ASHWIN NARENDRA LODHA, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, RAIPUR

ITSSA 02/RPR/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8599 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Keywords: Opportunity of being heard; Principle of natural justice; Assessment record; Documents seized; Set aside
• Section: 143(3); 153A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI PAWAN SINGH, JUDICIAL MEMBER I.T(SS).A. NO. 02/RPR/2018) ( [ [ / ASSESSMENT YEAR : 2012-13) ASHWIN NARENDRA LODHA 502, 5 TH FLOOR, 26/28 VAITARNA BUILDING, SIR POCHKHANWALA ROAD, WORLI, MUMBAI (MH) - 400018 / VS. ASST. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE II AAYAKAR BHAWAN, CIVIL LINES, RAIPUR (CG) ./ ./PAN/GIR NO. : AAFPL4502R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI NIKHILESH BEGANI , C.A. / RESPONDENT BY : SHRI P. K. MISHRA, CIT.DR / DATE OF HEARING 11/08/2021 / DATE OF PRONOUNCEMENT 13/08/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, RAIPUR (CIT(A) IN SHORT), DATED 10.01.2018 ARISING IN THE ASSESSMENT ORDER DATED 09.11.2016 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2013-14. IT(SS)A NO. 02/RPR/2018 (ASHWIN NARENDRA LODHA VS. ACIT) A.Y. 2012-13 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ HEREUNDER: GROUND NO.I THAT THE EX-PARTE APPELLATE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, RAIPUR (THE LD.CIT(A)) IS HIGHLY UNJUSTIFIED, BAD IN LAW, WITHOUT PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD, AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND NOT IN ACCORDANCE WITH THE PROVISIONS OF LAW. IT IS PRAYED THAT THE APPELLATE ORDER PASSED UNDER SECTION 250 OF THE ACT MAY PLEASE BE CANCELLED ON THIS GROUND ALONE. GROUND NO.II ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) HAS ERRED IN CONFIRMING AN ADDITION OF RS.2,06,79,10,000/- MADE BY THE LEARNED ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTION 56(2)(VII) OF THE ACT WHICH IS HIGHLY UNJUSTIFIED, UNWARRANTED, UNSUSTAINABLE, NOT PROPER ON FACTS, DEHORS AND INCRIMINATING MATERIAL OR DOCUMENTS SEIZED IN THE COURSE OF SEARCH, BASED ON PRESUMPTIONS & SURMISES, CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE AND NOT IN ACCORDANCE WITH THE PROVISIONS OF LAW. HENCE, IT IS PRAYED THAT THE ADDITION OF RS.2,06,79,100/- MAY PLEASE BE DELETED. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT LEARNED COMMISSIONER HAD PASSED EX PARTE ORDER GIVING ONE PARA FINDING ON PERTINENT QUESTIONS OF LAW AND FACTS INVOLVED IN THE PRESENT CASE. THE ASSESSEE HAS NOT PRESENTED ITS DEFENCE AND RELEVANT LAW FOR UNSUSTAINABILITY OF ADDITIONS BEFORE THE CIT(A). THE CIT(A) HAS MERELY REITERATED THE OBSERVATIONS OF THE AO AND HAS ENDORSED THE WHOLE ACTION IN FEW LINES WITHOUT ANY OBJECTIVE ANALYSIS. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE ADDITIONS, IF SUSTAINED ON SUCH EX PARTE ORDER, SHALL BE STAGGERINGLY DISPROPORTIONATE TO THE IT(SS)A NO. 02/RPR/2018 (ASHWIN NARENDRA LODHA VS. ACIT) A.Y. 2012-13 - 3 - DEFAULT COMMITTED BY THE ASSESSEE IN NOT ATTENDING THE CASE BEFORE THE CIT(A). 4. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, ON THE OTHER HAND, SUBMITTED THAT THE CIT(A) WAS LEFT WITH NO CHOICE BUT TO CONCLUDE THE HEARING EX PARTE WHERE THE ASSESSEE HAS FAILED TO REPRESENT ITS CASE DUTIFULLY DESPITE OPPORTUNITIES ACCORDED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. BEFORE WE PROCEED TO DEAL WITH THE MATTER IT WILL BE RELEVANT TO EXTRACT THE FINDING OF THE CIT(A) WHILE DISPOSING THE APPEAL. I HAVE CONSIDERED THE GROUNDS OF APPEAL AND GONE THROUGH THE MATERIAL ON RECORD. I OBSERVE THAT THE AO HAS DISCUSSED ALL RELEVANT ISSUES IN CONNECTION WITH THE ADDITION MADE BY HIM PERTAINING TO INCOME FROM OTHER SOURCES U/S.56(2)(VII) OF THE ACT. SUBSTANTIAL PART OF THE ASSESSMENT ORDER IS ON DETAILS OF THE SHARES HELD BY THE APPELLANT AS WELL AS THE METHOD OF CALCULATION FOR THE TAXABLE AMOUNT AS PER SECTION 56(2)(VII) OF THE ACT. THE AO HAS ALSO GIVEN A DETAILED WORKING OF THE VALUE ARRIVED AT IN CALCULATING THE GAINS MADE BY THE APPELLANT IN RESPECT OF THE TRANSACTIONS IN SHARES IN VARIOUS COMPANIES. THERE IS NO CONTRARY MATERIAL BROUGHT ON RECORD BY THE LD. COUNSELS APPEARING ON BEHALF OF THE APPELLANT AND HENCE THE ADDITIONS MADE BY THE AO DESERVES TO BE CONFIRMED. ACCORDINGLY THE ADDITION OF RS.2,06,79,10,000/- U/S. 56(2)(VII) OF THE ACT IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 6. WE NOTICE AT THE OUTSET THAT THE ASSESSEE HAD RAISED SEVERAL GROUNDS BEFORE THE CIT(A) AS NOTED IN PARA 3 OF THE FIRST APPELLATE ORDER FOR DETERMINATION. SECTION 250(6) OF THE ACT REQUIRES THAT THE CIT(A) IS OBLIGED TO RENDER THE DECISION AND REASON THEREOF ON EACH POINT WHILE DECIDING THE APPEAL. THE CIT(A) HAS PASSED A CRYPTIC ORDER WHEREBY THE ACTION OF THE AO HAS BEEN SUMMARILY ENDORSED. ONE OF THE GROUNDS RAISED BY THE ASSESSEE WAS THAT THE ABSENCE OF IT(SS)A NO. 02/RPR/2018 (ASHWIN NARENDRA LODHA VS. ACIT) A.Y. 2012-13 - 4 - INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. NO FINDING HAS BEEN GIVEN ON THE CRUCIAL QUESTION WHICH GOES TO THE ROOT OF THE MATTER AND MAY CHANGE THE COURSE OF CONCLUSION. THE CIT(A) OUGHT TO HAVE EXAMINED THE ASSESSMENT RECORDS AS WELL AS THE BACKGROUND MATERIAL, SUCH AS, APPRAISAL REPORT AND EVIDENCES COLLECTED BY THE AO TO ASCERTAIN THE TRUTHFULNESS OF THE OBLIGATION AND ITS CONNECTION WITH THE ADDITIONS/DISALLOWANCES. THE CIT(A) HAS FAILED TO DO SO. SIMILARLY, THE PROVISIONS OF SECTION 56(2)(VIIB) OF THE ACT HAS BEEN INVOKED IN A CASE WHERE NO PREMIUM HAS BEEN PAID. THE ISSUE IS LEGAL IN NATURE AND REQUIRES PROPER ADJUDICATION ON THE APPLICABILITY OF LAW ON THIS SCORE. NO OBJECTIVE APPRAISAL HAS TAKEN PLACE. 6.1 THE FAILURE OF THE ASSESSEE TO REPRESENT AND ASSIST THE CIT(A) IN THE MATTER, WHILE A SERIOUS LAPSE, WOULD NOT BE A TOTAL HANDICAP. IN OUR VIEW, THE ORDER OF CIT(A) CALLS FOR OBJECTIVE APPRECIATION OF FACTS AND LAW. WE ALSO FIND FORCE IN THE PLEA OF THE ASSESSEE THAT THE APPELLATE AUTHORITY REQUIRES TO BEAR IN MIND THE CONSEQUENCES OF EX PARTE ORDER WHICH ARE EXTREMELY DISPROPORTIONATE QUA THE DEFAULT COMMITTED IN THIS CASE. HENCE, ON APPRAISAL OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN TOTALITY, WE ARE OF THE VIEW THAT ANOTHER ROUND OF OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE IN THIS REGARD TO ADDUCE EVIDENCES AND MAKE SUBMISSIONS IN RESPECT OF VARIOUS QUESTIONS AS INVOLVED. 6.2 WE ACCORDINGLY, SET ASIDE THE EX PARTE FIRST APPELLATE ORDER DATED 10.01.2018 AND RESTORE THE MATTER BACK TO THE FILE OF THE FIRST APPELLATE AUTHORITY FOR ADJUDICATION OF THE APPEAL AFRESH IN ACCORDANCE WITH LAW. IT SHALL BE OPEN TO THE ASSESSEE TO ADDUCE SUCH EVIDENCES AS MAY BE CONSIDERED EXPEDIENT AND TO MAKE ALL IT(SS)A NO. 02/RPR/2018 (ASHWIN NARENDRA LODHA VS. ACIT) A.Y. 2012-13 - 5 - SUBMISSIONS ON FACTS AND POSITION OF LAW IN SUPPORT OF ITS CASE. NEEDLESS TO SAY, THE ASSESSEE SHALL EXTEND FULL COOPERATION AND ASSISTANCE FOR DETERMINATION OF THE ISSUES INVOLVED BEFORE THE CIT(A) WITHOUT ANY DEMUR . 7. IN THE RESULT, THE CAPTIONED APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (PAWAN SINGH) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAIPUR: DATED 13/08/2021 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, RAIPUR 6. [ / GUARD FILE. BY ORDER , SR. PRIVATE SECRETARY ITAT , RAIPUR (ON TOUR) THIS ORDER PRONOUNCED IN OPEN COURT ON 13/08/2021