R.C.UDAYAKUMAR,CHENNAI vs. ITO, DINDIGUL

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:

ITA No.2206/Mds/2015. :- 2 -: passed u/s.143(3) r.w.s. 147 and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).

The assessee has raised the grounds against the order of 2.

Commissioner of Income Tax (Appeals) erred in wrongly considering the addition under the head ‘’other sources’’ and overlooked weighted average method of valuation of stock and also erred on quantum valuation without any credible evidence and further violated the principles of natural justice without considering adjournment request of the assessee for submitting the information.

The Brief facts of the case is that the assessee is a proprietor 3. of M/s. R.C. Jewelers. There was a survey operation conducted on 26.03.2008. Subsequent to survey, notices u/s.142(1) and 148 of the Act were issued. In response to above notices, the assessee filed return of income on 01.12.2009 with toal income of �11,02,480/-. The ld. Authorised Representative appeared from time to time and the case was discussed. The ld. Assessing Officer found that assessee has offered difference in stock to the extent of 1185 grams in Gold Jewellery and 18817 grams in silver articles, valued at �9,50,000/- and �4,42,000/- respectively as per the prevailing market rate on the date of survey and the assessee has adopted the value of articles based on monthly sales and purchases for calculation of weightage average

ITA No.2206/Mds/2015. :- 3 -: method in valuing closing stock from earlier years and there is no change in accounting system and produced bills, invoices of purchases for verification. The ld. Authorised Representative explained the method adopted for valuation of gold jewellery and silver articles.

The ld. Assessing Officer considered assessee submissions and examined books of account, purchase bills and relied on the sworn statement recorded in survey operations and found difference in value of Gold jewellery and silver articles and calculated differential value of stock in comparison with survey statement �5,23,833/- added to the returned income and passed Assessment order u/s.143(3) r.w.s. 147 of the Act dated 29.12.2010. Aggrieved by the order, the assessee filed an appeal before Commissioner of Income Tax (Appeals).

said date of hearing. The ld. Authorised Representative again sought time to check the rates adopted by ld. Assessing Officer in valuation and finally on 16.09.2015, assessee requested time for submission and filed adjournment letter stating that the ld. Authorised Representative was busy with professional work. But the ld. Commissioner of Income Tax (Appeals) relied on the information on record and observation of the Assessing Officer and sworn statement on value of stock and finally concurred with findings of the Assessing Officer and dismissed the appeal without providing an opportunity to the assessee. Aggrieved by the Commissioner of Income Tax (Appeals) order, the assessee assailed an appeal before Tribunal.

Before us, the ld. Authorised Representative reiterated the 5. submissions made before Assessing Officer and appellate proceedings and evidence filed before Commissioner of Income Tax (Appeals).

The ld. Authorised Representative requested time for one more hearing on clarifications of the sworn statement provided in the appellate proceedings. The ld. Commissioner of Income Tax (Appeals) has not considered the adjournment request and proceeded relying on the observation of Assessing Officer and further no opportunity was provided to the assessee to submit details which are in the nature of clarificatory explanation on the findings of the sworn

ITA No.2206/Mds/2015. :- 5 -: statement. The assessee was denied opportunity of hearing and it is violation of principles of natural justice and prayed for allowing the appeal.

We heard the rival submissions, perused the material on 7. record. Before going into the merits, we find that the ld Authorised Representative made a request before Commissioner of Income Tax (Appeals) on the date of hearing for a copy of sworn statement and further requested for one more opportunity for hearing for submitting the clarifications on the rates adopted by the ld. Assessing Officer. On the date of hearing on 16.09.2015 the assessee filed a letter for adjournment of case as the ld. Authorised Representative was busy in professional work, but ld. Commissioner of Income Tax (Appeals) denied the adjournment request and proceeded with the disposal of the appeal. We are of the opinion that principles of natural justice is a concept of common law and represents higher procedural principles developed by the Courts, which every judicial, quasijudicial and administrative agency must follow in taking any decision adversely affecting the rights of assessee and opportunity of being heard is the ITA No.2206/Mds/2015. :- 6 -: most important component of the principles of natural justice were adequate and proper opportunity of hearing should be provided to ensure fair hearing and fair deal to the assessee . Therefore, assessee should be provided with one more opportunity before Commissioner of Income Tax (Appeals) to substantiate his case with factual evidence and clarifications, and we remit the entire disputed issue to the file of Commissioner of Income Tax (Appeals) for fresh adjudication.

In the result, the appeal of the assessee is allowed for 8. statistical purpose.

Order pronounced on Wednesday, the 8th day of June, 2016, at Chennai.