SHRI MAHIJIT KUMAR,MANDI GOBINDGARH vs. ITO, W-2, MANDI GOBINDGARH

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ITA 1434/CHANDI/2019Status: DisposedITAT Chandigarh21 October 2021AY 2010-114 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted a contradiction in the AO's stand regarding the initial information and the turnover assessed. It also observed that both the AO and CIT(A) passed ex-parte orders without ensuring proper service of notices to the assessee, violating the principle of 'audi alteram partem'.

What were the facts?

The Assessing Officer (AO) reopened the case under Section 147/148 based on information about financial transactions. The AO made an ex-parte addition of Rs. 23,59,772/- by treating certain credit entries as unaccounted turnover. The CIT(A) also passed an ex-parte order sustaining the addition.

What were the issues?

Whether the reopening of assessment and subsequent ex-parte orders passed by the AO and CIT(A) were valid without providing a reasonable opportunity of being heard to the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 271(1)(b),Section 271(1)(c),Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

PER N.K. SAINI, VICE PRESIDENT

1.

This is an appeal by the assessee against the order dt. 21/08/2019 of Ld.

CIT(A), Patiala.

2.

During the course of hearing nobody was present on behalf of the assesse.

3.

Following grounds have been raised in this appeal.

1. That the first appellate authority have not considered that the Assessing Officer has erred in reopening the case U/S 148 of the Income Tax Act, 1961.

2. The first appellate authority have not considered that the Assessing has erred in not considering that there was no believe or cogent material with the Income Tax Officer to form belief that the income of the Assesse has escaped assessment.

3. That the first appellate authority have not considered that the Assessing officer has erred in assessing the income amounting to Rs. 2359772/-. 4. That the first appellate authority has not considered that no sufficient or reasonable opportunity was afforded to the assesse to hear the case. 5. That the first appellate authority have not considered that the Assessing Officer assessed the income of Rs. 2359772/- against the facts and circumstances of the case 6. That the first appellate authority have not considered that notice u/s 271(l)(b), 271(l)(c) has been wrongly issued and interest u/s 234A AND 234B has been wrongly charged. 7. That the appellant craves leaves to add or amend any of grounds of appeal before the appeal is finally heard or disposed of.

4.

Facts of the case in brief are that the A.O. framed the assessment exparte under section 144 r.w.s 147 of the Income Tax Act, 1961 (for short the ‘Act’) by observing that as per the information available with the Department in NMS, the assessee has made financial transaction amounting to Rs. 77,90,000/- which represented cash deposits during the F.Y. 2009-10 relevant to A.Y. 2010-11. He therefore issued the notice under section 148 r.w.s 147 of the Act. Since there was no compliance from the assessee side the A.O. made the addition of Rs. 23,59,772/- by observing that the assessee had made credit entries of Rs. 471954580/- in his account maintained with State Bank of India, Mandi Gobindgarh. He treated the said amount as unaccounted turnover of the assessee and by applying the G.P. Rate of 0.5% worked out the profit of Rs. 23,59,772/-.

5.

Being aggrieved the assessee carried the matter to the Ld. CIT(A) who sustained the addition by passing the exparte order. He mentioned that whenever the notice for hearing was issued none attended except for hearing on 11 & 16/03/2019 when the adjournment was sought.

6.

Now the assessee is in appeal.

7.

The Ld. Sr. DR strongly supported the impugned order passed by the Ld. CIT(A) and reiterated the observations made therein.

8.

I have heard the submissions the Ld. DR and perused the material available on the record. In the present case it is noticed that the A.O. issued notices under section 148 r.w.s 147 of the Act by observing that the information available with the department in NMS was that the assessee had made Financial transactions of Rs. 77.90 lacs. However he treated the amount of Rs. 471954580/- as unaccounted turnover of the assessee, so there is contradiction in the stand of the A.O. Moreover the A.O. passed the assessment order exparte and the Ld. CIT(A) also passed the impugned order exparte. The Ld. CIT(A) simply stated that the notices for hearing were issued to the assessee and last one was on 31/07/2019 for hearing on 14/08/2019. However nothing is brought on record as to whether the said notice was served upon the assessee. It is well settled that nobody should be condemned, unheard as per the maxim, “audi alteram partem”.

9.

I therefore keeping in view the peculiar fact of this case restore this issue back to the file of the A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

10.

In the result, appeal of the Assessee is allowed for statistical purposes.

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