M/S. RAKESH GUPTA HUF,NEW DELHI vs. ACIT, NEW DELHI

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ITA 1496/DEL/2014Status: DisposedITAT Delhi07 April 2016AY 2007-084 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the AO and CIT(A) did not follow the prescribed procedure, denying the assessee an opportunity to be heard. Therefore, the assessment order and the CIT(A)'s order were set aside.

What were the facts?

The Assessing Officer (AO) completed the assessment ex-parte under Section 144 of the Income Tax Act without providing proper notice or opportunity to the assessee. The CIT(A) upheld this ex-parte assessment. The assessee claimed they never received any notices from the AO or the CIT(A).

What were the issues?

Whether the ex-parte assessment and penalty proceedings were valid without proper service of notices and opportunity of being heard to the assessee.

Which sections of the Income-tax Act were involved?

Section 144,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI

Hearing: 201

Date of Hearing : Date of Hearing : 06-04-201 Date of Hearing : Date of Hearing : 201 2016 201 Date of Order : Date of Order : 07 Date of Order : Date of Order : 07 07-04-201 07 201 2016 201

ORDER ORDER ORDER ORDER

PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM

1.

This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-XVIII, New Delhi dated 19.7.2012 pertaining to assessment year 2007-08 on the following grounds.

“1. That the Learned A.O. has erred in facts as well as in law by completing Assessment Ex-Party under section 144 of the Income tax Act without valid Notice and without giving any opportunity to Appellant of being heard and explain their case and furnish to the Assessing Officer with the details that he could and would have required for his satisfaction, thus the Assessment framed and consequent disallowances made and Dismissal of Appeal by Ld. ClT(A) are bad in law.

2.

That the Learned A.O. has erred in facts and in law in making Ex- Party Assessment under section 144 as none of the notices for Hearing as alleged to have been sent or affixed have been received and no Notice was served to Assessee for Hearing on 29.09.2009 as alleged in the Assessment Order and therefore the Assessment framed and Dismissal of Appeal by Ld.CIT (A) are bad in law.

3. That the Ex-Party Assessment framed under section 144 of the Income Tax Act,1961 and issue of notices dated 30.09.2009 for imposing penalty under section 271 (1) (c) and Dismissal of Appeal by Ld.CIT (A) are bad in law.

4.

That the Assessment completed Ex-Party, need to be reassessed by giving the Appellant the necessary opportunity of being heard, explain the case, submit the relevant details and offer necessary explanations and submissions and Dismissal of Appeal by Ld. ClT(A) are bad in law.

5. That the Appellant's Appeal be admitted on grounds of principles of natural justice and the Appellant may please be given the right and liberty to amend and also offer further grounds of Appeal and submissions and Dismissal of AppeaI by ld. CIT(A) are bad in law.

3.

The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of brevity.

4. At the time of hearing, Sh. DV Taneja, CA/ Ld. Authorised Representative of the Assessee appeared and made a statement that the assessee has not received any notice from the AO either by RPAD or by affixture as stated in the 2 assessment order. He further stated that similarly no notice has been received by the Assessee from the office of the Ld. CIT(A) and the Ld. CIT(A) has also decided the issue in dispute against the assessee exparte, without providing opportunity of being heard to the assessee. Ld. Authorised Representative undertakes to fully cooperate in the assessment proceedings and assured not to take unnecessary adjournment, if this Bench set aside the issue in dispute to the Assessing Officer. He further undertakes that assessee has changed his address and the Notices may be issued to the Assessee through him at his official address which has been given in Form No. 36 of the Appeal. He stated that in support of his contention, assessee has also filed an Affidavit at Page no. 21 of the Paper Book stating therein that neither the assessee nor his staff has received any of the notices from the ACIT, Circle 27(1), New Delhi in respect of Income Tax Assessment Proceedings for the assessment year 2007-08 either by process server or by affixture.

5.

On the contrary, Ld. DR relied upon the orders of the revenue authorities.

6.

We have heard both the parties and perused the relevant records especially the orders passed by the Revenue Authorities and we are of the considered view that AO without following the prescribed procedure under the law, issued Notices through affixture and thereafter completed the assessment u/s. 144 of the Act. Similarly, Ld. CIT(A) has also wrongly upheld the order of the AO without providing opportunity to the assessee. In the interest of justice, we are of the considered view that the issues in dispute requires thorough investigation at the level of the AO and the right of substantiating the claim by the assessee cannot be snatched in this way.

6.1 Keeping in view of the statement made by Sh. DV Taneja, CA/Authorised Representative of the Assessee that he will cooperate in the assessment proceedings before the AO and will not take unnecessary adjournment and the notice may be issued to the assessee through him at his official address mentioned in Form No. 36 and in the interest of justice, we set aside the issues in dispute to the AO for deciding the same afresh, under the law, after giving reasonable opportunity of being heard to the assessee. It is also made clear that the notice to the assessee be given on the following address.

“M/S RAKESH GUPTA (HUF) C/O SH. DV TANEJA, CA, 13/17, PUNJABI BAGH EXTN., NEW DELHI – 110 026”

7.

In the result, the Appeal filed by the Assessee stands allowed for statistical purposes.

Order pronounced in the Open Court on 07/04/2016.

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