MEASAGE LASA LAMA ARTS,SRINAGAR vs. INCOME TAX OFFICER WARD -3 (2), SRINAGAR

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ITA 388/ASR/2019Status: DisposedITAT Amritsar21 September 2020AY 2007-084 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) passed an ex-parte order without ensuring a reasonable opportunity of being heard to the assessee. The Tribunal also noted discrepancies regarding the addition made by the CIT(A) compared to the AO's order.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed ex-parte. The assessee claimed that notices for hearing were received after the hearing dates, preventing their appearance. The CIT(A) sustained an addition of Rs. 2,28,000/- for alleged bogus purchases.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without providing a proper opportunity of being heard to the assessee. Whether the addition made by the CIT(A) was justified and supported by evidence.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 142(1),Section 120

AI-generated summary — verify with the full judgment below

आदेश/Order आदेश आदेश आदेश PER N.K. SAINI, VICE PRESIDENT This is an appeal by the Assessee against the order dt. 14/02/2019 of Ld. CIT(A)-2, Amritsar. 2. Following grounds have been raised in this appeal:

1.

1. The Id. CIT (A) has erred in law and on facts in rejecting the appeal filed by the appellant and adjudicating the case ex- parte and upholding the order passed by the AO ignoring the email replies sent in response to notice by CIT Appeals on 24/01/2019 and also ignoring merits of the case which is against the natural justice of the land.

2. That the learned CIT (A) has erred on facts in sustaining an addition of Rs.228000/- being alleged bogus purchases as held by the Ld. AO and raising undue tax of Rs 1,16,500 and consequential interest of Rs 1,20,290/- which is bad in law .

3. That the Id AO. as well as the Id. CIT (A) have erred on facts in holding that the purchase of goods made by the appellant from M/s New Planet Trading Pvt. Ltd. is bogus and through accommodation entries only, without carrying any independent investigation into the said transactions and merely by relying on certain information received from investigation wing of the department.

4. That the Id. AO has erred in law as the notice u/s 148 was not issued by the AO having territorial jurisdiction as per section 120 but was served by ITO Ward 2 Margao, Goa (who is not the jurisdictional AO of the appellant) on appellant's Branch Office at Goa on 24.03.2014. That only a notice calling for information was served by the jurisdictional AO u/s 142(1) on the appellant on 21.11.2014 for submission of information, thus the notice u/s 148 is bad in law.

5. That the learned AO has rejected the purchases without making any comment on the sales arising out of the purchased stock. 6. That the AO has erred in rejecting partially the audited books of accounts of the assessee.

7.

That the Id. AO has failed to take cognizance of assessment proceedings already completed for AY 2007-08 vide assessment order dated 21.12.2009.

8.

That the assessment proceedings as per Section 147 can be initiated only for upto a period of 4 years in cases where assessment u/s 143(3) had already been completed however in the present case the notice u/s section 148 was served towards sixth year from end of relevant assessment year. The return of income was duly filed on time along with audited books of accounts and audit report and there was no failure on the part of the assessee in furnishing of any information.

9.

The appellant craves leave to amend or add any or more ground (s) of appeal.

3.

The main grievance of the assessee vide ground no. 1 relates to the exparte order passed by the Ld. CIT(A).

4.

The facts of the case in brief are that the assessee e-filed his return of income on 06/03/2008 declaring an income of Rs. 1,17,300/- later on the case was selected for scrutiny. The A.O. framed the assessment at an income of Rs. 1,49,025/- by making the addition of Rs. 31,725/- on account of disallowance made out of the expenses vide order dt. 21/12/2009 passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’).

5.

Being aggrieved the assessee carried the matter to the Ld. CIT(A) who dismissed the appeal by passing the exparte order.

6.

Now the assessee is in appeal.

7. Ld. Counsel for the assessee submitted that the Ld. CIT(A) passed the impugned order exparte without providing due and reasonable opportunity of being heard. It was stated that notices for hearing were received by the assessee after the date of hearing so there was a reasonable cause for non appearance before the Ld. CIT(A). It was also stated that the Ld. CIT(A) has not given due and proper opportunity of being heard to the assessee.

8. In his rival submissions the Ld. Sr. DR strongly supported the orders of the authorities below.

9. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is noticed that the Ld. CIT(A) in the impugned order had sustained the addition of Rs. 2,28,000/- by observing at page no. 4 of the impugned order that as no purchases of material were established to have been made by the assessee, the expenditure of Rs. 2,28,000/- claimed was only an accommodation entry which was rightly disallowed. However in the assessment order dt. 21/12/2009 there is no such addition made by the A.O. therefore, the facts are not clear. Secondly the Ld. CIT(A) while dismissing the appeal of the assessee simply stated that the case was fixed for hearing on 27/11/2018 & 16/01/2019 and that non attended nor any written submission filed. However, it is not brought on record that the notices for hearing for the aforesaid date were served upon the assessee. It is well settled that nobody should be condemned, unheard as per the maxim, “audi alteram partem”.

10.

We therefore by considering the peculiar facts of this case, deem it appropriate to set aside this case back to the file of Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

11.

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

Order pronounced on 22/09/2020

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