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Income Tax Appellate Tribunal, “SMC - C” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN
Date of hearing : 29.08.2019 Date of Pronouncement : 04.09.2019 O R D E R The assessee has filed an appeal against the order dated 6.2.2019 of learned Commissioner of Income Tax (Appeals), Belagavi passed under Section 250 of the Income Tax Act, 1961 for assessment year 2013-14.
The Assessee is an individual. He is partner in a partnership firm M/s. Ratna Palace. In the course of a Survey u/s.133A of the Income Tax Act, 1961 (Act), the statement of the Assessee and another partner Sri Gajanan was recorded wherein they admitted having made unexplained investment in construction of a complex in Bijapur. The Assessee admitted a sum of Rs.10 lacs for AY 2013-14 as unexplained investments in construction of complex and offered the said sum to tax in the return of income filed for AY 2013-14. The same was brought to tax in an order passed by the AO u/s.143(3) of the Act dated 31.7.2015.
3. Subsequently the AO issued a notice u/s.154 of the Act and passed an order dated 3.8.2017 in which he held that since the income of Rs.10 lacs is offered to tax as unexplained investments u/s.69B of the Act, the rate of tax applicable on such income was 30% as per Sec.115BBE of the Act and not at a lesser rate of tax, as was determined in the order of assessment dated 31.7.2015.
Against the aforesaid order of the AO, the Assessee filed appeal before CIT(A) contending that Sec.115BBE was not applicable to the facts of the case. The appeal of the Assessee was fixed for hearing on 27.12.2018, 22.01.2019 & 5.02.2019. According to the CIT(A) notices were issued for the above hearing dates but none appeared on the stipulated dates or any submissions were filed. In the circumstances, the CIT(A) decided the appeal ex parte and held that the action of the AO in passing the order u/s.154 of the Act was valid. Against the aforesaid order the Assessee is in appeal before the Tribunal.
The learned Authorised Representative submitted that the CIT(Appeals) has passed ex parte order and prayed that the assessee could not attend the hearing proceedings and prayed for an opportunity to present the case of the Assessee on merits. She also brought to our notice that on identical facts in the case of another partner of the firm M/s. Ratna Palace, Shri Gajanan, the “C” Bench of ITAT in order dated 26.8.2019 for AY 2013-14 set aside similar ex parte order of CIT(A) with the following observations:-
We heard the rival contentions and perused the material on record. The learned Authorised Representative’s contention that the CIT(Appeals) has passed exparte order as none appeared on behalf of the assessee nor adjournment petition was filed. On perusal of the order of the CIT(Appeals) at para 4, we found that the assessee’s case was posted for hearing on 27.12.2018, 22.01.2019 & 5.02.2019, none appeared on the stipulated dates or any submissions were filed. Further on perusal of the assessment order, we found that there was survey operation and the case was taken up for scrutiny and assessed the total income of Rs.10,74,350. The fact remains that the assessee choses not to appear in the appellate proceedings though the CIT(Appeals) has provided adequate opportunities of hearing. The learned Authorised Representative could not explain the reasons for non- appearance. We considering the principle of natural justice, are of the opinion that there must be various reasons for the assessee for non-appearance and by delaying the proceedings, the assessee shall not gain any benefit and according to meet the ends of justice, we restore the entire disputed issue to the file of CIT(Appeals) to adjudicate afresh on merits and provide reasonable opportunity of hearing to the assessee and further the assessee shall co-operate in submitting the information for early disposal of the appeal. Accordingly, the grounds of appeal
of the assessee are allowed for statistical purposes.”
6. The learned DR opposed the prayer for setting aside.
7. I have considered the rival contentions and find that the facts and circumstances in the case of the Assessee are similar to the case decided by the Tribunal referred to above. Moreover, the notices sent by the CIT(A) were claimed to have been not served on the Assessee. Following the order of the Tribunal, I set aside the order of the CIT(A) and restore the entire disputed issue to the file of CIT(Appeals) to adjudicate afresh on merits and provide reasonable opportunity of hearing to the assessee and further the assessee shall co-operate for early disposal of the appeal.
In the result, the appeal is treated as allowed for statistical purpose.
Pronounced in the open court on this 4th day of September, 2019.