INCOME TAX OFFICER, NCW-8(2), CHENNAI V. SHRI SIVANANTHAM, CHENNAI

ITA 984/CHNY/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6828 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 28-12-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: VENKATARAMAN
• Keywords: Principle of natural justice; Additional evidence; Set aside

Judgement Text

आयकर अपील य अ धकरण, ‘बी’ यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘B’ BENCH, CHENNAI ी महावीर संह, उपा य एवं ी जी. मंज ु नाथ, लेखा सद%य के सम BEFORE SHRI MAHAVIR SINGH, VICE-PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./I. T. A. No. 9 8 4/ Chn y/ 2 0 2 0 ( नधा रणवष / A s s e s sm e nt Yea r : 2 0 1 7- 1 8 ) The Income Tax Officer, Non-Corporate Ward-8(2) Chennai. V s Shri Sivanantham 4, Madha Nagar Main Road Madhanandhapuram, Porur Chennai-600 116. PA N: C H HPS 9 6 0 8 A (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. N.Sanjay Gandhi, Addl.CIT यथ क ओरसे/Respondent by : Mr. Venkata Raman, CA स ु नवाईक तार!ख/D a t e o f h e a r i n g : 15.09.2022 घोषणाक तार!ख /D a t e o f P r o n o u n c e m e n t : 15 .09.2022 आदेश / O R D E R PER G.MANJUNATHA, AM: This appeal filed by the Revenue is directed against order passed by the learned Commissioner of Income Tax (Appeals)-9, Chennai, dated 24.09.2020 and pertains to assessment year 2017-18. 2. At the outset, we find that there is a delay of 23 days in appeal filed by the revenue. During the course of hearing, when defect was brought to the notice of learned DR present for the submitted that delay in filing of appeal is mainly due to lockdown imposed by the Govt. on account of spread of Covid- 19 infections and in view of Hon’ble Supreme Court suo motu Writ Petition No.3 of 2020, if the period of delay is covered 2 ITA No. 984/Chny/2020 within the period specified in the order of the Apex Court , then same needs to be condoned in view of specific problem faced by the public on account of Covid-19 pandemic. 3. The learned AR, on the other hand, fairly agreed that delay may be condoned in the interest of justice. 4. Having heard both sides and considered reasons given by the learned DR, we find that the Hon’ble Supreme Court in suo motu Writ Petition No.3 of 2020, has extended limitation applicable to all proceedings in respect of courts and tribunals across the country on account of spread of Covid-19 infections w.e.f. 15.03.2020, till further orders and said general exemption has been extended from time to time. We further noted that delay noticed by the Registry pertains to the period of general exemption provided by the Hon'ble Supreme Court extending limitation period applicable for all proceedings before Courts and Tribunals and thus, considering facts and circumstances of the case and also in the interest of natural justice, we condone delay in filing appeal filed by the Revenue . 5. Brief facts of the case are that as per information available with the Department, the assessee has made cash 3 ITA No. 984/Chny/2020 deposits into Lakshmi Vilas Bank, Mowlivakkam branch, Chennai, during demonetization period between 09.11.2016 to 31.12.2016. Notice u/s.142(1) of the Income Tax Act, 1961, was issued on 01.05.2019 requiring the assessee to furnish source for cash deposits during the demonetization period. The assessee neither appeared nor furnished any details. Therefore, the Assessing Officer has completed assessment u/s.144 of the Act on 15.12.2019 and assessed total cash deposits amounting to Rs.55,16,000/- under the head “income from other sources’ as unexplained money u/s.69A of the Income Tax Act, 1961. The Assessing Officer had also estimated business income @ 8% on total receipts of Rs.4,93,01,114/- and made addition of Rs.33,19,507/-. 6. Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee has filed certain additional evidences to justify source for cash deposits and also income declared from business. The learned CIT(A), after considering relevant submissions of the assessee deleted additions made by the Assessing Officer towards cash deposits made into 4 ITA No. 984/Chny/2020 bank account during demonetization period and also scaled down estimation of profit from 8% to 6% on total turnover. Aggrieved by the learned CIT(A) order, the Revenue is in appeal before us. 7. The learned DR submitted that the Assessing Officer has passed ex-parte order u/s.144 of the Income Tax Act, 1961, due to non-cooperation of the assessee, but the learned CIT(A) deleted additions made by the Assessing Officer towards cash deposits by accepting certain additional evidences without providing those evidences to the comments of the Assessing Officer in violation of Rule 46A of the Income Tax Rules, 1962. Similarly, the learned CIT(A) has scaled down estimation of profit to 6% without giving opportunity to the Assessing Officer to make his comments on profit declared by the assessee. Therefore, appeal may be set aside to the file of the Assessing Officer to give one more opportunity to the Assessing Officer to verify case of the assessee. 8. The learned A.R. for the assessee referring to sub-rule 4 of Rule 46A of Income Tax Rules, 1962, submitted that the CIT(A) does have power to call for additional evidence and 5 ITA No. 984/Chny/2020 decide the issue on merits, without giving opportunity of hearing to the Assessing Officer for his comments. Therefore, there is no error in the reasons given by the learned CIT(A) to admit additional evidences and decide the issue on merits. Therefore, question of setting aside the issue to the file of the Assessing Officer does not arise. 9. We have heard both the parties, perused material available on record and gone through orders of the authorities below. It is well settled principle of law that no appeal or case should be decided unheard the other side. In other words, before deciding any issue reasonable opportunity of hearing should be given to both the sides. In this case, the assessee did not appear before the Assessing Officer to justify its case. Therefore, the Assessing Officer has passed ex-parte assessment order u/s.144 of the Act and made best judgement assessment on the basis of materials available on record. The learned CIT(A) decided the issue on merits by admitting certain additional evidences without confronting those evidences to the Assessing Officer for his comments. In our considered view, the learned CIT(A) erred in not providing opportunity of hearing to 6 ITA No. 984/Chny/2020 the Assessing Officer in violation of provisions of Rule 46A of Income tax Rules, 1962. Therefore, we are of the considered view that the issue needs to go back to the file of the Assessing Officer for fresh consideration. Hence, we set aside both the issues to the file of the Assessing Officer i.e., cash deposits made in bank account during demonetization period and estimation of profit on business turnover and direct the Assessing Officer to reexamine the issue of the assessee after providing reasonable opportunity of hearing to the assessee. 10. In the result, appeal filed by the Revenue is allowed for statistical purposes. Order pronounced in the open court on 15 th September, 2022 Sd/- Sd/- (महावीर संह) (जी. मंज ु नाथ) (Mahavir Singh) (G. Manjunatha ) उपा य / Vice-President लेखा सद'य / Accountant Member चे)नई/Chennai, *दनांक/Dated 15 th September, 2022 DS आदेश क त,ल-प अ.े-षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आय ु /त (अपील)/CIT(A) 4. आयकर आय ु /त/CIT 5. -वभागीय त न3ध/DR 6. गाड फाईल/GF.