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Income Tax Appellate Tribunal, DELHI BENCHES: ‘C’, NEW DELHI
Before: SHRI RS SYAL & SMT. BEENA A PILLAI
ORDER
PER BEENA A PILLAI, JUDICIAL MEMBER
The present appeal has been filed by assessee against the order dated 24/08/2016 passed by the Ld. Commissioner of Income Tax (Appeals)-28, New Delhi pertaining to the Assessment Year (A.Y.) 2011-12 on the following grounds .
1. That the Ld. CIT(A) erred in law, on facts and in the surrounding circumstances in failing to consider rejoinder filed in compliance to remand report, thereby depriving the appellant of reasonable opportunity of being heard, even though the remand report itself had been discussed in the impugned appellate order, under appeal.
2. That even before rejection of application u/r 46A of I.T. Rules, the Ld. CIT(A) again erred in law on facts and in surrounding circumstances in failing to provide an opportunity of being heard, thereby resulting in clear breach of doctrine of “audi-alterm pattern” being a part and parcel of natural justice mandated by law.
3. That in doing so, the Ld. CIT(A) also erred in failing to appreciate that breach of natural justice nullifies the order made in breach as also, that since the evidence produced by the appellant is genuine, reliable and proves the case of appellant, then appellant should not be denied of it being produced for the first time before the appellate authority as per settled law.
4. That the Ld. CIT(A) further erred in law, on facts and in surrounding circumstances, in failing to appreciate the exparte refusal to admit additional evidence u/r 46A of I.T. Rules, had resulted in a meritorious matter being thrown out at the very threshold and cause of justice being defeated, as in the instant case.
5. That the Ld. CIT(A) also erred in law, on facts and in surrounding circumstances in failing to take adverse view of the serious lapse on the part of the Ld. A.O. in issuing short time show cause notice dated 17-02-2014 at 2 ITA 5481/Del/16 A.Y. 2011-12 Along with S.A.423/Del/18 (In ITA 5481/Del/18 Sh. Gopal Bansal vs. ITO, Ward 7(2) non-correspondence address as per record of department with the intention of depriving the appellant of an opportunity of submission of full and final compliance.
That Ld. CIT(A) further erred in law, on facts and in surrounding circumstances in ignoring the failure on the part of Ld. A.O. to issue notice in the manner contemplated in section 144 of I.T. Act, thereby rendering the exparte order as null and void ab-inito on account of invalid notice, as per law. 7.That without prejudice to above glaring legal infirmities, the Ld.CIT(A) also erred in law, on facts and in surrounding circumstances, in sustaining the addition of Rs. 5430305, merely on the basis of legally and factually unsound grounds, in an arbitrary manner.
That the Ld. CIT(A) further erred in law on facts and in the surrounding circumstances in sustaining another addition of Rs. 2704454 in a mechanical manner based on the findings of Ld. A.O, ignoring the practical aspects that major purchases are on ‘for’ basis and there being no ‘octroi’ in Uttar Pradesh State, as also that in the purchase bills submitted during the assessment proceedings, lorry numbers have also been mentioned.
That the Ld. CIT(A) also erred in law, on facts and in surrounding circumstances in adopting net profit rate after taking G.P at the rate of 1.47% as against 1.43% as self admitted by the Ld. A.O.
That the Ld. CIT(A) also erred in law, on facts and in surrounding circumstances in sustaining the addition of Rs. 115000, towards addition in capital in an arbitrary and mechanical manner.
That the Ld. CIT(A) further erred in law, on facts and in surroundings circumstances in sustaining addition of Rs. 4916000 merely by following the findings of Ld. A.O. and that too without examining in depth that the cash deposits are inter connected with the withdrawals from time to time to meet business expenditure.
ITA 5481/Del/16 A.Y. 2011-12 Along with S.A.423/Del/18 (In ITA 5481/Del/18 Sh. Gopal Bansal vs. ITO, Ward 7(2) 12. That in doing so, the Ld. CIT(A) also erred in law, on facts and surrounding circumstances, in failing to appreciate that provisions of section 68 of I. T. Act are not applicable, as bank pass book is not a book maintained by the appellant, as per settled law. That for reasons discussed herein above, the impugned additions are liable for deletion and the appellate order, suffering from major legal lacuna, is liable to be quashed out rightly and the appeal based on strong foundations deserves to be allowed in the interest of natural justice and equity. The appellant seeks permission to add, amend or withdraw any ground(s) of appeal.
It is observed that assessment order passed by Ld.AO is u/s 144 of the of the Income Tax Act, 1961 (the Act) wherein an addition of Rs.1,67,53,210/- was made by Ld.AO towards undisclosed investments in immovable properties, addition to the capital account, unexplained cash deposits, short term capital gain. 2.1. Aggrieved by the order of Ld.AO assessee preferred appeal before Ld.CIT(A)/ Before Ld.CIT(A) assessee filed various evidences under Rule 46A. Ld.CIT(A) called upon a remand report from A.O. based on which the additional evidences were rejected. 2.2. Ld.A.R. submitted that assessee had not received notice during assessment proceedings as some notices were sent to Delhi Office at 641-B/2, Motiram Road, Ram Nagar, Shahdra, Delhi 32, whereas some notices were sent at 402, Loha Mandi, BS Road, Ghaziabad, UP, due to which assessee could not represent and file requisite details. It has been argued today that assessee was not given proper opportunity to produce relevant 4 ITA 5481/Del/16 A.Y. 2011-12 Along with S.A.423/Del/18 (In ITA 5481/Del/18 Sh. Gopal Bansal vs. ITO, Ward 7(2) documents to justify the claim made in return. He thus prayed that justice may be delivered to assessee. 2.3. Ld.Sr.D.R. though vehemently supported order of Ld.CIT(A), but could not controvert submissions of assessee regarding inability to file requisite details before Ld.AO during assessment proceedings.
We have perused the submissions in the light of records placed before us. It is observed that Ld.CIT(A) decided the issue without considering evidences filed by assessee which are necessary to decide the issues. It is also observed that no proper verification/investigation has been conducted before confirming the additions made by Ld.A.O.
We are therefore, of the opinion that the documents filed by assessee have to be looked into and necessary verification/investigation must be conducted as per law. We, therefore, in the interest of justice set aside this issue to Ld.AO for de-novo consideration of the additions made during original assessment. Needless to say that assessee shall be granted proper opportunity to represent its case and shall file all requisite details in order to support its claim made in the return of income. Assessee is also directed to file all relevant documents as called by Ld.AO to his satisfaction. Ld.AO shall then verify all the details as per law.
Accordingly the grounds raised by assessee stand allowed for statistical purposes.
ITA 5481/Del/16 A.Y. 2011-12 Along with S.A.423/Del/18 (In ITA 5481/Del/18 Sh. Gopal Bansal vs. ITO, Ward 7(2) 6. As we have already set aside the appeal to Ld.AO, the Stay Application being S.A.No.432/Del/2018 becomes infructuous and accordingly the same is dismissed. 7. In the result, appeal of assessee is allowed for statistical purposes and the Stay Application is dismissed as infructuous. Order pronounced in the Open Court on 08th June, 2018.