Gaurav Madan, New Delhi V. ITO, New Delhi

ITA 5376/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6839 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 30-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMANJANEYULU
• Assessee Lawyers: ASHISH CHADDHA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - 1 BENCH, NEW DELHI BEFORE N.K. SAINI , ACCOUNTANT MEMBER ITA N O. 5376 / DEL /201 6 A SSESSMENT YEAR: 20 10 - 1 1 GAURAV MADAN 11 - B, DDA FLATS (LIG) RAJOURI GARDEN EXT. NEW DELHI PIN - 110027 PAN - AKEPM3288L VS. ITO WARD0 48(4) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VED JAIN, ADV & SH. ASHISH CHADDHA, ADV RESPONDENT BY : SHRI. RAMANJANEYULU, SR. DR DATE OF HEARING : 30 - 1 1 - 201 6 DATE OF PRONO UNCEMENT : 0 - 02 - 201 7 O R D E R PER N.K. SAINI , A .M . : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 5.5.2016 OF CIT (A), 28, NEW DELHI. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE ORDER PASSED BY THE LEARNED ASSESSING OFFICER (AO) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE EX PARTE ORDER IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. (II) THAT THE NON - APPEARANCE BEFORE THE LEARNED CIT(A) WAS ON ACCOUNT OF REASON 2 ITA NO. 5376 /DEL/201 6 BEYOND THE CONTROL OF THE ASSESSEE. 3 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE ORDER WITHOUT GIVING ANY FINDING ON THE MERITS OF THE CASE. 4 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE AO DESPITE THE FACT THAT THE ORDER UNDER SECTION 143(3) MADE BY AO IS BAD AND LIABLE TO BE QUASHED AS T HE SAME HAS BEEN PASSED WITHOUT SERVICE OF NOTICE UNDER SECTION 143(2) OF THE A CT. 5(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.6,61,362/ - MADE BY THE AO. (II) THAT THE ADDITION WAS MADE DESPITE THE FACT THAT THE SAID AMOUNT RECEIVED IS NOT IN THE NATURE OF INCOME. 6 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.2,187/ - MADE B Y THE AO ON ACCOUNT OF BANK INTEREST. 7 . THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE EX PARTE ORDER PASSED BY THE LEARNED CIT(A ) AND THAT, THE ASSESS MENT FRAMED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WITHOUT SERVING THE NOTICE U/S 143(2) OF THE ACT WAS LIABLE TO BE QUASHED. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME OF RS. 7,13,636/ - ON 12.07.2010 WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY. THE AO PASSED THE ORDER U/S 143(3) OF THE ACT AND MADE THE ADDITION OF RS. 6,61,632/ - ON 3 ITA NO. 5376 /DEL/201 6 ACCOUNT OF NON DECLARATION OF INTEREST WHICH WAS APPEARING IN FORM NO. 26 AS. HE ALSO ADDED RS. 2,187/ - CREDITED TO THE SAVING BANK ACCOUNT OF THE ASSESSEE WHICH WAS NOT DECLARED. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) WHO PASSED THE EX PARTE ORDER BY STATING THAT A FINAL OPPORTUNITY WAS GIVEN VIDE NOTICE DATED 21.4.2016 AND THE CASE WAS FIXED FOR 2.5.2016 BUT THERE WAS NO COMPLIANCE. THE LEARNED CIT(A) UPHELD THE ACTION OF THE AO BY OBSERVING IN PARA 4.1 OF THE IMPUGNED AS UNDER: IN VIEW OF THE FACTS STATED ABOVE , IT IS OBSERVED THAT THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITIES TO REPRESENT HIS CASE BEFORE THE APPELLATE AUTHORITY BUT NOBODY ATTENDED THE PROCEEDINGS. IN VIEW OF THE INDIFFERENT APPROACH, I FIND THAT NO USEFUL PURPOSE WOULD BE SERVED BY KEEPING TH E APPEAL PROCEEDINGS PENDING INDEFINITELY. THEREFORE, IT IS PRESUMED THAT THE ASSESSEE HAS NOTHING TO APPEAL AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICER. HENCE, THE ACTION OF THE AO IS UPHELD AND THE APPEAL IS DISMISSED. 4 . NOW THE ASSESSEE IS IN APPEAL. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) PASSED THE EX PARTE ORDER WITHOUT PROVIDING DUE AND REASONABLE OPPORT UNITY OF BEING HEARD TO THE ASS ESSEE. IT WAS FURTHER SUBMITTED THAT THE AO ALSO MADE ARBITRARY ADDITIONS WIT HOUT CONSIDERING THE EXPLANATION AND THE SUBMISSIONS OF THE ASSESSEE. IT WAS ALSO SUBMITTED THAT THE NOTICE U/S 143(2) WAS NOT SERVED UPON THE ASSESSEE WHICH IS THE MANDATORY REQUIREMENT FOR FRAMING THE ASSESSMENT U/S 143(3) OF THE 4 ITA NO. 5376 /DEL/201 6 ACT. IT WAS STATED THAT THE AO APPLIED THE PROVISIONS LAID DOWN IN SECTION 292 (BB) OF THE ACT BUT HAVE NOT CONSIDERED THE PROVISO TO SECTION 292(BB) OF THE ACT. IN HIS RIVAL SUBMISSIONS, THE LEARNED DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LEARNED CIT(A) HAD NOT GIVEN HIS INDEPENDENT FINDING WHILE PASSING THE EX PARTE ORDER. HE SIMPLY STATED THAT IT WA S TO BE PRESUMED THAT THE ASSESSEE HAS NOTHING TO APPEAL AGAINST THE ADDITIONS MADE BY THE AO. IT IS ALSO NOTICED THAT THE LEARNED CIT(A) MENTIONED IN THE IMPUGNED ORDER THAT A NOTICE DATED 21.4.2016 WAS ISSUED TO THE ASSESSEE AND THE CASE WAS FIXED FOR 2. 5.2016 BUT NOWHERE IT IS BROUGHT ON RECORD THAT THE SAID NOTICE WAS SERVED UPON THE ASSESSEE. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM . 6 . IN THE INSTANT CASE, AS I HAVE POINTED OUT EARLIER THAT NOTH ING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE NOTICE FOR HEARING ON 2.5.2016 WAS SERVED UPON THE ASSESSEE . T HEREFORE THE IMPUGNED ORDER IS SET ASIDE AND THE MATTER IS REMANDED BACK TO THE LEARNED CIT (A) TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTE R PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5 ITA NO. 5376 /DEL/201 6 6. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSE S . ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF FEBRUARY , 201 7 . SD/ - ( N.K. SAINI ) ACCOUNTANT MEMBER DATED : 13 - 0 2 - 201 7 . SH COPY OF ORDER TO : - 1 ) THE APPELLANT; 2 ) THE RESPONDENT; 3 ) THE C IT ; 4 ) THE CIT(A) - , NEW DELHI ; 5 ) THE DR, I.T.A.T., NEW DELHI ; BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT , NEW DELHI 6 ITA NO. 5376 /DEL/201 6 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & P LACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE A.R. 10 DATE OF DISPATCH OF ORDER