Arham Properties, Surat V. Dy. Commissioner of Income Tax, Central Cir.3, Surat

ITSSA 56/SRT/2022

AI Insights

The case involves Arham Properties, the appellant, contesting an ex-parte order by the CIT(A)-4, Surat, which dismissed their appeal regarding the assessment year 2015-16. The primary contention was that the CIT(A) had erroneously held that the appellant was not interested in pursuing the appeal, despite the appellant having made detailed submissions. The appellant also challenged the assessment order passed under sections 143(3) r.w.s. 153C of the Income Tax Act, which included unaccounted payments and protective additions based on presumptions and assumptions without direct incriminating evidence against the appellant. The Tribunal found that the CIT(A) had not adequately considered the facts and submissions of the appellant, leading to the decision to set aside the CIT(A)'s order and remand the case for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302049 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-02-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 24-07-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside
• Section: 143(3); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER IT(SS)A No. 56/Srt/2022 (Assessment Year: 2015-16) (Physical hearing) Arham Properties, Shop No. 403, 2 nd Floor, Poddar Plaza Market, Ghod Dod Road Junction, Surat. PAN No. ABEFA 0246 M Vs. D.C.I.T, Central Circle-3, Surat. Appellant/ assessee Respondent/ revenue Appellant represented by Ms. Chaitali Shah, CA Respondent represented by Shri Ashok B Koli, (CIT-DR) Date of hearing 09/02/2023 Date of pronouncement 09/02/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is e directed against the order of learned Commissioner of Income Tax (Appeals)-4, Surat (in short, the ld. CIT(A) both dated 20/05/2022 for the Assessment year (AY) 2015-16. In this appeal, the assessee has raised following grounds of appeal: “1. On facts and circumstances of the case, the Ld. CIT(A)-4, Surat has grossly erred in passing the impugned appellate order on an ex-parte basis, by erroneously holding that the appellant is not interested in pursuing the appeal, when the fact is that the appellant has made detailed submissions in Form no. 35 itself, which ought to have been considered by the Ld. CIT(A)-4, Surat while passing the impugned order. Therefore, the appellate order of the Ld. CIT(A)-4, Surat being passed on an ex-parte basis, needs to be quashed as being erroneous, illegal and bad-in-law. 2. Without prejudice to the aforesaid ground of appeal, the appellant even otherwise raises the following independent grounds of appeal. (i) On facts and circumstances of the case and in law, the Ld. CIT(A)-4, Surat has erred in not adjudicating on the action of IT(SS)A 56/Srt/2022 Arham Properties Vs DCIT 2 the Ld. AO of issuing notice u/s. 153C of the Act in the case of the appellant for the year under consideration and passing the impugned assessment order u/s. 143(3) r.w.s 153C of the Act , even though no incriminating material or information belonging to or relating to the appellant has been found during the course of search in the case of a third party and it is therefore, prayed that the impugned assessment made u/s.143(3) r.w.s. 153C may kindly be quashed. (ii) On facts and circumstances of the case, the Ld. CIT(A)-4, Surat has erred in not adjudicating on the action of the Ld. AO of applying the presumption u/s. 132(4A) and section 292C in the case of the appellant without appreciating that the said presumption is available only in the case of a person from whose possession and control the documents are found and is not at all available in respect of the documents found am seized from a third party, wherein there is no statement of the third party against the appellant and there is even no corroborative evidence to support such presumption. Hence, the impugned additions as made in the assessment order only on presumptions and assumptions needs to be deleted as being erroneous and bad in law. (ii) On facts and circumstances of the case the Ld. CIT(A)-4, Surat has erred in not adjudicating on the action of the Ld. AO of making a protective addition of Rs. 40,000/- alleging unaccounted payments by the appellant from M/s. Param Properties, inspite of both the alleged receipts and payments being undisputedly accepted by M/s. Param Properties, as belonging to and pertaining to them and who have even covered the same in their application filed before the Hon'ble Settlement Commission. Hence, the protective addition alleging unaccounted payments in the hands of the appellant is absolutely erroneous and needs to be deleted in the interest of natural justice and equity. 3. The appellant craves leave to add, amend, alter, substitute, modify in any or all the above grounds of appeal, if necessary, on the basis of submissions to be made at the time of personal hearing. IT(SS)A 56/Srt/2022 Arham Properties Vs DCIT 3 2. At the outset of hearing, learned Authorized Representative (Ld.AR) for the assessee submits that Ld. CIT(A) dismissed the appeal of assessee in an ex parte order without considering the merit of the case. The Ld. CIT(A) dismissed the appeal of assessee without adjudicating the various grounds of appeal as per mandate of Section 250(6) of the Act. The ld. AR of the assessee submits that the assessee has a good case on merit and likely to succeed if the assessee is to be heard and the appeal is to be decided on merit. The ld AR for the assessee submits that in the statement of facts the assessee has explained all the facts, the ld CIT(A) even has not considered such facts available on record. The ld. AR of the assessee prayed that matter may be restored back to the file of Ld. CIT(A) for adjudicating the issue afresh in accordance with law and she undertake on behalf of the assessee to be more vigilant in attending the hearing before ld CIT(A). 3. On the other hand, the learned Commissioner of Income Tax- Departmental Representative (ld. CIT-DR) for the revenue supported the order of ld. CIT(A) and submitted that the assessing officer as well as ld CIT(A) granted sufficient opportunity to the assessee. The assessee failed to availed such opportunity and now taking plea that sufficient opportunity was not given to him. The assessee has no regards to the public authorities in attending the hearing before them IT(SS)A 56/Srt/2022 Arham Properties Vs DCIT 4 and now claiming that no fair or reasonable opportunity was not given to the assessee. 4. We have heard the submissions of both the parties and have gone through the orders of lower authorities carefully. We find that the Assessing Officer while passing the assessment order under section 143(3) r.w.s. 153C of the Act on 27/12/2017 made addition of Rs. 40,000/- on account of unaccounted payments added on protective basis. The ld. CIT(A) dismissed the appeal of assessee by holding that in spite of several opportunities, no one attended the hearing proceedings. We find that the ld CIT(A) has not considered the basic facts available on record in the form of statement of facts file with Form -35. We further find that the ld. CIT(A) has not adjudicated the grounds of appeal raised by assessee as per mandate of Section 250(6) of the Act. Section 250(6) mandates that order of ld. CIT(A) must contain facts of the case, points of determination and decision thereon and reasons of such decision. Considering the fact that ld. CIT(A) passed the ex parte order, in our view, the assessee was not offered sufficient and reasonable opportunity of hearing, therefore, the order of ld. CIT(A) is set aside and all the grounds of appeal raised by the assessee are restored back to the file of ld. CIT(A) to decide all the grounds of appeal afresh and in accordance with law. Needless to direct that before passing the order, the ld. CIT(A) shall grant IT(SS)A 56/Srt/2022 Arham Properties Vs DCIT 5 reasonable opportunity of hearing to the assessee. The assessee is also directed to be vigilant and not to cause further delay and seek adjournment without any valid reason. The assessee is further directed to file all the relevant evidence in his power and possession, if so desired without any further delay, before the ld. CIT(A). In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 5. In the result, the appeal of assessee is allowed for statistical purposes only. Order pronounced in the open court on 09th February, 2023. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 09/02/2023 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT(A) 4. CIT 5. DR 6. Guard File By order Sr. Private Secretary, ITAT, Surat