SRI. M. NAGESH,BANGALORE vs. ITO, BANGALORE

One of the grounds raised by assessee is that CIT (A) had not provided him adequate opportunity for representing his case, thereby violating the principles of natural justice.

Facts apropos are that assessee, a contractor, had filed his return declaring income of Rs.1,75,000/-, for the impugned assessment year. During the course of assessment proceedings in response to notices u/s.143(2) and 142(1) of the Income-tax Act, 1961 (‘the Act’ in short), Shri. K. Ramachandra, authorised representative for the assessee appeared. However no explanation was given by the assessee with regard to various information sought by the AO which inter alia included source for purchase of immovable property for Rs.35,50,000/-, confirmation for unsecured loan of Rs.9,12,098/-, confirmation for sundry creditors of Rs.1,16,431/- and proof for VAT liability of Rs.8,250/-. Further as per the AO, assessee did not produce any evidence for claim of Chapter VIA deduction of Rs.1,00,000/-. Assessment was completed u/s.144 of the Act, making additions for all the above.

Aggrieved assessee moved in appeal before the CIT (A). CIT (A) noted that assessee did not enter appearance despite notice having been served. As per the CIT (A), more than two notices were sent to the ITA.1587/Bang/2014 Page - 4 assessees and one of them was returned with a postal remark that no such person existed. CIT (A) held that assessee was not interested in pursuing the case. He confirmed the additions.

Ld. AR submitted that assessee was not given a proper chance to explain its case before the CIT (A). As per the Ld. AR, no notice of any sort was ever received by the assessee. An affidavit of Shri. K. Ramachandra, authorised representative, was also filed by the Ld. AR, which inter alia stated that the address for communication in the appeal filed before the CIT (A) was G. R. Associates, but no notice was served in the said address.

Per contra, Ld. DR supported the orders of authorities below.

We have perused the materials and heard the rival contentions. Affidavit filed by the representative of the assessee states that the address for service of notice mentioned in Form.35, filed by the assessee was that of the authorised representative. Contention of the Ld. AR was that no such notice was ever received. It is one of the basic tenets of justice that no man should be punished unheard. Rule ‘audi alteram partem’ has to be adhered to in law as well as in spirit. I am of the opinion that the circumstances call for a revisit by the CIT (A). We, therefore, set aside the ITA.1587/Bang/2014 Page - 5 orders of the CIT (A) and remit the matter back to him for fresh consideration. Assessee shall ensure that he is properly represented before the CIT (A).

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