The ACIT, Central Circle-2(1), Ahmedabad V. Shri Kantilal H.Kapasi, Ahmedabad

ITSSA 182/AHD/2005

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8157 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-08-2011
• Assessment Year: misc
• Appeal Filed On: 15-06-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: MUKESH M PATEL
• Keywords: Opportunity of being heard

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , , , , !' !' !' !', , , , #$ #$ #$ #$ %% % & %% % & %% % & %% % &, , , , ' ' ' ' ( ' ( ' ( ' ( ' BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MUKUL KR. SHRAWAT, JUDICIAL MEMBER) IT(SS)A NO.182/AHD/2005 [BLOCK PERIOD 1-4-96 TO 17-1-2003] ACIT, CENT.CIR.2(1) AHMEDABAD. /VS. SHRI KANTILAL H. KAPASI PROP: M/S.KAPASI HANDICRAFT EMPORIUM JITENDRA CHAMBERS OFF. ASHRAM ROAD AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( (,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ' . / (/ REVENUE BY : SHRI S.K. GUPTA 1& . / (/ ASSESSEE BY : SHRI MUKESH M. PATEL (2 / O R D E R PER G.D. AGARWAL, VICE-PRESIDENT : THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INC OME-TAX (APPEALS)- III, AHMEDABAD DATED 23.03.2005 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 158BC(C) OF THE INC OME TAX ACT, 1961. 2. THE GROUND OF THE REVENUES APPEAL READS AS UNDE R: 1. LEARNED CIT (APPEALS) ERRED IN IGNORING THE MAN DATORY PROVISIONS OF SEC.250(1) OF THE ACT IN NOT GIVING N OTICE TO THE AO AND FURTHER IN NOT GRANTING THE AO AN OPPORTUNITY O F BEING HERD AS PER SECTION 250(2)(B) OF THE ACT. 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED DR THAT NO NOTICE UNDER SECTION 250(2)(B) OF THE ACT WAS SE RVED UPON THE AO AND THEREFORE THE CIT(A) DECIDED THE APPEAL WITHOUT ALL OWING ANY OPPORTUNITY OF BEING HEARD TO THE REVENUE. THE SAM E IS IN VIOLATION OF MANDATORY PROVISIONS OF SECTION 250, THEREFORE, THE ORDER OF THE CIT(A) IT(SS)A NO.182/AHD/2005 -2- SHOULD BE SET ASIDE AND THE MATTER SHOULD BE RESTOR ED BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION THAT HE SHOULD RE-ADJ UDICATE THE APPEAL AFTER ALLOWING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE AO. IN SUPPORT OF HIS CONTENTION OF NON-SERVICE OF NOTICE ON THE AO, HE FURNISHED AFFIDAVIT OF ASSESSING OFFICER, SHRI DROP SINGH MEENA. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, STATED THAT FROM THE COPY OF THE NOTICE OF HEARING WITH THE ASS ESSEE, IT IS CLEAR THAT THE NOTICE WAS SENT BY THE CIT(A) TO THE AO ALSO. THAT THE OFFICE OF THE CIT(A) AS WELL AS THE AO IS IN THE SAME BUILDING AN D THEREFORE, THE NOTICE MUST HAVE BEEN SERVED BY HAND FOR WHICH THERE WOULD NOT BE ANY DOCUMENTARY EVIDENCE OF SERVICE OF NOTICE ON RECORD . HE FURTHER STATED THAT THE CIT(A) HAS CONSIDERED EACH AND EVERY ASPEC T RECORDED IN THE ASSESSMENT ORDER. THEREFORE, THERE IS NO PREJUDICE TO THE REVENUE EVEN IF IT IS TECHNICALLY HELD THAT NO NOTICE IS SERVED UPO N THE AO. HE ALSO STATED THAT THE MATTER IS ALREADY BEFORE THE ITAT IN WHICH THE REVENUE HAS RAISED THE GROUNDS AGAINST ALL THE ADDITIONS DELETE D BY THE CIT(A). THEREFORE, WHATEVER IS THE AOS VIEW POINT, CAN BE VERY WELL PLACED BEFORE THE ITAT. HE THEREFORE SUBMITTED THAT THE G ROUND NO.1 OF THE REVENUES APPEAL DESERVES TO BE REJECTED ON FACTS A S WELL AS IN LAW. 5. THE LEARNED DR REITERATED THAT IT IS MANDATORY F OR THE CIT(A) TO ALLOW OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS TO THE AO. ONCE THE APPEAL IS DECIDED WITHOUT ALLOWING ANY OPP ORTUNITY TO THE AO, THE ORDER IS VOID AB INITIO . 6. WE HAVE CAREFULLY CONSIDERED ARGUMENTS OF BOTH T HE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. FROM THE PH OTO-COPY OF THE NOTICE PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE, WE FIND THAT THE CIT(A) IT(SS)A NO.182/AHD/2005 -3- ISSUED NOTICE ON 14-2-2005 IN WHICH ADDRESS OF THE ASSESSEE IS MENTIONED. AT THE BOTTOM OF THE NOTICE COPY TO THE CONCERNED AO IS ALSO MENTIONED. HOWEVER, THE AO HAS FURNISHED THE AFFID AVIT WHICH READS AS UNDER: I, UNDERSIGNED, DROP SINGH MEENA, S/O SHRI MADAN L AL MEENA, AGED ABOUT 31 YEARS, WORKING AS ASSISTANT COMMISSIO NER OF INCOME TAX, CIRCLE-7, AHMEDABAD HAVING OFFICE ADDRE SS AT ROOM NO. 204, SECOND FLOOR, NAVJIVAN TRUST BUILDING, GUJ ARAT VIDYAPITH CAMPUS, ASHRAM ROAD, AHMEDABAD: 380 009, DO HEREBY SOLEMNLY AFFIRM THAT 2. THAT I STATE THAT : A PERUSAL OF THE CASE RECORDS OF KANTILAL I-I. KAPA SI - BLOCK PERIOD I.4.96 TO 17.1.03 (ITA (SS) NO. I82/A/05) REVEALS T HAT THERE IS NO EVIDENCE/ CORRESPONDENCES ON THE SAID RECORDS, WHIC H CAN SUGGEST THAT CIT (A) HAS GIVEN ANY NOTICE TO THE AO AS PER PROVISIONS OF SECTION 250(L) OF THE I. T. ACT OR HE HAS GRANTED A NY OPPORTUNITY OF BEING HEARD AS PER PROVISIONS OF SECTION 250(2)B OF THE I. T. ACT. 3. THIS AFFIDAVIT IS EXECUTED BY ME FOR CLARIFYING THE ABOVE MENTIONED FACTS AND TO PRODUCE IT BEFORE THE HON'BL E INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD IN APPEAL IT A (SS) NO. 182/A/05. FROM THE ABOVE, IT IS EVIDENT THAT THE AO AFTER VER IFICATION OF THE CASE RECORD, DEPOSED THAT THERE IS NO EVIDENCE OF THE SE RVICE OF THE NOTICE BY THE CIT(A). THE REVENUE HAS ALSO PRODUCED BEFORE U S THE ORIGINAL RECORD OF THE CIT(A) FROM WHICH WE HAVE SEEN THAT ON THE R ECORD OF THE CIT(A) ALSO THERE IS NO EVIDENCE OF THE SERVICE OF THE NOT ICE TO THE AO. THEREFORE, WE HOLD THAT THOUGH THE CIT(A) ISSUED NO TICE TO THE AO BUT THE SAME WAS NOT SERVED. 7. SECTION 250 READS AS UNDER: 250. PROCEDURE IN APPEAL.--(1) THE DEPUTY COMMISSI ONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) IT(SS)A NO.182/AHD/2005 -4- SHALL FIX A DAY AND PLACE FOR THE HEARING OF THE AP PEAL, AND SHALL GIVE NOTICE OF THE SAME TO THE APPELLANT AND TO THE ASSESSING OFFICER AGAINST WHOSE ORDER THE APPEAL IS PREFERRED . (2) THE FOLLOWING SHALL HAVE THE RIGHT TO BE HEARD AT THE HEARING OF THE APPEAL-- (A) THE APPELLANT, EITHER IN PERSON OR BY AN AUTHO RISED REPRESENTATIVE; (B) THE ASSESSING OFFICER, EITHER IN PERSON OR BY A REPRESENTATIVE. FROM THE ABOVE, IT IS EVIDENT THAT AS PER SUB-SECTI ON (1) OF SECTION 250, THE CIT(A) HAS TO FIX THE DATE AND PLACE FOR THE HE ARING OF THE APPEAL AND THEREAFTER HAS TO GIVE NOTICE OF THE SAME TO THE AP PELLANT AS WELL AS THE AO, AGAINST WHOSE ORDER, THE APPEAL IS PREFERRED. SUB-SECTION (2) OF SECTION 250 FURTHER REITERATED THAT THE APPELLANT A S WELL AS THE AO HAVE THE RIGHT TO BE HEARD ON THE HEARING OF THE APPEAL. TH E COMBINED READING OF THE ABOVE TWO SUBSECTIONS MAKES IT ABUNDANTLY CLEAR THAT SERVICE OF NOTICE FOR HEARING UPON THE APPELLANT AS WELL AS THE AO BO TH IS MANDATORY. ANY FAILURE ON THE PART OF THE CIT(A) IN THIS REGARD WO ULD INFRINGE THE RIGHT OF THE PARTIES OF BEING HEARD AS PROVIDED UNDER SUB-SE CTION (2) OF SECTION 250. ADMITTEDLY, IN THE CASE UNDER APPEAL BEFORE U S, THERE IS NO EVIDENCE OF SERVICE OF NOTICE UPON THE AO. THE AO HAS GIVEN THE AFFIDAVIT TO THIS EFFECT. UNLESS NOTICE OF HEARING WAS ACTUALLY SERV ED UPON THE PERSON, IT CANNOT BE SAID THAT HE HAS BEEN GIVEN NOTICE OF HEA RING AS PROVIDED IN SUB-SECTION 1 OF SECTION 250. IN VIEW OF THE ABOVE , WE HOLD THAT THE CIT(A) PASSED THE ORDER WITHOUT GIVING NOTICE OF HE ARING AS REQUIRED BY SUB-SECTION (1) OF SECTION 250 AND WITHOUT ALLOWING OPPORTUNITY OF BEING HEARD UNDER SUB-SECTION (2) OF SECTION 250. THUS, THERE IS A CLEAR VIOLATION OF SUB-SECTIONS (1) AND (2) OF THE SECTIO N 250. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTE R BACK TO HIS FILE. WE DIRECT HIM TO ALLOW ADEQUATE OPPORTUNITY OF BEING H EARD AS PROVIDED IT(SS)A NO.182/AHD/2005 -5- UNDER SUB-SECTIONS (1) AND (2) OF SECTION 250 TO BO TH THE PARTIES I.E. THE APPELLANT AS WELL AS THE AO AND THEREAFTER RE-ADJUD ICATE THE APPEAL IN ACCORDANCE WITH LAW. 8. OTHER GROUNDS IN THE REVENUES APPEAL WHICH ARE AGAINST VARIOUS ADDITIONS DELETED BY THE CIT(A) AT PRESENT NEEDS NO ADJUDICATION BECAUSE WHILE ADJUDICATING THE GROUND NO.1 WE HAVE ALREADY SET ASIDE THE ORDER OF THE CIT(A) AND RESTORED THE MATTER BACK TO THE F ILE OF THE CIT(A). HE WILL RE-ADJUDICATE THE ENTIRE APPEAL AFRESH AFTER A LLOWING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES AS P ER SECTION 250 OF THE I.T. ACT. 9. IN THE RESULT, REVENUES APPEAL IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 4 TH AUGUST, 2011 SD/- SD/- ( %% % & %% % & %% % & %% % & / MUKUL KR. SHRAWAT) ' ' ' ' /JUDICIAL MEMBER ( . .. . . .. . G.D. AGARWAL) !' !' !' !' /VICE-PRESIDENT PLACE : AHMEDABAD DATE : 04-08-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD