Smt. Gitaben Rameshchandra Gandhi, Surat V. The Income tax Officer,Ward-6(2), Surat

ITA 341/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6672 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 02-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : AH MEDABAD ( BEFORE HONBLE SHRI G.D.AGRAWAL, V.P. & HONBLE SHR I T.K.SHARMA, J.M.) I.T.A.NO. 341/AHD./2009 : BLOCK PERIOD 2003-04 SMT. GITABEN RAMESHCHANDRA GANDHI, SURAT VS- ITO, WARD-6(2), SURAT (PAN : ABLPG 2529G) (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SHRI MAHESH KUMAR, SR.D.R. O R D E R PER SHRI T.K.SHARMA, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 26.11.2008 OF LD. CIT(A)-IV, SURAT IN APPEAL NO.CAS-IV/08/08-09 CONFI RMING THE PENALTY OF RS.46,78,196/- LEVIED BY THE AO UNDER SECTION 271(1 )(C) OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 2005-2006. 2. IN THIS CASE, AT THE TIME OF HEARING, NOBODY APP EARED ON BEHALF OF THE ASSESSEE. HOWEVER, THE ASSESSEE FILED AN APPLICATION SEEKING ADJOURNMENT. LOOKING TO THE FACTS AND CONTROVERSY INVOLVED, WE PROCEED TO DECIDE THIS APPEAL, AFTER HEARING THE LD. D.R. AND THE MATERIALS AVAILABLE ON RECORD. 3. BRIEF FACTS RELATING TO THE CONTROVERSY INVOLVED ARE THAT FOR THE ASSESSMENT YEAR UNDER APPEAL, THE AO FRAMED THE ASSESSMENT UNDER SE CTION 143(3) WHEREIN ADDITION OF RS.1,48,93,635/- WAS MADE ON ACCOUNT OF BONUS PURCH ASES OF GRAY CLOTH. THE AO ASKED THE ASSESSEE TO PRODUCE THE BROKERS THROUGH W HOM THE GRAY CLOTH WAS CLAIMED TO HAVE BEEN PURCHASED BUT IT WAS NOT DONE. THE AO ACC ORDINGLY MADE ADDITION OF RS.1,48,93,635/-. SUBSEQUENTLY, THE AO LEVIED PENAL TY UNDER SECTION 271(1)(C) OF RS.46,78,196/-. ON APPEAL, IN THE IMPUGNED ORDER, T HE LD. CIT(A) CONFIRMED THE SAME ON THE GROUND THAT THE ASSESSEE COULD NOT FURNISH A NY EXPLANATION. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2 ITA NO.341/AHD/2009 4. AT THE TIME OF HEARING BEFORE US, SHRI MAHESH KU MAR, SR.D.R. APPEARED ON BEHALF OF THE REVENUE AND POINTED OUT THAT SINCE NO EXPLANATION WAS FURNISHED BEFORE THE LD. CIT(A), THEREFORE, PENALTY OF RS.46,78,196/ - IS RIGHTLY CONFIRMED BY THE LD. CIT(A). 5. AFTER HEARING THE LD. DR, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE IMPUGNED ORDER OF LD. CIT(A) IS A NON-SPEAKING ONE. ONLY IN ONE SENTENCE, LD. CIT(A) CONFIRMED THE HUGE PENALTY OF RS. RS.46,78,196/- LEVIED UNDER SECTION 271(1)(C). THE ITAT, AHMEDABAD BENCHC IN ITS DECISION IN THE CASE OF GUJARAT THEMIS BIOSYN LTD. VS- JCIT REPORTED IN 74 ITD 339(AHD.) HELD AS UNDER: THE PROVISIONS OF SECTION 250(6) PROVIDES THAT THE APPELLATE ORDERS OF LD. CIT(A) ARE TO STATE THE POINTS ARISING IN THE APPEA L, THE DECISION OF THE AUTHORITY THEREON AND THE REASONS FOR SUCH DECISION. THE UNDE RLYING RATIONALE OF THE PROVISION IS THAT SUCH ORDERS ARE SUBJECT TO FURTHE R APPEAL TO THE TRIBUNAL. SPEAKING ORDER WOULD OBVIOUSLY ENABLE A PARTY TO KN OW PRECISE POINTS DECIDED IN HIS FAVOUR OR AGAINST HIM. ABSENCE OF THE FORMUL ATION OF THE POINT FOR DECISION FOR WANT OF CLARITY IN A DECISION UNDOUBTE DLY PUTS A PARTY IN QUANDARY. SECTION 250(6) EXPRESSLY EMBODIES THE PRINCIPLES OF NATURAL JUSTICE AND SUCH A PROVISION IS CLEARLY MANDATORY IN NATURE. THE IMPUG NED ORDER PASSED BY THE COMMISSIONER (APPEALS) IN VIOLATION OF THE PROVISIO NS OF SECTION 250(6) COULD NOT, THEREFORE, BE SUSTAINED. 5.1 KEEPING IN VIEW THE PROVISIONS OF SECTION 250(6 ) OF THE I. T. ACT AND THE RATIO OF AFORESAID DECISION OF THE ITAT, AHMEDABAD C BE NCH, THE IMPUGNED ORDER OF LD. CIT(A) IS SET ASIDE AND WE DIRECT HIM TO DECIDE THE APPEAL OF THE ASSESSEE AFRESH, AFTER GIVING OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES . 6. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 16.05.2011 SD/- SD/- (G.D.AGRAWAL) (T.K.SHARMA) VICE PRESIDENT JUDICIAL MEMBER DATED : 16/05/2011 3 ITA NO.341/AHD/2009 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT 3) CIT(A) CONCERNED 4) CIT CONCERNED 5) D.R., ITAT, AHMEDABAD TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD TALUKDAR/SR.P.S.