MAHESH INDER, LUDHIANA,LUDHIANA vs. INCOME TAX OFFICER, WARD 2(1), LUDHIANA

The Ld. DR opposed the condonation of delay.

We have heard the rival submissions and perused the condonation application placed on record. Upon consideration of the facts and circumstances of the case, we are satisfied that the assessee was prevented by reasonable cause from filing the present appeal within the prescribed period of limitation. Accordingly, the delay of 121 days in filing the appeal is condoned and the appeal is admitted for adjudication on merits..

In the present appeal Assessee has raised the following grounds:

Briefly stated, the facts emerging from the record are that the assessee is an individual. The assessment in the present case was reopened under section 147 of the Act on the basis of information received from the Investigation Wing alleging that the assessee had made an investment in the purchase of immovable property amounting to Rs. 1,50,00,000/- during the financial year relevant to the assessment year under consideration. The assessment was ultimately completed ex parte under section 144 read with section 147 of the Act and the addition of Rs.1,50,00,000/- was made under section 69 of the Act as unexplained investment.

The assessee carried the matter before the learned CIT(A). The learned CIT(A), after condoning the delay in filing the appeal, dismissed the appeal mainly on the ground that, despite several opportunities, the assessee failed to appear or file any effective submissions during the appellate proceedings and accordingly confirmed the action of the Assessing Officer.

Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.

During the course of hearing before us, the Ld. AR submitted that the assessment order as well as the appellate order have been passed ex parte without providing effective and meaningful opportunity to the assessee. It was submitted that the assessee could not properly represent his case before the lower authorities due to sufficient and bona fide reasons and that the assessee is now in possession of documentary evidences to explain the nature of the impugned transaction. It was further contended that various legal grounds challenging the validity of reopening under sections 147/148 as well as the addition made under section 69 of the Act were neither properly examined nor adjudicated on merits. The Ld. AR accordingly

Per contra, the Ld. DR relied upon the orders of the lower authorities and submitted that sufficient opportunities were granted both during the assessment proceedings and appellate proceedings. However, the Ld. DR fairly submitted that if the Bench is inclined to restore the matter, appropriate directions may be issued to the assessee to cooperate in the proceedings.

We have heard the rival submissions and perused the material available on record. We find that the assessment in the present case has been framed ex parte under section 144 of the Act and the Ld. CIT(A) has also dismissed the appeal primarily on account of non-compliance by the assessee. We further notice that the assessee has raised various legal as well as factual grounds challenging the reopening proceedings and the addition made under section 69 of the Act. However, neither the assessment order nor the appellate order reflects proper examination of the evidences and explanations which the assessee now claims to possess in support of his case.

1 It is a settled proposition of law that no person should be condemned unheard, and the principles of natural justice require that an adequate and effective opportunity should be granted before fastening tax liability upon an assessee. At the same time, the assessee is also under an obligation to diligently pursue the proceedings before the authorities below. Considering the totality of the facts and circumstances of the case, and in order to provide one final opportunity to the assessee to substantiate his claim, we deem it appropriate to restore the entire matter back to the file of the Assessing Officer for fresh adjudication.

2 Accordingly, the impugned order of the Ld. CIT(A) is set aside and the matter is restored to the file of the Assessing Officer with a direction to decide the issue afresh in accordance with law after providing reasonable and sufficient opportunity of being heard to the assessee. The assessee is directed to fully cooperate in the assessment proceedings and shall file all necessary documentary evidences and explanations in support of his case. The Assessing Officer shall also adjudicate all legal grounds raised by the assessee including the grounds challenging the validity of reopening proceedings under sections 147/148 of the Act and thereafter pass a speaking order in accordance with law.

3 Since we have restored the matter to the file of the Assessing Officer for fresh adjudication, we are not expressing any opinion on the merits of the addition or the legal issues involved in the present appeal and all issues are left open. The Ld. DR strongly relied upon the assessment order as well as the findings recorded by the Ld. CIT(A). It was submitted that despite repeated opportunities, the assessee neither complied before the Assessing Officer nor before the first appellate authority and, therefore, the authorities below were justified in proceeding ex parte.

4 In our considered opinion, the principles of natural justice require that one more effective opportunity should be granted to the assessee to substantiate his case and to place relevant evidences on record. Therefore, considering the entirety of the facts and circumstances of the case, and in the interest of substantial justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and remand the matter back to the file of the Assessing Officer for de novo adjudication in accordance with law.

5 The Assessing Officer shall afford adequate and reasonable opportunity of being heard to the assessee and shall examine all the legal as well as factual issues raised by the assessee including the validity of reopening proceedings under sections 147/148 of the Act, the issue relating to alleged unexplained investment under section 69 of the Act, and any other contention which may be raised during the set aside proceedings. The assessee is also directed to fully cooperate in the assessment proceedings and furnish all necessary documentary evidences as may be called for by the Assessing Officer.

6 Before parting, considering the larger public interest and environmental concerns, we further direct the assessee to deposit a sum of Rs. 15000/- towards the plantation of trees of Indian origin having a minimum height of 4 feet as a precondition for setting aside the order of the Ld. CIT(A) / AO with the JAN VIKAS SHIKSHA SAMITI TRUST (PAN No. AACTJ8160E and Address: House No. 1577, Sector 38B, Chandigarh) NGO doing plantation work on the riverbank of the Yamuna near Yamunanagar (Haryana). The said plantation shall be carried out within a period of three months from the date of receipt of this order. The assessee shall submit documentary evidence regarding such plantation, including photographs and a certificate from the concerned local authority/nursery, before the Ld. Assessing Officer as well as before the