SHRI KAILASH CHANDRA RAJANI, V. THE ACIT CIR. 1(1),

ITA 62/IND/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1478 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-11-2009
• Assessment Year: misc
• Appeal Filed On: 31-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: A L JAIN
• Keywords: Principle of natural justice
• Section: 145

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI V.K. GUPTA, AM ITA NO.62/IND/2006 AY : 2002-03 KAILASH CHANDRA RAJANI (PAN ABLPR 0183 R) C/O AMRITLAL H. JAIN, CA, 2, DHANWANTARI MARG, INDIRA PRIYADARSHINI SQUARA, FREEGANJ, UJJAIN 456 010 (MP) .....APPELLANT V/S. ACIT-1(1), UJJAIN .....RESPONDENT ASSESSEE BY : SHRI A.L. JAIN, CA DEPARTMENT BY : SMT. APARNA KARAN, SR. DR ORDER PER JOGINDER SINGH, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-UJJAIN DATED 24.11.2005 ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) ERRED IN HOLDING THAT THE APPLICATION OF SEC. 145 OF THE ACT IN THE CASE OF THE APPELLANT, BY THE ASSESSING OFFICER WAS CORRECT AND VALID. 2 2. THAT THE LD. CIT(A) FURTHER ERRED IN NOT DELETING THE ENTIRE GROSS PROFIT ADDITION MADE BY THE ASSESSING OFFICER AT RS.3,46,180/- AND IN MAINTAINING THE SAME AT RS.1,09,815/- AND IN DOING SO ALSO ERRED: - A) IN ESTIMATING THE SALES AT RS.77.00 LACS INSTEAD OF ACTUAL SALES OF RS.75.93 LACS AS PER BOOKS OF ACCOUNT AS ACCEPTED BY THE ASSESSING OFFICER; AND B) IN APPLYING THE G.P. RATE OF 27.50% AS AGAINST THE ACTUAL G.P. RATE OF 26.44% AS PER BOOKS OF ACCOUNT (G.P. RATE APPLIED BY THE ASSESSING OFFICER WAS 31%). 2. DURING THE HEARING OF THE APPEAL, WE HAVE HEARD SHRI A.L. JAIN, LD. COUNSEL FOR THE ASSESSEE AND SMT. AP ARNA KARAN, SR. DR FOR THE REVENUE. AT THE OUTSET, IT WA S POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THAT ENHANC EMENT WAS MADE BY THE LD. CIT(A) WITHOUT GIVING ANY NOTICE TO THE ASSESSEE AND ALSO NO OPPORTUNITY WAS PROVIDED TO TH E ASSESSEE. IT WAS PLEADED THAT THE IMPUGNED APPEAL M AY BE REMANDED TO THE FILE OF THE LD. CIT(A). ON THE OTHE R HAND, THE 3 LD. SR. DR THOUGH DEFENDED THE IMPUGNED ORDER BUT H AS NO OBJECTION IN REMANDING THE FILE BACK TO THE FILE OF THE LD. CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON THE FILE. IN VIEW OF THE ASSERTION OF THE LD. RESPECTIVE COUNSEL AND THE FACT THAT NO ENHANCEMENT NOTICE WAS GIVEN TO THE ASSESSEE, WE ARE OF THE VIEW THAT IT IS A VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. ADMITTED LY, AS PER SEC. 251(1)(A), THE LD. FIRST APPELLATE AUTHORITY I S EMPOWERED TO CONFIRM, REDUCE, ANNUL OR ENHANCE THE ASSESSMENT BUT AS PER SUB-CLAUSE (2) TO SEC. 251, THE LD. FIRST APPEL LATE AUTHORITY SHALL NOT ENHANCE THE ASSESSMENT OR PENAL TY OR TO REDUCE THE AMOUNT OF REFUND UNLESS THE ASSESSEE IS PROVIDED REASONABLE OPPORTUNITY FOR SUCH ENHANCEMENT OR REDU CTION, THEREFORE, IN ALL FAIRNESS, WE REMAND THIS FILE TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WIT H LAW. NEEDLESS TO MENTION HERE THAT DUE OPPORTUNITY OF BE ING HEARD BE PROVIDED TO THE ASSESSEE. THE ASSESSEE IS ALSO A T LIBERTY TO FURNISH EVIDENCE, IF ANY, TO SUBSTANTIATE ITS CLAIM . FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES ONLY. 4 ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES ON THE CONCLUSI ON OF THE HEARING ON 25.11.2009. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.11.2009 {VYAS} COPY TO: APPELLANT/RESPONDENT/CIT/ CIT(A)/DR