Shri Arun Kumar Jain, Ghaziabad V. ITO, Ghaziabad

ITA 3693/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6825 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 17-10-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 21-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY PARASHAR
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SM C - II , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 3693 /DEL/2016 : ASSTT. YEAR : 2005 - 0 6 SH. ARUN KUMAR JAIN, R - 5/25, RAJ NAGAR, GHAZIABAD ( UP) - 201002 VS INCOME TAX OFFICER, WARD - 1 (1 ), GHAZIABAD (UP) (APPELLANT) (RESPONDENT) PAN NO. A DDPJ5103B ASSESSEE BY : SH. ANOOP SHARMA, ADV. & SH. SANJAY PARASHAR, AD V. REVENUE BY : SH. RAJESH KUMAR , SR. DR DATE OF HEARING : 1 7 .10 .201 6 DATE OF PRONOUNCEMENT : 19 . 10 .201 6 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 22.03.2016 OF LD. CIT(A) , MUZAFFARNAGAR . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE LD. CIT(A),ERRED ON FACTS, IN LAW AND IN SURROUNDING CIRCUMSTANCES IN SUSTAINING THE WH OPPING ADDITION OF RS 47,50,000/ - IN AN ARBITRARY MANNER ON THE BASIS OF ASSUMPTIONS, PRESUMPTIONS, SURMISES, CONJECTURES AND SPECULATIONS. 2. THAT IN DOING SO, BOTH LD. CIT(A) AS WELL AS LD. AO, ERRED IN LAW, ON FACTS, AND IN SURROUNDING CIRCUMSTANCES, IN FAILING TO GIVE CREDIT OF RS. 22,24,676 BY WAY OF TURNOVER ALLOWABLE U/S 44AF OF IT ACT AS ALSO R S.10,00,100 AS SHOWN BY TRANSFER ON 20 - 04 - 2004 IN BANK AS WELL AS RS, 15,25,424 BEING ITA NO. 3693 /DEL /201 6 ARUN KUMAR JAIN 2 ADVANCE FROM CUSTOMERS, WITHOUT ASSIGNING ANY JUSTIFICATION FOR SUCH SWEEPING DISALLOWANCES. 3. THAT KNOWINGLY WELL THAT ADDITION U/S 68 OF IT ACT BEING UNSUSTAINABLE IN THE LIGHT OF VARIOUS CAS E LAW INCLUDING VERDICT OF HON' BLE SUPREME COURT RELIED UPON BY THE APPELLANT THAT THE LD. CIT(A), WITH DUE APOLOGY, IN A ZEAL TO SUSTAIN IMPUGNED ADDITIONS, BY INVOKING PLENARY POWERS VESTED WITH CIT(A), CONVERTED SECTION 68 OF IT ACT INTO SECTION 69A OF IT ACT IN AN ABRUPT MANNER, WITHOUT PROVIDING OPPORTUNITY OF BEING HEARD, TO THE APPELLANT ON THIS CRUCIAL AND CRUX ISSUE. 4. THAT THE LD CIT(A) AS WELL AS AO, ERRED IN LAW, ON FACTS AND IN SURROUNDING CIRCUMSTANCES, IN FAILING TO FOLLOW TH E PRINCIPLE OF 'AUDI ALTERAM PARTEM ' THEREBY RENDERING THE ASSESSMENT - CUM APPELLATE PROCEEDING, UNSUSTAINABLE IN LAW, AB - INTIO. 5. THAT WITHOUT PREJUDICE TO ABOVE, THE LD CIT(A) AS WELL AS AO BOTH ERRED IN LAW, ON FACTS AND IN SURROUNDING CIRCU MSTANCES, IN FAILING TO APPRECIATE THAT UNDER THE RETAIL TRADERS BENEFICIAL SECTION 44AF OF IT ACT, NO DOCUMENTATIONS OF ANY TRANSACTIONS IS MANDATORY AND SO CALLED INABILITY OF THE APPELLANT TO FILE ANY DOCUMENTARY EVIDENCE BEING UNCALLED FOR, IS NOT LIAB LE FOR DAMAGING COMMENTS. 6. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, AMEND OR MODIFY THE GROUND/GROUNDS OF APPEAL. 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE PROPER OPPORTUNITY NOT BEING PROVIDED BY THE AO /CIT(A) WHILE MAKI NG /SUSTAINING THE ADDITION. ITA NO. 3693 /DEL /201 6 ARUN KUMAR JAIN 3 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 30.03.2006 DECLARING AN INCOME OF RS.1,33,481/ - . LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE AO FRAMED THE ASSESSMENT AT AN INCOME OF RS.49 ,73,811/ - BY MAKING AN ADDITION OF RS.47,50,100/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION MADE BY THE AO. HOWEVER, THE LD. CIT(A) SUSTAINED THE ADDITION U/S 6 9 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) INSTEAD OF SECTION 68 OF THE ACT INVOKED BY THE AO. 6. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURT HER SUBMITTED THAT THE AO ASKED THE ASSESSEE TO FURNISH VARIOUS DETAILS RELATING TO THE CASH CREDITS WHICH WERE FURNISHED ON 25.03.2013 BUT THE AO WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD TO EXPLAIN THE CASE FRAMED THE ASSESSMENT WITHIN A PERIOD OF 3 DAYS ON 28.03.2013, SO, THERE WAS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) CHANGED THE SECTION UNDER WHICH ADDITION WAS MADE BY THE AO I.E. FROM SECTION 68 TO SEC. 69 OF THE ACT BUT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO ITA NO. 3693 /DEL /201 6 ARUN KUMAR JAIN 4 EXPLAIN THE CASES. THEREFORE, THE ACTION OF THE LD. CIT(A) IN SUSTAINING THE ADDITION U/S 69 OF THE ACT WHEN THE AO ORIGINALLY MADE THE ADDITION U/S 68 OF THE ACT WAS NOT JUSTIFIED . HE REQUESTED TO SET ASIDE THE ISSUE BACK TO THE FILE O F THE AO TO BE DECIDED AFTER PROVIDING A PROPER AND DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 7. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AO AS WELL AS THE LD. CIT(A) HAD GIVEN AMP LE OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS FULLY JUSTIFIED, PARTICULARLY WHEN, THE ASSESSEE HAD NOT GIVEN PROPER EXPLANATION IN SUPPORT OF HIS CLAIM. 8. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MAT ERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, I T IS NOTICED THAT THE ASSESSEE FURNISHED THE DETAILS ASKED BY THE AO VIDE REPLY DATED 25.03.2013. HOWEVER, THE AO WITHOUT POINTING OUT A NY SHORTCOMING IN THE REPLY OF THE ASSESSEE AND WITHOUT POINTING OUT TO THE ASSESSEE THAT THE REPLY WAS NOT SATISFACTORY MADE THE ADDITION BY FRAMING THE ASSESSMENT ON 28.03.2013. IT, THEREFORE, APPEARS THAT PROPER OPPORTUNITY OF BEING HEARD WAS NOT GIVEN TO THE ASSESSEE WHILE MAKING THE ADDITION U/S 68 OF THE ACT. IT IS ALSO NOTICED THAT ITA NO. 3693 /DEL /201 6 ARUN KUMAR JAIN 5 THE LD. CIT(A) SUSTAINED THE ADDITION BY INVOKING THE PROVISIONS OF SECTION 69 OF THE ACT WHILE THE ADDITION MADE BY THE AO WAS U/S 68 OF THE ACT. AT THE SAMETIME, NO OPPO RTUNITY WAS GIVEN TO THE ASSESSEE TO EXPLAIN HIS CASE AND NO INTENTION WAS SHOWN BY THE LD. CIT(A) THAT THE ADDITION WOULD BE MADE U/S 69 OF THE ACT INSTEAD OF SECTION 68 OF THE ACT. I, THEREFORE, BY CONSIDERING THE PECULIAR FACTS OF THIS CASE, DEEM IT APP ROPRIATE TO SET ASIDE THE ISSUE BACK TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD . THE ASSESSEE IS ALSO DIRECTED TO COOPERATE AND NOT TO SEEK UNDUE AND UNWARRANTED ADJOURNME NTS. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (ORDER PRON OUNCED IN THE COURT ON 19 /10 /2016) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 19 /10 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR