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

PDF · subscribers
ITA 3333/CHNY/2018Status: DisposedITAT Chennai31 January 2022AY 2012-135 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted the additional grounds, finding that the CIT(A) had violated principles of natural justice by not providing a fresh opportunity of hearing after a change in incumbent. The order of the CIT(A) was set aside.

What were the facts?

The assessee's appeal against the CIT(A)'s order confirming additions of Rs. 56,45,000 under Section 68 was heard. The assessee raised additional grounds alleging violation of natural justice due to a change in the incumbent CIT(A) without a fresh hearing.

What were the issues?

Whether the principles of natural justice were violated by the CIT(A) due to a change in incumbent without a fresh hearing. Whether the additions made under Section 68 were justified without proper opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 68,Section 129

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI MAHAVIR SINGH & SHRI G. MANJUNATHA

Hearing: 31.01.2022Pronounced: 31.01.2022

आदेश / O R D E R

PER G. MANJUNATHA, ACCOUNTANT MEMBER:

1.

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.

2.

The assessee has raised the following grounds of appeal:

1) The Hon'ble Commissioner of Income Tax (Appeals)-7 [CIT(A)] has erred in confirming the addition of Rs.56,45,000/- made by the Assessing Officer(AO) u/s 68 of the Income tax Act,1961. 2) The Hon'ble CIT(A) has erred in giving a finding that the assessee has not proved the 'genuineness of transaction' when it was submitted before him that all the borrowings were made through banking channel and some of the borrowings were repaid through banking channel. 3) Having remanded the issue of verification of the credits to the AO, the Hon'ble CIT(A) has erred in giving a finding that the Assessee has not proved the 'credit worthiness' of the creditors without directing the AO either to write to the creditors or issue summons to the creditors and find out about the 'credit worthiness' of the creditors. 4) Any other ground that may be urged at the time of hearing.

3.

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:

1) The CIT(A) who passed the order dated 25.10.2018 has erred in not giving an opportunity of being heard to the Appellant as she was not the CIT(A) before whom the Authorized Representative appeared and filed the Paper Book. 2) The CIT(A) who passed the order dated 25.10.2018 has erred in not following the principles of natural justice.

4.

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.

5.

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.

6.

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.

7.

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.

8.

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.

9.

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

Order pronounced on the 31st day of January, 2022, in Chennai.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →