Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, NEW DELHI BENCH “A”: NEW DELHI
Before: SHRI SUNIL KUMAR YADAV & SHRI L.P. SAHU
O R D E R Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the assessee against the order of the CIT(Appeals) inter alia on the following grounds:- “1. The Assessing Officer has erred in not appreciating either the facts and circumstances of the case or the submissions of the appellant or the provisions of law and further erred in passing the order, which is bad in law and on facts.
Page 2 of 5 2. The Assessing Officer has erred in making the addition of Rs. 32,00,000/- u/s. 68 of the Income Tax Act out of the Interest Loans being received by the appellant from the existing income tax assessee's.
3. The Assessing Officer has erred in not appreciating the Confirmations, Income Tax Particulars, Bank Statements and ID proof of the lenders filed before her and further erred in not appreciating the Confirmation, Bank Statement & Income Tax Particular filed by the lenders in response to enquiry made u/s. 133(6)/131 of the Income Tax Act.
4. The Assessing Officer has erred in making the addition of Rs. 32,00,000/- u/s. 68 of the Income Tax Act without pointing out any defect in the overwhelming documents filed before her.
5. The Assessing Officer has erred in not appreciating that Sh. Satish Arora unfortunately passed away in March, 2009 and the lenders were not known to the legal heir Sh. Ashwini Arora and he has handicapped for producing the said lenders before the Assessing Officer in short span of time.
6. The order of the Assessing Officer being arbitrary, erroneous and illegal, it may kindly be modified.”
During the course of hearing, the ld. counsel for the assessee has contended that a notice u/s. 143(2) was not served upon the assessee. In support of his contention, he invited our attention to the assessment order, according to which notice u/s. 143(2) was issued on 9.8.2010 fixing the date of hearing for 25.8.10, whereas the assessee expired on 23.03.2010. Thereafter the assessee has also filed a return of income through its LRs for the A.Y. 2010-11 on 03.09.10. Despite informing the AO with regard to demise of the assessee, the AO has not issued a notice u/s. 143(2) of the Act upon the LRs of the assessee. For the first time notice u/s. 143(2) was issued upon the LRs of assessee on 23.8.11, in response to return filed by the LRs on 19.8.11 for the AY 2009-10. Since notice u/s. 143(2) was not served upon the assessee, the assessment itself is bad and is not sustainable in the eyes of law.
The ld. DR, on the other hand, in this regard has contended that assessee has filed return under his own signature and AO has not been informed by the LRs of the assessee with regard to demise of the assessee. In response to notice issued on 9.8.10 fixing the date for hearing as 25.8.10 u/s. 143(2) of the Act upon the assessee, Mr. S.K.
Batra, CA & AR of assessee attended the proceedings and thereafter hearing was adjourned sine die and during the course of appearance, he has not informed about the demise of the assessee. Had it been informed, notice would have been issued u/s. 143(2) of the Act upon the LRs of the assessee. Later on, whenever the LRs of the assessee filed a revised return under the signature of LRs, 143(2) notice was duly issued to the LRs of assessee. Therefore, there is no violation of legal provisions.
On merits, the ld. counsel for the assessee has contended that he has filed the bank statement of the lenders, besides their confirmations.
The AO has also made an enquiry from the lenders and in response thereto, they have confirmed the loans advanced to the assessee and assessee had also paid interest on the loans.
The ld. DR in this regard has contended that the CIT(Appeals) has not adjudicated this issue and has passed ex parte order. Before the Assessing Officer, the assessee has not established creditworthiness of the creditors, as from the bank statements it is evident that some credits were introduced in the account of lender before issuance of cheques in favour of assessee. Therefore, all these aspects are required to be properly examined.
Having carefully examined the orders of authorities below in the light of rival submissions, we find that assessee has not raised any specific ground with regard to the validity of the assessment on account of non- service of notice u/s. 143(2) of the Act upon the assessee. This argument was raised for the first time before the Tribunal without raising a specific ground. More over, the CIT(Appeals) has adjudicated the appeal ex parte as none appeared on behalf of assessee. Therefore, we are of the view that without having the benefit of the finding of the first appellate authority, it is not proper for the second appellate authority to adjudicate the issues on merit. So far as the validity of the assessment on the ground of non- service of notice is concerned, we are of the view that this aspect was not examined by the CIT(Appeals). Therefore, in the interest of justice, we are of the opinion that let the matter be examined by the CIT(Appeals) on both the issues, after affording opportunity of being heard to the assessee.
Page 5 of 5 7. In the result, the appeal of the assessee is allowed for statistical purposes.
Pronounced in the open court on this 23rd day of September 2016.