PROMODH NAGARAJA SHARMA,CHENNAI vs. ACIT, NCC 7(1), CHENNAI

This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax(Appeals)-7, Chennai, dated 25.10.2018 and pertains to AY 2012-13.

The assessee has raised the following grounds of appeal:

The assessee had also filed a petition for admission of additional grounds under Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 and the relevant additional grounds filed by the assessee are as under:

At the time of hearing, the ld.Counsel for the assessee submitted that additional grounds filed by the assessee are purely on legal ground which can be taken at any time of the proceedings, including proceedings before the Tribunal and hence, prayed for admission of additional grounds. The Ld.DR, on the other hand, did not raise any objection for admitting additional grounds of appeal filed by the assessee. Having heard both the sides and considered the petition filed by the assessee for admission of additional grounds, we are of the considered view that additional grounds taken by the assessee challenging the principle of natural justice not followed by the Ld.CIT(A), is purely a legal ground, which can be taken at any time of the proceedings including proceedings before the Tribunal and hence, we admit the additional grounds filed by the assessee for adjudication.

Brief facts of the case are that the assessee has filed his return of income for the AY 2012-13 on 06.02.2014 admitting taxable income of Rs.1,94,95,180/-. The assessment has been completed u/s.144 of the Income Tax Act, 1961 on 20.03.2015 and determined the taxable income at Rs.2,57,43,160/- by making additions towards unsecured loan taken from certain parties. The assessee carried the matter in appeal before the First Appellate Authority. The Ld.CIT(A) for the reasons stated in his Appellate Order dated 25.10.2018 sustained the additions made by the AO toward unexplained cash credits u/s.68 of the Act, and dismissed the appeal filed by the assessee. Aggrieved by the Ld.CIT(A)’s order, the assessee is in appeal before us.

The Ld.AR for the assessee referring to additional grounds filed by the assessee submitted that the Ld.CIT(A) who passed the order on 25.10.2018 has erred in not giving an opportunity of being heard to the assessee in violation of principles of natural justice as she was not the Ld.CIT(A) before whom the Authorized Representative of the assessee appeared and filed Paper Book. Therefore, prayed that the appeal may be set aside to the file of the Ld.CIT(A) to give one more opportunity of hearing to the assessee.

The Ld.DR for the Revenue, on the other hand, fairly agreed that the appeal may be set aside to the file of the Ld.CIT(A) to give one more opportunity of hearing to the assessee.

We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. As per the provisions of Sec.129 of the Act, if there is a change in incumbent of an Officer, then the incumbent Officer shall issue a fresh notice of hearing to the assessee before completing the proceedings. In this case, there is a change of an incumbent which is evident as per the claim of the assessee that the appellate authority who passed the order on 25.10.2018 is different from the appellate authority before whom the Authorized Representative had appeared and filed various details. The Ld.AR, further, claimed that the assessee has filed various details before the appellate authority and the same has not been considered before passing the appellate order. We find that when there is a change in incumbent of an Officer, he should give a fresh notice of hearing intimating the assessee with respect to change in incumbent of an Officer and also give adequate opportunity of hearing to the assessee to explain its case. In this case, the appellate authority has passed the order without giving proper opportunity of hearing in contravention of principles of natural justice. Therefore, we are of the considered view that the appeal needs to be go back to the Ld.CIT(A) to give one more opportunity of hearing to the assessee to explain his case. Hence, we set aside the order passed by the Ld.CIT(A) and restore the appeal to the file of the Ld.CIT(A) and direct him to give reasonable opportunity of being heard to the assessee. Needless to say, the assessee shall appear before the appellate authority without seeking any adjournment unless or otherwise warranted.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.