Shri Pankaj Jaiswal, Kanpur V. Income Tax Officer-3(3) , Kanpur

ITA 513/LKW/2013

• Counselvise Citation: 51323714 RSA 2013
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 04-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW SMC BENCH, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.513/LKW/2013 ASSESSMENT YEAR:2006-07 SHRI. PANKAJ JAISWAL 14/47, SKYLARK COMPLEX CHUUNI GAN J , KAN P UR V. INCOME-TAX OFFICER 3(3) KANPUR PAN:AAOPJ7808H ( A PP ELLANT ) ( RES P ONDENT ) APPELLANT BY: SHRI. ABHI NAV MEHROTRA, ADVOCATE RES P ONDENT B Y :SHRI. ALOK MITRA, D.R. DATE OF HEARIN G : 22.08.2013 DATE OF PRONOU NCEMENT: 26.08.2013 O R D E R THIS APPEAL IS PREFERRED BY TH E ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOU S GROUNDS WHICH ARE AS UNDER:- 1 (A) BECAUSE THE LD. COMMISSION ER OF INCOME TAX (APPEALS), KANPUR HAS COMMITTED ILLEGALITY IN MAKING AN ENHANCEMENT TO THE RETURNED INCOME OF THE ASSESSEE, ON ACCOUNT OF RATE OF GROSS PROFIT, WHEN NO SUCH GROUND OF APPEAL WAS BEFORE THE SAME AND THE CIT(A) HAD NO OCCASION TO MAKE A COMMENT/ RENDER ANY ADJUDICATION UPON THE SAME. 1 (B) BECAUSE THE LD. COMMISSIO NER OF INCOME TAX (APPEALS), HAS COMMITTED ILLEGALITY IN SO FAR AS, THOUGH THE POWER TO MAKE AN ENHANCEMENT, VESTS IN THE CIT(A) , THE SAME IS JUDICIOUSLY BEEN :-2-: DECLARED TO BE RESTRICTED TO ON LY THOSE ASPECTS, WHICH ARE IN APPEAL BEFORE THE SAME. 2. BECAUSE THE LD. COMMISSION ER OF INCOME TA X (APPEALS), HAS ERRED IN FACTS AND IN LAW IN CONF IRMING THE ACTION OF THE AO BY SUSTAINING THE ADDITION OF RS.91, 000/- WITHOUT VERIFYING THE TRUE FACTS AND THE NATURE OF TRAN SACTION AND WITHOUT PROPERLY APPRECIATING THE EVIDENCE ON RECORD. 3. BECAUSE THE ORDER PASSED BY TH E CIT(A) SUFFERS FROM ILLEGALITY, IS CONTRARY TO FACTS, IS BAD IN LAW AND DESERVES TO BE QUASHED. 4. THE HUMBLE APPELLANT CRAVES FOR LEAVE TO INTRODUCE ANY OTHER GROUND OF APPEAL AS MAY BE FO UND DESIRABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS TH E HON'BLE COURT MAY GRACIOUSLY ALLOW TO BE RAISED. 2. DURING THE COURSE OF HEARING, IT WAS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THAT THERE WAS A DELAY OF 68 DAYS IN FILING THE APPEAL, FOR WHICH THE ASSESSEE HAS FILED AN AFFIDAVIT STATING THER EIN THAT ON ACCOUNT OF ILLNESS OF THE ASSESSEE THE APPEAL COULD NOT BE F ILED IN TIME. THE LD. COUNSEL FOR THE ASSESSEE PRAYED THAT SINCE THERE WAS A REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME, THE DELAY IN F ILING THE APPEAL MAY BE CONDONED. FINDING FORCE IN THE CONTEN TIONS OF THE ASSESS EE, I CONDONE THE DELAY AND ADMIT THE A PPEAL FOR HEARING. 3. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS PASSED THE EX-PARTE ORDER. BESIDE S CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER, THE LD. CIT(A) HAS ENHA NCED THE INCOME OF THE ASSESSEE BY ` 4,59,068 WITHOUT SERVI NG THE NOTICE OF ENHANCEMENT. IT WAS FURTHER CONTENDED THAT THE LD. CIT(A) HAS MADE ENHANCEMENT EXCEEDING HIS :-3-: JURISDICTION, AS THE ENHANCEMENT CAN ON LY BE MADE WITH REGARD TO THOSE ISSUES WHICH WERE ADJUDI CATED BY THE ASSESSING O FFICER. THE LD. CIT(A) CANNOT MAKE OUT A NEW SOURCE OF INCOME FOR MAKING ENHANCEMENT. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT V. RAI BAHADUR HARDUTROY MOTILAL CHAMARIA [1 967] 66 ITR 443; HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SARDAR I LAL & CO, 120 TAXMAN 595 (DELHI) AND THE HON'BLE ORISSA HIGH COURT IN THE CASE OF CIT VS. S. V. DIVAKAR, 65 TAXMAN 72. THE LD. COUNSEL FOR THE AS SESSEE FURTHER CONTENDED THAT IN THE LIGHT OF THESE JUDGMENTS, ENHANCEMENT MADE BY THE LD. CIT(A) IS NOT SUSTAINABLE IN THE EYES OF LAW. 4. THE LD. D.R., ON THE OT HER HAND, HAS SUBMITTED THAT THE LD. CIT(A) HAS AFFORDED REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BY ISSUING VARIOUS NOTICES, BUT THE ASSESS EE DID NOT RESPOND TO THE NOTICE OF HEARING AND THE LD. CIT(A) WAS CONS TRAINED TO COMPLETE THE APPELLATE PROCEEDINGS EX-PARTE. SINCE THE LD. CI T(A) HAS CONFIRMED THE ADDITION AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A). 5. HAVING HEARD THE RIVAL SUBMISSION S AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, I FIND THAT THE LD. CIT(A) HAS ISSUED ONLY TWO NOTICES OF HE ARING ON 30.8.2012 AND 29. 10.2012. THEREAFTER NO FRESH NOTICE WAS ISSUED TO THE ASSESS EE. MOREOVER, NOTHING HAS BEEN STATED IN THE ORDER OF THE LD. CIT(A) THAT TH E NOTICE OF HEARING WAS EVER SERVED UPON THE ASSESSEE. MERE ISSUANCE OF NOTICE DOES NOT MEAN THAT THE NOTICE OF HEARING HAS BEEN SERVED UPON THE ASSESSEE AND THE ASSESSEE DID NOT MAKE COMPLIANCE INTENTIONALLY. IT IS ALSO NOTICED FROM THE ORDER OF THE LD. CIT(A) THAT THE LD. CIT(A) HAS ENHANCED THE INCOME BY RAISING GP ADDITION FROM 5.22% TO 10% A ND MADE ADDITION OF ` 4,59,068. BEFORE ENHANCING THIS INCOME, THE LD. CIT(A) HAS NOT IS SUED ANY NOTICE OF ENHANCEMENT. :-4-: THEREFORE, I AM OF THE VI EW THAT THE LD. CIT(A) HA S ADJUDICATED THE APPEAL WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. I, THEREFORE, SET ASIDE THE OR DER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE APPEAL AFRESH ON MERIT AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF RE CEIPT OF THE ORDER OF THE TRIBUNAL. 6. SO FAR AS THE ENHANCEMENT OF INCO ME IS CONCERNED, THE OBJECTION RAISED BY THE ASSESSEE BE FORE THE TRIBUNAL CAN BE RAISED BEFORE THE LD. CIT(A) AND THE LD. CIT(A) IS ALSO DIRECTED TO ADJUDI CATE THE SAME. ACCORDINGLY THE MATTER IS RESTORED TO THE FILE OF THE LD. CIT(A) FOR RE- ADJUDICATION IN TERMS INDICATED ABOVE AFTER AFFORDING PROP ER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE A SSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26.8.2013. SD/- [SUNIL KUMAR YADAV] JUDICIAL MEMBER DATED:26.8.2013 JJ:2208 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR