M/s PCH Associates, Hyderabad V. ACIT, Hyderabad

ITA 610/HYD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3396 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 31-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 04-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: H PHANI RAJU
• Assessee Lawyers: A V RAGHURAM
• Keywords: Principle of natural justice; Period of limitation; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR ITA NO.610/HYD/09 : ASSTT. YEAR 2 005-06 M/S. PCH ASSOCIATES, HYDERABAD. ( PAN AAGFP 4893 C ) V/S. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-6(1), HYDERABAD . (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.V.RAGHU RAM RESPONDENT BY : SHRI. H.PHANI RAJU O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005- 06 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). 2. EFFECTIVE GROUND OF APPEAL OF THE ASSESSEE IS GROUND OF APPEAL NO.2 TO 4, WHICH ARE REPRODUCED BELOW- '2. THE COMMISSIONER(APPEALS) ERRED IN NOT ADMITTIN G THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT FOR INVA LID AND IRRELEVANT REASONS. THE FINDING OF THE COMMISSIONER (APPEALS) THAT THE APPELLANT KNOWING THE REAL NATURE OF TRANS ACTIONS, CONSCIOUSLY AVOIDED PRODUCTION OF SUCH EVIDENCE BEF ORE ASSESSING OFFICER IS ABSOLUTELY INCORRECT IN AS MUC H AS ENTIRE INFORMATION IS FILED BEFORE THE COMMISSIONER (APPEA LS). 3. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE VALID AND COGENT REASONS SUBMITTED BY THE APPELLANT FOR NOT B EING ABLE TO FILE THE ADDITIONAL EVIDENCE BEFORE THE ASSESSING O FFICER . 4. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT EVEN THOUGH THE ASSESSING OFFICER WAS GIVEN A TIM E OF TWO YEARS FOR COMPLETING THE ASSESSMENT, THE ASSESSMENT WAS TAKEN UP JUST BEFORE A MONTH BEFORE EXPIRY OF LIMITATION. THE COM MISSIONER (APPEALS) FURTHER FAILED TO APPRECIATE THAT APPELLA NT WAS GIVEN ITA NO.610/HYD/09 M/S PCH ASSOCIATES, HYDERABAD . 2 HARDLY 20 DAYS TIME TO COLLECT CONFIRMATION LETTERS FROM AS MANY AS 35 CREDITORS WHO ARE RESIDENTS OF ANOTHER STATE (CHENNAI CITY.' 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO OPPORTUNITY WAS ALLOWED TO THE ASSESSEE TO FILE EVIDENCE IN SUPPORT OF ITS CASE AND THE ASSESSMENT WAS TAKEN UP JUST A MONTH BEFOR E THE EXPIRY OF THE PERIOD OF LIMITATION. HE SUBMITTED TH AT THE ASSESSEE WAS GIVEN HARDLY 20 DAYS TIME TO COLLECT CONFIRMATION LETTE RS FROM 35 CREDITORS, WHO WERE RESIDENTS OF ANOTHER STATE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT ADEQUATE OPPORTUNITY WAS ALLO WED TO THE ASSESSEE BY THE REVENUE AUTHORITIES. HE RELIED ON THE DE CISION OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN A.K. BABU KHAN (B Y LEGAL REPRESENTATIVES) V/S. CIT (102 ITR 757). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND T HAT IN THE FACTS OF THE CASE OF THE ASSESSEE, ASSESSEE WAS NOT PROVIDE D WITH ADEQUATE OPPORTUNITY BEFORE FINALIZATION OF THE ASSESSM ENT. BY MERELY GIVING A DATE OF HEARING TO THE ASSESSEE, IT COULD NOT B E SAID THAT ADEQUATE OPPORTUNITY HAS BEEN PROVIDED TO THE ASSESSEE AND THE SPIRIT OF PRINCIPLES OF NATURAL JUSTICE HAS TO BE COMPLIED WITH. IN THESE FACTS OF THE CASE, WE HOLD THAT IT SHALL BE IN THE INTERESTS O F JUSTICE TO PROVIDE THE ASSESSEE WITH OPPORTUNITY TO FILE EVIDENCE I N SUPPORT OF ITS CASE BEFORE THE REVENUE AUTHORITIES. ACCORDINGLY ORDERS O F THE REVENUE AUTHORITIES ARE SET ASIDE AND THE MATTER IS R ESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO FRAME THE ASSE SSMENT DE NOVO IN ACCORDANCE WITH LAW, AFTER PROVIDING REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE. ASSESSEE SHALL BE AT LIBERTY TO FI LE EVIDENCE IN SUPPORT OF ITS CASE. WE DIRECT ACCORDINGLY. ITA NO.610/HYD/09 M/S PCH ASSOCIATES, HYDERABAD . 3 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 9/4/2010 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 9TH APRIL, 2010. COPY FORWARDED TO: 1. M/S. PCH ASSOCIATES, C/O. M/S. A.V.RAGHURAM & B.PEDDI RAJULU, ADVOCATES, FLAT NO.403, D.NO.10-1-18/31, MANISHA TOWER S, SHYAM NAGAR, HYDERABAD. 2. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 6(1), HYDERA BAD. 3. COMMISSIONER OF INCOME-TAX (APPEALS) IV, HYDERABAD. 4. COMMISSIONER OF INCOME-TAX-III, HYDERABAD 5 THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.