Shri B K Shivappa , Bangalore V. Assistant Commissioner of Income Tax Central Circle-1(2), Bangalore

ITA 855/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8082 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN
• Assessee Lawyers: S KRISHNA SWAMY
• Keywords: Unexplained cash credit; Business income; Opportunity of being heard; Principle of natural justice; Set aside; Audi alteram partem; Capital Gains
• Section: 153A; 68; 144

Judgement Text

B.K. SHIVAPPA V. ACIT - CC - 1(2) BANGALORE / I.T.A.NO. 855 TO 862 /BANG/ /20 1 9 /A.Y.: 08 - 09 TO 14 - 15 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL B ANGALOR - B - BENCH - BANGALORE BEFORE SMT. BEENA PILLAI , JUDICIAL MEMBER AND SHRI O.P.MEENA , A CCOUNTANT MEMBER I.T.A NO. 855 TO 862 / BANG /20 1 9 ASSESSMENT YEAR: 20 08 - 09 TO 2014 - 15 & 2014 - 15 SHRI B. K. SHIVAPPA, BILESHIVALE VILLAGE, DODDAGUBBI, POST, BANGALORE EAST TALUK, BANGALORE 560077 PAN: AVNPS 2292 Q VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1( 2) BANGALORE APPELLANT RESPONDENT ASSESSEE BY SHRI S. KRISHNASWAMY, CA REVENUE BY SHRI MUZAFFAR HUSSAIN, CIT(D.R.) DATE OF HEARING: 22.01.2010 DATE OF P RONOUNCEMENT ON 22.01.2020 /O R D E R PER O. P. MEENA, A M : 1. THE ABOVE CAPTIONED 8 APPEAL S BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 11, BANGALORE (IN SHORT THE CIT (A)) ALL DATED 20.02.2019 FOR THE ASSESSMENT YEAR S 2008 - 09 TO 2014 - 15 & 2014 - 15 RESPECTIVELY , WHICH IN TURN HAS ARISEN FROM THE SEPARATE SIX ASSESSMENT ORDER S PASSED UNDER SECTION 153A READ WITH SECTION 14 4 ALL DATED 28.03.2016 FOR A.Y. 2008 - 09 TO 2013 - 14 , ONE ASSESSMENT ORDER PASSED UNDER SECTION 153D READ WITH SECTION 144 FOR A.Y. 2014 - 15 DATED 28.03.2016 AND PENALTY ORDER DATED 29.08.2016 FOR A.Y. 2014 - 15 PA SSED U /S 271AA B OF IT ACT,1961 (IN SHORT THE ACT), BY THE B.K. SHIVAPPA V. ACIT - CC - 1(2) BANGALORE / I.T.A.NO. 855 TO 862 /BANG/ /20 1 9 /A.Y.: 08 - 09 TO 14 - 15 PAGE 2 OF 6 ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1(2) BANGALORE (IN SHORT THE AO). 2. THE ABOVE GROUP APPEALS WERE HEARD TOGETHER AND BEING DISPOSED - OFF BY THIS COMMON ORDER. I.T.A.NO. 855 TO 861/BANG/2019/A.Y. 2008 - 09 TO 2014 - 15: 3. IN THE QUANTUM APPEALS , FOR THE ASSESSMENT YEAR 2008 - 09 TO 2014 - 15, THE ASSESSEE HAS TAKEN VARIOUS GROUNDS OF APPEALS WHICH INCLUDED THE CHALLENGING THE VALIDITY OF PROCEEDINGS OF ASSESSMENT MADE UNDER SECTION 153A READ WITH SECTION 144 OF THE ACT BEING LEGAL GROUND AND VARIOUS ADDITION MADE UNDER SECTION 68 AND UNEXPLAINED DEPOSITS , CAPITAL GAINS, BUSINESS INCOME AND AGRICULTURAL INCOME AND OTHER ADDITION S, MADE BY THE AO WHILE F INALIZING ASSESSMENT ORDER UNDER SECTION 153A/153D READ WITH SECTION 1 44 OF THE ACT. 4. AT THE OUTSET, THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT ASSESSMENT ORDER S FOR THE ASSESSMENT YEAR 2008 - 09 TO 2014 - 15 UNDER CONSIDERATION HAS BEEN FR AMED UNDER SECTION 153A/153D READ WITH SECTION 144 OF THE ACT , EX - PARTE , WITHOUT AFFORDING SUFFICIENT TIME AND OPPORTUNITIES BY THE AO . THE LD. CIT (A) HAS ALSO CONFIRMED THE ASSESSMENT MADE UNDER SECTION 144 READ WITH SECTION 153A/153D PASSED BY THE AO BY OBSERVING THAT THE ASSESSEE HAS NOT FURNISHED EXPLANATION BEFORE THE AO AND ADJUDICATED COMPLICATED ISSUES ON MERIT AS WELL AS LEGAL ISSUE, WITHOUT B.K. SHIVAPPA V. ACIT - CC - 1(2) BANGALORE / I.T.A.NO. 855 TO 862 /BANG/ /20 1 9 /A.Y.: 08 - 09 TO 14 - 15 PAGE 3 OF 6 ALLOWIN G REBUTTAL OF THE FINDINGS OF THE AO. THE AO HAS FAILED TO CONSIDER THE EVIDENCE PROVIDED AND EXPLANATION OFFERED BY THE ASSESSEE . THEREFORE, THE LEARNED COUNSEL FOR THE ASSESSEE URGED BEFORE US THAT ONE MORE OPPORTUNITY OF BEING HEARD MAY BE GRANTED TO T HE ASSESSEE TO MAKE GOOD HIS SUBMISSIONS WITH RELEVANT EVIDENCE TO THE SATISFACTION OF REVENUE AUTHORITIES BY SETTING ASIDE THE APPEAL TO THE FILE OF THE AO FOR A DE NOVO CONSIDERATION. 5. THE LEARNED D.R. RELIED ON LOWER AUTHORITIES , BUT HAVE NO SERIOUS OBJECTION IF ISSUE IS SET - ASIDE TO THE AO. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE ASSESSMENT IN ALL THE SEVEN ASSESSMENT YEARS HAVE BEEN PASSED EX - PARTE UNDER SECTION 153A/153D READ WITH SECTION 144 OF THE ACT BY THE AO . THE AO THOUGH AFFORDED NUMBER OF OPPORTUNITIES BUT THE ASSESSEE HAS FAILED TO RESPOND THE SAME. THE LD. CIT (A) HAS ALSO UPHELD THE EX - PARTE ASSESSMENT MADE BY THE AO UNDER SECTION 153A /153D READ WITH SECTION 144 OF THE ACT . 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 PRES ENT 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 B.K. SHIVAPPA V. ACIT - CC - 1(2) BANGALORE / I.T.A.NO. 855 TO 862 /BANG/ /20 1 9 /A.Y.: 08 - 09 TO 14 - 15 PAGE 4 OF 6 SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS ARE MUST. WE FIND THE GUIDANCE FOR RIGHT OF HEARING, AS IS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MANEKA GANDHI V. UNION OF INDIA, WHEREIN HON'BLE SUPREME COURT HAS HELD 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. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE MUST BE GIVEN ONE MORE OPPORTUNITY OF HEARING AND TO REPRESENT H IS CASE. THEREFORE, IN EXERCISE OF POWER CONFERRED UNDER RULE 28 OF TRIBUNAL RULES, WE RESTORE THIS APPEAL TO THE FILE OF THE LD.AO FOR DE NOVO CONSIDERATION ON ALL ISSUES INVOLVED AFTER ALLOWING PROPER AND REASONABLE OPPORTUNITY OF BEING HEARD IN ACCORDA NCE WITH LAW. NEVERTHELESS, TO MENTION THAT THE ASSESSEE WILL COOPERATE IN THE APPEAL PROCEEDINGS AND FILE NECESSARY EVIDENCES ON WHICH HE WANTS TO RELY UPON. 7. IN THE RESULT, THE QUANTUM APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR S FROM 2008 - 09 TO 2014 - 1 5 UNDER CONSIDERATION IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A.NO. 862/BANG/2019/ A.Y. 2014 - 15 /P ENALTY U/S. 271AAB OF THE ACT. 8. THE ASSESSEE HAS AGITATED AGAINST THE CONFIRMATION OF PENALTY OF RS. 25,13,400 LEVIED UNDER SECTION 271AAB OF THE ACT ON THE GROUND THAT OF CONFIRMATION OF ADDITION ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT WERE B.K. SHIVAPPA V. ACIT - CC - 1(2) BANGALORE / I.T.A.NO. 855 TO 862 /BANG/ /20 1 9 /A.Y.: 08 - 09 TO 14 - 15 PAGE 5 OF 6 TREATED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT FOR THE ASSESSMENT YEAR 2014 - 15. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MA TERIAL ON RECORD. WE FIND THAT THE ISSUE OF UNEXPLAINED CASH CREDIT ON WHICH PENALTY LEVIED STANDS SET ASIDE TO THE FILE OF THE AO FOR FRESH /DE NOVO DECISION BY THE ORDER OF TRIBUNAL IN THE QUANTUM APPEAL FOR ASSESSMENT YEAR 2014 - 15 IN ABOVE PART OF THIS ORDER FOR DE NOVO CONSIDERATION . THUS, THE ISSUE ON WHICH PENALTY IS LEVIED IS NO LONGER SURVIVED; THEREFORE, PENALTY LEVIED IS NOT MAINTAINABLE AS OF NOW. ACCORDINGLY, WE SET - ASIDE THE PENALTY SO LEVIED SUBJECT TO CONDITION THAT THE AO IS FREE TO RE - INITIATE PENALTY PROCEEDINGS UNDER SECTION 271 AAB OF THE ACT, ON FINALIZATION OF SET - ASIDE ASSESSMENT PROCEEDINGS, IF THE CIRCUMSTANCES SO WARRANT OR HE THINKS FIT. 10. IN THE RESULT, THE PENALTY APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2014 - 1 5 IS ALLOWED FOR STATISTICAL PURPOSES. 11. THE ORDER PRONOUNCE D IN THE OPEN COURT ON 22.01.2020. SD/ - SD/ - (BEENA PILLAI) (O.P. MEENA) JUDCIAL MEMBER ACCOUTANT MEMBER DATED:22 ND JANUARY 2020 AM* B.K. SHIVAPPA V. ACIT - CC - 1(2) BANGALORE / I.T.A.NO. 855 TO 862 /BANG/ /20 1 9 /A.Y.: 08 - 09 TO 14 - 15 PAGE 6 OF 6 COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST.REGISTRAR