SHRI CHANDRAKANT KRISHANAJI INGAWALE,MUMBAI vs. I.T.O. WARD 1(3), THANE, MUMBAI

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ITA 7156/MUM/2017Status: DisposedITAT Mumbai15 May 2019AY 2010-115 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the Commissioner (Appeals)'s order and restored the issues for de novo adjudication. The assessee was granted one more opportunity to present his case with proper documentary evidence, and the Commissioner (Appeals) was directed to provide a reasonable opportunity of being heard.

What were the facts?

The assessee, a builder and developer, had his assessment re-opened under Section 147. He failed to appear before the Assessing Officer or provide evidence for stock reconciliation, leading to a best judgment assessment. The assessee also failed to appear before the Commissioner (Appeals), resulting in an ex-parte order.

What were the issues?

Whether the Commissioner (Appeals) order was passed in violation of natural justice due to ex-parte disposal, and whether the re-opening of assessment under Section 147 was valid.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Shri Hardik Sethia
For Respondent: Shri Abhi Rama Kartikeyan

Date of Hearing – 08.05.2019 Date of Order – 15.05.2019

O R D E R PER SAKTIJIT DEY. J.M.

The aforesaid appeal has been filed by the assessee challenging the order dated 17th November 2016, passed by the learned Commissioner (Appeals)–1, Thane, for the assessment year 2010–11.

2.

In ground no.1, the assessee has challenged the impugned order of the learned Commissioner (Appeals) to have been passed in violation of rules of natural justice.

2 Shri Chandrakant Krishnaji Ingawale 3. Brief facts are, the assessee, an individual, is engaged in the activity of builder and developer. The return of income filed for the impugned assessment year was initially processed under section 143(1) of the Income Tax Act, 1961 (for short "the Act"). Subsequently, the assessment was re–opened under section 147 of the Act and in the course of re–assessment proceedings, the Assessing Officer called upon the assessee to reconcile the difference in opening and closing stock. As observed by the Assessing Officer, in response to the notice issued by him, the assessee neither appeared nor filed any evidence to reconcile the difference. Thus, ultimately, the Assessing Officer proceeded to complete the assessment under section 144 r/w section 147 of the Act to the best of his judgment and determined the total income at ` 2,59,75,480.

4.

Being aggrieved with the assessment order so passed, the assessee preferred appeal before the first appellate authority challenging the validity of re–opening of assessment under section 147 of the Act as well as the addition made. As could be seen from the observations of learned Commissioner (Appeals) since the assessee failed to appear on the date appeal was fixed for hearing, he proceeded to dispose of the appeal ex–parte. Stating that the assessee did not file any documentary evidence to reconcile the difference in stock, he sustained the addition made by the Assessing Officer.

3 Shri Chandrakant Krishnaji Ingawale Further, he also rejected assessee’s ground challenging the re–opening of the assessment.

5.

We have considered rival submissions and perused the material on record. Before us, it is contended on behalf of the assessee that due to unavoidable circumstances, the assessee could not appear before the first appellate authority which resulted in dismissal of the appeal ex–parte. It is submitted, given an opportunity, the assessee would properly represent its case before learned Commissioner (Appeals).

6.

Learned Departmental Representative on the other hand submitted that the assessee did not avail the opportunities given to him resulting in ex–parte disposal of the appeal.

7.

Having considered rival submissions, we have noticed that the assessee had neither represented his case properly before the Assessing Officer nor before learned Commissioner (Appeals). Therefore, to some extent, the assessee is responsible for ex–parte disposal of its appeal. However, taking a lenient view and in the interest of justice, we are inclined to grant one more opportunity to the assessee to represent his case before learned Commissioner (Appeals) by furnishing proper documentary evidence to reconcile the difference in stock. To enable the assessee to do so, we set aside the 4 Shri Chandrakant Krishnaji Ingawale impugned order of the learned Commissioner (Appeals) and restore all the issues raised in the present appeal, including the issue relating to the validity of re–opening of assessment under section 147 of the Act, for de novo adjudication by learned Commissioner (Appeals). Needless to mention, learned Commissioner (Appeals) must afford reasonable opportunity of being heard to the assessee before deciding the issue. At the same time, the assessee is also directed to respond to the notice of hearing to be issued by learned Commissioner (Appeals) and co–operate in finalising the appeal proceedings. With the aforesaid observations, grounds are allowed for statistical purposes.

8.

In the result, appeal is allowed for statistical purposes. Order pronounced in the open Court on 15.05.2019

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