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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI
Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI
PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, Ahlawat Developers and Promotors, Haryana (hereinafter referred to as ‘the Assessee’), by filing the present appeal sought to set aside the impugned order dated 03.09.2019 passed by the Commissioner of Income-tax (Appeals)-1, Gurgaon, qua the assessment year 2016-17 on the grounds inter alia that :-
“1. That the order of the Assessing officer as upheld by the CIT(A) is bad in law and is beyond all the cannons of law and justice.
That the order appealed against passed by the CIT(A) is an ex parte order which has been passed without hearing the appellant that too when the main partner Shri Jagjit Singh Ahlawat of the appellant firm was under the judicial custody and thus unable to attend needs to be set aside.
That the order of the Assessing Officer as upheld by the CIT(A) by an exparte order with regard to the addition of Rs. 36517959/- being the amount of difference under the head sundry creditors is bad in law and needs to be set aside.
That the order of the Assessing officer as upheld by the CIT(A) by an ex parte order with regard to the addition of Rs. 5004750/- being the amount of difference under the head cash in hand is bad in law and needs to be set-aside.
That the order of the Assessing Officer as upheld by the CIT(A) by an ex parte order with regard to the addition of Rs. 45560091/- being the amount of interest paid on the loans and claimed as expenditure is bad in law and needs to be set aside.
That the appellant craves leave to add, delete or amend any of the grounds of appeals before the date of its final hearing.”
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : assessee’s case was put under limited scrutiny by way of issuance of notice u/s 143(2) and necessary information regarding creditors, cash in hand and interest expenses were called but assessee failed to appear despite issuance of notices and consequently Assessing Officer after perusing the balance sheet, Income Tax Return etc. proceeded to make addition of Rs. 3,65,17,959/-, 50,04,750/- and Rs. 4,55,60,091/- on account of income treated as unexplained creditors and being the cash in hand as unexplained income and by way of disallowance of expenses claimed by the assessee respectively and thereby assess the total income at Rs. 8,70,82,800/- u/s 144 of the Act.
3. Assessee carried the matter before Ld. CIT(A) who has dismissed the appeal ex parte due to non-appearance of the assessee.
4. At the very outset, Ld. AR for the assessee contended that since assessee remained in jail/ judicial custody with effect from 11.10.2018 to 05.04.2021, he could not contact his lawyer to present his case before AO as well as Ld. CIT(A) and placed on record copy of order dated 05.04.2021, CRM-M-43941-2020(O &M) passed by Hon’ble High Court and jail custody certificate available at page 14 to 17 of the paper book. This factual position has not been controverted by the revenue. However, ld. DR for the revenue contended that even before going to jail, assessee had the sufficient opportunity to appear before Assessing officer and he has already been given numerous opportunities to put forth his case but he has not availed of the same.
5. Keeping in view the fact that assessee remained in jail during the period 11.10.2018 to 05.04.2021 and has been released vide order dated 05.04.2021 (supra), which was beyond his control and is a sufficient reason to set aside the impugned order passed by Ld. CIT(A). Providing adequate opportunity before passing impugned orders is a sine qua non for imparting complete justice to the parties to the appeal. Consequently appeal filed by the assessee is set aside to the file of AO as no detail before AO was filed to decide afresh after providing adequate opportunity of being heard.
However, it is made clear that assessee shall appear before the AO with all the documents within 90 days. Resultantly, appeal filed by the assessee is allowed for statistical purposes.