MESERS BHILAI CEMENT,BHILAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1), BHILAI

This appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals)-II, hereinafter called as “ld.CIT(A)” Raipur, dated 10.12.2019 for the A.Y. 2010-11. The assessee raised the following grounds of appeal:- “1. In the facts and circumstances of the case and in law, the ld. Commissioner of Income-tax (Appeals) has grossly erred in passing the impugned order without giving sufficient and proper opportunity to the appellant to be heard and the impugned order is passed in violation of principles of natural justice.

Brief facts of the case are that the assessee is proprietary firm of Shri Sudhir Kumar Bansal. The assessee is engaged in manufacturing and trading of coal tar pitch etc. For the A.Y. 2010-11, the assessee filed its return of income declaring income of Rs. 21,87,130/-. The case of the assessee was selected for scrutiny and assessment was completed on 30/03/2013 determining total income of Rs. 24,36,030/-. Subsequently, the case was reopened under section 147. Notice under section 148 was issued on 31/03/2017 which was served upon the assessee. The assessee filed its reply on 06/06/2017 informing that return filed on 14/10/2010 may be treated return in response to the notice under section 148. The assessee requested for supply of reasons recorded. The AO recorded that reasons recorded were provided to the assessee along with his letter dated 09/06/2017. The AO after serving statutory notices completed the 2 M/s. Bhilai Cement reassessment under section 143(3) r.w.s 147 on 08/12/2017. The AO in the re-assessment order made addition of Rs. 55,05,043/- on account of unexplained expenditure, thereby determining total income at Rs. 76,92,170/-. On appeal, ld.CIT(A) confirmed the action of AO in ex- parte. Further aggrieved, the assessee filed the present appeal before us.

We have heard the submissions of ld. Authorized Representative (AR) for the assessee and the ld. Departmental Representative (DR) for the revenue. Ground Nos. 1 & 2 relates to not providing sufficient and proper opportunity and passing ex-parte order by the ld. CIT(A). The ld.AR of the assessee submits that ld. CIT(A) passed ex-parte order without giving fair and reasonable opportunity to the assessee. The ld.AR for the assessee submits that the assessee has raised specific ground against the validity of reopening under section 147. The ld. CIT(A) has not given any finding nor considered the same while deciding the appeal. The ld. CIT(A) confirmed the order of AO on merit without giving opportunity to the assessee. 4. On the other hand, ld. DR for the revenue submits that ld. CIT(A) granted three opportunities to the assessee as recorded at page No.1 of the impugned order. The ld. CIT(A) recorded that in response to various notices neither the assessee attended nor furnished any written submissions and therefore the ld. CIT(A) has no option except to decide M/s. Bhilai Cement ITA No.08/RPR/2020 the case on the basis of material available on record. The ld.DR for the revenue supports the order of ld. CIT(A).

We have considered the rival submissions of both the parties and perused the order of ld. CIT(A). We find that before the ld. CIT(A), assessee filed appeal on 11/01/2018. As per order of ld. CIT(A) notices dated 22/04/2019, 07/06/2019 and 20/11/2019 were issued. We find that ld. CIT(A) has not recorded the respective date of hearing under the different notices. Further, the ld. CIT(A) has not recorded his satisfaction whether notices issued by him were duly served upon the assessee or not. The ld.CIT(A) recorded that no response was received from the assessee hence, proceeded to decide the appeal by presuming that the assessee has nothing to say other than the material already on record. The ld. CIT(A) in para 2.2 of his order concurred with the additions made by the AO. The ld CIT(A) has not considered the fact pleaded by the assessee in Form-35( appeal form before ld. CIT(A). We find that the assessee raised a specific ground of appeal before the ld.CIT(A) that initiation of reassessment under section 147 is bad in law and on facts. The ld. CIT(A) has not given any finding nor discussed that fact is leading to reopening under section 147 and validity of notice under section 148. We find that non-consideration of jurisdictional issue is fatal. The principle of audi alteram partem and natural justice has not been adhered by ld. CIT(A).