SHRI AJIT DARDA,INDORE vs. THE ITO 2(3), INDORE

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ITA 156/IND/2017Status: DisposedITAT Indore27 March 2017AY 2009-106 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessment was made in violation of the principles of natural justice as the assessee was not given a proper opportunity to be heard. Therefore, the case was restored to the AO for fresh assessment.

What were the facts?

The assessee failed to appear before the Assessing Officer (AO) and provide explanations for cash deposits of Rs. 14,27,056/- in his savings bank account. The AO made an addition under Section 68, which was confirmed by the CIT(A).

What were the issues?

Whether the assessment made under Section 144 without providing a proper opportunity of being heard to the assessee violates the principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 68,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI C. M. GARG & SHRI O.P. MEENA

Ajit Darda ITA No.156/Ind/2017 : A.Y. 2009-10 Page 1 of 6

आयकरअपील�यअ�धकरण ,इ�दौर�यायपीठ ,इ�दौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE �ी सी.एम.गग� ,�या�यकसद�य तथा �ीओ.पी.मीना ,लेखासद�यकेसम� BEFORE SHRI C. M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER आ.अ.सं /.I.T.A. No.156/Ind/2017 �नधा�रणवष� / Assessment Year: 2009-10 Shri Ajit Darda vs. Income tax Officer 2(3) 163-A, Brinjeshwar Annex Indore Indore

अपीलाथ� अपीलाथ� /Appellant अपीलाथ� अपीलाथ� ��यथ� ��यथ� /Respondent ��यथ� ��यथ� �था.ले.सं./PAN: AEXPD – 4727Q अपीलाथ� क� ओर से अपीलाथ� क� ओर से/Appellant by अपीलाथ� क� ओर से अपीलाथ� क� ओर से None ��यथ� क� ओर से ��यथ� क� ओर से/Respondent by ��यथ� क� ओर से ��यथ� क� ओर से Shri Mohd. Javed सुनवाई क� तारीख सुनवाई क� तारीख/Date of hearing सुनवाई क� तारीख सुनवाई क� तारीख 21.03.2017 उ�ोषणा क� तारीख उ�ोषणा क� तारीख/Date of pronouncement उ�ोषणा क� तारीख उ�ोषणा क� तारीख 27.03.2017 आदेश आदेश /O R D E R आदेश आदेश PER BENCH This appeal is filed by the assessee against the order of ld. Commissioner of Income tax (Appeals)-II, Indore [hereinafter referred to as the CIT (A)] dated 16.11.2016. This appeal pertains to Assessment Year 2009-10 as against appeal decided in respect of assessment order dated 16.12.2011 passed u/s. 144 of Income Tax 1

Ajit Darda ITA No.156/Ind/2017 : A.Y. 2009-10 Page 2 of 6

Act, 1961(herein after referred to as "the Act) by the ITO 2(3), Indore

[hereinafter referred to as the AO].

1.

At the time of hearing, none attended on behalf of the assessee

at the time of hearing inspite of notice. The learned DR was heard.

2.

The sum and substance of the grounds of appeal of the

assessee is that the learned CIT(A) was not justified in confirming

the addition of Rs.14,27,056/- made by the Assessing Officer u/s

68 of the Act in respect of cash deposits made by the assessee in

his savings bank account without considering the material fact that

the entire cash deposits were made by the assessee out of the

explained sources only .

2.1 Succinctly, facts as culled out from the orders of lower

authorities are that the return of income was filed by the assessee

on 25.3.2010 declaring total income at Rs. 1,98,650/-. The case

was selected for scrutiny and first notice u/s 143(2) of the Act was

issued on 18.8.2010 fixing the hearing of the case for 9.9.2010. The

notice was served on the assessee on 25.8.2010. However, there

was no representation on behalf of the assessee on the date of

hearing. Thereafter detailed questionnaire along with notices u/s

143(2) and 142(1) were issued to the assessee on 20.1.2011 by 2

Ajit Darda ITA No.156/Ind/2017 : A.Y. 2009-10 Page 3 of 6

speed post fixing the date of hearing on 11.2.2011. On this date

also, none attended on behalf of the assessee. The Assessing

Officer again issued another notice u/s 142(1) on 14.2.2011 fixing

the date of hearing on 8.3.3011. However, on this date also, neither

anybody attended nor any reply was filed on behalf of the assessee.

Further the Assessing Officer issued notice u/s 143(1) on 25.5.2011

fixing the date of hearing on 9.6.2011 but to no avail. As last

opportunity, the Assessing Officer again issued a notice u/s 142(1)

of the Act on 6.7.2011 fixing the case for hearing on 15.7.2011.

The Assessing Officer issued questionnaire vide notice dated

20.1.2011 in response to which the AR of the assessee attended

and filed written reply. Vide note sheet entry dated 3.11.2011 the

Assessing Officer asked the assessee to submit the requisite

information and documents by fixing the case for hearing on

10.11.2011. However, on this date also, neither the assessee

attended nor filed any reply. Since it was a time barring case and

the assessment was to be made by 31.12.2011, therefore, finally

notice u/s 143(2)/142(1) of the Act dated 25.11.2011 was issued to

the assessee fixing the case for hearing on 25.11.2011 by clearly

mentioning therein that “as a last opportunity, you are once again 3

Ajit Darda ITA No.156/Ind/2017 : A.Y. 2009-10 Page 4 of 6

requested to furnish the requisite information as per notices above on

12.12.2011 at 11 AM otherwise your assessment has been

completed on the basis of facts and record under section 144 of the

Act for which are only responsible”. However, the assessee did not

care to respond. In view of this conduct of the assessee, the

Assessing Office had no alternate but to proceed to make the

assessment u/s 144 of the Act on the basis of material available on

record. During the course of assessment proceedings, the Assessing

Officer found that the assessee has deposited an amount of

Rs.14,27,056/- in the savings bank account with standard

Chartered Bank. However, the assessee did not file any source of

proof of the said deposit with the return of income or during the

course of assessment proceedings. The Assessing Officer, therefore,

observed that the assessee has no proof regarding the source of

cash deposit and this money has been deposited by him out of his

undisclosed income. He, therefore, added this undisclosed income

of Rs.14,27,056/- to the total income of the assessee u/s 68 of the

Act.

2.2 Felt aggrieved with the above addition made by the Assessing

Officer, the assessee preferred first appeal before the learned CIT(A). 4

Ajit Darda ITA No.156/Ind/2017 : A.Y. 2009-10 Page 5 of 6

The learned CIT(A) considering the submissions of the assessee in

the wake of the facts of the case, confirmed the action of the

Assessing Officer.

2.3 Against the confirmation of addition by the learned CIT(A), the

assessee is in appeal before the Tribunal.

2.4 The learned DR supported the orders of the authorities below.

The learned DR submitted that since the assessee has been

provided a number of opportunities, the assessee is not entitled for

further opportunity.

2.5 After careful consideration of the submissions of the parties

in view of the facts of the case, we find that in this case the

Assessing Officer has made the assessment u/s 144 of the IT Act.

It is a well settled principle of natural justice that no-body should

be condemned unheard. Principle of natural requires that sufficient

opportunity of being heard should be provided to the assessee

before deciding the issue against him. We are of the view that since

the Assessing Officer has decided the matter without hearing the

assessees in violation of the principles of natural justice and fair

play, this appeal needs to be restored to his file for deciding the

same after providing due opportunity of being heard to the 5

Ajit Darda ITA No.156/Ind/2017 : A.Y. 2009-10 Page 6 of 6

assessees. We, therefore, following the principle of natural justice, restore this appeal to the file of the Assessing Officer with the direction to frame fresh assessment after providing the assessees due opportunity of being heard. Needless to mention that the assessee is at liberty to file evidence, if any, in support of his claim before the Assessing Officer. 2. In the result, the appeal of the assessees is allowed for statistical purposes. 3. Order pronounced in the open Court on 27th March, 2017.

Sd/- Sd/- (सी.एम.गग�) (ओ.पी.मीना) �याियक सद�य लेखा सद�य (C.M.GARG) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 27th March , 2017 Dn/-

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