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Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD
Before: SHRI SANDEEP GOSAIN & SHRI AMARJIT SINGH
आदेश / O R D E R
PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER :
The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax (Appeals)–2, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)-2/10370/ITO, Wd.2(1)(3)/2017-18 dated 20/08/2018 arising in the assessment order passed under s.143(3) of the Income Tax Act, 1961(hereinafter referred to as "the Act") dated 15/12/2017 relevant to Assessment Year (AY) 2015-16.
Hans Road Carriers Pvt.Ltd. vs. ITO Asst.Year – 2015-16 - 2 -
The assessee has raised the following grounds of appeal:-
“Ground No. 1 1.1 That on the facts and in the circumstances of the case and as per law learned CIT (A) grossly erred by dismissing the appeal of the appellant and deciding the issues raised in the grounds of appeal without taking into consideration the submissions, through online compliance portal, by the appellant. 1.2 That the learned CIT (A) failed to consider the submissions made by the appellant, along with evidences, against the additions made by the AO as per the assessment order. Learned CIT(A) failed to. verify the E-submission on the income tax department's portal by the appellant on 13/08/2018. Hence, the order of the CIT (A) is liable to be set aside for fresh adjudication. Ground No. 2 2.1 That on the facts and circumstances of the case and as per law the learned CIT (A) erred in sustaining additions of Rs.8,433,025 by way of disallowance out of the expenses incurred by the appellant company to earn the income. 1.2 That the learned CIT (A) was ought to have considered the fact that books of accounts of the appellant company were audited as per the provisions of Income Tax Act, 1961 and also as per the provisions of the Companies Act, 1956. Hence, such a huge additions by way of disallowing expenses to the extent of Rs.8,433,025 is not sustainable and it should have been deleted by the learned CIT (A). Ground No. 3 3.1 That on the facts and in the circumstances of the case and as per law the learned CIT (A) erred in sustaining the disallowance of Rs.l,187,940 out of the depreciation claim.
3.2 That the learned CIT (A) was ought to have considered the fact that in the Audit Report, in Form 3 CD, auditor had certified the allowable appreciation as per the provisions of Income Tax Act, 1961. Hence, he should not have sustained the disallowance out of the depreciation claim.”
As per the facts of the present case, assessee-company filed its return of income on 31/10/2015 declaring total income at Rs.7,71,570/-. The Hans Road Carriers Pvt.Ltd. vs. ITO Asst.Year – 2015-16 - 3 - return was processed u/s.143(1) of the Act. Later on, the case was selected for scrutiny and after serving statutory notice, order of the assessment was passed u/s.143(3) of the Act thereby making additions.
Aggrieved by the order of the AO, assessee preferred an appeal before Ld.CIT(A), who after considering the case of both the parties, dismissed the appeal filed by the assessee.
Aggrieved by the order of the ld.CIT(A), now the assessee is further in appeal before us.
At the very outset, we notice from the records that additions were made by the Assessing Officer on account of failure on the part of assessee to submit the details, information and explanations despite several opportunities provided during the assessment proceedings. And similarly, none appeared on behalf of the assessee before the ld.CIT(A). Therefore, the ld.CIT(A) also upheld the order passed by the Assessing Officer.
The Ld.AR submitted before us that the assessee could not furnish the details as called for by the Assessing Officer because of the reason that father of one of the Directors was seriously ill and subsequently expired on 08/11/2017, at the time of assessment proceedings. The Directors were at native place before and after his demise. Therefore, assessee could not look after the assessment proceedings.
Hans Road Carriers Pvt.Ltd. vs. ITO Asst.Year – 2015-16 - 4 - 7.1. The Ld.AR also drawn our attention towards the Affidavit dated 02/03/2020 filed by the assessee wherein one Shri Dayakishan R.Sharmaaged being the Director of the assessee-company had undertaken to submit all the details, information and explanations as well as evidences in support of returned income before the Assessing Officer and seeks an opportunity to be present before the Assessing Officer.
The Ld.DR relied upon the orders of the authorities below.
Be that as it may, after considering the rival submissions, we are of the view that matter requires reconsideration. Since according to assessee, the assessee had already submitted the required documents before Ld.CIT(A), but the same do not find mention in the order. Therefore, it can be inferred that those documents filed by the assessee were not considered. The principle of audi alteram partem is the basic concept of natural justice. The expression “audi alteram partem” implies that a person must be given an opportunity to defend himself. This principle is sine qua non of every civilized society. The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross examination, right to legal representation, disclosure of evidence to party, report of enquiry to be shown to the other party and reasoned decisions or speaking orders. We took this guidance for right of hearing, from the ratio as is laid down by the Hon'ble Supreme Court in the case of Maneka Gandhi vs. Union of India, wherein Hon'ble Supreme
Hans Road Carriers Pvt.Ltd. vs. ITO Asst.Year – 2015-16 - 5 - Court has laid down that rule of fair hearing is necessary before passing any order. We find that it is pre-decision hearing standard of norm of rule of audi alteram partem. We are, therefore, of the view that matter requires reconsideration at the level of AO. Thus, while setting aside the order of Ld.CIT(A), we restore the matter back to the file of Assessing Officer and direct that assessee be given one more opportunity of being heard and to file documents before the AO, as called for, and the AO is also directed to decide the issue afresh in the light of our aforesaid discussion and decide the issue in accordance with law. Needless to state that the ld.AO shall grant opportunity of hearing to both the parties. The assessee is also directed to co-operate by promptly furnishing all the required details called for by the AO. Thus, the appeal of assessee is allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 04-03-2020 at Ahmedabad