Shri Jivrajbhai Sukhabhai Dhankhara, Surat V. ITO Ward 3(3)(2), Surat

ITA 734/SRT/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1831 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 27-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHWIN PAREKH
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 56(2)

Judgement Text

JIVRAJBHAI SUKHABHAI DANKHARA V. ITO 3(3)(2) SURAT /I.T.A. NO.734/SRT/2018/A.Y.14-15 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI O. P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 734/SRT/2018: ASSESSMENT YEAR: 2014-15 SHRI JIVRAJBHAI SUKHBHAI DANKHARA, 8, GOKULDHAM SOCIETY ABRAMA ROAD, MOTA VARACHHA, SURAT PAN:ABZPD0915D VS. INCOME TAX OFFICER WARD- 3(3)(2) SURAT APPELLANT RESPONDENT ASSESSEE BY SHRI ASHWIN PAREKH, CA REVENUE BY SHRI PRASOON KABRA, SR. D.R. DATE OF HEARING 25.02.2019 DATE OF PRONOUNCEMENT 26.02.2019 ORDER PER O. P. MEENA, AM 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, SURAT (IN SHORT THE CIT (A)) DATED PERTAINING TO ASSESSMENT YEAR 2014-15, WHICH IN TURN HAS ARISEN FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143 (3) DTD.21.08.2018 OF INCOME TAX ACT, 1961 (IN SHORT THE ACT) BY THE INCOME TAX OFFICER, WARD- 3(3)(2), SURAT (IN SHORT THE AO). 2. THE ASSESSEE HAS TAKEN THE GROUNDS OF APPEAL AGAINST THE CONFIRMATION OF RS. 7,82,434 UNDER SECTION 56(2) (VII)(B) OF THE ACT , RS. 20 LAKH ADDITION FOR GOODWILL, JIVRAJBHAI SUKHABHAI DANKHARA V. ITO 3(3)(2) SURAT /I.T.A. NO.734/SRT/2018/A.Y.14-15 PAGE 2 OF 3 RS. 8,91,196 FOR DISALLOWING INTEREST UNDER SECTION 36(1)(III) AND PASSING EX-PARTE ORDER, WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT NO PROPER OPPORTUNITY OF HEARING WAS AFFORDED TO THE ASSESSEE. THE LD. CIT (A) WAS NOT JUSTIFIED IN REJECTING THE APPEAL OF THE ASSESSEE EX-PARTE. THE DOCUMENTS RELIED BY THE AO WERE NOT MADE AVAILABLE TO ASSESSEE. THE LD. COUNSEL PRAYED THAT THE APPEAL BE RESTORED TO THE FILE OF LD. CIT (A) WITH A DIRECTION THAT PROPER OPPORTUNITY OF BEING HEARD MAY BE ALLOWED TO THE ASSESSEE. 4. THE LD. SENIOR D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW, HOWEVER, HAS NO OBJECTION IF THE ENTIRE ISSUE IS SET-ASIDE TO CIT (A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE LD. CIT (A) HAS NOT ALLOWED PROPER OPPORTUNITY OF BEING HEARD. THE PRINCIPLE OF AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRESSION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN AN OPPORTUNITY TO DEFEND HIMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVIDENCE, RIGHT TO REBUT ADVERSE EVIDENCE, RIGHT TO CROSS EXAMINATION, RIGHT TO LEGAL REPRESENTATION, DISCLOSURE OF EVIDENCE TO PARTY, REPORT OF ENQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS. WE TOOK THIS GUIDANCE FOR RIGHT OF HEARING, FROM THE RATIO AS IS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MANEKA GANDHI V. UNION OF INDIA, WHEREIN JIVRAJBHAI SUKHABHAI DANKHARA V. ITO 3(3)(2) SURAT /I.T.A. NO.734/SRT/2018/A.Y.14-15 PAGE 3 OF 3 HON'BLE SUPREME COURT HAS LAID DOWN THAT RULE OF FAIR HEARING IS NECESSARY BEFORE PASSING ANY ORDER. WE FIND THAT IT IS PRE-DECISION HEARING STANDARD OF NORM OF RULE OF AUDI ALTERAM PARTEM. WE FIND THAT IN THIS INSTANT CASE, THE ASSESSEE WAS NOT GIVEN PROPER HEARING AND SIMPLY DISMISSED APPEAL BY RELYING ON THE DECISION IN THE CASE OF B. N. BHATTACHARJEE 118 ITR 461 (SC). THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE MUST BE GIVEN ONE MORE OPPORTUNITY OF HEARING TO REPRESENT HIS CASE. THEREFORE, IN EXERCISE OF POWER CONFERRED UNDER RULE 28 OF TRIBUNAL RULES, WE RESTORE THIS APPEAL TO THE FILE OF LD. CIT (A) FOR RECONSIDERATION ALL GROUNDS OF APPEAL AFTER ALLOWING PROPER OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH LAW. NEVERTHELESS, TO MENTION THAT THE ASSESSEE WILL COOPERATE IN THE APPEAL PROCEEDINGS AND HIS FAILURE WILL ENTAIL CONFIRMATION OF THE IMPUGNED ADDITION MADE BY THE AO. THE ASSESSEE WILL FILE NECESSARY EVIDENCES ON WHICH HE WANTS TO RELY UPON. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 26.02.2019 SD/- SD/- (KUL BHARAT) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 26 TH FEBRUARY, 2019/OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT