Sahyadri Constructions , Bangalore V. Income Tax Officer Ward-2 , Mandya

ITA 527/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4485 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 15-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Keywords: Opportunity of being heard; Reasonable cause; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO.527/BANG/2019 S.P. NO. 121/BANG/2019 ASSESSMENT YEAR : 20 1 4 - 1 5 M/S. SAHYADRI CONSTRUCTIONS, C/O. SANTHOSHKUMAR S. R., NO.2301/A, 4 TH CROSS, 4 TH MAIN, 2 ND STAGE, VIJAYANAGAR, RPC LAYOUT, BANGALORE 560 104. PAN : ACKFS 0825 K VS. INCOME TAX OFFICER, WARD 2, MANDYA. APPELLANT RESPONDENT ASSESSEE BY : SHRI. VAGEESH HEGDE, CA REVENUE BY : SHRI. L. V. BHASKAR REDDY, ADDL. CIT DATE OF HEARING : 05 . 0 4 .201 9 DATE OF PRONOUNCEMENT : 15 . 0 5 .201 9 O R D E R PER SHRI JASON P BOAZ, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE EX-PARTE ORDER OF CIT(A)- MYSORE, DATED 23.08.2018 FOR ASSESSMENT YEAR 2014-15. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: ITA NO.527/BANG/2019 S.P. NO. 121/BANG/2019 PAGE 2 OF 4 2.1 THE ASSESSEE, A FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 24.03.2016 DECLARING INCOME OF RS.8,60,141/-. THE CASE WAS SELECTED FOR SCRUTINY FOR THIS ASSESSMENT YEAR. THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 06.12.2016 WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.33,60,140/-; IN VIEW OF AN ADDITION OF RS.25,00,000/- ON ACCOUNT OF NON- RECONCILIATION OF DIFFERENCE IN THE RECEIPTS FROM M/S. ZUARI INFRAWORLD AND THEREBY RAISING DEMAND OF RS.10,86,570/-. ON APPEAL, THE CIT(A)-MYSORE DISMISSED THE ASSESSEES APPEAL, IN LIMINE, VIDE THE IMPUGNED ORDER DATED 23.08.2018 AS BEING DEFECTIVE (1) SINCE THE ORIGINAL NOTICE OF DEMAND ISSUED UNDER SECTION 156 OF THE ACT HAD NOT BEEN FILED ALONG WITH THE ASSESSEES APPEAL IN FORM NO.35 AND (2) THAT THE NOTICE DATED 17.07.2018 ISSUED TO THE ASSESSEE BY SPEED POST TO CORRECT THIS DEFECT WAS RETURNED UNSERVED BY THE POSTAL AUTHORITIES. 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A)-MYSORE DATED 23.08.2018 FOR ASSESSMENT YEAR 2014-15, THE ASSESSEE HAS PREFERRED THIS APPEAL. AT THE OUTSET OF PROCEEDINGS, THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER OF THE CIT(A) HAS BEEN PASSED EX-PARTE, DISMISSING THE APPEAL IN LIMINE, WITHOUT EITHER PROVIDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND WITHOUT DECIDING THE APPEAL ON THE MERITS OF THE GROUNDS RAISED BEFORE HIM. ACCORDING TO THE LEARNED AR, THE ASSESSEES APPEAL WAS HELD TO BE DEFECTIVE; NOT ADMITTED AND DISMISSED IN LIMINE ON THE GROUND THAT THE ORIGINAL NOTICE OF DEMAND UNDER SECTION 156 OF THE ACT WAS NOT FURNISHED ALONG WITH THE DOCUMENTS IN FORM NO.35. THE LEARNED AR SUBMITTED THAT THE NOTICE DATED 17.07.2018 SAID TO HAVE BEEN SENT BY CIT(A) WAS NEVER RECEIVED BY THE ASSESSEE AND IT IS FOR THIS REASON THAT THE SAID DEFECT COULD NOT BE CORRECTED AND SUBMITTED THAT THE ASSESSEE UNDERTAKES TO FURNISH THE ORIGINAL NOTICE OF DEMAND TO THE CIT(A). IT IS PRAYED THAT IN VIEW OF THE ABOVE, THE IMPUGNED ORDER EX-PARTE OF THE CIT(A) BE SET ASIDE AND THE MATTER BE RESTORED TO THE FILE OF THE CIT(A) FOR ADJUDICATION OF THE GROUNDS RAISED ON MERITS. ITA NO.527/BANG/2019 S.P. NO. 121/BANG/2019 PAGE 3 OF 4 3.2 PER CONTRA, THE LEARNED DR FOR REVENUE SUPPORTED THE IMPUGNED ORDER OF THE CIT(A). 3.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND CONSIDERED THE MATERIAL ON RECORD. IT IS EVIDENT FROM A PERUSAL OF THE IMPUGNED ORDER OF THE CIT(A) DATED 23.08.2018 THAT IT HAS BEEN PASSED EX-PARTE, DISMISSING THE ASSESSEES APPEAL, IN LIMINE, ON THE GROUNDS THAT THE ASSESSEE DID NOT FURNISH THE ORIGINAL DEMAND NOTICE UNDER SECTION 156 OF THE ACT ALONG WITH FORM 35. THE IMPUGNED ORDER INDICATES THAT THE CIT(A) ISSUED ONE LETTER DATED 17.07.2018 TO THE ASSESSEE, BY SPEED POST, REQUIRING IT TO RECTIFY THE DEFECT OF NON-FILING OF ORIGINAL NOTICE OF DEMAND; WHICH ADMITTEDLY WAS RETURNED UNSERVED. THEREFORE, IT IS EVIDENT THAT THE ASSESSEE WAS NOT PUT ON NOTICE OR HAD AN OPPORTUNITY TO CORRECT THE SAID DEFECT IN FORM NO.35, AND THIS, IN OUR VIEW, WOULD CONSTITUTE REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE CIT(A)S LETTER DATED 17.07.2018. THE ASSESSEES APPEAL WAS DISMISSED WITHOUT HEARING THE ASSESSEE IN THE MATTER AND WITHOUT ADJUDICATING THE GROUNDS RAISED ON MERITS. IN THESE FACTS AND CIRCUMSTANCES, AS NARRATED ABOVE, AND CONSIDERING THE UNDERTAKING OF THE LEARNED AR AT THE BAR BEFORE US THAT THE ASSESSEE WOULD FILE THE ORIGINAL NOTICE OF DEMAND UNDER SECTION 156 OF THE ACT FOR THE ORDER OF ASSESSMENT DATED 06.12.2016 FOR ASSESSMENT YEAR 2014-15, WE ARE OF THE OPINION THAT THE INTEREST OF SUBSTANTIAL JUSTICE WOULD BE SERVED BY SETTING ASIDE THE IMPUGNED ORDER OF CIT(A) AND DO SO. THE MATTER IS RESTORED TO THE FILE OF CIT(A), TO BE HEARD ON MERITS OF THE ISSUES RAISED IN THE GROUNDS OF APPEAL BEFORE HIM. NEEDLESS TO ADD, THE ASSESSEE IS TO BE AFFORDED ADEQUATE OPPORTUNITY FOR FILING ORIGINAL NOTICE OF DEMAND UNDER SECTION 156 OF THE ACT TO RECTIFY THE DEFECT IN FORM NO.35 AND SUBSEQUENT TO THE FULFILMENT OF THIS REQUIREMENT; BE ALLOWED OPPORTUNITY OF BEING HEARD IN THE MATTER AND TO FILE DETAILS / SUBMISSIONS REQUIRED THAT SHALL BE DULY CONSIDERED BEFORE DECIDING THE ISSUES ON MERITS. WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, THE GROUNDS RAISED ON MERITS IN THE ASSESSEES APPEAL BEFORE US DO NOT REQUIRE ADJUDICATION AT THIS JUNCTURE. ITA NO.527/BANG/2019 S.P. NO. 121/BANG/2019 PAGE 4 OF 4 4. AS THE ASSESSEES APPEAL FOR ASSSSMENT YEAR 2014-15 HAS BEEN DECIDED AS ABOVE, THE STAY PETITION NO.121/BANG/2019 FILED BY THE ASSESSEE IS RENDERED INFRUCTUOUS AND ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 IS ALLOWED FOR STATISTICAL PURPOSES AND THE STAY PETITION IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF MAY, 2019. SD/- SD/ - SD/ - (LALIET KUMAR) JUDICIAL MEMBER (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE. DATED: 15 TH MAY, 2019. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.