ENCEE DYING & PTG, WORKS P. LTD,MUMBAI vs. ADDL CIT RG 9(1), MUMBAI

Brief facts of the case are that the assessing officer while passing assessment order for Assessment Year 2004-05 noted that the assessee has made payment of loan to various parties otherwise then by cross cheque, thereby violated the provisions of section 269Tof Income tax Act (the Act). The Assessing Officer referred the case to the Additional Commissioner of Income Tax Act (Add. CIT) for necessary action. The Add.CIT after granting opportunity of hearing to the assessee levied the penalty of Rs. 12,87,639/- for contravention of provision of section 269T of the Act vide order dated 10th March 2008. On appeal before the ld. Commissioner (Appeals) the action of Assessing Officer was confirmed.

We have heard the submission of Authorised Representative (AR) of the assessee and Departmental Representative (DR) for revenue and perused the material available on record. The perusal of record reveals that, even this appeal was dismissed twice; however, on filing miscellaneous application the order was recalled. The learned AR of the assessee submits that the ld. Commissioner (Appeals) passed the order ex-parte without giving fair and proper opportunity to the assessee. The learned AR further submits that assessee has raised specific grounds of appeal

On the other hand, the learned DR for the revenue supported the order of lower authorities. The learned DR submits that the assessee is most negligent in proper perusing the case before ld. Commissioner (Appeals).

We have considered the submissions of the ld. AR of the assessee and ld. DR for the revenue and perused the record. The perusal of impugned order dated 9th January 2009 reveals that the appeal was fixed for hearing on 23rd September 2008, 15th December 2008 and finally on 15th January 2009. The learned Commissioner (Appeals) passed the order on 19.01.2009. The ld. Commissioner (Appeals) while passing the impugned order noted that there is no compliance from the assessee. We have seen that the ld. Commissioner (Appeals) further noted that assessee sought adjournment on 13th September 2008 and again on 9th December 2008. We have noted that the learned Commissioner (Appeals) before proceeding ex-parte has not recorded his satisfaction, if notice for the hearing fixed on 15th January 2009 was served upon the assessee. There is no satisfaction recorded in the impugned order that the assessee has not appeared despite the service of notice of hearing. There is no satisfaction of learned Commissioner (Appeals) that the notice was served upon the assessee or not. The learned Commissioner (Appeals) presumed that notice for the hearing was served upon the assessee.

In para-4 of the impugned order dated 19.01.2009, the ld. Commissioner (Appeals) recorded that the appeal is decided on the basis of material on record. In the impugned order there is no reference as to what material was considered by learned Commissioner (Appeals) while passing the impugned order. Fact remains the same that the impugned order was passed ex parte. The application filed by assessee for recalling of the order was also dismissed holding that there is no mistake apparent in the order which require rectification and that the assessee was seeking review of the order.

The principal of audi alteram petrem is the basic concept of natural justice. The basic concept in this principal is that no one should be condemned unheard. This principal is sine a qua non in every judicial and quasi judicial proceedings. Admittedly the impugned order on appeal of the assessee was passed without hearing of the assessee. Therefore, keeping in view the principal audi alteram petrem the ground No. &2 raised by the assessee are allowed; resultantly the appeal is restored to the file of learned Commissioner (Appeal) to decide the appeal on merit in accordance with law. Needless to say the ld. Commissioner (Appeals) shall grant fair opportunity to the assessee before deciding the appeal.

In the result, appeal of the assessee is allowed for statistical purpose.