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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. SANJAY ARORA & SH. N. K. CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. No. 430/(Asr)/2016 Assessment Year: 2012-13
Surinder Singh S/o Chanan Vs. Income Tax Officer, Singh Prop. Akal Trading Co. Ward 2(4), Batala Booth No. 79, New Grain Market, Batala [PAN: AUCPS 9785N] (Appellant) (Respondent)
Appellant by : Sh. Ashwani Kalia (C.A.) Respondent by: Sh. Bhawani Shankar (D.R.) Date of Hearing: 23.05.2018 Date of Pronouncement: 31.05.2018
ORDER Per Sanjay Arora, AM: This is an Appeal by the Assessee, directed against the Order by the Commissioner of Income Tax (Appeals)-1, Amritsar ('CIT(A)' for short) dated 29.03.2016, dismissing the assessee’s appeal contesting his assessment u/s. 143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) dated 28.03.2014 for the Assessment Year (AY) 2012-13.
The appeal raises the following grounds:
‘1. That on the facts and in circumstances of the case the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal without giving reasonable opportunity to be heard.
2 ITA No. 430/Asr/2016 (AY 2012-13) Surinder Singh v. ITO 2. That the Learned CIT(A) has further erred in deciding the case after holding that the Assessing Officer has written a well reasoned order and rightly made addition of Rs.950000/- without giving any reasonable opportunity to us to explain our case. 3. That it is prayed that the order of the Assessing Officer and Worthy Commissioner of Income Tax (Appeal) may be vacated and the original assessment at Rs.266940/- under section 143(1) may please be restored. 4. That the appellant craves, leave to add or amend the grounds of appeal before the appeal is heard or disposed off.’ [ 3. The only issue arising in the instant appeal is the maintainability in law of the impugned order in the facts and circumstances of the case. The ld. CIT(A) has, recording the various dates – five in number, on which the assessee was afforded an opportunity to present his case before him, also mentioning the assessee’s response thereto, which is either a complete absence of any response (on four occasions) or by way of seeking adjournment (once), dismissed the assessee’s appeal in limine, i.e., for want of prosecution. The assessee, per its Ground 1, impugns the same on the ground of being not afforded a reasonable opportunity of being heard. The other grounds are on the merits of the assessment made.
We have heard the parties, and perused the material on record. The various dates on which the opportunity of hearing was granted by the ld. CIT(A) stand tabulated at para 2 of his order. The same have not been disputed. There is without doubt grant of abundant opportunity – spread over a period of six months, by the ld. CIT(A) to the assessee to present his case before him. The ld. counsel for the assessee, Sh. Kalia, in fact, did not refute this, merely stating that the assessee, on the last of such dates, i.e., 16.05.2016, had in fact applied for adjournment, adducing before us a copy of application per an email of that date, sent to the ld. CIT(A) at 5:17 p.m., and that it was incorrect to state — as has been, that the assessee did not respond on that date. How, we wonder, would that alter the fact that opportunity was granted to the assessee? If anything, it only shows
3 ITA No. 430/Asr/2016 (AY 2012-13) Surinder Singh v. ITO that the same was, once again, not availed of; the assessee admittedly seeking further time. As also observed by the Bench during hearing, an authority can only afford opportunity, and not compel a litigant to avail the same. We are thus unable to accept the assessee’s contention that the impugned order be set aside in-as-much as it is an ex parte order without granting reasonable opportunity of hearing. As explained by the Hon'ble jurisdictional High Court in CIT v. SAS Educational Society [2009] 319 ITR 65 (P&H), also referred to during hearing, and relying on the decision in Esthuri Aswathiah v. CIT [1967] 66 ITR 478 (SC), that the Tribunal cannot set aside the impugned order unless it records a finding that the assessee was not granted proper opportunity to present his case. We have in the instant case, in fact, recorded a finding to the contrary. Why, even no explanation for not availing the several opportunities stands stated. The assessee fails on his Ground 1. Grounds 2 & 3, which are the only other grounds raised, are on the merits of the addition/s made. However, as there has been no adjudication thereof, i.e., on merits, by the ld. CIT(A), the same do not arise out of the impugned order. There can accordingly be no adjudication by us on them. As explained by the tribunal in Sunit Kaur v. ITO (in ITA No. 128/Asr/2018, dated 15.05.2018), it is only where there are independent findings by the first appellate authority, confirming, reversing, or modifying that by the Assessing Officer, that the doctrine of merger comes into effect. It is only in that case that the tribunal is obliged to address the grounds on merits, again, either confirming or reversing or modifying the findings by the first appellate authority. It is for this reason that section 250(6) of the Act contemplates a speaking order. Indeed as explained by the Hon'ble Apex Court in CIT v. Chenniappa Mudaliar [1969] 74 ITR 41 (SC), the tribunal is also not entitled to dispose an appeal before it other than on merits. Per contra, it is only where the appellant is not traceable, has left, etc., that the principle embodied in the dictum ‘Vigilantibus, Non Dormentibus, Jura Subveniunt’ would come into
4 ITA No. 430/Asr/2016 (AY 2012-13) Surinder Singh v. ITO play. We are conscious that no specific ground in this regard, i.e., the maintainability of the impugned order de hors the aspect of grant or otherwise of reasonable opportunity of being heard, stands raised before us. So however, that, in our view, would not restrain us from setting aside the impugned order as not maintainable in law. The reason is simple. Proceedings under the Act are not adversarial in nature. The purview of an appellate authority under the Act is the correct determination of the assessee’s taxable income and, thus, tax liability. The tribunal therefore is not confined to the grounds raised before it, and it is open for the parties to urge any ground not assumed in the appeal memo. Reference toward this may also be made to rules 11 & 27 of the Income Tax (Appellate Tribunal) Rules, 1963, which though are not exhaustive of the powers of the tribunal. The only stipulation is that the parties must be heard thereon, meeting thus the principle of natural justice. Why, the tribunal can also formulate the issue/s arising in appeal, and which also explains our delineation of the said issue in the instant case, i.e., in the manner it has been. As explained in CIT v. Walchand and Co. (P.) Ltd. [1967] 65 ITR 381 (SC), the tribunal is to deal with and determine all the questions which arise out of the subject matter of appeal, in light of the evidence and consistently with the justice of the case. In Kapurchand Shrimal v. CIT [1981] 131 ITR 451 (SC), the Apex Court explaining the scope of the duty of the tribunal, held it as enjoined to issue appropriate directions to the lower authority. Case law in the matter is in fact legion; we may though refer only to a couple of decisions, viz. Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232 (SC); Ahmedabad Electricity Co. Ltd. v. CIT [1993] 199 ITR 351 (Bom-FB). It is this that leads us to hold that the impugned order is not sustainable in law in-as-much as it is an in limine order, without addressing the merits of the addition/s impugned on their merits per a speaking order, as contemplated u/s. 250(6) of the Act. Needless to add, the parties were during hearing, heard on this aspect.
5 ITA No. 430/Asr/2016 (AY 2012-13) Surinder Singh v. ITO 5. We, accordingly, setting aside the impugned order, restore the matter back for an adjudication on merits to the file of the ld. CIT(A), after affording both the parties before him a reasonable opportunity of being heard. We decide accordingly.
In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on May 31, 2018
Sd/- Sd/- (N. K. Choudhry) (Sanjay Arora) Judicial Member Accountant Member Date: 31.05.2018 /GP/Sr. Ps. Copy of the order forwarded to: (1) The Appellant: Surinder Singh s/o Chanan Singh, Prop. Akal Trading Co., Booth No. 79, New Grain Market, Batala (2) The Respondent: Income Tax Officer, Ward 2(4), Batala (3) The CIT(Appeals)-1, Amritsar (4) The CIT concerned (5) The Sr. DR, I.T.A.T