Ranganathan Sambanthan Babu, Hyderabad, Hyderabad V. ITO, Ward-10(1), Hyderabad, Hyderabad

ITA 467/HYD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2268 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 28-11-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J P ANAND
• Assessee Lawyers: S RAMA RAO
• Keywords: Opportunity of being heard; Principle of natural justice; Right to appeal; Condonation of delay
• Section: 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 467/HYD/2017 ASSESSMENT YEAR: 2010-11 RANGANATHAN SAMBANTHAN BABU, HYDERABAD [PAN: AGVPB4225H] VS INCOME TAX OFFICER, WARD-10(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI D.J.P.ANAND, DR DATE OF HEARING : 28-11-2019 DATE OF PRONOUNCEMENT : 04-12-2019 O R D E R PER D.KARUNAKARA RAO, A.M. : THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-8, HYDERABAD, DATED 29-08-2016, FOR THE AY.2010-11. CONDONATION OF DELAY 2. THE ASSESSEE HAS FILED THIS APPEAL WITH A DELAY O F 33 (THIRTY THREE) DAYS, FOR WHICH THE ASSESSEE HAS FILED AN AFF IDAVIT, SEEKING CONDONATION OF DELAY. CONSIDERING THE PETITION FOR CONDONATION OF DELAY IN RE SPECT OF ASSESSEE AND BEING SATISFIED WITH THE REASONABLE CAUS E FOR THE DELAY, ITA NO. 467/HYD/2017 :- 2 -: WE HEREBY CONDONE THE DELAY IN FILING THE APPEAL OF A SSESSEE, WHICH IS ADMITTED AND BEING HEARD ON MERITS. 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE , AN INDIVIDUAL, DERIVING INCOME FROM THE BUSINESS OF SHI PPING C&F. THE ASSESSEE FILED RETURN OF INCOME, DECLARING A TOTAL INC OME OF RS.15,32,300/-. THE CASE WAS TAKEN UP FOR SCRUTINY UN DER CASS. 4. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OF FICER (AO) CALLED FOR THE BOOKS OF ACCOUNT FROM THE ASSESSEE AND THERE WAS NO RESPONSE TO THE SAME. FURTHER, THE AO NOTED INVESTMENT IN THE IMMOVEABLE PROPERTY TO THE TUNE OF RS.33,09,000/-. ON HEARING THE ASSESSEE, THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT, AFTER MAKING THE FOLLOWING COUPLE OF ADDITIONS I. FIRST ADDITION INCLUDES ESTIMATION OF INCOME, APPLY ING THE FLAT RATE @8% OF THE TURNOVER. NON-SUBMISSION OF BO OKS OF ACCOUNT IS THE REASON FOR THIS ADDITION OF RS.19,13,11 3/-. II. THE SECOND ADDITION RELATES TO THE UN-EXPLAINED INVESTMENT FOR PURCHASE OF IMMOVEABLE PROPERTY AT CHEN NAI OF RS.33,09,000/-. FINALLY, AO ASSESSED THE TOTAL INCOME AT RS.67,54,413/- (I.E., RS.15,32,300 + 19,13,113 + 33,09,000). 4.1. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A), WHO DISMISSED THE APPEAL OF ASSES SEE, AFTER GRANTING AN OPPORTUNITY TO ASSESSEE. BUT THIS OPPORTUNIT Y WAS NOT AVAILED BY THE ASSESSEE. BEFORE DISMISSING THE APPEA L, THE LD.CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO AND THE COMMEN TS OF THE CONCERNED AUTHORITY I.E., JOINT COMMISSIONER OF INCO ME TAX, RANGE-10. THE CIT(A) COULD NOT SERVE THE COPY OF THE SAID REMAND ITA NO. 467/HYD/2017 :- 3 -: REPORT TO THE ASSESSEE. EVENTUALLY, THE CIT(A) DISMISSE D THE APPEAL OF ASSESSEE, STATING THE FOLLOWING: IT IS NOTED THAT THE APPELLANT HAS NOT AVAILED THE OPPORTUNITY OF APPEARING BEFORE THE ASSESSING OFFICER AND TO SUBMIT THE DETA ILS CALLED FOR. IT WOULD BE PERTINENT TO NOTE THAT THE APPELLANT SHRI RANGAN ATHAN SAMBANATHAN BABU DID NOT SHOW SERIOUSNESS IN PURSUING THE APPEA L AND EVEN IN THE REMAND PROCEEDINGS AND SUBSEQUENTLY, WHEN PROVIDED WITH COPY OF THE REMAND REPORT WHICH WAS RETURNED UNDELIVERED. NO C HANGE OF ADDRESS WAS GIVEN BY THE APPELLANT NOR DID THE APPELLANT FILE A NY NEW ADDRESS. CONSIDERING THE FACTS, ISSUES AND CIRCUMSTANCES OF THE INSTANT CASE AND NON-APPEARANCE BEFORE THE ASSESSING OFFICER AND IN APPEAL, THE APPEAL IS DISMISSED. HENCE, GROUND NO.4,5,6 & 7 ARE DISMISSE D. 5. CONSIDERING THE ABOVE DECISION OF THE CIT(A) AND A GGRIEVED WITH THE SAME, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUNDS: 1) THE ORDER OF THE LEARNED CIT (A) IS ERRONEOUS BO TH ON FACTS AND IN LAW. 2) THE LEARNED CIT (A) ERRED IN DECIDING THE APPEAL EX-PARTE WITHOUT PROVIDING PROPER OPPORTUNITY TO THE APPELLANT; 3) THE LEARNED CIT (A) OUGHT TO HAVE SEEN THAT THE ASSESSMENT WAS MADE WITHOUT SERVING NOTICE U/S 143(2) OF THE I.T.ACT AN D, THEREFORE, THE ASSESSMENT MADE U/S 143(3) OF THE I.T.ACT ON 30.03. 2013 IS NOT VALID. 4) THE CIT (A) ERRED IN CONFIRMING THE ACTION OF TH E ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT AND ESTIMATING THE I NCOME AT 8%. THE LEARNED CIT (A) OUGHT TO HAVE SEEN THAT PROPER BOOKS WERE M AINTAINED AND, THEREFORE, NO ESTIMATION COULD HAVE BEEN MADE. 5) THE CIT (A) ERRED IN CONFIRMING THE ACTION OF TH E ASSESSING OFFICER IN MAKING AN ADDITION OF RS.33,09,000/- TOWARDS UNEXPL AINED INVESTMENT WITHOUT CONSIDERING THE FACT THAT NO SUCH INVESTMEN T WAS MADE DURING THE YEAR UNDER CONSIDERATION. 6) ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 5.1. FROM THE ABOVE GROUNDS, IT IS EVIDENT THAT THE ASSE SSEE IS AGGRIEVED WITH THE EX-PARTE ORDER AS WELL AS THE AT THE FAILURE TO GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FURTHER, ITA NO. 467/HYD/2017 :- 4 -: COMPLETING THE ASSESSMENT WITHOUT SERVICING OF NOTICE, E STIMATION OF PROFITS @8%, MAKING ADDITION OF RS.33,09,000/-, O N ACCOUNT OF UN-EXPLAINED INVESTMENT FOR PURCHASE OF IMMOVEABLE PR OPERTY AT CHENNAI. THESE ARE THE GRIEVANCES OF THE ASSESSEE. 6. BEFORE US, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THA T THIS IS A FIT CASE FOR SENDING THE ISSUE TO THE FILE OF CIT(A) FOR ONE MORE ROUND OF ADJUDICATION OF ISSUES. IT IS A FACT THAT THE ASSES SEE NEVER RECEIVED THE COPY OF REMAND REPORT AND THE COMMENTS OF THE JOINT COMMISSIONER WERE HIGHLIGHTED. LD.COUNSEL PRAYED FOR GRANT OF ONE MORE OPPORTUNITY AND GAVE AN UNDERTAKING THAT THE ASSES SEE SHALL APPEAR BEFORE THE AUTHORITIES, WITHOUT FAIL IF AN OPPOR TUNITY IS GRANTED. 7. ON THE OTHER HAND, LD.DR FOR THE REVENUE RELIED HEA VILY ON THE ORDERS OF AO AS WELL AS THE CIT(A). LD.DR IS OF THE OPINION THAT THE LIBERALISM IN GRANTING OPPORTUNITY TO THE ASSESSEE O NLY RESULTS IN ASSESSEE FOR NOT COMPLYING WITH THE PROVISION OF THE ACT. AS PER THE LD.DR, STRICT VIEW SHOULD BE TAKEN IN THE MATTERS OF G RANTING OPPORTUNITIES TO THE PERSON, WHO IS NOT SERIOUS AND COM PLYING TO THE PROVISIONS OF THE ACT. 8. WE HEARD BOTH THE PARTIES ON THIS LIMITED ISSUE OF RE MANDING THE MATTER TO THE FILE OF CIT(A). ON CONSIDERING THE ABOV E FACTS, WE FIND THAT THE REMAND REPORTS, COMMENTS OF JOINT COMMISSI ONER AND NOTICES ETC., WERE NEVER SERVED EVENTUALLY ON THE A SSESSEE. THERE MUST BE REASONS FOR NON-SERVICE OF NOTICES. NO EVIDENCE IS BROUGHT TO OUR NOTICE. THE ABOVE REFERRED CORRESPONDE NCE WAS NOT SERVED SUCCESSFULLY ON THE ASSESSEE. IT IS NOT THE CAS E OF THE REVENUE THAT IT HAS SENT COPIES FOR SERVICE THROUGH ITS SERVER FO R SERVING BY ITA NO. 467/HYD/2017 :- 5 -: AFFIXTURE. IT IS ONLY A CASE OF SENDING CORRESPONDENC E THROUGH POSTAL AUTHORITIES. IN OUR VIEW, THE RIGHT OF APPEAL IS VERY PRECIOUS AND THE SAME IS BORNE OUT OF THE STATUTES. PROCEDURES HAVE TO BE PROPERLY COMPLIED WITH BOTH BY THE ASSESSEE AS WELL AS THE REVE NUE. SERVICE OF NOTICE IS VERY IMPORTANT AND SO IS THE SERVICE OF RE MAND REPORTS ETC. FURTHER, WE HAVE ALSO CONSIDERED THE STATEMENT MAD E BY THE LD.COUNSEL AT BAR. MR.COUNSEL SUBMITTED THAT HE WILL CO MPLY WITH THE NOTICES AND THE PROCEDURES THIS TIME, IF AN OPPORTUN ITY IS GRANTED. CONSIDERING THE SAME, WE ARE OF THE OPINION THAT ONE MO RE OPPORTUNITY IS GRANTED TO THE ASSESSEE AND THE SAME IS I N TUNE WITH THE SAID PRINCIPLES OF NATURAL JUSTICE. THE ASSESSEE I S EXPECTED TO COMPLY WITH THE PROVISIONS AND THE PROCEDURES. THE C IT(A) IS FREE TO TAKE ADVERSE VIEWS IF ANY, IF THE ASSESSEE REPEATS THE SAME. THE ASSESSEE IS DIRECTED TO COMMUNICATE THE CHANGE OF ADDR ESS IF ANY, AND CO-OPERATE WITH THE PROCESS OF LAW. IT IS ALSO NOTE D THAT CIT(A) IS ALSO JUSTIFIED IN MAKING EX-PARTE ORDER, HOWEVER, THE LOOPHOLES WERE NOT PROPERLY FILLED UP. THE GROUNDS RAISED BY A SSESSEE ARE ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DECEMBER, 2019 SD/- SD/- (V. DURGA RAO) (D. KARUNAKARA R AO) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 4 TH DECEMBER, 2019 TNMM ITA NO. 467/HYD/2017 :- 6 -: COPY TO : 1. SHRI RANGANATHAN SAMBANTHAN BABU, 1-10-52, ANUSH A APARTMENTS, FLAT NO.500, CHIKOTI GARDENS, BEGUMPET, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-10(1), HYDERABAD. 3. CIT(APPEALS)-8, HYDERABAD. 4. PR.CIT-6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.