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Facts
The assessee appealed against the CIT(A)'s orders for Assessment Years 2016-17 and 2017-18. The core contention was the violation of natural justice principles, as the lower authorities allegedly made additions based on third-party statements without providing the assessee an adequate opportunity for cross-examination.
Held
The Tribunal found that the assessee was not granted an effective and adequate opportunity of being heard. Consequently, it set aside the orders of the CIT(A) and the AO, remitting the matter back to the AO for fresh adjudication with a clear direction to provide the assessee with adequate opportunity, including cross-examination.
Key Issues
Whether the assessment orders were invalid due to a violation of natural justice principles, specifically the denial of adequate opportunity for hearing and cross-examination of third-party statements.
Sections Cited
250
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Income Tax Appellate Tribunal, ‘C BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI AMITABH SHUKLA
(प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee by : Shri Shri Suraj Nahar, C.A. प्रत्यर्थी की ओर से /Revenue by Shri R.Clement Ramesh Kumar, CIT सुिवाई की तारीख/Date of Hearing : 20.11.2024 घोर्णा की तारीख /Date of Pronouncement : 15.01.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
These appeals are filed against the order bearing DIN & Order No.ITBA / APL / S / 250 / 2024-25 / 1064982939(1) and No.ITBA/APL/S/250/2024-25/1064982848(1) dated 17.05.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2016-17 & 2017-18. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 17.05.2024 passed by CIT(A), Chennai. Both the Page - 1 - of 4 & 1921/Chny/2024 :- 2 -: appeals are contesting identical issues and hence are adjudicated by way this common order.
2.0 At the outset the Ld. Counsel for the assessee stated that the common controversy raised through the impugned grounds of appeal in the ITA 1920/Chny/2024 and ITA 1921/Chny/2024 2016-17 and 2017-18 respectively is that no effective and adequate opportunity of being heard was granted by the lower authorities which has resulted in violation of principles of natural justice. It has been argued that additions have been made in the hands of the assessee on the basis of third party statements without affording the mandatory opportunity of cross examination of the said party. Reportedly, the impugned parties whose statements have been relied upon by the Ld. AO were under judicial custody at the opportune time. The Ld. Counsel, placing reliance upon the decision of Hon’ble Coordinate Bench of this tribunal in dated 21.12.2023, contended that the case of partners of assessee firm, deeply embroiled in the controversy, have been set aside to the file of the Ld. AO for fresh adjudication after giving adequate opportunity of being heard to the assessee. It was therefore argued that in the interest of a comprehensive examination of the varied facts of the case involving different stake holders at the level of the Page - 2 - of 4 & 1921/Chny/2024 :- 3 -:
Ld.AO, the impugned twin appeals may also be set aside to for fresh examination. The Ld. DR protested against the proposal of the Ld. Counsel and argued that there is no merit in the proposal, however he could not controvert the above facts.
3.0 We have heard rival submissions in the light of material available on records. After hearing rival contentions and considering the overall background of this case we deem it fit, in the interest of justice, to remit the issue back to the Ld.Assessing Officer for fresh examination. The assessee shall be required to place all materials deemed necessary before the Ld.AO and comply to Ld.AO’s requirement as per law. The Ld. AO is free to conduct appropriate enquiries in the case, as deemed fit, without being guided by any observations made by his predecessor AO or Ld.First Appellate Authority. The Ld. AO shall furnish adequate opportunity of being heard, on the material etc, to be used against it and decide the matter in accordance with law. Accordingly, the order of the Ld.CIT(A) and Ld.AO are set aside and the issue is remitted back to the file of the Ld.AO for fresh adjudication .
Page - 3 - of 4 & 1921/Chny/2024 :- 4 -: 4.0 In the result, the appeals of the assesee are decided as under:-
Result Year ITA 1920/Chny/2024 2016-17 Allowed for Statistical Purposes ITA 1921/Chny/2024 2017-18 Allowed for Statistical Purposes Order pronounced on 15th , January-2025 at Chennai.