Vidyadevi Bhagchand Jain, Surat V. Income tax Officer, Ward 1(2)(5), Surat

ITA 463/SRT/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1888 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 29-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S CHOUDHARY
• Keywords: Unexplained cash credit; Unexplained expenditure; Opportunity of being heard; Principle of natural justice; Penny stocks
• Section: 69C

Judgement Text

VIDYADEVI BHAGCHAND JAIN VS. ITO, WARD-1(2)(5) /ITA NO.463/SRT/2018/ A.Y. 2014-15. PAGE 1 OF 4 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT , . . , BEFORE SMT.DIVA SINGH, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A. NO.463/SRT/2018 / ASSESSMENT YEAR : 2014-15 VIDYADEVI BHAGCHAND JAIN LOWER GROUND, M.R. HOUSE, KOHINOOR TEXTILE MARKET, RING ROAD, SURAT [PAN: AAXPJ 5235 H] VS. THE INCOME TAX OFFICER, WARD-1 (2) (5), SURAT. APPELLANT /RESPONDENT /ASSESSEE BY SHRI RAMESH MALPANI CA /REVENUE BY SHRI P.S.CHOUDHARY SR.DR / DATE OF HEARING: 09 .01.2019 /PRONOUNCEMENT ON 10 .01.2019 /O R D E R PER O.P.MEENA, AM: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, SURAT, DATED 14.05.2018, FOR THE ASSESSMENT YEAR 2014-15. 2. THE GROUND RAISED BY THE ASSESSEE READ AS UNDER : 1. THAT THE EX-PARTE APPEAL ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS) [CIT (A)] IS WRONG AND BAD-IN-LAW AS THE SAME HAS BEEN PASSED WITHOUT HEARING THE APPELLANT. 2. THAT THE EX-PARTE APPEAL ORDER PASSED BY LD. CIT(A) DISMISSING THE APPEAL OF THE APPELLANT IS WRONG AND BAD-IN-LAW AS THE SAME HAS BEEN PASSED WITHOUT CONSIDERING THE SUBMISSION AND CONTENTIONS OF THE APPELLANT FURNISHED IN THE FORM OF STATEMENT OF FACTS ALONG WITH THE APPEAL AND ALSO BY WAY OF ARGUMENTS VIDYADEVI BHAGCHAND JAIN VS. ITO, WARD-1(2)(5) /ITA NO.463/SRT/2018/ A.Y. 2014-15. PAGE 2 OF 4 RAISED DURING THE ASSESSMENT PROCEEDINGS AS RE-PRODUCED IN THE ASSESSMENT ORDER. 3. THAT THE EX-PARTE APPEAL ORDER PASSED BY LD. CIT(A) DISMISSING THE APPEAL OF THE APPELLANT IS WRONG AND BAD-IN-LAW AS THE SAME HAS BEEN PASSED WITHOUT DECIDING THE VARIOUS GROUNDS OF APPEAL ON MERITS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD, STATEMENT OF FACTS AND GROUNDS OF APPEAL. 4. WITHOUT PREJUDICE TO OTHER OF APPEAL, THAT THE LD.CIT(A) HAS ERRED ON FACTS AS WELL AS IN LAW IN UPHOLDING THE ADDITION OF RS.39,96,919/- U/S. 68 OF THE I.T ACT, 1961 (THE ACT), BY ASSUMING THE GENUINE AND BONA FIDE LONG TERM CAPITAL GAIN (LTCG) FROM SALE OF SHARES AS UNEXPLAINED CASH CREDITS. THE ADDITION MADE BY LD. AO IS WRONG AND UNJUSTIFIED AND LD. CIT(A) HAS ERRED IN UPHOLDING THE SAME BY DISMISSING THE APPEAL OF THE APPELLANT ON EX-PARTE BASIS. 5. WITHOUT PREJUDICE TO OTHER GROUND OF APPEAL, THAT THE ADDITION MADE BY LD. AO OF RS.3,96,919/-,BY JUST DISCUSSING GENERALLY ABOUT THE REPORTS OF BOGUS LONG TERM CAPITAL GAINS IN PENNY STOCKS, WITHOUT ANY SPECIFIC AND COGENT ADVERSE FINDING IN RESPECT OF THE TRANSACTIONS OF AND CAPITAL GAINS EARNED BY THE APPELLANT, IS COMPLETELY WRONG AND UNJUSTIFIED ON FACTS AS WELL AS IN LAW. LD. CIT(A) HAS ERRED IN UPHOLDING THE SAME BY DISMISSING THE APPEAL OF THE APPELLANT ON EX-PARTE BASIS. 6. WITHOUT PREJUDICE TO OTHER GROUNDS OF APPEAL, THAT THE LD. CIT(A) HAS ERRED ON FACTS AS WELL AS IN LAW IN UPHOLDING THE ADDITION OF RS.39,96,919/- U/S. 69C OF THE ACT ON ACCOUNT OF PRESUMPTIVE UNEXPLAINED EXPENDITURE, WHEREAS THERE HAS BEEN NO FINDING OF ANY SUCH EXPENDITURE INCURRED BY THE APPELLANT. THE ADDITION MADE BY LD. AO IS WRONG AND UNJUSTIFIED AND LD. CIT(A) HAS ERRED IN UPHOLDING THE SAME BY DISMISSING THE APPEAL OF THE APPELLANT ON EX-PARTE BASIS. 7. THAT LD. CIT(A)HAS ERRED UPHOLDING THE CHARGING OF INTEREST U/S. 234A/234B/234C OF THE ACT, BY WAY OF DISMISSING THE APPEAL OF THE APPELLANT ON EX-PARTE BASIS. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ANY GROUNDS OF APPEAL. 3. THE ABOVE GROUNDS NO. 1 TO 4 RELATES TO PASSING EX-PARTE ORDER BY CIT (A) . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO PROPER OPPORTUNITY OF HEARING AFFORDED TO THE ASSESSEE. THE LD. CIT (A) WAS NOT JUSTIFIED IN REJECTING THE APPEAL OF THE ASSESSEE EX-PARTE. THE LAST DATE FIXED FOR HEARING WAS 30.04.2018 WHICH WAS PUBLIC HOLIDAY ON ACCOUNT OF BUDH PURNIMA SO NO HEARING COULD TAKE VIDYADEVI BHAGCHAND JAIN VS. ITO, WARD-1(2)(5) /ITA NO.463/SRT/2018/ A.Y. 2014-15. PAGE 3 OF 4 PLACE. SUBSEQUENTLY, NO NOTICE OF GIVING FRESH HEARING WAS GIVEN AND THE APPEAL WAS DECIDE EX-PARTE. THE EX-PARTE ORDER WITHOUT CONSIDERING SET-OFF AND WITHOUT DECIDING APPEAL ON MERIT AMOUNTS INJUSTICE TO THE ASSESSEE AS HELD BY CO-ORDINATE BENCH OF ITAT AHMEDABAD IN THE CASE OF GUJARAT THEMIS BOISYN LTD. V. JCIT 74 ITD 339 (AHD). THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER PLACED RELIANCE IN THE CASE OF CIT V. PREMKUMAR ARJUNDAS LUTHRA HUF [2016] 69 TAXMANN.COM 407 (BOMBAY). THE LD. COUNSEL PRAYED THAT THE APPEAL BE RESTORED TO THE FILE OF LD. CIT (A) WITH A DIRECTION THAT PROPER OPPORTUNITY OF BEING HEARD MAY BE ALLOWED TO THE ASSESSEE. 4. THE LD. SENIOR D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW BUT NOT SERIOUSLY OBJECTED TO RESTORATION OF APPEAL TO CIT (A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE LD. CIT (A) HAS FIXED LAST DATE OF HEARING FOR 30.04.2018 WHICH WAS A PUBLIC HOLIDAY ON ACCOUNT OF BUDH PURNIMA. THEREAFTER, NO NOTICE FOR HEARING WAS ISSUED. HOWEVER, THE NOTICE FOR HEARING ON 29.11.2017, 08.02.2018, 27.02.2018 AND 27.03.2018 AND 12.04.2018 WERE REMAINS NOT COMPLIED WITH AND HEARING WAS ADJOURNED AS MENTIONED IN APPELLATE ORDER. HOWEVER, ON CAREFUL CONSIDERATION, WE FIND LAST DATE OF HEARING WAS PUBLIC HOLIDAY AND THEREAFTER, NO NOTICE FOR HEARING WAS ISSUED MEANS THAT THE CIT (A) HAS NOT ALLOWED PROPER OPPORTUNITY OF BEING HEARD. WE FIND THAT THE LD. CIT(A) HAS SIMPLY DISMISSED THE APPEAL FOR NON-APPEARANCE BY THE ASSESSEE ON VARIOUS DATES BY APPLYING CASE LAW OF CIT V. B. N. BHATTACHARJEE & OTHERS 118 ITR 461(SC)-, ESTATE OF LATE TUKOJIRAO HOLKAR V. CWT, 223 ITR 480 (M.P.) AND MULTIPLAN INDIA LIMITED, 38 ITD 320 (DEL). THE PRINCIPLE OF AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRESSION AUDI ALTERAM PARTEM VIDYADEVI BHAGCHAND JAIN VS. ITO, WARD-1(2)(5) /ITA NO.463/SRT/2018/ A.Y. 2014-15. PAGE 4 OF 4 IMPLIES THAT A PERSON MUST BE GIVEN THE OPPORTUNITY TO DEFEND HIMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVIDENCE, RIGHT TO REBUT ADVERSE EVIDENCE, RIGHT TO CROSS EXAMINATION, RIGHT TO LEGAL REPRESENTATION, DISCLOSURE OF EVIDENCE TO PARTY, REPORT OF ENQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS. WE TOOK SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT, IN THE CASE OF MANEKA GANDHI VS. UNION OF INDIA, WHEREIN HON'BLE SUPREME COURT HAS HELD THAT RULE OF FAIR HEARING IS NECESSARY BEFORE PASSING ANY ORDER. WE FIND THAT IT IS PRE-DECISION HEARING STANDARD OF NORM OF RULE OF AUDI ALTERAM PARTEM. WE FIND THAT IN THIS INSTANT CASE, THE ASSESSEE WAS NOT GIVEN PROPER HEARING. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE MUST BE GIVEN ONE MORE OPPORTUNITY OF HEARING AND TO REPRESENT HIS CASE. THEREFORE, WE RESTORE THIS APPEAL TO THE FILE OF LD. CIT (A) FOR ALLOWING PROPER OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH LAW. NEVERTHELESS, TO MENTION THAT THE ASSESSEE WILL COOPERATE IN THE APPEAL PROCEEDINGS AND FILE NECESSARY EVIDENCES ON WHICH HE WANTS TO RELY UPON. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 10.01.2019. SD/- SD/- ( /DIVA SINGH) ( . . /O.P.MEENA) ( /JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) / SURAT, DATED : 10 TH JANUARY, 2019/ SUBHANKAR SAMANTA, PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT