SHRI VIJAYKUMAR T. JARIWALA,SURAT vs. THE INCOME TAX OFFICER, WARD-2(2)(5), SURAT

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT Before Shri C.M.GARG, Judicial Member, and Shri O.P. MEENA, Accountant Member ITA No.1932/AHD/ 2016 Assessment Year: 2009-10 Vijaykumar Thakordas Jariwala, 9/317-B, Chakawala Ni Sheri, Chorlyashi Dairy, Wadi Falia, Surat 395003. (Appellant) PA: No. ABCPJ5932D ITO, Ward -2(2)(5) , T Surat Vs. (Respondent_ Assessee_by Shri P. M__Jagaseth CA Revenue by Shri Dharamveer D Yadav Sr . DR Final Date of Hearing: 05/12/2017 Date of Order: 0) /01/2018 3G8 LO RD ER Per Shri C MGarg_JM: This appeal is filed by the assessee against the order of the learned CIT (Appeals) 1, Surat, dated 24.06.2016 passed under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2009-10_ 2 In this appeal the assessee has raised following grounds of appeal: a) On the facts and in the circumstances of the case as well as law on the subject; the leared commissioner of the Vijaykumar T. Jariwala ITA No.1932/4/2016 Income Tax (Appeal) has erred confirming the action of the assessing officer in levying penalty of Rs. 2,06,374/ - u/ s 271(1)(c) of the Income Tax Act; 1961. b) t is therefore prayed that the above addition be deleted as learned may please members of the tribunal may deem it proper: 3_ Brief facts giving rise to this appeal are that the Assessing Officer initiated penalty proceedings in respect of two additions viz addition on account of GP on unaccounted sale and addition on account of peak of cash deposits. The aggrieved assessee carried the matter before Ld. CIT(A) who dismissed the appeal of assessee on non prosecution as well as on merits and confirm the penalty on both the counts. Now the empty handed assessee is before this Tribunal with the sole effective ground as noted above. 4 We have heard arguments from both the sides and carefully perused the material placed on the record of the Tribunal: The Ld. Counsel submitted that the Ld. CIT(A) has dismissed appeal of the assessee in non prosecution ex-party without allowing due opportunity of being heard to the assessee therefore the case may kindly be restored to the file of Assessing Officer for & fresh adjudication: Further;, on merits, the Ld. AR placing reliance on the order of ITAT, Ahmadabad ' Bench dated 23/11/2015 in the case of Shri Jasmindersingh Grewal Vs DCIT ITA No 2536/AHD /2011 for A.Y. 2007-08 submitted that when the assessee has himself computed cash credits for declaring the same as additional Vijaykumar T. Jariwala ITA No.1932/4/2016 income then penalty cannot be levied on account of peak credits_ The Ld_ Counsel submitted that the assessee during the assessment proceedings voluntarily agreed for addition on account of peak cash credit bank account pertaining to the Jari Trading Activity hence, penalty cannot be levied on the assessee. 5_ The Ld. AR further submitted that GP addition has been made on estimate basis and therefore, no penalty can be levied on account of GP addition which is purely on estimated base. The Ld_ AR also poin ted out that normal rate of GP in the trading of Jari is 2%/ whereas the Assessing Officer has adopted GP rate of 16.05% on the basis of other business of manufacture and seeling of Jari Kasab which is not a correct approach but for the sake of peace of mind and to save cost of litigation the assessee did not TulhuaQ carried the matter before Hon ble High Court which could not be a basis for imposing penalty as penalty proceedings are different from quantum_ The Ld AR finally submitted that the penalty on both the counts is not sustainable hence, the same may kindly be cancelled_ 6 Replying to the above , the Ld_ Departmental Representative (DR) submitted that the assessee did not comply with the notices issued by the Ld. CIT(A) therefore he was right in passing ex-party order. However, on being asked by the Bench the Ld_ DR could not controvert this fact that there is no mentioning of the fact of servica " of notice on the Vijaykumar T. Jariwala ITA No.1932/A/2016 assessee for the hearing in the first appellate proceedings. Replying to the contention on merits, the Ld_ DR submitted that in the present case the assessee declared peak credit when the Assessing Officer show caused him by way of notice hence, it is not a case of voluntary surrender and assessee has not filed any revised return therefore, benefit of the ratio of ITAT Ahmadabad order dated 23/11/2015 (Supra) is not available for the assessee The Ld DR also submitted that the penalty on account of GP addition is also sustainable as the assessee has not shown its financial activities in Jari Trading in the books of accounts which is a clear case of concealment of particulars of income hence, penalty is to be levied on the assessee. 7 _ On careful consideration of above rival submission, first of all we are in agreement with the contention of the Ld. AR that in the present case the Ld. CIT (A) has decided the appeal ex-party without affording due opportunity of hearing to the assessee as from careful perusal of the first appellate order we observe that in the last sentence of first para the Ld: CIT (A) noted that "During the appellate proceedings, neither anybody attended the hearing nor any written submission/ details were submitted: But in the order there is no mentioning of any fact stating that the notice for such date of hearing was issued to the assessee and despite of due service neither the assessee nor his authorized representative attended the proceedings. Hence , we are inclined to hold that the first appellate order has been passed in violation of principle of natural justice 5 Vijaykumar T. Jariwala ITA No. 1932/A/2016 hence, we set aside the same and the case is restored to the file of CIT (A) to the first appellate stage for adjudication after providing due opportunity of being heard to the assessee. Accordingly, appeal is allowed for statistical purposes 8 Since , we have restored the case to the file of Ld CIT (A) for a fresh adjudication thus, rival arguments on merits become academic and in-fructuous and we are not adjudicating them as having become in-fructuous. In the result appeal is allowed for the statistical purposes_ Order pronounced in the open court on h/01/2018 S7/ (O.P. Meena) - (C. M. Galrg) JUDICIAL MEMBER AcCOUNTANT MEMBER fniv /Dated : January, 2018 Nhanu/LDC Copy to: Assessee_ AO/ Pr. CIT/ CIT (A)/ITAT (DR) / Guard file . By order 0a ih Sr Private_Secretary, Surat 77t6T Liy erikrir eny W= 7ta, T: