GURU CONSTRUCTIONS,MUMBAI vs. DCIT - 18(3), MUMBAI

Brief facts of the case pertaining to the assessment year 2010-11 are that the assessee filed its return of income for the relevant assessment year declaring the total income of Rs. 58,25,240/-. The case was selected for scrutiny as there was a survey operation u/s 133A of the Act against the assessee during the previous year. In response to the notice issued u/s 142(2) and subsequent notice u/s 142(1) of the Act the assessee submitted certain details through its authorized representative (AR). Thereafter neither the assessee nor his AR appeared before the AO. Accordingly, the AO passed the assessment order u/s 144 of the Act, determining the total income of the assessee at Rs. 1,16,02,860/-. Aggrieved by the action of the AO the assessee preferred first appeal before the Ld. CIT(A).

The assessee is in appeal before the Tribunal on the following effective grounds:- “1. Under the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals), (Ld. CIT(A)) erred in making observation and there upon concluding that the appellant is not interested in prosecuting the appeal of the Appellant.

Under the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals), (Ld. CIT(A)) erred in making observation and there upon concluding that the appellant has not effectively pursued the appeal after filing the appeal.

At the outset the Ld. Counsel for the assessee submitted that both the authorities below have passed their orders without hearing the assessee. Since, the AO had passed the assessment order u/s144 of the Act, the Ld, CIT(A) ought to have heard the assessee before passing the impugned order. The Ld. Counsel further submitted that the assessee may be granted an opportunity to present its case before the AO.

On the other hand the Ld. CIT(A) relying on the order passed by thy Ld. CIT(A) submitted that since the assessee failed to present its case before the authorities below despite sufficient opportunity granted to it, there is no merit in the contention of the assessee, therefore, the appeal is liable to be set aside.

We have heard the rival submissions and perused the orders passed by the authorities below. We notice that the AO has not mentioned the details of notices issued/served upon the assessee to ensure its presence during assessment proceedings. In the absence of the said details it cannot be concluded that non appearance of the assessee was a deliberately act. So far as the appellate order is concerned, though the Ld. CIT(A) has mentioned the details of date of hearings and notices issued/ served upon the appellant to justify the ex parte proceedings yet in our considered view, since the assessment order has been passed on the basis of material on record without hearing the assessee, the assessee should get an opportunity to present his case before the assessing officer in the interest of justice and fair play. Keeping in view the cardinal principles of natural justice we set aside the impugned order passed by the Ld. CIT(A) and restore the appeal to the file of AO with the direction to pass the assessment order afresh after affording reasonable opportunity of being heard to the assessee. We also direct the assessee not to seek any adjournment on frivolous grounds during the assessment proceedings.