD OF THE INCOME - TAX ACT,1961 UNDER THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE AS DONE BY THE A.O. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATION S. 4. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE VEHEMENTLY ARGUED APART FROM CONTENDING THE ISSUES ON MERITS THAT THE LEARNED CIT(A) HAS NOT GIVEN PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO VENTILATE HIS CASE BEFORE HIM AS PRAY ED IN THE GROUNDS OF APPEAL BEFORE HIM. IT IS EVIDENT FROM THE IMPUGNED ORDER THAT THE LEARNED CIT(A) HAS ISSUED NOTICE BY SPEED POST ON 22.3.2011 FIXING THE HEARING OF THE CASE ON 23.02.2011. THE SAID NOTICE APPEARS TO HAVE BEEN RETURNED UNSERVED WITH TH E POSTAL REMARK LEFT. FROM THIS THE LEARNED CIT(A) INFERRED THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL AND HENCE, THE PROCEEDED TO DECIDE THE APPEAL EXPARTE. SIMPLY BECAUSE THERE IS RETURN OF NOTICE WITH THE POSTAL REMARK LEFT WILL N OT DEPRIVE THE ASSESSEE TO PARTICIPATE IN THE PROCEEDINGS. THE LEARNED CIT(A) WITHOUT VERIFYING THE TRUTHFULNESS OR OTHERWISE OF THE POSTAL REMARK, HAS PROCEEDED TO ADJUDICATE THE APPEAL OF THE ASSESSEE IN HIS ABSENCE. THIS ACT OF THE LEARNED CIT(A) IS NOT IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE REQUIRED TO BE FOLLOWED BY HIM. THEREFORE, THE ASSESSEE MAY BE ALLOWED ANOTHER OPPORTUNITY OF DEMONSTRATING ITS AS BEFORE THE LEARNED CIT(A). 5. CONTRARY TO THIS, THE LEARNED DR HAS VEHEMENTLY ARGUED SU PPORTING THE ORDER OF THE LEARNED CIT(A) AND ASSAILING THE GROUNDS OF APPEAL RAISED BY ITA NO.308/CTK/2011 3 THE ASSESSEE AND SOUGHT FOR DISMISSAL OF THE APPEAL FILED BY THE ASSESSEE. IT WAS FURTHER CONTENDED BY HIM THAT THE LEARNED CIT(A) IS VERY MUCH RIGHT IN PROCEEDING TO DE CIDE THE APPEAL OF THE ASSESSEE EX PARTE AS THE NOTICE SENT BY HIM WAS RETURNED UNSERVED WITH THE POSTAL REMARK LEFT. THE NOTICE HAVING BEEN SENT TO THE ASSESSEE IN THE ADDRESS AS GIVEN IN FORM 35 FILED BEFORE THE LEARNED CIT(A), IT IS TO BE TAKEN AS SEN T ON CORRECT ADDRESS AND HENCE, THE LEARNED CIT(A) IS WELL WITHIN HIS RIGHT TO TAKE THE RETURN OF NOTICE AS UNSERVED. THEREFORE, THE ACTION OF THE LEARNED CIT(A) IS VERY MUCH JUSTIFIED AND REQUIRE NO INTERFERENCE. ACCORDINGLY, HE SOUGHT FOR UPHOLDING THE ORDER OF THE LEARNED CIT(A) BY DISMISSING THE APPEAL OF THE ASSESSEE. 6. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, IT IS FOUND THAT THE LEARNED CIT(A) WHILE DECIDING THE APPEAL IN ABSENCE OF THE ASSESSEE, HAS NOT DECIDED THE ISSUES RAISED BY THE ASSESSEE BEFORE HIM ON MERITS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THIS IS A FIT CASE TO BE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR DE NOVO CON SIDERATION OF THE ISSUES RAISED BEFORE HIM BY GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND PASS NECESSARY CONSEQUENTIAL ORDER AS PER LAW. WE, THEREFORE, SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE APPEAL TO HIS FILE FOR CONSIDERATION AFRESH STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDIC IAL MEMBER DATE: 25.08.2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. ITA NO.308/CTK/2011 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SRI BANA BIHARI RATH, S/O. BANNCHHANIDHI RATH, PLOT NO.LB 48, KAPILA PRASAD HB COLONY, BHIMTANGI, BHUBANESWAR 751 002 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.