Sh. Harbans Lal S/o Sh. Ganpat Ram, Mandi Gobindgarh V. ITO, Ward, Nabha camp at , Mandi Gobindgarh

ITA 419/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4085 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 05-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHUBHIKA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 80C; 234B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 419/CHD/2018 (ASSESSMENT YEAR: 2013-14) SH. HARBANS LAL VS. THE ITO S/O SH. GANPAT RAM, WARD NABHA CAMP H.NO. -254, SECTOR-4 AT MANDI GOBINDGARH BLOCK D, SHASTRI NAGAR, MANDI, GOBINDGARH PAN NO. ALZPS3021K (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. SHUBHIKA REVENUE BY : SHRI MANOJ KUMAR DATE OF HEARING : 21/06/2018 DATE OF PRONOUNCEMENT : 07/08/2018 ORDER PER DIVA SINGH, J.M. THE PRESENT APPEAL HAS BEEN FILED BY ASSESSEE ASSAI LING THE CORRECTNESS OF THE ORDER DT. 06/02/2018 OF CIT(A)-1, LUDHIANA PERT AINING TO A.Y. 2013-14 ON THE FOLLOWING GROUNDS OF APPEALS: 1. THAT THE IMPUGNED ORDER IS BAD BOTH ON FACTS AND LA W. 2. THAT THE LD. APPELLATE AUTHORITY HAS WRONGLY AND IL LEGALLY CONFIRMED THE ASSESSMENT ORDER WHICH WAS WITHOUT JURISDICTION, WI THOUT COMPLYING THE MANDATORY PROVISION OF LAW BECAUSE NOTICE U/S 143(2 ) WAS NEITHER PROPERLY ISSUED NOR ACTUALLY SERVED UPON THE APPELLANT BESIDES BEIN G BARRED BY TIME. 3. THAT, WITHOUT PREJUDICE, THE LD. APPELLATE AUTHORIT Y HAS WRONGLY AND ILLEGALLY CONFIRMED THE EX-PARTY ORDER PASSED U/S 1 44 IGNORING THE FACTS AND CIRCUMSTANCES OF CASE. 4. THAT, WITHOUT PREJUDICE, THE LD. APPELLATE AUTHORIT Y HAS WRONGLY AND ILLEGALLY CONFIRMED THE ADDITION OF RS. 8,02,394/- IN TRADING ACCOUNT AND RS. 1,00,000/- BEING DISALLOWANCE U/S 80C AGAINST THE F ACTS AND CIRCUMSTANCES OF CASE. 5. THAT THE LD. APPELLATE AUTHORITY HAS WRONGLY AND IL LEGALLY CONFIRM THE CHARGING OF INTEREST U/S 234B AND 234C. 2. AT THE TIME OF HEARING AN ADJOURNMENT APPLICATIO N WAS MOVED ON BEHALF OF THE ASSESSEE SEEKING TIME. CONSIDERING THE FACT THAT THE IMPUGNED ORDER HAD BEEN PASSED ON THE BASIS OF WRITTEN SUBMISSIONS AND WITHOUT HEARING THE ASSESSEE AND NOTING THE FACT THAT THE GRIEVANCE OF THE ASSESSEE QUA THE ADDITIONS MADE BY THE ASSESSING OFFICER STILL REMAI NS THE ADJOURNMENT APPLICATION WAS REJECTED. THE RECORD SHOWS THAT THE CIT(A) CONSIDERING THE WRITTEN SUBMISSIONS HELD AS UNDER: ITA NO. 419/CHD/2018 (ASSESSMENT YEAR: 2013-14) 2 OF 3 5. IN THE APPELLATE PROCEEDINGS, BESIDES CHALLENGIN G THE SERVICE OF NOTICE, NOTHING WORTHWHILE WAS STATED . HOWEVER, AS IS EVIDENT, THE IMPUGNED ASSESSMENT ORDER IS BASED ON ESTIMATE AND DISALLOWANCES HAVE B EEN MADE BY JUST ADOPTING A PERCENTAGE OF THE EXPENSES CLAIMED IN THE RETURN. WHILE ACKNOWLEDGING THAT THE AO HAD NO OTHER OPTION BUT TO ESTIMATE BECAUSE OF THE CONTINUED NON- COOPERATION ON THE PART OF THE APPELLANT, YET IT IS FELT THAT ONCE AN ENHANCED GP RATE OF 7% AS AGAINST DECLARED 5.2% HAS BEEN ADOPTE D, THERE IS NO REASONABLE SCOPE FOR MAKING FURTHER ESTIMATED DISALLOWANCES OU T OF EXPENSES INCURRED ON POWER AND CONSUMPTION, REPAIR TO MACHINERY AND SALARY AND WAGES. THE AO IS, THEREFORE, DIRECTED TO DELETE THE ADDITIONS OF RS. 2,54,848/-, RS. 13,161/- & RS. 87,886/-. SINCE NO EVIDENCE HAS BEEN FILED REGA RDING THE CLAIM OF DEDUCTION UNDER CHAPTER VIA, THE ACTION OF THE AO IN DISALLOW ING THE SAME IS CONFIRMED. THUS, THE ADDITIONS OF RS. 8,02,394/- ON TRADING AC COUNT AND RS. 1 LAKH ON ACCOUNT OF LACK OF EVIDENCE REGARDING THE CLAIM OF DEDUCTIO N ARE SUSTAINED. IT IS ORDERED ACCORDINGLY. (EMPHASIS SUPPLIED) 3. ON PERUSAL OF THE ABOVE IT IS EVIDENT THAT THE T AX PAYER HAS NOT BEEN ABLE TO ADVANCE HIS CASE IN THE SO CALLED WRITTEN SUBMIS SION TAKEN ON RECORD AND THE GRIEVANCE PERSISTS. ON A READING OF THE CONCLUSION AND THE REASONING OF THE CIT(A) IT WOULD DEMONSTRATE THAT ON ACCOUNT OF LACK OF OPPORTUNITY OF BEING HEARD THE ASSESSEES APPEAL BEFORE THE CIT(A) WHERE IN THE ASSESSMENT ORDER WAS CHALLENGED BOTH ON MERITS AS WELL AS ON JURISDI CTION FAILED FOR WANT OF REPRESENTATION. RIGHT TO BE HEARD FORMS THE BED ROC K OF THE PRINCIPLES OF NATURAL JUSTICE. THE WORD NATURAL JUSTICE IS DERIVED FROM T HE ROMAN WORD JUS NATURALE WHICH PRESUPPOSES PRINCIPLES OF NATURAL LAW INCLUDI NG JUSTICE, EQUITY, FAIR PLAY AND GOOD CONSCIENCE. FAIR PLAY PRE SUPPOSES FAIR NO TICE OF CHARGE, AND PLACE OF HEARING, OPPORTUNITY OF EFFECTIVE HEARING TO ADD RESS THE CHARGE AND SPEAKING ORDER ADDRESSING THE REASONS FOR AGREEING OR DISAGR EEING WITH THE CLAIMS PUT FORTH. AUDI ALTEREM PARTEM WHICH IS ONE OF THE FOUN DATIONAL AND FUNDAMENTAL BED ROCKS OF NATURAL JUSTICE MEANS THAT NO ONE SHOU LD BE CONDEMNED UN HEARD. THOUGH THESE RULES ARE NOT NECESSARILY CODIFIED BUT WHICH EVOLVED OVER THE YEARS AND ARE READ INTO NOT ONLY WHEN STATUTORY PRO VISIONS SO PROVIDE BUT ALSO IN QUASI ADMINISTRATIVE DECISIONS WHEREBY THE RIGHTS / INTERESTS OF THE PARTY IS ADVERSELY EFFECTED THAN IT NECESSITATES THAT THE PR OCEDURE REQUIRED TO BE ADHERED TO ENVISAGE A RIGHT TO BE HEARD. NO DOUBT A PARTY MAY CHOOSE TO WAIVE THE RIGHT TO BE HEARD AND INSTEAD CHOOSE TO R ELY ON WRITTEN SUBMISSIONS, HOWEVER IT IS THE DUTY OF THE COURT TO ENSURE THAT THE WAIVER SO MADE IS INTELLIGENTLY MADE AND WITH FULL KNOWLEDGE AND UNDE RSTANDING I.E; WITH THE FOREKNOWLEDGE THAT THE RIGHT TO BE HEARD EXISTS. TH E RECORD IS SILENT ON THIS ASPECT. ACCORDINGLY SINCE THERE IS NOTHING ON RECOR D TO SHOW THAT THE RIGHT TO BE ITA NO. 419/CHD/2018 (ASSESSMENT YEAR: 2013-14) 3 OF 3 HEARD WAS CONSCIOUSLY AND KNOWINGLY WAIVED. IN VIEW THEREOF TO SET RIGHT THIS DEFICIT IN THE ORDER PASSED THE IMPUGNED ORDER IS R ESTORED BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEI NG HEARD. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED : 07/08/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR