RAMESH KUMAR KOCHAR , CHENNAI V. DCIT , CHENNAI

ITSSA 1/CHNY/2022

AI Insights

The case involves an appeal by Mr. Ramesh Kumar Kochar against the order of the Commissioner of Income Tax (Appeals)-18, Chennai, which confirmed additions made by the Assessing Officer regarding unexplained stock of jewellery and unexplained cash found during a search operation. The search was conducted under section 132 of the Income-tax Act, 1961, at the premises associated with Mr. Kochar and his brother, Mr. Suresh Kumar Kochar. The Tribunal found that the CIT(A) had disposed of the appeal while remand proceedings were still pending, which was deemed a violation of the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135025 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-02-2023
• Assessment Year: misc
• Appeal Filed On: 02-10-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside
• Section: 132; 143(3); 158BD

Judgement Text

आयकर अपीलीय अिधकरण, ‘बी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ᮰ी वी दुगाᭅ राव, ᭠याियक सद᭭य एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./IT(SS)A No.: 1/Chny/2022 Block Period: 01.04.1996 to 17.12.2002 Mr. Ramesh Kumar Kochar, No. 33, NSC Bose Road, Sowcarpet, Chennai – 600 079. [PAN: AAIPK-7125-Q] v. The Deputy Commissioner of Income Tax, Central Circle – 2(2), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri. Shrenik Chordia, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. S. Senthil Kumaran, CIT सुनवाई कᳱ तारीख/Date of Hearing : 01.03.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 08.03.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-18, Chennai, dated 30.08.2022 and pertains to block period 01.04.1996 to 17.12.2002. :-2-: IT(SS)A. No:1/Chny/2022 2. The assessee has raised the following grounds of appeal: “1. For that the Order of the Learned Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case. 2. For that the Learned Commissioner of Income Tax (Appeals) erred in disposing the appeal during the pendency of the remand proceedings. 3. For that the Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of a sum of Rs.38,00,596/- as unexplained stock of jewellery without appreciating the explanation provided by the appellant. 4. For that the Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of a sum of Rs.9,66,615/- as unexplained cash without considering the explanation provided by the appellant. 5. For that the Learned Commissioner of Income Tax (Appeals) failed to consider the fact that the cash found during search pertained to one Mr.Suresh Kumar Kochar, Brother of the appellant, who had sufficiently disclosed the said cash in his return of income which was duly assessed and confirmed by the Assessing Officer. 6. For these grounds and such other grounds that may be adduced before or during the hearing of the appeal, it is prayed that the Hon'ble Tribunal may be pleased to delete the disallowance made and/or provide such other relief as this Hon'ble Tribunal deems fit.” 3. The brief facts of the case are that, a search u/s. 132 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) was conducted in the residential premises of Shri. N. Dhanraj Kochar on 17.12.2002. As a part of search, the business premises of M/s. Dhanraj Jewellers, which is the proprietary concern of the assessee was also covered. During the course :-3-: IT(SS)A. No:1/Chny/2022 of search, excess stock of gold jewellery to the extent of 4511.02 gms was found and cash to the extent of Rs. 9,66,615/- was also found. Consequent to search, the assessment has been completed u/s. 158BD r.w.s. 143(3) of the Act, on 29.03.2007 and determined total income at Rs. 47,67,210/-, by making additions towards unexplained cash found during the course of search and unexplained stock of gold jewellery. The assessee carried the matter in appeal before the first appellant authority. Before the ld. CIT(A), the assessee has filed certain additional evidences. During the appellant proceedings, the CIT(A) furnished additional evidences filed by the assessee to the Assessing Officer for his comments. The AO, furnished his remand report on 14.02.2022 and reiterated his observations with regard to additions made in the assessment order, on the ground that the assessee could not file any evidences to substantiate its claim, even though two letters dated 27.12.2021 and 01.03.2022 was served. Therefore, the ld CIT(A) by taking into account various facts including remand report submitted by the AO, opined that the assessee could not explain excess gold jewellery as well as cash seized during the course of search and thus, sustained additions made by the AO. :-4-: IT(SS)A. No:1/Chny/2022 4. The Ld. Counsel for the assessee, submitted that the Ld. CIT(A) erred in disposing of appeal filed by the assessee, when second remand proceedings was pending before the AO, which is evident from the fact that, although, the AO has submitted his remand report on 14.03.2022, but he has issued one more letter dated 30.07.2022 and called upon the assessee to explain its case in respect of issues remanded for verification. Therefore, argued that the matter may be set aside to the file of the CIT(A), to give one more opportunity to the assessee. 5. The Ld. DR, on the other hand supporting order of the CIT(A) submitted that, when matter has been remanded to the file of the AO, the assessee could not file any evidences to justify his case and thus, the CIT(A) has disposed of appeal filed by the assessee, on the basis of details filed by the assessee and facts brought on record by the AO and thus, there is no reason to given one more opportunity of hearing to the assessee. 6. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The ld. CIT(A) has disposed of appeal filed by the :-5-: IT(SS)A. No:1/Chny/2022 assessee on the basis of evidences filed during the course of appellant proceedings and remand report submitted by the AO, where the AO stated that the assessee could not file any evidences to justify his stand during remand proceedings, even though two letters dated 27.12.2021 and 01.03.2022 were issued. We find that although, the AO has submitted his remand report on additional evidences filed by the assessee on 14.03.2022 and reiterated his observations made during assessment proceedings on two additions in absence of any fresh evidences from the assessee side, but fact remains that after submission of remand report on 14.03.2022, the Assessing Officer has issued one more letter on 30.07.2022 and called upon the assessee to explain various issues remanded by the CIT(A) and the case was posted for hearing on 04.08.2022. From the above, it is very clear that the CIT(A) has disposed of appeal filed by the assessee when remand proceedings was pending before the AO, in violation of principle of natural justice, because when the CIT(A) has remanded the case to the AO for verification, in our considered view the CIT(A) ought to have given sufficient time to the AO as well as assessee to comply with his directions. Since, the CIT(A) has disposed of appeal filed by the assessee when :-6-: IT(SS)A. No:1/Chny/2022 remand proceedings is pending before the AO, we are of the considered view that the issue needs to go back to the file of the CIT(A) for fresh consideration of the issue. Thus, we set aside the order passed by the CIT(A) and restore the issue back to the file of the CIT(A) and direct the CIT(A) to re- consider the issue afresh after giving sufficient opportunity of hearing to the assessee. 7. In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the court on 8 th March, 2023 at Chennai. Sd/- Sd/- (वी दुगाᭅ राव) (V. DURGA RAO) ᭠याियकसद᭭य/Judicial Member (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 8 th March, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ/CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF