Bharat Kathuria, Faridabad V. ITO, Faridabad

ITA 5061/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91448 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 20-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 144

Judgement Text

ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 BHARAT KATHURIA, VS INCOME TAX OFFICER, FCA-3681, A-92, WARD II(3), FARIDABAD. SGM NAGAR, FARIDABAD. (PAN NO.ABFPK5224L) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P.C. YADAV, ADV. RESPONDENT BY: SHRI K.K. JAISWAL DR DATE OF HEARING: 20.7.2015 DATE OF PRONOUNCEMENT: 23.07.2015 O R D E R PER C.M. GARG, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE HAS BEEN DIRECTED AGAI NST THE ORDER OF THE CIT(A)-FARIDABAD DATED 15.7.2013 IN APPEAL NO. 244/ 2011-12 FOR AY 2009-10. 2. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT GROUND NO. 2, 3, 4 & 5 OF THE ASSESSEE MAY KINDLY B E ADJUDICATED, BEING LEGAL GROUNDS PERTAINING TO VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE AND THE LD. DR ALSO PLACED HIS CONSENT TO THAT. GROUND NO. 2 TO 5 OF THE ASSESSEE READ AS UNDER:- ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 2 2. THAT THE LD CIT(A)-FARIDABAD HAS ARBITRARILY REJECTED THE GROUND OF 'NON- OPPORTUNITY' AS NO REA SONABLE OPPORTUNITY WAS AFFORDED BY THE LD AO WHILE FRAMING THE ASSESSMENT AND IN THE SAME WAY, THE LD CIT(A) HAS A LSO NOT AFFORDED SUFFICIENT OPPORTUNITY TO EXPLAIN THE FACT S & CIRCUMSTANCES OF CASE. THE ENTIRE ASSESSMENT ORDER WHICH WAS PASSED U/S 144 OF I.T. ACT HAS WRONGLY BEEN UPHELD. 3. THAT THE CIT(A)-FARIDABAD HAS GROSSLY VIOLATED T HE PRINCIPLES OF NATURAL JUSTICE, WHILE IGNORING THE E GOISTIC APPROACH OF THE LD AO IN THE PRESENT CASE, WHICH HAS CAUSED IRREPARABLE DAMAGE TO THE ASSESSEE'S LIVELIHOOD. THE VOLUMINOUS RECORD OF ASSESSEE'S PLEAS BEFORE & AFTER THE ASSESSMENT FRAM ED, HAS BEEN DEALT BY THE LD AO IN MOST BIASED MATTER WITH MALA- FIDE INTENTS FOR THE REASONS BEST KNOWN TO HIM. 4. THAT THE LD CIT(A)-FARIDABAD HAS ERRED IN LAW & ON FACTS WHILE SUMMARILY REJECTING THE CONTENTION & MA TERIAL PLACED ON RECORD BEFORE HIM AND BEFORE THE LD AO AND DESPI TE OF HUMBLE PLEAS MADE BY THE ASSESSEE, HAD ALSO REJECTED THE A PPLICATION FILED U/S 46A OF I.T. ACT FOR PLACING FRESH MATERIAL ON R ECORD, WHICH WAS ESSENTIAL FOR APPRECIATION OF FACTS & CIRCUMSTANCES OF CASE. 5. THAT THE LD CIT (A) - FARIDABAD HAS ERRED IN LA W & ON FACTS WHILE MECHANICALLY PASSING THE ORDER, UPHOLDING THE ENTIRE ADDITIONS OF THE LD AO IN THE ORDER PASSED U/S 144 OF I.T. ACT. THE WHOLE ORDER IS BASED ON ARBITRARINESS, SURMISES AND CONJECTURES. THERE IS NO APPLICATION OF JUDICIOUS MIND OR EVEN A PPRECIATION OF EXISTING MATERIAL LYING ON RECORD AT THE TIME OF AS SESSMENT. 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE AO DENIED OPPORTUNITY OF BEING HEARD TO THE ASS ESSEE AND PASSED EX PARTE ORDER U/S 144 OF THE INCOME TAX ACT, 1961 (FOR SHOR T THE ACT). LD COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THAT THE AGGRIEVED ASS ESSEE FILED AN APPEAL BEFORE THE CIT(A) ALONG WITH AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES 1962 BUT THE SAME WAS DISMISSED BY THE CIT(A) WITHO UT ANY REASON DENYING ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 3 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. LD. CO UNSEL OF THE ASSESSEE VEHEMENTLY POINTED OUT THAT THE CIT(A) PASSED A CRY PTIC, SLIPSHOD AND BRIEF ORDER WITHOUT ADJUDICATING ALL GROUNDS RAISED BY TH E ASSESSEE BEFORE HIM WHICH IS ALSO A CLEAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND AGAINST THE SPIRIT OF SECTION 250(6) OF THE ACT. LD. COUNSEL STRENUOUSLY CONTENDED THAT THE ASSESSEE WAS PREVENTED FROM FILING RELEVANT MATERIAL IN HIS SUPPORT AND RETURNED INCOME AS THE AO DID NOT ALLOW OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THEREFORE, THE REQUEST OF THE ASSESSEE FOR ADMISSION AND CONSIDERA TION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF INCOME TAX RULES. LD. COUNSEL FI NALLY SUBMITTED THAT THE REVENUE AUTHORITIES MAY KINDLY BE DIRECTED TO ADMIT ADDITIONAL EVIDENCE OF THE ASSESSEE AND THE MATTER MAY KINDLY BE RESTORED TO T HE FILE OF AO FOR A FRESH DE NOVO ADJUDICATION. 4. LD. DR REPLIED THAT DESPITE SEVERAL NOTICES, THE ASSESSEE DID NOT ATTEND ASSESSMENT PROCEEDINGS, THEREFORE, THE AO HAD NO AL TERNATIVE BUT TO PASS AN EX PARTE ORDER AND TO FRAME ASSESSMENT AS PER WELL FOU NDED PRINCIPLES OF BEST JUDGEMENT U/S 144 OF THE ACT. LD. DR FURTHER POINT ED OUT THAT THE ASSESSEE COULD NOT SHOW ANY CIRCUMSTANCE AS PER REQUIREMENT OF RULE 46A OF THE RULES WHICH COULD SUPPORT THE REQUEST FOR ADMISSION AND C ONSIDERATION OF ADDITIONAL EVIDENCE DURING FIRST APPELLATE PROCEEDINGS, THEREF ORE, THE CIT(A) WAS CORRECT IN DISMISSING THE SAID APPLICATION OF THE ASSESSEE. HO WEVER, LD. DR FAIRLY ACCEPTED THAT THE CIT(A) HAS PASSED A VERY BRIEF AND CRYPTIC ORDER WITHOUT ADDRESSING AND ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 4 ADJUDICATING ALL THE ISSUES/GROUND RAISED BY THE AS SESSEE DURING FIRST APPELLATE PROCEEDINGS AGAINST THE IMPUGNED ASSESSMENT ORDER. LD. DR FINALLY PRAYED THAT THE DEPARTMENT HAS NO SERIOUS OBJECTION IF THE CASE IS RESTORED TO THE FILE OF CIT(A). 5. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS OF BOTH THE SIDES AND VIGILANT PERUSAL OF THE RELEVANT MATERIAL PLACED BE FORE US, INTER ALIA IMPUGNED ASSESSMENT ORDER, ORDER OF THE CIT(A), AT THE VERY OUTSET, WE OBSERVE THAT ADMITTEDLY AND UNDISPUTEDLY, ASSESSMENT ORDER HAS B EEN PASSED U/S 144 OF THE ACT EX PARTE IN ABSENCE OF ASSESSEE AND HIS REPRESE NTATIVE. THE AO NOTED THAT THE ASSESSEE WAS GIVEN 25 OPPORTUNITIES TO EXPLAIN HIS CASE WHICH WERE NOT PROPERLY AVAILED BY THE ASSESSEE. FROM THE DATE OF EVENTS, WE OBSERVE THAT ON 18.11.2011, THE ASSESSEES REPRESENTATIVE DID NOT F ILE ANY REPLY/INFORMATION AND THE AO WITHOUT PROVIDING ANY FURTHER OPPORTUNITY, C LOSED THE ASSESSMENT PROCEEDINGS AND PASSED ORDER ON 21.11.11 IN A HASTY MANNER WHICH IS NOT A REASONABLE AND JUSTIFIED APPROACH. FROM BARE PERUS AL OF THE IMPUGNED ORDER OF THE CIT(A), SPECIALLY PARA NO. 4.5, WE NOTE THAT TH E CIT(A) DISMISSED THE APPLICATION OF ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE BY HOLDING THAT NONE OF THE CONDITIONS FOR ADMISSION OF ADDITIONAL EVIDENCE AS SPECIFIED IN RULE 46A OF THE RULES ARE ATTRACTED, THEREFORE, ADDITION AL EVIDENCE CANNOT BE ADMITTED AT THE APPELLATE STAGE. THE CIT(A) AFTER DISMISSIN G THE REQUEST OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE PROCEEDED TO D ECIDE THE APPEAL OF THE ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 5 ASSESSEE IN ONE SENTENCE BY OBSERVING THAT SINCE ADDITIONAL EVIDENCE IS NOT ADMITTED, VARIOUS GROUNDS OF APPEAL ARE RENDERED IN FRUCTUOUS SINCE ANY RELIEF ON THOSE GROUNDS HINGES ON THE ADDITIONAL EVIDENCE PRO DUCED BY THE ASSESSEE. 6. IN VIEW OF ABOVE, WE ARE INCLINED TO HOLD THAT T HE CIT(A) MISUNDERSTOOD THE LETTER AND SPIRIT OF RULE 46A OF THE INCOME TAX RULES BECAUSE CLAUSE (C) AND (D) OF THE SAID RULE CLEARLY MANDATES THAT WHERE TH E ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE AO ANY E VIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL OR WHETHER THE AO HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELL ANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL, THEN IN THESE CIR CUMSTANCES, THE ASSESSEE SHALL BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE DURING F IRST APPELLATE PROCEEDINGS. IN THE PRESENT CASE, WE HAVE NO HESITATION TO HOLD THA T THE ASSESSEE WAS NOT ALLOWED DUE OPPORTUNITY OF HEARING BY THE AO AND THE AO FRA MED ASSESSMENT EX PARTE IN A HASTY MANNER U/S 144 OF THE ACT WHICH IS NOT SUST AINABLE AND IN ACCORDANCE WITH THE PROCEDURE AND THE PROVISIONS OF THE ACT. WE MAY FURTHER POINT OUT THAT THE CIT(A) ALSO DISMISSED REQUEST FOR ADMISSION AND CONSIDERATION FOR ADDITIONAL EVIDENCE PLACING WRONG INTERPRETATION OF FACTS AND CIRCUMSTANCES AND ESSENCE OF RULE 46A OF THE RULES WHICH IS ALSO NOT SUSTAINABLE . AS WE HAVE ALREADY NOTED THAT THE CIT(A) PASSED A BRIEF AND CRYPTIC ORDER OF ONE LINE DISMISSING ALL GROUNDS OF THE ASSESSEE WITHOUT ANY ADJUDICATION ON MERITS AND WITHOUT ANY REASONING SUPPORTING THE CONCLUSION, THEREFORE, THE IMPUGNED ORDER OF THE ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 6 CIT(A) ALSO CANNOT BE HELD AS VALID AND SUSTAINABLE AND WE SET ASIDE THE SAME. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, SPECIALLY NOTICING THE MANNER IN WHICH ASSESSMENT AND FIRST A PPELLATE PROCEEDINGS WERE CONDUCTED BY THE REVENUE AUTHORITIES, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSMENT FOR AY 2009-10 DESERVES TO BE RESTORED T O THE FILE OF THE AO FOR DE NOVO ADJUDICATION AND WE RESTORE THE SAME TO THE FI LE OF AO WITH A DIRECTION THAT HE SHALL PASS A FRESH ASSESSMENT ORDER AFTER AFFORD ING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND WITHOUT BEING PREJUDICED FROM THE EARLIER ASSESSMENT AND IMPUGNED APPELLATE ORDER. ACCORDINGLY, GROUND NO. 2 TO 5 OF THE ASSESSEE ARE ALLOWED DIRECTING THE AO TO FRAME A FRESH ASSESSMEN T. 7. SINCE BY THE EARLIER PART OF THIS ORDER, WE HAVE RESTORED ENTIRE ISSUE OF ASSESSMENT TO THE FILE OF AO FOR A FRESH ADJUDICATI ON, THEREFORE, OTHER GROUNDS OF THE ASSESSEE BECOME INFRUCTUOUS AND WE DISMISS THE SAME HAVING BECOME INFRUCTUOUS. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 23.7.2015. SD/- SD/- (N.K. SAINI) (CHANDRAMOHAN GAR G) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 23RD JULY, 2015 GS ITA NO. 5061/DEL/2013 ASSTT.YEAR: 2009-10 7 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. C.I.T. 5. DR BY ORDER ASSTT. REGISTRAR