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Facts
A search and seizure action was conducted on the assessee, who is a member of the Chandra Mohan Bhati and Kishan Singh Group. During the search, incriminating documents were found, indicating unaccounted investment and profit on the sale of flats and shops. The assessee had surrendered this income, but later retracted his statement. The CIT(A) dismissed the appeal after providing multiple opportunities, finding that the assessee did not file any reply or produce evidence.
Held
The Tribunal noted that adjournment applications were filed by the assessee but not discussed or disposed of by the CIT(A), leading to an ex-parte order. The Tribunal held that the assessee was deprived of justice and set aside the order of the CIT(A), remanding the matter back for a fresh decision after giving proper opportunity to be heard.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without properly considering the assessee's contentions and adjournment applications, thereby depriving the assessee of natural justice.
Sections Cited
153A, 143(3), 24(b), 44 AD, 132, 133A, 132(4), 17, 31, 251, 144, 254, 29
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES, “A” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA Nos. 161 to 163/JP/2024
Aggrieved from the order of the ld. AO, the assessee preferred an appeal before ld. CIT(A). The ld. CIT(A) noted that even though the assessee was given five opportunities from 2021 to 2023. The assessee has neither filed any reply nor attained to the notice to the assessee. Therefore, the ld. CIT(A) has dismissed. The appeal of the assessee and relevant part of the decision of ld. CIT(A) is reiterated here in below:-
“5. DECISION: 5.1 Despite of the various opportunities, the appellant has neither filed any reply nor any documentary evidences in support of his pending
5.2 During the course of search, various incriminating material were found and seized. On analysis of these documents, it was found that assessee has made unaccounted investment and had earned unaccounted profit on sale of flats and shops. During the course of search the assessee had surrendered this undisclosed income while recording statement u/s 132(4). The AO had discussed each fact in assessment order in detailed manner. Further relevant seized material and statement recorded u/s 132(4) had also scanned in the assessment order. These documents and figures written on these documents clearly reflect that the assessee had made unaccounted investment and had earned profit. It was concluded that the total investment and profit earned for the year was Rs 1,37,60,836/- and the same had added in the hand of the appellant.
5.3 The addition was based upon incriminating material found and admission in statement recorded u/s 132(4). Such statement was based upon documents seized from his residence, which is sufficiently reliable in the eye of law. The disclosure was made voluntarily by the appellant. Admission of a particular fact during the course of search proceedings is strong evidence, which can be used against the person giving it. More so, when a person himself admits it to be true it may reasonable be presumed to be so, unless it is satisfactorily explained otherwise. Thus the effect of an admission is to shift the burden of proof to the person making the admission especially in a case when the statement so given was based upon incriminating documents impounded during search. The Supreme Court in the case of Basant Singh Janki Singh AIR 1967 SC 341 held that "An admission by a party in a plaint signed and verified by him in a prior suit is an admission within the meaning of section 17 of the Indian Evidence Act, 1872 and may be proved against him in other litigation. Section 17 of the Act makes no distinction between an admission made by a party in a pleading and other admission". Considering the evidentiary value of an admission and the fact that an admission shifts the onus in terms of section 31 of the evidence Act, the Supreme Court in Kishorilal Vs. Mst Chaltibai AIR 1959 SC 304 held that the admission shifted the onus on to the respondent on the principle that what a party himself admits to be true may reasonably be presumed to be so and until the presumption was rebutted the facts admitted must be taken to be established ....... It is also relevant to point out that the staternent which are recorded are presumed to be carrying truth in view of section 181 and section 193 of the Indian penal Code. In the Income tax proceedings, admission made during the course of search proceedings binds its maker unless rebutted through clear and specific evidence to the contrary. Unless the 5.4 Considering the above facts and circumstances, the addition made by the AO of Rs 1,37,60,836/- (Rs 1,25,00,000+ Rs 1260.836/-) as his undisclosed income is hereby confirmed.
5.5 It was noticed that the assessee has claimed deduction u/s 24(b) of the Act of Rs 76,761/-on self occupied property 17. Kalyan Colony, Jaipur. On verification it was found that housing loan has been taken on property 16, Telephone Colony, Jaipur which is owned by his wife Smt Laxmi Bhati. Moreover the property 17, Kalyan Colony, Jaipur also belongs to his wife Srnt Laxmi Bhati. Considering the above facts and circumstances, the appellant had wrongly taken deduction u/s 24(b) and the AO had correctly disallowed the same. Hence the addition made by the AO of Rs 76,761/- by disallowing deduction u/s 24(b) is hereby confirmed.
5.6 Further, I take support from a judgement of the Hon'ble ITAT Agra Bench in the case of Shivangi Steel (P.) Ltd. v. Assistant Commissioner of Income tax, Central Circle, reported in [2014] 42 taxmann.com 393 (Agra Trib.), where it has been held that Section 251, read with section 144, of the Income-tax Act, 1961-Commissioner (Appeals) Powers of [Exparteorder) - Assessment year 2005-06 - Despite several notices issued under sections 143(2) and 142(1), assessee did not attend assessment proceedings, nor filed any explanation -Assessing Officer, therefore. passed an exparte assessment order under section 144 on assessee - Further assessee in spite of large number of adjournments granted by Commissioner (Appeals) did not produce any document in respect of grounds of appeal
, nor made written or oral submissions before him Commissioner (Appeals), therefore, proceeded ex parte against assessee and confirmed assessment order -Whether both Commissioner (Appeals) and Assessing Officer rightly proceeded ex parte against assessee Held, yes [Para 6] [In favour of revenue] Section 254 of the Income-tax Act, 1961 read with rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 Appellate Tribunal Powers of [Powers to admit additional evidence] Assessment year 2005
06. Assessing Officer passed an exparte assessment order under section 144 on assessee -Commissioner (Appeals) in absence of any co- operation from side of assessee proceeded exparte against assessee and confirmed assessment order Against order of Commissioner (Appeals), assessee filed appeal before Tribunal - It also moved application under rule 29 of Appellate Tribunal Rules. 1963 for admission of additional evidences - Whether since assessee had not made out any case that authorities below had decided case without giving sufficient opportunity to adduce evidence, requirement of rule 29
14 to 163/JP/2024 Shri Chander Mohan Bhati vs. ACIT had not been satisfied - Held yes Whether, therefore, above application was liable to be rejected - Held, yes [Para 7][In favour of revenue] 5.7 Following the above discussion, I uphold the additions made by the AO Rs 1,37,60,836/-(Rs 1,25,00,000+ Rs 1260,836/-) and Rs 76,761/-. Thus, grounds of appeal 1 to 9 are hereby dismissed
7. Aggrieved from the above ex-party order of ld. CIT(A), the assessee has preferred the present appeal submitting that the ld. CIT(A) has not appreciated the contentions raised by the assessee before ld. AO and has simply confirmed the view of the ld. AO and even the assessee could not advance the argument because of the fact that they have filed the adjournment application and the proof of the same was placed on record. Since, the assessee could not get chance to represent the case on all the occasion as the assessee sought the adjournment and therefore, the assessee humbly prayed that the order of the ld. CIT(A) be set aside and the assessee may be granted one more opportunity.
8. Per contra, the ld. DR opposed the prayer of the assessee that ld. CIT(A) has given as many as five opportunities from 2021 to 2023 and on all five opportunities granted to the assessee has not filed any written submission and has not responded to the notices and considering aspect of the matter there is no meaning of decided on merit by the ld. CIT(A) and therefore, there is no meaning to give the 2nd inning to the assessee
We have heard the rival contentions and perused the material placed on record. A propose to the grounds so raised by the assessee that the order of the ld. CIT(A) is ex-party. The ld. AR of the assessee submitted that although four notices were issues and all the occasions. They have filed adjournment application and the proof of the same is placed on record. The bench noted that there is no reference as to the acceptance or rejection of these adjournment applications by the ld. CIT(A) and therefore, the assessee is deprive of justice and therefore, considering that aspects of the matter which is not disputed by the ld. DR that these adjournment applications were not on record. In the light of this fact, we are of considered view that the assessee sought adjournment. The adjournment applications were not discussed or disposed off by ld. CIT(A) and the order has been passed without giving any opportunity to the assessee and therefore, we set aside the order of ld. CIT(A) and directly to set aside afresh in proper opportunity being heard to the assessee. At the same time, the assessee is directed to represent and present all the facts before the ld. CIT(A) and should not ask for adjournment of trifles grounds. At this stage, we remand back the matter without commenting upon the merits of the case and ld. CIT(A) is directed to pass an order in accordance with law.
In terms of these observations, the appeal of the assessee in is allowed for statistical purposes.
The fact of the case in & 163-JP-2024 is similar to the case in ITA No. 161-JP-2024 and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in this appeal No. 162 & 163/JP/2024 is equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 161/JP/2024 for the Assessment Year 2014-15 shall apply mutatis mutandis in the In the result, three appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 03/04/2024.