M/S. SAKAR FIBER BOARD & CONTAINERS PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 478/DEL/2017Status: DisposedITAT Delhi18 May 2017AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in deciding the appeal ex-parte without ensuring proper service of notice and providing a reasonable opportunity to be heard. The principle of 'audi alteram partem' was invoked.

What were the facts?

The assessee's appeal was against an order of the CIT(A) which confirmed additions made by the Assessing Officer. The assessee contended that both the AO and CIT(A) passed orders ex-parte without providing a reasonable opportunity of being heard.

What were the issues?

Whether the CIT(A) was justified in deciding the appeal ex-parte without providing a reasonable opportunity to the assessee. Whether the reopening of assessment under Section 147/148 was valid.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. N. K. Saini

Hearing: 16.05.2017Pronounced: 18.05.2017

ORDER This is an appeal by the assessee against the order dated 30.11.2016 of ld. CIT(A)-14, New Delhi. 2. Following grounds have been raised in this appeal: “1. That in view of facts and in the circumstances of the case the Ld. CIT(A)-XIV committed an error in confirming the addition made by the Assessing Officer on the back of the appellant without providing reasonable opportunity which is must in law as settled by various courts from time to time.

1.

2. That in view of facts and in the circumstances of the case it is apparent that no proper satisfaction as contemplated u/s 147/148 has been recorded by the Assessing Officer, therefore, the approval /sanctioned to re-open the case as accorded by the Addl. Commissioner, Range-7, New Delhi in furtherance of such invalid and improper satisfaction in a mechanical manner is arbitrary, bad in law, unjust and deserves to be quashed.

2 Sakar Fiber Board & Containers Pvt. Ltd.

3.

That in view of facts and in the circumstances of the case the assumption of jurisdiction u/s 147/148 as made by the Assessing Officer is invalid in view of reasons recorded solely on the basis of information received from investigation wing without application of independent mind and accordingly the re- assessment so framed in furtherance of such invalid jurisdiction is bad in law, illegal, void ab -initio and deserves to be quashed.

4.

That in view of the facts and circumstances of the case, the Ld. CIT(A)-XIV committed an error in confirming the addition made by the Assessing Officer on account of :- a. Rs. 5,00,000/- as unexplained cash credit b. Rs. 10,000/- as commission paid c. Rs. 17,58,520/- on account of share premium d.Rs.7,50,000/- as investment from undisclosed sources 5. That the appellant crave to add, delete or modify any ground of appeal

at the time of hearing.”

3. Ground No. 1 relates to the reasonable opportunity not provided by the ld. CIT(A) while confirming the addition made by the AO.

4. During the course of hearing the ld. Counsel for the assessee submitted that the AO passed the assessment order ex-parte u/s 144 of the Act and the ld. CIT(A) also decided the appeal ex-parte without providing any reasonable opportunity of being heard and that the assessee had not received any notice for hearing. Therefore, the ld. CIT(A) was not justified in deciding the appeal ex-parte.

5. In his rival submissions the ld. DR supported the order of the ld. CIT(A).

3 Sakar Fiber Board & Containers Pvt. Ltd.

6.

I have considered the submissions of both the parties and perused the material available on the record. In the present case, it is noticed that the AO passed the assessment order ex-parte and the ld. CIT(A) also dismissed the appeal ex-parte in limine and had not decided the issues raised by the assessee on merits. The ld. CIT(A) simply stated that the notices were issued to the assessee, however, he never stated that the notice of hearing was served upon the assessee. He simply stated that none attended and no request for adjournment was received. It is well settled that nobody should be condemned unheard as per the maxim “audi alterm partem”. I, therefore, deem it appropriate to set aside the impugned order and the matter is remanded back to the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

7.

In the result, the appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 18/05/2017)

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