M/S SAI MADHAV SAREES PRIVATE LIMITED,SURAT vs. INCOME TAX OFFICER, WARD-2(1)(2), SURAT

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ITA 540/SRT/2018Status: DisposedITAT Surat26 September 2019AY 2011-123 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the principle of natural justice, specifically 'audi alteram partem' (hear the other side), was violated as the assessee was not given a proper opportunity to be heard. The appeal was restored to the CIT(A) for fresh consideration.

What were the facts?

The assessee's appeal was dismissed ex-parte by the CIT(A) without providing a proper opportunity for hearing. The assessee contended that documents relied upon by the AO were not shared and that the CIT(A) wrongly rejected the appeal.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal ex-parte without affording a proper opportunity of hearing to the assessee, violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 68

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Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: SHRI AMARJIT SINGH & SHRI O.P.MEENA

For Respondent: Shri B.P.K.Panda –Sr.DR
Hearing: 26.09.2019

आदेश /O R D E R PER O.P.MEENA, AM: 1. This appeal filed by the Assessee is directed against the order of Learned Commissioner of Income Tax(Appeals)-2, Surat dated 18.05.2018 for the assessment year 2011-12.

2.

The assessee has taken the grounds of appeal against the confirmation of addition of Rs.50,40,000/- u/s.68 of the Income Tax Act and passing order ex-parte without giving an opportunity of being heard to the appellant.

Sai Madhav Sarees Pvt Ltd., Vs. ITO, Ward-2(1)(2), Surat/ ITA No.540/SRT/2018 : A.Y: 2011-12 Page 2 of 3

3.

At the outset, the Ld. Counsel for the assessee contended that no proper opportunity of hearing afforded to the assessee. The ld. CIT (A) was not justified in rejecting the appeal of the assessee ex-parte. The documents relied by the AO were not made available to assessee. The Ld. Counsel prayed that the appeal be restored to the file of ld. CIT (A) with a direction that proper opportunity of being heard may be allowed to the assessee.

4.

The Ld. Senior D.R. relied on the orders of the authorities below, however, has no objection if the entire issue is set-aside to CIT (A).

5.

We have heard the rival contentions of both the parties. We find that the ld. CIT(A) has simply dismissed the appeal for non- appearance by the assessee on various dates by applying case law of B.N. Bhattachargee & another (118 ITR 461) . We find that the ld. CIT (A) has not allowed proper opportunity of being heard. 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 v. Union of India, wherein Hon'ble Supreme 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

Sai Madhav Sarees Pvt Ltd., Vs. ITO, Ward-2(1)(2), Surat/ ITA No.540/SRT/2018 : A.Y: 2011-12 Page 3 of 3

rule of audi alteram partem. We find that in this instant case, the assessee was not given proper hearing. Therefore, we are of the view that the assessee must be given one more opportunity of hearing and to represent his case. Therefore, in exercise of power conferred under Rule 28 of Tribunal Rules, we restore this appeal to the file of Ld. CIT (A) for reconsideration all grounds of appeal after allowing proper opportunity of being heard in accordance with law and decision afresh subject to a payment of cost of Rs.10,000/- with Income Tax Department in the interest of justice. The assessee is directed to appear before the ld.CIT(A) on 11.11.2019 at 10.00 AM for hearing through his Counsel or in person for which no notice will be issued to him and make his submissions or comply with hearing before CIT (A) as per dated of hearing that may be granted to the assessee . We make it clear that non attendance will of the assessee before CIT (A) will entail confirmation of the impugned addition made by the AO. The assessee will file necessary evidences on which he wants to rely upon.

6.

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

7.

Order passed in the open court on 26.09-2019 Sd/- Sd/- (AMARJIT SINGH) (O.P.MEENA) (�याियक सद�यतथा/JUDICIAL MEMBER) (लेखा सद�यकेसम� /ACCOUNTANT MEMBER) सुरत/ Surat, �दनांक Dated: 26th September, 2019/S.Gangadhara Rao, Sr.PS Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat

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