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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI D.KARUNAKARA RAO & SHRI V.DURGA RAO
PER D.KARUNAKARA RAO, A.M. :
This appeal of assessee is directed against the order of the Commissioner of Income Tax (Appeals)-8, Hyderabad, dated 29-08-2016, for the AY.2010-11.
Condonation of delay 2. The assessee has filed this appeal with a delay of 33 (Thirty Three) days, for which the assessee has filed an affidavit, seeking condonation of delay. Considering the petition for condonation of delay in respect of assessee and being satisfied with the reasonable cause for the delay,
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we hereby condone the delay in filing the appeal of assessee, which is admitted and being heard on merits.
Briefly stated relevant facts include that the assessee, an individual, deriving income from the business of shipping C&F. The assessee filed return of income, declaring a total income of Rs.15,32,300/-. The case was taken up for scrutiny under CASS.
During the assessment proceedings, the Assessing Officer (AO) called for the books of account from the assessee and there was no response to the same. Further, the AO noted investment in the immoveable property to the tune of Rs.33,09,000/-. On hearing the assessee, the assessment was completed u/s.143(3) of the Act, after making the following couple of additions – i. First addition includes estimation of income, applying the flat rate @8% of the turnover. Non-submission of books of account is the reason for this addition of Rs.19,13,113/-. ii. The second addition relates to the un-explained investment for purchase of immoveable property at Chennai of Rs.33,09,000/-. Finally, AO assessed the total income at Rs.67,54,413/- (i.e., Rs.15,32,300 + 19,13,113 + 33,09,000).
4.1. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A), who dismissed the appeal of assessee, after granting an opportunity to assessee. But this opportunity was not availed by the assessee. Before dismissing the appeal, the Ld.CIT(A) called for the Remand Report from the AO and the comments of the concerned authority i.e., Joint Commissioner of Income Tax, Range-10. The CIT(A) could not serve the copy of the said Remand
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Report to the assessee. Eventually, the CIT(A) dismissed the appeal of assessee, stating the following:
“It is noted that the appellant has not availed the opportunity of appearing before the Assessing Officer and to submit the details called for. It would be pertinent to note that the appellant Shri Ranganathan Sambanathan Babu did not show seriousness in pursuing the appeal and even in the remand proceedings and subsequently, when provided with copy of the remand report which was returned undelivered. No change of address was given by the appellant nor did the appellant file any new address. Considering the facts, issues and circumstances of the instant case and non-appearance before the Assessing Officer and in appeal, the appeal is dismissed. Hence, Ground No.4,5,6 & 7 are dismissed”.
Considering the above decision of the CIT(A) and aggrieved with the same, the assessee filed an appeal before the Tribunal with the following Grounds:
“1) The order of the learned CIT (A) is erroneous both on facts and in law.
2) The learned CIT (A) erred in deciding the appeal ex-parte without providing proper opportunity to the appellant;
3) The learned CIT (A) ought to have seen that the assessment was made without serving notice u/s 143(2) of the I.T.Act and, therefore, the assessment made u/s 143(3) of the I.T.Act on 30.03.2013 is not valid.
4) The CIT (A) erred in confirming the action of the Assessing Officer in rejecting the books of account and estimating the income at 8%. The learned CIT (A) ought to have seen that proper books were maintained and, therefore, no estimation could have been made.
5) The CIT (A) erred in confirming the action of the Assessing Officer in making an addition of Rs.33,09,000/- towards unexplained investment without considering the fact that no such investment was made during the year under consideration.
6) Any other ground or grounds that may be urged at the time of Hearing”.
5.1. From the above Grounds, it is evident that the assessee is aggrieved with the ex-parte order as well as the at the failure to grant reasonable opportunity of being heard to the assessee. Further,
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completing the assessment without servicing of notice, estimation of profits @8%, making addition of Rs.33,09,000/-, on account of un-explained investment for purchase of immoveable property at Chennai. These are the grievances of the assessee.
Before us, Ld.Counsel for the assessee submitted that this is a fit case for sending the issue to the file of CIT(A) for one more round of adjudication of issues. It is a fact that the assessee never received the copy of Remand report and the comments of the Joint Commissioner were highlighted. Ld.Counsel prayed for grant of one more opportunity and gave an undertaking that the assessee shall appear before the authorities, without fail if an opportunity is granted.
On the other hand, Ld.DR for the Revenue relied heavily on the orders of AO as well as the CIT(A). Ld.DR is of the opinion that the liberalism in granting opportunity to the assessee only results in assessee for not complying with the provision of the Act. As per the Ld.DR, strict view should be taken in the matters of granting opportunities to the person, who is not serious and complying to the provisions of the Act.
We heard both the parties on this limited issue of remanding the matter to the file of CIT(A). On considering the above facts, we find that the Remand Reports, comments of Joint Commissioner and notices etc., were never served eventually on the assessee. There must be reasons for non-service of notices. No evidence is brought to our notice. The above referred correspondence was not served successfully on the assessee. It is not the case of the Revenue that it has sent copies for service through its server for serving by
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affixture. It is only a case of sending correspondence through postal authorities. In our view, the right of appeal is very precious and the same is borne out of the Statutes. Procedures have to be properly complied with both by the assessee as well as the Revenue. Service of notice is very important and so is the service of Remand Reports etc. Further, we have also considered the statement made by the Ld.Counsel at Bar. Mr.Counsel submitted that he will comply with the notices and the procedures this time, if an opportunity is granted. Considering the same, we are of the opinion that one more opportunity is granted to the assessee and the same is in tune with the said principles of natural justice. The assessee is expected to comply with the provisions and the procedures. The CIT(A) is free to take adverse views if any, if the assessee repeats the same. The assessee is directed to communicate the change of address if any, and co-operate with the process of law. It is also noted that CIT(A) is also justified in making ex-parte order, however, the loopholes were not properly filled up. The Grounds raised by assessee are accordingly treated as allowed for statistical purposes.
In the result, the appeal of assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 4th December, 2019
Sd/- Sd/- (V. DURGA RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated 4th December, 2019 TNMM
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Copy to : 1. Shri Ranganathan Sambanthan Babu, 1-10-52, Anusha Apartments, Flat No.500, Chikoti Gardens, Begumpet, Hyderabad.
The Income Tax Officer, Ward-10(1), Hyderabad.
CIT(Appeals)-8, Hyderabad.
Pr.CIT-6, Hyderabad. 5. D.R. ITAT, Hyderabad.
Guard File.