Sh. Bir Parkash Malhotra, Ludhiana V. Income Tax Officer, Ludhiana

ITA 574/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0021 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Opportunity of being heard; Principle of natural justice; Right to appeal
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 574/CHD/2015 ASSESSMENT YEAR: 2008-09 SH. BIR PARKASH MALHOTRA, VS. THE ITO, WARD II(1) , L/H OF SH. BALDEV RAJ MALHOTRA, LUDHIANA LUDHIANA PAN NO. ACHPM4335F (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHOK GOYAL RESPONDENT BY : SH. S.K. MITTAL DATE OF HEARING : 18.04.2016 DATE OF PRONOUNCEMENT : 19.04.2016 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)-I, LUDHIANA DATED 27.2.2015 IN CONFIRMING THE PENALTY OF RS. 35,39,782/- LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE WORTHY CIT(A) HAS ERRED IN DISMISSING THE APPEAL OF THE ASSESSEE AND CONFIRMING THE ORDER OF ASSESSING OFFICER IN LEVYING PENALTY OF RS. 35,39,782/- U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 2. THAT NO REASONABLE / PROPER OPPORTUNITY HAS BEEN AF FORDED TO THE ASSESSEE TO PRESENT HIS CASE. 3. THAT PENALTY U/S 271(1)(C) HAS BEEN CONFIRMED BY T HE WORTHY CIT(A) AGAINST THE FACTS AND CIRCUMSTANCES OF THE C ASE. 2. AT THE VERY OUTSET, LD. COUNSEL FOR THE ASSESSEE SHRI ASHOK GOYAL SUBMITTED THAT ASSESSEE WAS NOT PROVIDED ADEQUATE O PPORTUNITY OF BEING HEARD BY THE LD. CIT(A). FURTHER, IT IS SUBMITTED THAT IN TH IS CASE, THE ASSESSING OFFICER FRAMED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT I N DECEMBER 2010. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER MADE CERTAI N ADDITIONS / DISALLOWANCES. THEREAFTER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED A PENALTY OF RS. 35,39,782/- VID E ORDER DATED 22.4.2013. 3. ON APPEAL, THE LD. CIT(A) DISMISSED THE APPEAL O F THE ASSESSEE BY PASSING AN EX-PARTE ORDER DATED 27.02.2015, OBSERVING AS UN DER:- THE SAID ADDITIONS WERE CONFIRMED BY THE CIT(A)-1 LUDHIANA AS NO REPRESENTATION IN SUPPORT OF THE GRO UNDS OF APPEAL HAD BEEN MADE AT THE TIME OF APPELLATE PROCE EDINGS. THE APPELLANT FILED APPEAL BEFORE THE HON'BLE ITAT AGAINST THE ORDER OF THE CIT(A)-1, LUDHIANA AND FOR REASONS BEST KNOWN TO HIM CHOSE NOT TO PRESENT THE ARGUMENTS BEF ORE THE HON'BLE TRIBUNAL AS WELL. THE HON'BLE TRIBUNAL, THE REFORE, DISMISSED THE APPEAL ON ACCOUNT OF NON PROSECUTION . THE PERUSAL OF THE PENALTY ORDER FURTHER REVEALS THAT EVEN DURING THE PENALTY PROCEEDINGS, NO REPLY TO THE SHOW CAUSE NOTICE HAD BEEN GIVEN AND THEREFORE, NO EXPLANATION FOR C ONCEALING THE PARTICULARS OF INCOME HAD BEEN SUBMITTED. THE PENALTY U/S 271(1)(C) WAS, THEREFORE, IMPOSED TO THE TUNE O F RS. 35,39,782/-. THE CASE OF THE APPELLANT HAD BEEN FIX ED FOR THE PURPOSE OF SEEKING ARGUMENTS IN SUPPORT OF GROUND O F APPEAL BUT GAIN IT REMAINED UNATTENDED. HOWEVER, THE AR SH RI SUDHIR SEHGAL, ADVOCATE SUBMITTED POWER OF ATTORNEY TO SUB MIT THE 3 EXPLANATION ON BEHALF OF THE APPELLANT. HOWEVER, N O ARGUMENTS WERE SUBMITTED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN THE INST ANT CASE THE CIT(A) DREW A CONCLUSION THAT SINCE THE ADDITIONS MADE ARE CONF IRMED BY CIT(A) IN THE QUANTUM APPEAL AND THE TRIBUNAL DISMISSED THE APPEA L OF THE ASSESSEE FOR NON- PERSECUTION. HE, THEREFORE, PRESUMED THAT THE ASSES SEE HAD NO EXPLANATION ABOUT THE CASH DEPOSIT AND SUNDRY CREDITORS. IT IS TRITE LAW THAT FINDINGS IN ASSESSMENT PROCEEDINGS ARE RELEVANT BUT NOT CONCLUSIVE IN PENA LTY PROCEEDINGS. THE FINDINGS ARE MATERIAL ALONE AND MAY NOT JUSTIFY THE IMPOSITION OF A PENALTY IN A GIVEN CASE. AT THE SAME TIME IT IS ALSO TRUE THAT A SSESSEE IS ENTITLED TO TENDER FURTHER EVIDENCE IN PENALTY PROCEEDINGS. THE RECORD OF THE PRESENT CASE SHOWS THAT THE CIT(A) HAS NOT AFFORDED ADEQUATE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE APPEAL. THE LD. CIT(A) HAS STATED THAT THE COUNSEL OF THE ASSESSEE SUBMITTED POWER OF ATTORNEY TO SUB MIT THE EXPLANATION ON BEHALF OF THE ASSESSEE. THE LD. CIT(A) FURTHER STATED THAT , HOWEVER, NO ARGUMENTS WERE SUBMITTED. FROM THE ABOVE OBSERVATIONS OF THE CIT(A) IT IS CLEAR THAT HE HAS NOT AFFORDED PROPER OPPORTUNITY TO THE ASSESSEE TO PLEAD HIS CASE. IN THE CASE OF RADHIKA CHARAN BANERJEE V SAMBALPUR MUNICIP ALITY, AIR 1979 ORI 69, WHEREIN THE HON'BLE ORISSA HIGH COURT HELD THAT A RIGHT OF APPEAL WHEREVER CONFERRED INCLUDES A RIGHT OF BEING AFFORDED AN OPPORTUNITY OF BEING HEARD, IRRESPECTIVE OF THE LANGUAGE CONFERRIN G SUCH RIGHT. THAT IS A PART AND PARCEL OF THE PRINCIPLE OF NATURAL JUSTICE. WHE RE AN AUTHORITY IS REQUIRED TO ACT IN A QUASI-JUDICIAL CAPACITY, IT IS IMPERATIVE TO GIVE THE APPELLANT AN ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE APPEAL. OPPORTUNITY OF HEARING DOES NOT ALWAYS NECESSARILY MEAN GIVING A P ERSONAL HEARING. A WRITTEN REPRESENTATION, IF COMPLETE AND ELABORATE IN ALL RE SPECTS FULLY EXPLAINING THE POINTS OF VIEW OF THE APPELLANT, WHEN ACCEPTED MAY, IN SOME CASES, AMOUNT TO 4 AFFORDING OPPORTUNITY OF HEARING. WHAT PARTICULAR R ULE OF NATURAL JUSTICE SHOULD APPLY TO A GIVEN CASE MUST ALSO DEPEND TO A GREAT E XTENT ON THE FACTS AND CIRCUMSTANCES OF THAT CASE. IN THAT VIEW OF THE MATTER, IT WAS HELD THAT WHERE NO EFFECTIVE OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE APPELLANT IN DISPOSING OF HIS APPEAL INSPITE OF HIS EXPRESS REQUEST THAT H IS COUNSEL SHOULD BE HEARD, THE ORDER MUST BE QUASHED. 5. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE, AND ALSO THE SETTLED LEGAL POSITION, WE THINK IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER IN TOTO AND REMAND THE MATTER TO THE LEARNED CIT (APPEALS) WITH THE DIRECTION TO DECIDE THE APPE AL OF THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE A ND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LE ARNED CIT (APPEALS) IS DIRECTED TO DECIDE THE APPEAL OF THE ASSESSEE P REFERABLY WITHIN FOUR MONTHS FROM THE DATE OF RECEIPT OF COPY OF THIS ORD ER. 6. AT THIS STAGE, WE ARE NOT OFFERING ANY COMMENTS ON THE MERITS OF THE CASE. 7. FOR STATISTICAL PURPOSES, THE APPEAL OF THE ASSE SSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.04.2016 SD/- SD/- (ANNAPURNA GUPTA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : APRIL, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 5