R. Sadulla, Bangalore V. ITO, Bangalore

ITA 482/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57458 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SUSAN THOMAS JOSE
• Assessee Lawyers: RAJENDRA HEGDE
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 142(1); 80G; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO.482/BANG/2011 (ASSESSMENT YEAR : 200 7-08) MR. R. SADULLA, NO.26, II MAIN, I STAGE, SERVICE ROAD, WEST OF CHORD ROAD, MANJUNATHA NAGAR, BANGALORE-560 026 . APPELLANT. PAN AUPZS 6670 H VS. INCOME TAX OFFICER, WARD 5(3), BANGALORE. .. RESPONDENT. APPELLANT BY : MR. RAJENDRA HEGDE. RESPONDENT BY : MRS. SUSAN THOMAS JOSE. DATE OF HEARING : 30.1.2012. DATE OF PRONOUNCEMENT : 30.1.2012. O R D E R PER SHRI N.K. SAINI, A.M. : THIS IS AN APPEAL BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER DATED 27.12.2010 OF LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-II, BANGALORE. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS A PPEAL : 1. THE ORDER OF THE LEARNED CIT(A) II, BANGALORE IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER IS PASSED IN HASTE AND WITHOUT PROVID ING SUFFICIENT AND REASONABLE OPPORTUNITIES OF BEING HEARD. 2 ITA NO.482/BANG/11 3. THE ORDER IS PASSED MUCH AGAINST TO THE PRINCIP LE OF NATURAL JUSTICE AND THUS LIABLE TO BE QUASHED. 4. THE LEARNED ASSESSING OFFICER OUGHT TO HAVE ASS UMED JURISDICTION OVER THE APPELLANT, SINCE THE APPELLANT WAS NEITHER A CHARTE RED ACCOUNTANT, MEDICAL PRACTITIONER, NOR AN ADVOCATE. 5. THE LEARNED CIT(A) OUGHT NOT TO HAVE CONFIRMED THE DISALLOWANCE OF RS.75,000 CLAIMED BY THE APPELLANT UNDER SECTION 80 DD OF THE ACT, MERELY BECAUSE CERTIFICATE WAS NOT ENCLOSED. 6. THE CIT(A) FURTHER ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.25,000 BEING THE DEDUCTION CLAIMED UNDER SECTION 80GG OF THE ACT , SINCE THERE WAS NO CERTIFICATE. 7. THE ORDER OF THE CIT(A) IS OPPOSED TO FACTS IN CONFIRMING THE ADDITION OF RS.5,00,000 MADE UNDER THE PROVISIONS OF 68 OF THE ACT, WHEN THE APPELLANT HAS NOT INTRODUCED ANY CASH CREDITS DURING THE FINA NCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER REFERENCE. 8. THE CIT(A) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION OF RS.1,00,000 CLAIMED UNDER SECTION 80G OF THE ACT, SINCE THE APPELLANT WAS NOT REQUIRED TO ENCLOSE ANY PROOF ALO NG WITH THE RETURN OF INCOME AS PER REVISED PROCEDURE AND SUCH PROOF HAS TO BE P RODUCED ONLY WHEN IT IS CALLED FOR. 3. THE MAIN GRIEVANCE OF THE ASSESSEE VIDE GROUND N O.2 RELATES TO THE ACTION OF THE LEARNED CIT(A) IN DECIDING THE APPEAL IN HASTE AND WITHOUT PROVIDING SUFFICIENT AND REASONABLE OPPORTUNITY TO THE ASSESSEE. 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE FILED HIS RETURN OF INCOME ON 10.10.2007 DECLARING TOTAL INCOME OF RS.2,44,675 BE ING INCOME FROM PROFESSION. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE IN COME TAX ACT, 1961 (HEREIN AFTER REFERRED AS THE ACT). LATER ON THE CASE WAS SELE CTED FOR SCRUTINY. HOWEVER, THE ASSESSMENT WAS FRAMED EX-PARTE UNDER SECTION 144 OF THE ACT ON 31.12.2009 AT AN INCOME OF RS.10,64,184. AGAINST THE SAID ASSESSMENT ORDER , THE ASSESSEE PREFERRED AN APPEAL TO 3 ITA NO.482/BANG/11 THE LEARNED CIT(A) WHO DISMISSED THE APPEAL FOR NON -PROSECUTION BY OBSERVING IN PARA 2 OF THE IMPUGNED ORDER AS UNDER : IN THIS CASE, THE APPEAL WAS INSTITUTED ON 29.1.2 010 AND THEREAFTER A FORMAL NOTICE FOR HEARING WAS ISSUED ON 9.8.2010 FI XING THE HEARING ON 24.8.2010. IN RESPONSE, THE APPELLANTS AUTHORIZE D REPRESENTATIVE VIDE LETTER DATED 24.8.2010 SOUGHT ADJOURNMENT. SUBSEQUENT OPP ORTUNITIES WERE GIVEN ON 16.8.2010, 28.10.2010, 9.11.2010 AND ON 27.12.2010. IN SPITE OF THAT, THE APPELLANT NEITHER APPEARED IN PERSON NOR THROUGH AN AUTHORIZED REPRESENTATIVE, EVEN NO WRITTEN SUBMISSIONS WERE FURNISHED. UNDER THESE CIRCUMSTANCES, IT IS CONSTRUED THAT, THE APPELLANT DOES NOT WANT TO PROS ECUTE THE APPEAL. OWING TO NON-PROSECUTION, THE APPEAL IS DISMISSED FOLLOWING THE DECISION OF THE HON'BLE ITAT, DELHI IN THE CASE OF CIT VS. MULTIPLAN INDIA PVT. LTD. (1991) 38 ITD 320 AND OF THE HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF LATE TUKAJI RAO HOLKAR VS. CWT (1997) 225 ITR 480. NOW THE ASSESSEE IS IN APPEAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE VER Y OUTSET, STATED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL O F THE ASSESSEE IN LIMINE WITHOUT DECIDING THE VARIOUS ISSUES ON MERIT. IT WAS SUBMITTED THAT NO NOTICE OF HEARING WAS SERVED ON THE ASSESSEE. THEREFORE, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DISMISSING THE APPEAL FOR NON-PROSECUTION. 6. IN HER RIVAL SUBMISSION, THE LEARNED DEPARTMENTA L REPRESENTATIVE STRONGLY SUPPORTED THE ORDER OF THE LEARNED CIT(A) AND FURTH ER SUBMITTED THAT VARIOUS OPPORTUNITIES WERE GIVEN TO THE ASSESSEE FOR DEFEND ING HIS CASE, HOWEVER, THE ASSESSEE DID NOT APPEAR IN PERSON NOR THROUGH AN AUTHORIZED REPR ESENTATIVE. THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN DISMISSING THE APPEAL ON AC COUNT OF NON-PROSECUTION. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT C ASE, IT IS NOTICED THAT THE ASSESSING 4 ITA NO.482/BANG/11 OFFICER PASSED THE ASSESSMENT ORDER EX-PARTE UNDER SECTION 144 OF THE ACT. HE HAS MENTIONED IN THE BODY OF THE ASSESSMENT ORDER DATED 31.12.2009 THAT HE RECEIVED THE FILE ON TRANSFER FROM ITO, WARD 8(3), BANGALORE ON 11.11 .2009 AND ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT WHICH WAS SERVED ON THE ASSESSEE ON 18.11.2009. AGAIN REMINDER WAS ISSUED VIDE LETTER DT.27.11.2009 AND SERVED ON THE ASSESSEE ON 2.12.2009 HE ALSO MENTIONED THAT A FINAL OPPORTUNITY OF BEING HEARD A LONG WITH A PROPOSAL FOR EXPARTE ASSESSMENT WAS ACCORDED TO THE ASSESSEE VIDE LETTER DT.21.12.2009. THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER UNDER SECTI ON 144 OF THE ACT ON 31.12.2009 AND WHILE PASSING THE SAID ORDER, IT IS MENTIONED THAT DATE FIXED FOR HEARING WAS INTIMATED VIDE LETTER DT.21.12.2009. SO, IT IS NOT CLEAR AS TO WH ETHER THE ASSESSEE WAS ASKED TO APPEAR ON SAID DATE I.E. 31.12.2009 OR SOME OTHER DATE. IT A PPEARS THAT THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER IN HASTE WITHOUT AFFORD ING A DUE AND REASONABLE OPPORTUNITY OF BEING HEARD AND WHEN THE ASSESSEE CARRIED THE MA TTER TO THE LEARNED CIT(A), HE ALSO DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-PROSEC UTION BY STATING THAT IN PARA 2 OF THE IMPUGNED ORDER THAT OPPORTUNITIES WERE GIVEN ON 16. 8.2010, 28.10.2010, 9.11.2010 AND 27.12.2010. FROM THE OBSERVATION OF THE LEARNED CI T(A), IT IS NOT CLEAR AS TO WHETHER NOTICE FOR THE LAST HEARING WAS SERVED ON THE ASSES SEE. IT IS ALSO NOTICED THAT THE LEARNED CIT(A) HAD NOT DISCUSSED THE ISSUES AGITATED BY THE ASSESSEE ON MERITS. IN OTHER WORDS, THE CASE HAS NOT BEEN DECIDED ON MERIT. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACT S AND KEEPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE, SET ASIDE T HE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND REMAND THE CASE BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED 5 ITA NO.482/BANG/11 AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE A ND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO DIRECT THE ASSESSEE TO CO-OPERATE, NOT TO SEEK UNWARRANTED AND UNREASONABLE ADJOURNMENT. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JAN., 2012.) SD/- SD /- (P. MADHAVI DEVI) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 30.01.2012. *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, -BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR, ITAT, BANGALORE