Shri Vishwamitter Sharma, Kangra V. ITO, Kullu

ITA 794/CHANDI/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9843 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 23-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Right to appeal
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 794/CHD/2013 ASSESSMENT YEAR: 2005-06 SHRI VISHWAMITTER SHARMA, VS. THE ITO PROP.M/S MATRI BHUMI FILLING STATION. KULLU BASHING PO BABELI, KANGRA PAN NO. ANNPM1054A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 23/06/2015 DATE OF PRONOUNCEMENT: 29/06/2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), SHIMLA, H.P. DT. 09/11/2012 RELATING TO ASSESSMENT YEAR 2005-06. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW IN DECIDING THE APPEAL EXPARTE WITHOUT AFFORDING PR OPER OPPORTUNITY OF HEARING WHICH IS AGAINST THE PRINCIP LES OF NATURAL JUSTICE AND AS SUCH THE ORDER PASSED IS ILLEGAL, AR BITRARY AND UNJUSTIFIED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN UPHOLDING THE AD DITION OF RS. 5,50,200/- FOR ALLEGED UNEXPLAINED DEPOSITS IN THE BANK ACCOUNTS APPLYING THE PROVISIONS OF SECTION 69 OF THE ACT WH ICH IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS. 1,50,000/- O N ACCOUNT OF ALLEGED UNEXPLAINED ENTRY IN THE BANK ACCOUNT OF TH E ASSESSEE 2 APPLYING THE PROVISIONS OF SECTION 69 OF THE ACT WH ICH IS ARBITRARY AND UNJUSTIFIED. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-0 6 ON 31/10/2005 DECLARING NET LOSS OF RS. 17082/- AND THE SAME WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT 1961 (IN SHORT THE AC T) ON 24/02/2006. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D THE AO ISSUED STATUTORY NOTICES TO THE ASSESSEE ALONGWITH DETAILE D QUESTIONNAIRE. THE ASSESSEE IS RUNNING A PETROL PUMP AT VILLAGE-BA SHING, DISTRICT KULLU. THE BUSINESS WAS STARTED IN THE MONTH OF OCT OBER, 2004. THE ASSESSEE PRODUCED BOOKS OF ACCOUNT AND OTHER DETAIL S / PARTICULARS AS CALLED FOR BY THE AO. AFTER EXAMINATION AND VERI FICATION OF DETAILS/PARTICULARS THE AO MADE AN ADDITION OF RS. 5,50,200/- UNDER SECTION 69 OF THE ACT AS PER PARA 2 OF THE ASSESSME NT ORDER. THE AO MADE AN ADDITION OF RS. 10,000/- ON ACCOUNT OF INCO ME FROM THE SALES OF SHAWLS AS PER PARA 3 OF THE ASSESSMENT ORD ER. VIDE PARA 4 OF THE ASSESSMENT ORDER THE AO MADE ANOTHER ADDITIO N OF RS. 1,50,000/- UNDER SECTION 69 OF THE ACT. THE AO NOTI CED THAT THE ASSESSEE HAS CREDITED A SUM OF RS. 1,50,000/- ON 30 -12-2004 BY TRANSFER. ACCORDING TO AO THE ASSESSEE COULD NOT EX PLAIN THE SOURCE OF DEPOSIT OF ABOVE SAID AMOUNT. FOR THE REASONS ST ATED IN PARA 4 OF THE ASSESSMENT ORDER THE AO ADDED THE SUM OF RS. 1, 50,000/- TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 69 OF TH E ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE THE CIT(A), WHO VIDE HER OR DER DATED 9/11/2012 DISPOSED OF THE APPEAL OF THE ASSESSEE EX PARTE, OBSERVING AS UNDER: 2. THE APPEAL WAS FIXED FOR HEARING AS PER THE FOL LOWING DETAILS: 02.08.2012 ISSUED NOTICE FOR HEARING THE CASE FOR 26.09.2012 26.09.201 NO ONE ATTENDED. 26.09.2012 LETTER SEEKING ADJOURNMENT RECEIVED. IS SUED NOTICE FOR HEARING THE CASE FOR 07.11.2012 01.11.2012 NOTICE RECEIVED BACK ON 01.11.2012. THER EFORE, THE APPELLANTS COUNSEL SH. ARVIND MEHTA WAS DULY INFORMED ABOUT THE DATE OF THE HEARING ON TELEPHONE . IT IS PERTINENT TO NOTE THAT THE APPELLANT HAS GIVE N THE ADDRESS OF HIS COUNSEL SH. ARVIND MEHTA ONLY IN COLUMN NO. 14 OF F ORM NO. 35, THEREBY DESIRING THAT THE NOTICES SHOULD BE SENT AT THE GIV EN ADDRESS. STILL NO ONE ATTENDED ON THE GIVEN DATE. HENCE IT APPEARS THAT T HE APPELLANT IS NOT SERIOUS ABOUT PURSUING THE APPEAL. IT IS, THEREFORE , CONSIDERED APPROPRIATE 3 TO DISPOSE OF THE APPEAL ON MERITS ON THE BASIS OF MATERIAL AND INFORMATION AVAILABLE ON RECORD. NOW THE ASSESSEE IS AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) BEFORE THE TRIBUNAL. 5. I HAVE HEARD SHRI TEJ MOHAN SINGH, LD. COUNSEL F OR THE ASSESSEE AND SHRI S.K. MITTAL, LD. DR AT LENGTH AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE VERY OUTSET S HRI TEJ MOHAN SINGH, LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGU ED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DECIDING THE APPEAL EXP ARTE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND AS SUC H THE IMPUGNED ORDER IS ILLEGAL, ARBITRARY AND HENCE NOT SUSTAINAB LE. AS PER THE ORDER OF THE LD. CIT(A), NOTICE FOR HEARING OF THE CASE W AS ISSUED TO THE ASSESSEE ON 26/09/2012, FIXING THE CASE FOR HEARING ON 07/11/2012. THE NOTICE ISSUED ON 26/09/2012 WAS RECEIVED BACK A S UNSERVED BY THE OFFICE OF CIT(A) ON 01/11/2012. THUS, IT IS CLE AR THAT NOTICE ISSUED ON 26/09/2012 WAS NEVER SERVED UPON THE ASSESSEE. IN MY OPINION THE LD. CIT(A) SHOULD HAVE ISSUED ANOTHER NOTICE TO THE ASSESSEE INFORMING HIM ABOUT THE DATE OF HEARING. HOWEVER, T HE LD. CIT(A) OBSERVED THAT ON 01/11/12 SHE HERSELF INFORMED THE ASSESSEES COUNSEL SH. ARVIND MEHTA ABOUT THE DATE OF HEARING TELEPHONICALLY. IN MY CONSIDERED OPINION THE SAID ACTION OF THE LD. CIT(A) IS NOT PROPER AND IN ACCORDANCE WITH LAW, AND SHE HAS PASS ED AN EXPARTE ORDER ON 09/11/2012 IN A HURRY. FROM THE IMPUGNED ORDER, IT CAN SAFELY BE HELD THAT SHE HAS NOT AFFORDED ADEQUATE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE APP EAL. IT IS WELL SETTLED LAW THAT A RIGHT OF APPEAL WHEREVER CONFERR ED INCLUDES A RIGHT OF BEING AFFORDED AN OPPORTUNITY OF BEING HEA RD, IRRESPECTIVE OF THE LANGUAGE CONFERRING SUCH RIGHT. THAT IS A P ART AND PARCEL OF THE PRINCIPLE OF NATURAL JUSTICE. WHERE AN AUTHORIT Y IS REQUIRED TO ACT IN A QUASI-JUDICIAL CAPACITY, IT IS IMPERATIVE TO G IVE THE APPELLANT AN ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE APPEAL. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES IN T HE PRESENT CASE, I THINK IT APPROPRIATE TO SET ASIDE THE ORDER OF LD. CIT(A) IN TOTO AND REMAND THE MATTER TO THE AO WITH A DIRECTION TO DEC IDE THE ISSUES 4 AFRESH ON MERITS AFTER AFFORDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THIS CASE, THE ASSESSEE HAS SUBMITTED AN APPL ICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WHICH READS AS UND ER: IN THE MATTER ON ITA NO. 794/CHANDI/2013 RELATING TO ASSESSMENT YEAR 2005-06 FIXED FOR HEARING TODAY THE 3 RD OF NOVEMBER, 2014. APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE FO R ADJUDICATION. RESPECTFULLY SHOWETH AS UNDER: THE ABOVEMENTIONED APPEAL IS FIXED FOR HEARING TODA Y THE 3 RD OF NOVEMBER, 2014. THE ASSESSMENT IN THIS CASE HAS BEE N FRAMED AT AN INCOME OF RS. 6,93,118/- AS AGAINST RETURNED LOSS O F RS. 17,082/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE WIFE OF THE ASSESSEE SMT. SANTOSH SHARMA HAD WITHDRAWN VARIOUS AMOUNTS FROM HER ACCOUNT WHICH WAS DEPOSITE D IN THE BANK ACCOUNT OF THE ASSESSEE. COPY OF THE BANK STATEMENT IS ANNEXED HEREWITH AT PAGE 1-2. IT WAS ALSO SUBMITTED THAT THE ASSESSE E HAD GIVEN AN ADVANCE TO HIS BROTHER SH. RAJ KUMAR SHARMA OF RS. 1,50,000/- IN THE YEAR 2000 WHICH WAS RETURNED BY HIM IN MARCH 2004. UNFOR TUNATELY SH. RAJ KUMAR SHARMA EXPIRED IN 2006.HIS WIFE SMT. CHANDER PRABHA SHARMA IS FILING AN AFFIDAVIT ON BEHALF OF HIS DECEASED HUSBA ND STATING THAT THE AMOUNT HAD BEEN RETURNED BY HER HUSBAND. COPY OF TH E AFFIDAVIT AND DEATH CERTIFICATE OF SH. RAJ KUMAR SHARMA IS ANNEXE D AT PAGES 3-4. THIS EVIDENCE COULD NOT BE SUBMITTED EARLIER FOR WA NT OF PROPER REPRESENTATION OF THE CASE BEFORE THE LOWER AUTHORI TIES. AS SUCH IT IS, THEREFORE, RESPECTFULLY PRAYED THAT THE ADDITIONAL EVIDENCE WHICH GOES TO THE ROOT AND NECESSARY TO CULL OUT THE FACTS MAY PL EASE BE ADMITTED AND ADJUDICATED UPON. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE DOCUMENTS ARE RELEVANT AND GO TO THE ROOT OF THE MA TTER IN ORDER TO DECIDE THE ISSUES ON MERITS. HE FURTHER SUBMITTED T HAT THE ABOVE ADDITIONAL EVIDENCE COULD NOT BE PRODUCED BEFORE TH E LD. CIT(A) FOR WANT OF PROPER REPRESENTATION OF CASE BEFORE HE R. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THESE DOCUMENTS C OULD NOT BE PRODUCED BEFORE CIT(A) FOR THE REASONS THAT SHE HAS PASSED AN EX.PARTE ORDER WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS I HAVE ALREADY OBSERVED HERE IN ABOVE THAT THE LD. CIT(A) HAS NOT PROVIDED AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING THE ORDER IN THE MAT TER AND THEREFORE IN THE INTEREST OF JUSTICE THESE DOCUMENTS DESERVE TO BE ADMITTED AS ADDITIONAL EVIDENCE. IN OTHER WORDS LD. CIT(A) HAS DECIDED THE CASE WITHOUT PROVIDING AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. UNDER THE PROVISIONS OF LAW, THE ASSESSE E COULD HAVE 5 PRODUCED THE ADDITIONAL EVIDENCE BEFORE THE CIT(A), HAD HE NOT PASSED THE IMPUGNED ORDER WITHOUT HEARING THE ASSES SEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/06/2015 SD/- (H.L.KARWA) VICE PRESIDENT DATED :29/06/2015 AG COPY TO:1. THE APPELLANT,2. THE RESPONDENT,3.THE CI T, 4.THE CIT(A),5. THE LD. DR