KAUSHALYA R. SAMPAT,MUMBAI vs. ITO 19(3)(2), MUMBAI

सुनवाई क" तार"ख /Date of Hearing : 21-6-2016 घोषणा क" तार"ख /Date of Pronouncement : 15-09-2016 आदेश / O R D E R

PER RAMIT KOCHAR, Accountant Member

ITA 1839/Mum/2012 2

“1. On the facts and in the circumstances of the case and in law, the learned C.I.T.(A) erred in dismissing the appeal and that too without giving any opportunity of being heard in the matter.

2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal and that too without appreciating fully and properly the facts of the case.

3. The brief facts of the case are that the assessee is partner in the firm M/s Deccan Enterprises. Survey action was conducted u/s 133A of the Act by the ITO Ward 19(3)(1), Mumbai in the case of Deccan Enterprises on 12.09.2007 and as informed by the said ITO to the AO , certain incriminating documents and loose papers pertaining to the assessee were found in the premises of Deccan Enterprises during the course of survey operations in which the assessee was partner. On perusal of the impounded documents pertaining to the assessee as received from the ITO , Ward 19(3)(1), Mumbai, it was observed by the AO that copies of demand draft/cheques issued in the name of the assesses (Loose paper file no A-4 , page 90-100) to the aggregate value of Rs 51 lacs were found and impounded as per the details in ITA 1839/Mum/2012 3 assessment order dated 22-12-2010/page1 which as per the AO are not reflected in the return of income filed by the assessee for the assessment year 2003-04. During Survey action on 12.09.2007, statement of Sh. Rajgopalchari Sampat , constituted attorney of the firm and husband of the assessee was recorded on oath on 12.09.2007 wherein said Sh. Rajgopalchari Sampat accepted that the above sum represents sales proceeds of immovable property and also that income earned from sale of this undisclosed house property at Bangalore was not offered for taxation by the assessee in the return of income filed with the Revenue. Based on the above facts , the case of the assessee for assessment year 2003-04 was reopened u/s 147 of the Act as per reasons recorded and with the prior approval of Additional CIT vide approval dated 24-03-2010. Accordingly notices u/s 148 of the Act was issued to the assessee by the AO on 24-03-2010 which was served on the assessee on 25-03-2010. The assessee submitted that the return of income of the assesses filed u/s. 139 of the Act be treated as return of income filed u/s. 148 of the Act. Thereafter, several notices were issued u/s. 142(1) of the Act by the AO requiring assessee to appear before the AO in connection with the reassessment proceedings u/s. 147/148 of the Act but there was no compliance on the part of the assesssee. On 06.12.2010 , Sh R.C.Sampat, husband of the assessee appeared before the AO and sought adjournment to 08-12-2010. Again on 08-12-2010 none appeared before the AO. The AO proceeded to frame ex-parte order u/s. 144 of the Act based on material on record, keeping in view the matter being getting time barred by limitation . The AO based on the impounded copies of cheques during survey and statements recorded during survey action, made addition of Rs. 46,00,000/- towards cheques/drafts received for sale of house property at Bangalore as no explanation was offered by the assessee with respect to ownership of the said property. Since one DD no 758280 for Rs. 5,00,000/- pertained to the assessment year 2004-05 , no addition of the said amount of Rs. 5 lacs was made during the impugned assessment year out of copies of cheques/DD of ITA 1839/Mum/2012 4 Rs. 51 lacs impounded during the assessment year and balance Rs. 46 lacs was added to the income as income being unexplained cash credit u/s 68 of the Act vide ex-parte assessment order dated 22.12.2010 passed by the AO u/s 144 read with Section 147 of the Act.

4. Aggrieved by the ex-parte assessment order dated 22.12.2010 passed by the AO u/s. 143(3) read with Section 147 of the Act, the assessee filed first appeal before the learned CIT(A) . The assessee did not appear before the learned CIT(A) despite several opportunities being given by learned CIT(A) and the appeals was dismissed by the learned CIT(A) based on material on record vide appellate order dated 09-01-2012 passed by learned CIT(A).

5. Aggrieved by the appellate order dated 09-01-2012 passed by learned CIT(A) dismissing the assessee appeal , the assessee filed second appeal with the Tribunal.

6. The learned counsel for the assessee contended before the Tribunal that an ex-parte appellate order has been passed by learned CIT(A) It was submitted that on similar facts, the Tribunal has set aside and restored the matter to the file of learned CIT(A) for de-novo adjudication of appeal by affording one more opportunity to the tax-payers for making submissions before the learned CIT(A) on merits in and ITA no. 1840/Mum/2012 vide common order dated 24/10/2013 for the assessment year 2003-04 in the case of relatives of the assessee namely Smt Rashmi Sampat and Sh Rajesh Sampat . It was prayed that the one more opportunity be granted to the assessee and the issue/matter may be set aside and restored to learned CIT(A) and the assessee will present her case on merits before learned CIT(A) by filing all necessary and relevant evidences and explanations. The learned DR relied upon the orders of learned CIT(A) and submitted that in the case of the relatives of the assessee as set out above , ITA 1839/Mum/2012 5 the matter was set aside by the Tribunal to the file of learned CIT(A) and on the same basis , the issue/matter in this appeal may also be set aside and restore to the file of learned CIT(A).

“7. We have heard both the parties and their contentions have carefully been considered. For the sake of convenience we may reproduce the relevant paras of the orders of Ld. CIT(A) which state the reasons for proceeding to decide the appeals ex-parte:

In the case of Smt. Rashi Sampat: “The present appeal is directed against the assessment order passed by ITO 19(3)(2), Mumbai u/s. u/s.144 r.w.s. 147 of the I.T. Act, 1961 ) dated 22.12.2010. In this case the first notice of hearing was issued on / 23.8.2011 fixing the case for hearing on 14.9.2011 at 11.45 AM. However, in response to this notice neither anybody attended nor any adjournment was sought. Therefore, another notice dated 11.10.2011 was issued fixing the case for hearing on 1.11.11 at 11.30 AM. In response to this notice also neither anybody attended nor any adjournment was sought. This being so a notice dated 28.11.11 was issued fixing the case for hearing on 15.12.2011 at 12 PM. However, as usual neither anybody attended nor any adjournment was sought.

ITA 1839/Mum/2012 6 2.1 From the above it becomes clear that the appellant is not interested in pursuing her appeal and therefore the appeal of the appellant is decided exparte on the basis of material available on record. The appellant has raised various grounds of appeal which are as under:”

In the case of Shri Rajesh Sampat: “2.1. In this case, first notice of hearing was issued on 09-09-20 11 fixing the case for hearing on 27-09-2011 at 3.00 P.M. This notice was duly served on the appellant. However, in response to this notice, neither anybody attended nor any adjournment was sought. Therefore, another notice dated 29-09-2011, fixing the case for hearing on 19-10-2011 at 12. P.M. was issued. There was no compliance to this notice also as neither anybody attended nor any letter for adjournment was filed. Therefore, another notice dated 19-10-2011 was issued fixing the case for hearing on 7-11- 2011 at 11 .30A.M. However, on this date also, neither nobody attended nor any adjournment was sought. This being so, final notice of hearing dated 21-11-2011 was issued fixing the case for hearing on 29-11-2011 at 3.45 P.M. However as usual neither anybody attended in response to this notice nor any adjournment was sought. Under the circumstances, it becomes quite clear that the appellant is not interested in pursuing his appeal and therefore, the appeal of the appellant is decided ex-parte on the basis of material available on record. At this juncture, it will not be out of place to mention that same kind of non-cooperation / non- compliance was shown by the appellant during the assessment proceedings also which resulted in passing ex-parte order u/s. 144 r.w.s. 147 of the I.T. Act.

ITA 1839/Mum/2012 7 A perusal of the aforementioned paras will reveal that it is not stated by Ld.CIT(A) that the last date on which the appeal of the assessee is decided ex-parte, the notice was duly served upon the assessee. Therefore, according to facts of the present case it can be presumed that on the last date of hearing notice issued by Ld. CIT(A) was not duly served upon the respective assessees. Taking into consideration such fact, we are of the opinion that it would serve the interest of justice if the matter is restored back to the file of Ld. CIT(A) with a direction to re- adjudicate these appeals in accordance with law after giving both the assessees a reasonably opportunity of hearing. We order accordingly.

7.1 To ensure compliance on behalf of assessee, we direct the assessee to appear before Ld. CIT(A) on 22/1/2014. Ld. AR of the assessee has duly noted the said date and he ensured the compliance of the directions.

7.2 Since we are disposing of these appeals on the basis of ground No.1, which is regarding non-grant of opportunity of hearing, we do not consider it necessary to go into the other grounds as both the appeals in their entirety are being restored back to the file of Ld. CIT(A) with a direction to re-adjudicate the same as per law in the manner aforesaid.”

We have observed that the facts in the instant appeal are almost similar as to appeal in the case of relatives of the assessee Mrs. Rashmi Sampat(Supra) and Mr. Rajesh Sampat(supra) , and in our considered view , interest of justice will be best served in the instant appeal if all the matter/issues in this appeal are also set aside and restored to the file of learned CIT(A) for de-novo adjudication of the issues in this appeal of the assesssee on merits in accordance with law. The assessee is directed to appear before the learned CIT(A) and file all necessary and relevant evidences and explanations in support of her contention with respect to all grounds of appeal raised by the ITA 1839/Mum/2012 8 assessee in this appeal, which evidences and explanations shall be admitted by learned CIT(A) and adjudicated on merits in accordance with law. The learned CIT(A) shall grant proper and adequate opportunity of being heard to the assessee in accordance with the principles of natural justice in accordance with law. We order accordingly.