ASHOK KUMAR,KANPUR vs. COMMISIONER OF INCOME TAX (APPEALS), FACELESS

PER ANADEE NATH MISSHRA:A.M.

(A) This appeal has been filed by the assessee for assessment year 2018-19 against impugned appellate order dated 30/03/2024 (DIN & Order No.ITBA/NFAC/S/250/2023-24/1063707331(1) passed by learned Commissioner of Income Tax (Appeals) ["CIT(A)” for short].

(A.1) In this case assessment order dated 25/03/2023 (DIN ITBA/AST/S/147/2022-23/1051337444(1) passed by the Assessing Officer u/s 147 read with section 144 read with section 144B of the Income Tax Act, 1961 ("the Act" for short) wherein the assessee's total income was determined at Rs.4,44,62,706/-. Against the aforesaid assessment order, the appeal filed by the assessee before the learned CIT(A) was dismissed vide impugned appellate order dated 30/03/2024. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 30/03/2024 of learned CIT(A). Alongwith the appeal filed by the assessee in Form-36, written submissions were also filed by the assessee, which is reproduced below for the ease of reference:

Before the Income Tax Appellate Tribunal
In the matter of Mr. Ashok Kumar (Appellant)
Versus
Income Tax Department (Respondent)

Grounds of Appeal and Submissions:

* Case Law Support: Citing Commissioner of Income Tax, Gujarat vs. Smt. Kusumben D. Mahadevia (1980 AIR 1653), the appellant points to the court's recognition that the mere possession of business ownership does not entail active management. This precedent supports the appellant's position that his role as owner did not necessarily include daily management tasks, thus challenging any assumptions about his direct involvement in operational irregularities.

* Counter Case Law: in reference to Commissioner of Income Tax vs. Gold Leaf Capital Corporation Ltd. (ITA No.798 of 2009), the court held the assessee responsible for substantiating their financial disclosures with evidence. However, the appellant argues that his situation is distinct due to the extended transfer period and subsequent managerial delegation, which complicates the direct association between ownership and operational responsibility.

Case Law Support:

Salem Advocate Bar Association, Tamil Nadu vs. Union of India (2003) 1 SCC 49: This landmark decision underscores the fundamental principle that all parties in a legal proceeding must be adequately informed and provided with a fair opportunity to participate. The judgment highlights that effective communication is essential for the integrity of judicial processes, a principle that was compromised in Mr. Kumar's case due to his inability to interact with electronic communication systems.

Addendum: Additionally, in recognizing the diverse capacities of individuals to engage with modern technology, the judiciary has often emphasized the need to adapt communication methods to ensure fairness and inclusivity in legal processes.

Counter Case Law:

Rasiklal Manikchand Dhariwal vs. Commissioner of Income Tax (1974 AIR 1812): While this case acknowledges the legal validity of electronic notices, it also points to the judiciary's responsibility to ensure that such practices do not inadvertently exclude or disadvantage parties who may lack the means to engage with these technologies effectively.

Further Consideration: The appellant argues that his particular disadvantages due to technological limitations were not adequately considered by the Assessing Officer, leading to a significant procedural oversight. This oversight effectively deprived him of his right to participate fully in his defense, a right that is fundamental to the principles of justice and equity.

The appellant insists that the reliance on electronic communications without ensuring that all parties are equally equipped to handle such interactions is a failure to uphold the standards of procedural fairness. Given his demonstrated limitations, Mr. Kumar stresses that alternative methods of communication, specifically physical notices, should have been utilized to ensure his effective participation in the judicial process. The absence of such accommodations has not only disadvantaged him but also compromised the fairness of the proceedings, warranting reconsideration of the approach to notice delivery in his case.

* Case Law Support: In Hari Har Yadav, Durgapur vs. Assessee (2011) and Southern Steel Industries vs. AAC (CT) (1996) 101 STC 273, 278 (MAD), the courts emphasized the critical examination of the sources of funds and actual ownership in financial transactions. These precedents support the appellant's claim that ownership should be determined based on actual financial contributions rather than mere nominal designations.

* Counter Case Law: While Commissioner of Income Tax vs. Gold Leaf Capital Corporation Ltd. (ITA No.798 of 2009) stresses the need for solid documentary evidence in financial matters, the appellant seeks understanding from the tribunal given his commitment to rectify the documentation shortfall and the unique circumstances surrounding the ownership of the funds.

* Case Law Support:

State of Maharashtra vs. Chandrabhan Sudam Sanas (AIR 1964 SC 1581): In this case, the Supreme Court highlighted the importance of clear and unambiguous communication from governmental authorities as a cornerstone for ensuring compliance. The judgment emphasizes that when such communications are unclear, it can lead to misunderstandings and unintentional non-compliance. The appellant leverages this precedent to argue that the unclear directives he received were a direct cause of the discrepancies noted in his documentation submissions.

* Additional Insight: This case law is crucial as it establishes that the burden of clarity lies not only on the taxpayer but equally on the authorities to provide unequivocal instructions regarding their requirements. This principle supports the appellant's claim that his compliance issues were more a result of poor communication than any negligence on his part.

* Counter Case Law:

Commissioner of Income Tax vs. Gold Leaf Capital Corporation Ltd. (ITA No.798 of 2009): This ruling emphasizes the assessee's obligation to provide comprehensive evidence to support their financial declarations. The court held that the lack of such evidence could be grounds for adverse findings against the taxpayer. However, the appellant argues that, in his case, the primary issue was not the absence of evidence but the lack of clarity about what was precisely required. He contends that he has always been prepared to submit any and all documentation and thus, requests the Tribunal to consider the unique circumstances that led to his perceived non-compliance.

* Further Argument: Mr. Kumar urges the Tribunal to recognize his proactive efforts to comply with the documentation requirements amidst confusing and insufficient guidelines. He stresses that he has retained all necessary documentation that substantiates his financial statements and is fully prepared to present this evidence should clearer specifications be provided.

Conclusion: Mr. Ashok Kumar respectfully requests that the Tribunal take into account the challenges posed by ambiguous official communications, which have led to his unintentional non-compliance. He underscores his commitment to transparency and compliance, demonstrated by his possession of all relevant financial documentation. The appellant pleads for a reconsideration of his case, emphasizing that with clear guidelines, he can and will provide all necessary documentation to resolve any issues.

Case Law Support:

Rasiklal Manikchand Dhariwal vs. Commissioner of Income Tax (1974 AIR 1812): This Supreme Court ruling emphasizes that the essence of fair proceedings lies in the opportunity afforded to all parties to present their cases comprehensively. The judgment asserts that every assessee should have a reasonable chance to contribute to the proceedings, which forms the basis of equitable justice.

Bihar State Mineral Development Corporation Ltd. vs. Commissioner of Income Tax (2015) 61 taxmann.com 195 (Patna): The Patna High Court in this case ordered a remand due to procedural anomalies that had denied the appellant a fair hearing. This precedent strongly supports the appellant's request for remand, highlighting the courts' willingness to correct procedural imbalances to uphold the principles of justice.

Addendum to Case Law: The appellant suggests that these cases illustrate a judicial acknowledgment that procedural fairness is not merely a formality but a fundamental right that influences the outcome of legal proceedings.

Counter to Case Law Cited by Commissioner Appeals:

M/s. Chemipol v/s. Union of India [Central Excise Appeal No.62 of 2009]: In this case, the court upheld the authority of judicial bodies to dismiss cases in default. However, the appellant challenges the application of this ruling in his circumstances, arguing that his case was not a matter of non-compliance or neglect but rather resulted from procedural deficiencies that prevented a fair trial. The dismissal of his appeal for default, therefore, should be reconsidered given the substantial compliance he has demonstrated, including his efforts to engage with the process despite the technological and communicative barriers he faced.

Further Analysis: The appellant stresses that the dismissal of his case overlooks critical factors such as his proactive submission of necessary documents and his repeated attempts to comply with procedural requirements despite significant obstacles. These efforts indicate a commitment to due process that was not reciprocated by the administrative body, highlighting a substantial disparity in procedural justice.

Conclusion:
The appellant, Mr. Ashok Kumar, earnestly requests that this Tribunal recognize the procedural shortcomings of the initial stages of his case and remand the matter to the Assessing Officer. By doing so, the Tribunal will ensure that the principles of natural justice and procedural fairness are upheld, allowing for a thorough and equitable reassessment of the case in a manner that fully respects the appellant's rights.

Conclusion:
The appellant implores the Tribunal to consider the complexities and unique circumstances of his case. Emphasizing procedural fairness and adherence to the principles of natural justice, he requests a comprehensive re-evaluation to ensure equitable treatment.

Date: 13/04/2024
Place: Kanpur Nagar
Appellant's Signature: Asnol.

(B) At the time of hearing before us, learned A.R. for the assessee submitted that the assessee did not get reasonable opportunity in the course of assessment proceedings before the Assessing Officer and in the course of appellate proceedings in the office of the learned CIT(A). He submitted that therefore, the issue in dispute regarding additions made in the assessment order should be restored back to the file of the Assessing Officer with the direction to pass de novo assessment order in accordance with law after providing reasonable opportunity to the assessee. In this context he also drew our attention to the written submissions, which have been reproduced in paragraph (A.1) of this order wherein also a similar request/prayer has been made. The learned D.R. for Revenue did not express any objection to the aforesaid request/prayer made from the assessee's side. In view of the foregoing and as representatives of both sides are in agreement on this, the issue in dispute is restored to the file of the Assessing Officer with the direction to pass de novo assessment order in accordance with law after providing reasonable opportunity to the assessee.

(C) In the result, the appeal is partly allowed for statistical purposes.
(Order pronounced in the open court on 25/02/2025) .
.
Dated:25/02/2025
*Singh

Copy of the order forwarded to :
1. The Appellant
2. The Respondent
3. Concerned CIT
4. The CIT(A)
5. D.R. ITAT, Lucknow

Asstt.