Smt. Rosy Dawra , Ludhiana V. ITO, W-7(3), Ludhiana

ITA 464/CHANDI/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9478 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 12-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT SHUKLA SR DR
• Assessee Lawyers: PANKAJ BHALLA
• Keywords: Opportunity of being heard; Principle of natural justice; Agreed addition; Set aside; Audi alteram partem
• Section: 271(1)(c); 143(3); 274; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH .., ! '# #$ %, & '( BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, J M ITA NO. 464/CHD/2019 ASSESSMENT YEAR : 2013-14 SMT. ROSY DAWRA H.NO. 7200/2, BAWA COLONY, DURGA PURI, ST. NO. 25, BADI HAIBOWAL, LUDHIANA THE ITO WARD-7(3) LUDHIANA PAN NO: ARJPD5229N APPELLANT RESPONDENT !' ASSESSEE BY : SHRI PANKAJ BHALLA, CA #!' REVENUE BY : SHRI AMIT SHUKLA, SR. DR $ %! & DATE OF HEARING : 18/09/2019 '()*! & DATE OF PRONOUNCEMENT : 18/09/2019 ')/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 26/10/2018 OF LD. CIT(A)-3, LUDHIANA. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT THE LD. C.I.T.(A)-3, LUDHIANA, HAS WRONGLY PAS SED THE ORDER U/S 250(6) OF THE INCOME TAX ACT, 1961 AGAINST LAW AND FACTS OF T HE CASE. 2. THAT THE ORDER PASSED BY THE LD. CIT(A)-3, LUDHIANA IS IN CONTRAVENTION TO THE PRINCIPLES OF NATURAL JUSTICE AND WITHOUT PROVI DING REASONABLE OPPORTUNITY TO THE ASSESSEE. THAT THE LD. CIT(A) GROSSLY ERRED IN LAW & FACTS IN NOT TAKING INTO COGNIZIANCE THE ADJOURNMENT APPLICATION FILED BEFOR E HER. 2 3. THAT THE LD. CIT(A) ERRED IN LAW & FACTS TO CONFIRM PENALTY U/S 271(L)(C) TO THE TUNE OF RS. 18,23,564/- FOR CONCEALED THE PARTI CULARS OF INCOME TO THE EXTENT OF RS. 59,01,500/-, WITHOUT ANY BASE & REASONS THER EOF. 3.1 THE LD. CIT(A) ERRED IN LAW & FACTS IN FAILING TO A PPRECIATE THAT NO PENALTY IS LEVIABLE ON AGREED ADDITION. FURTHER THAT IT IS A SETTLE LEGAL POSITION THAT NO PENALTY IS LEVIABLE MERELY BECAUSE THE ASSESSEE HAS AGREED FOR THE ADDITION. 3.2 THAT THE LD. CIT(A) ERRED IN LAW & FACTS IN SUMMARI LY NOT TAKING INTO ACCORD DOCUMENTARY EVIDENCES REGARDING GENUINENESS OF THE TRANSACTION 3.3 FURTHER THAT THE PENALTY LEVIED IS AN A DEBATAB LE ISSUE. 4. THAT THE SHOW CAUSE NOTICE U/S 274 WAS DEFECTIVE AS IT DID NOT SPELL OUT GROUND ON WHICH PENALTY WAS SOUGHT TO BE IMPOSED. F URTHER THAT THE SATISFACTION RECORDED FOR INITIATING PENALTY PROCEEDINGS WERE NO T CONGRUENT WITH THE ORDER LEVYING PENALTY RENDERING THE ORDER A NULLITY. 5. THAT THE LD. A.O. ERRED IN INITIATING PENALTY AS NO SPECIFIC SATISFACTION WAS RECORDED EITHER FOR CONCEALMENT OF INCOME OR FOR IN ACCURATE PARTICULARS OF INCOME. 6. THAT THE APPELLANT CRAVES, LEAVE TO VARY, ALTER OR ADD ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 3. VIDE GROUND NO. 2 THE GRIEVANCE OF THE ASSESSEE RELATES TO THE EX-PARTE ORDER PASSED BY THE LD. CIT(A) WITHOUT PROVIDING RE ASONABLE OPPORTUNITY OF BEING HEARD. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. FRA MED THE ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED TO AS ACT) ON 16/03/2016 BY MAKING THE ADDITION OF RS. 59,01,500/ - ON ACCOUNT OF BOGUS LONG TERM CAPITAL GAIN (LTCG) AND UNVOUCHED EXPENSES. TH E A.O. ALSO INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE A.O. OBSERVED THAT 3 THE ASSESSEE SURRENDERED THE AMOUNT OF RS. 59,01,50 0/- OVER AND ABOVE THE RETURNED INCOME BY STATING AT THE TIME OF ASSESSMEN T PROCEEDINGS AS UNDER: I HAVE INVESTED IN THE SHARES OF KOLKATA BASED CO MPANY AND AFTER SALE EARN RS. 59,01,500/- AS LONG TERM CAPITAL GAIN. I DO NOT KNO W THIS MODUS OPERANDI AS CAPITAL FORMATION. HOWEVER, TO BUY PEACE OF MIND I SURRENDER LONG TERM CAPITAL GAIN OF RS. 59,01,500/- OVER AND ABOVE MY RETURNED INCOME FOR THE F.Y. 2012-13 RELEVANT TO THE A.Y. 2013-14 SUBJECT TO NO PENAL AC TION. 5. THE A.O. OBSERVED THAT THE ASSESSEE FAILED TO PR OVE THE GENUINENESS OF CREDIT ENTRIES REFLECTED IN HER SAVING BANK ACCOUNT MAINTAINED WITH ICICI BANK AND USED THE SAME TO EARN BOGUS LTCG, WHICH WAS TRE ATED AS ASSESSEES OWN UNEXPLAINED FUNDS AND WAS ADDED BACK TO HER INCOME UNDER SECTION 68 OF THE ACT. ACCORDING TO HIM THE ASSESSEE CONCEALED THE PA RTICULAR OF INCOME AMOUNTING TO RS. 59,01,500/- WHILE FILING THE RETUR N OF INCOME. HE THEREFORE LEVIED THE PENALTY OF RS. 18,23,564/- UNDER SECTION 271(1) (C) OF THE ACT, ON THE UNDISCLOSED INCOME OF RS. 59,01,500/-. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO PASSED THE EX-PARTE ORDER BY OBSERVING IN PARA 5 AN D 5.1 OF THE IMPUGNED ORDER AS UNDER: 5. DURING THE COURSE OF APPELLATE PROCEEDINGS VARIOUS DATES OF HEARING HAVE BEEN FIXED DETAILS OF WHICH ARE AS UNDER: SL.NO DATE ON WHICH NOTICE WAS ISSUED MODE OF SERVICE DATE OF HEARING REMARK 1. CASE FIXED FOR HEARING ON 30/08/2017 NOTICE SERVER OF THE OFFICE 19/09/2017 ADJOURNMENT APPLICATION RECEIVED CASE ADJOURNED TO 11/10/2017 2. 11/10/2017 ADJOURNED ON REQUEST TO 24/10/2017 4 3. 24/10/2017 NONE ATTENDED 4. 23/11/2017 THROUGH SPEED POST 12/12/2017 NONE AT TENDED 5. 12/12/2017 NOTICE SERVER OF THE OFFICE 10/01/2018 NONE ATTENDED 6. 16/01/2018 THROUGH SPEED POST 23/01/2018 NONE AT TENDED 7. 13/08/2018 THROUGH NOTICE SERVER 07/09/2018 NONE ATTENDED 8. 04/10/2018 (LAST OPPORTUNITY) THROUGH NOTICE SERVER 04/10/2018 NONE ATTENDED 5.1 FROM THE ABOVE SEQUENCE OF EVENT, IT CAN BE SEE N THAT ON EACH OCCASION OF HEARING DESPITE PROPER SERVICE OF NOTIC E THE LD. COUNSEL OF THE APPELLANT HAS ONLY INCLINED TO TAKE ADJOURNMENT ON ONE GROUND OR OTHER EVEN AFTER AVAILING SO MANY OPPORTUNITIES THE APPELLANT HAS COMPLETING FAILED TO ADDUCE ANY CONCRETE OR COGENT EVIDENCE IN SUPPORT O F THE VARIOUS GROUNDS OF APPEAL TAKEN BY HER IN THE PRESENT APPEAL. AS THE A PPELLANT HAS NOT AVAILED ANY OF THE OPPORTUNITIES ALLOWED TO HIM TO REPRESENT TH E CASE, I AM OF THE OPINION THAT THE APPELLANT IS NOT INTERESTED IN PURSUING HIS APP EAL MATTER AND HAS TO SAY NOTHING IN THE MATTER IN ADDITION TO GROUNDS OF APP EAL, TAKEN BY HIM. SO, THE APPEAL FILED BY THE APPELLANT IS BEING DISPOSED OFF EX-PARTY ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORDS WITHOUT ALLOWING ANY FURTHER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. THE MAXIM VIGILANTIBUS NON-DERMIENTIBUS JURA SUBVENUNT' I.E. 'THE LAW ASSIST THOSE WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIGHTS' IS APPLICABLE IN THIS CASE. 7. NOW THE ASSESSEE IS IN APPEAL. 8. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT PROP ER OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED BY THE LD. CIT(A) THEREFORE IMPUGNED PENALTY SUSTAINED WAS NOT JUSTIFIED. 9. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR SUPPORTE D THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT ASSESSEE CONCEALED THE INCOME WHICH WAS ADDED BY THE A.O. THEREFORE THE PENALTY UNDER SECTI ON 271(1)(C) OF THE ACT WAS RIGHTLY LEVIED AND THE LD. CIT(A) WAS JUSTIFIED IN SUSTAINING THE SAME. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS 5 NOTICED THAT THE LD. CIT(A) MENTIONED IN PARA 5 OF THE IMPUGNED ORDER THAT HE ISSUED THE NOTICE ON 04/10/2018 THROUGH NOTICE SERV ER FOR HEARING ON THE SAME DATE I.E; 04/10/2018, HOWEVER, IT IS NOT CLEAR AS T O WHETHER THE NOTICE WAS SERVED UPON THE ASSESSEE FOR HEARING ON THE SAME DATE OF I SSUANCE OF NOTICE. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM. WE THEREFORE, KEEPING IN VIEW THE PRINCIPLES OF NATUR AL JUSTICE, DEEM IT APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF THE LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PRO VIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 18/09/201 9) SD/- SD/- #$ % .., (SANJAY GARG ) ( N.K. SAI NI) & '(/ JUDICIAL MEMBER ! / VICE PRESIDENT AG DATE: 18/09/2019 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE