Sri. C.M. Venkateshappa, Kolar V. ITO, Kolar

ITA 888/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8551 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 31-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINAY D
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice
• Section: 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.888/BAN G/2009 (ASST. YEAR 2005-06) SHRI C.M VENKATESHAPPA, S/O SRI MUNISHAMAPPA, VOKKALERI MAIN ROAD, KOLAR DISTRICT. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-1, KOLAR. . RESPONDENT APPELLANT BY : SHRI VINAY D, ADVOCATE RESPONDENT BY : SMT. V.S SREELEKHA, ADDL. COMMISSIO NER OF INCOME-TAX O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVAN T ASSESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V AT BANGALORE DATED 18.5.09 AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 144 OF THE INCOME-TAX ACT 1961. ITA NO.888/BANG/20 09 - 2 - 2. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEA L READ AS BELOW: (I) AT THE OUTSET, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSMENT WAS CONCLUDED U/S 144 OF THE ACT AND THAT THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE RELEVANT EVIDENCES BEFORE THE AO. THUS, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE HARDSHIP OF THE APPELLANT AND ACCORDINGLY OUGHT TO HAVE DISPOSED OF THE APPEAL ON MERITS AFTER GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO CONTEST THE MATTER. (II) THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE EVIDENCES FILED BEFORE HIM DURING APPELLATE PROCEEDINGS AS ANNEXURES TO WRITTEN SUBMISSIONS WERE FORWARDED TO THE AO FOR HER COMMENTS (REMAND REPORT). THIS BEING SO, DISMISSING THE APPEAL ULTIMATELY ON THE GROUND THAT APPLICATION U/S 46A WAS NOT FURNISHED WAS FRIVOLOUS/PERVERSE AND ACCORDINGLY IMPUGNED ORDER WAS BAD IN LAW AND LIABLE TO BE SET ASIDE. (III) THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT ALONG WITH THE EVIDENCE ITSELF WAS ITA NO.888/BANG/20 09 - 3 - AN APPROPRIATE APPLICATION U/S 46A OF THE RULES AND THE LD. CIT(A) HAVING ENTERTAINED THE SAME AND HAVING FORWARDED THE SAME TO THE AO FOR HER COMMENTS; THERE WAS NO VIOLATION OF COMPLIANCE OF RULE 46A OF THE ACT AND THE DISPOSAL OF APPEAL ON SUCH AN ALLEGATION WAS OPPOSED TO LAW AND PRINCIPLES OF NATURAL JUSTICE. CONSEQUENTLY, THE ORDER IS LIABLE TO BE SET ASIDE. (IV) ON FACTS OF THE CASE, THE LD. CIT(A) HAVING NOT GIVEN OPPORTUNITY OF BEING HEARD/HEARING TO THE APPELLANT AFTER THE SERVICE OF THE REMAND REPORT OF THE AO, THE ORDER PASSED IS OPPOSED TO LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE, CONSEQUENTLY THE IMPUGNED ORDER IS BAD IN LAW AND LIABLE TO BE DELETED. (V) WITHOUT PREJUDICE THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE AGRICULTURAL INCOME AS DECLARED BY THE APPELLANT WAS FAIR AND REASONABLE AND SUPPORTED BY EVIDENCE AND ACCORDINGLY HE OUGHT TO HAVE ACCEPTED THE EVIDENCE AND REFRAINED FROM UPHOLDING THE ADDITION IN THE IMPUGNED ORDER. 3. WE HEARD BOTH SIDES IN DETAIL AND CONSIDERED THE MATTERS RELATING TO THE APPEAL. ITA NO.888/BANG/20 09 - 4 - 4. THE ASSESSING OFFICER HAS DETERMINED A TOTAL INC OME OF RS.27,70,000/- AS UNEXPLAINED CREDITS UNDER THE HEA D INCOME FROM OTHER SOURCES. 5. IN FIRST APPEAL, THE ASSESSMENT HAS BEEN CONFIRM ED BY THE CIT(A) ON THE GROUND THAT THE ASSESSEE HAS NOT PROD UCED ANY EVIDENCE IN SUPPORT OF HIS CONTENTIONS. 6. EVEN THOUGH, THE ASSESSMENT COULD BE MADE EX-PAR TE U/S 144, THE ASSESSMENT SHOULD BE FAIR AND REASONABLE DOING JUSTICE TO THE FACTS AND CIRCUMSTANCES OF EACH CASE. IN THE PRESENT ASS ESSMENT, THE ASSESSING OFFICER HAS TREATED THE ENTIRE AMOUNT OF RS.27,70,000/- AS UNEXPLAINED CREDITS IN THE HANDS OF THE ASSESSEE WI THOUT MAKING A REASONABLE ASSESSMENT OF THE SITUATION. THE CIT(A) ALSO HAD TAKEN A CASUAL VIEW OF THE MATTER, WHICH IS EVIDENT FROM TH E FACT THAT HE HAS NOT PROPERLY CONSIDERED EVEN THE REMAND REPORT AVAI LABLE BEFORE HIM. WHILE, THE CIT(A) HOLDS THAT THE ASSESSEE HAS NOT E XPLAINED HIS DEFENCE PROPERLY, THE CIT(A) HIMSELF HAS NOT EXAMIN ED WHETHER THE QUANTUM OF INCOME DETERMINED IN THE ASSESSMENT WAS JUSTIFIED, ESPECIALLY IN THE LIGHT OF THE FACT THAT THE ASSESS EE WAS EARNING AGRICULTURAL INCOME. THE CIT(A) HAS NOT APPLIED HI S MIND ALSO TO THE ITA NO.888/BANG/20 09 - 5 - ARGUMENT OF THE ASSESSEE THAT THE CREDIT AMOUNT POI NTED OUT BY THE ASSESSING AUTHORITY RELATED NOT ONLY TO HIM BUT ALS O TO OTHER MEMBERS OF THE HUF. 7. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE F IND THAT THE ASSESSMENT HAS TO BE REDONE AFRESH AFTER GIVING THE ASSESSEE AN EFFECTIVE OPPORTUNITY OF BEING HEARD. THEREFORE, W E REMIT THE MATTER BACK TO THE ASSESSING OFFICER FOR REDOING THE ASSES SMENT IN ACCORDANCE WITH LAW AFTER PURSUING THE MATERIALS AN D EXPLANATIONS THAT MAY BE PRODUCED AND OFFERED BY THE ASSESSEE IN THIS MATTER. 8. WE ALSO FIND THAT THERE WERE LAPSES ON THE PART OF THE ASSESSEE IN NOT COMPLYING WITH THE OPPORTUNITIES GIVEN BY THE L OWER AUTHORITIES. HE CANNOT BE ABSCOND FROM HIS RESPONSIBILITY. WE DI RECT THE ASSESEE TO REMIT A SUM OF RS.1 LAKH TO THE CREDIT OF THE GOVER NMENT OF INDIA ON OR BEFORE 30.4.2010 AND PRODUCE THE CHALLAN BEFORE THE ASSESSING AUTHORITY, UPON WHICH, THE ASSESSING AUTHORITY WILL INITIATE THE REMAND ASSESSMENT PROCEEDINGS. THE AMOUNT OF RS.1 LAKH, S O PAID BY THE ASSESSEE SHALL BE GIVEN CREDIT AGAINST THE DEMAND T HAT MAY COME OUT OF THE REMAND ASSESSMENT TO BE COMPLETED OR REFUNDE D TO THE ASSESSEE IF NO DEMAND IS CREATED, WITH APPLICABLE INTEREST. ITA NO.888/BANG/20 09 - 6 - IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY , THE 11TH DAY OF MARCH, 2010, AT BANGALORE. SD/- SD/- (GEORGE GEORGE K) (DR. O.K NARAYANAN ) JUDICIAL MEMBER V ICE PRESIDENT VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF 7..GF, ITAT, NEW DELHI. BY ORDER ASST. REGISTRAR, ITAT, BANGALO RE.