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Before: SHRI SAKTIJIT DEY & SHRI RAMIT KOCHAR
Assessee by Shri Haridas Bhatt Revenue by : Shri Ritesh Mishra,DR सुनवाई क� तार�ख /Date of Hearing : 03-03-2016 घोषणा क� तार�ख /Date of Pronouncement : 20-05-2016 आदेश / O R D E R PER RAMIT KOCHAR, Accountant Member
This appeal, filed by the assessee, being 22-02-2013 passed by learned Commissioner of Income Tax (Appeals)- 35, Mumbai (hereinafter called “the CIT(A)”), for the assessment year 2008-09, the appellate proceedings before the learned CIT(A) arising from the assessment order dated 24.12.2010 passed by the learned Assessing Officer (hereinafter called “the AO”) u/s 143(3) of the Income Tax Act,1961 (Hereinafter called “the Act”).
The brief facts of the case are that the assessee has declared income from business, income from capital gains and income from other sources in the return of income filed with the Revenue on 24.09.2008 which was revised ITA 3861/Mum/2013 2 on 20.04.2009. The case was selected for scrutiny and notices u/s 143(2) of the Act was issued by the AO for framing assessment u/s 143(3) read with Section 143(2) of the Act.
The assessee was asked by the AO to submit the details i.e. loan confirmations, copy of return of income and bank passbook of the lenders with respect to fresh unsecured loans raised to prove identity, creditworthiness and genuineness of the loans raised by the assessee during the impugned assessment year.
The assessee submitted loan confirmations, while with respect to copy of return of income and bank passbook, the assessee submitted to the AO to issue summons directly to the loan lenders to seek the requisite details/documents.
The AO issued notices u/s 133(6) of the Act to the lenders from whom the fresh loans were raised by the assessee during the impugned assessment year but the notices with respect to two parties namely Sh. Ashok A Rajput(Rs.1.50 lacs) and Sh. Ashwin Mulchandani(Rs.4.5 lacs) were returned by the Postal Authorities.
With respect to Mr. Shah Sureshchandra Velchand, the assessee took loan of Rs.2.00 lacs but no details i.e. copy of the Return, bank passbook etc was furnished by the lenders in response to notice u/s 133(6) of the Act .
With respect to Sh Prakashchandra Champalal (Rs. 2.00 lacs) , Mr Tarabhai Kotumal (Rs. 2.00 lacs) and Sh Sharad P. Thakker(Rs. 1.0 lacs) the assessee took fresh loan during the relevant previous year , although the said loans were squared up the during the relevant previous year, the Postal Authorities returned the notices sent to them u/s 133(6) of the Act.
ITA 3861/Mum/2013 3 The assessee was asked to produce copy of bank statement and copy of return of income of all these six lenders to prove genuineness of loan and creditworthiness of the loan lenders, which the assessee failed to produce.
Thus, the AO vide assessment orders dated 24.12.2010 u/s 143(3) of the Act added loan of Rs.13,00,000/- received from these six lenders as unexplained cash credit u/s. 68 of the Act. Further addition of Rs.54,975/- was made for interest paid on these loans of Rs.13 lacs by the assessee during the previous year relevant to the assessment year u/s. 68 of the Act as unexplained cash credit, vide assessment orders dated 24.12.2010 u/s 143(3) of the Act.
Further addition of Rs.1 lac was made for loan of Rs.1.00 lac shown as payable to Mr.Parsaram Issardes in the Balance Sheet/statement of unsecured loan filed by the assessee before the AO , while loan confirmation filed by the assessee and also loan lender showed that the said loan is squared up during the year. Thus, the AO treated this non-existent loan of Rs. 1 lac as unexplained cash credit u/s 68 of the Act, vide assessment orders dated 24.12.2010 passed by the AO u/s 143(3) of the Act.
Aggrieved by the assessment order dated 24.12.2010 passed by the AO u/s. 143(3) of the Act, the assessee filed first appeal before the learned CIT(A) which was dismissed ex-parte by the learned CIT(A) in limine without discussing the issues on merits, for non prosecution as the assessee did not attended the proceedings before the learned CIT(A) despite several notices issued from 24-01-2012 to 20-12-2013, vide appellate orders of the learned CIT(A) dated 22.02.2013.
Aggrieved by the appellate orders dated 22.02.2013 passed by the learned CIT(A), the assessee filed second appeal with the Tribunal.
ITA 3861/Mum/2013 4
The ld counsel for the assessee submitted that the assessee address had changed and notices issued by the learned CIT(A) on 24-01-2012 , 21-12- 2012 and 20-12-2013 were not received by the assessee and hence the assessee was not aware of the date of hearings of the appeal before the learned CIT(A) which is the main reason for non-attendance on the date of hearings before the learned CIT(A). The ld. Counsel for the assessee submitted that the assessee duly notified to the learned CIT(A) about the new address vide letter dated 30-1-2012, a copy of which is also filed with the Tribunal and is placed in the file. The ld. Counsel submitted that replies were submitted before the learned AO but he did not considered the replies filed by the assessee while framing the assessment orders , and the learned CIT(A) also has framed an ex-parte orders against the assessee dismissing the appeal in limine . The ld. Counsel submitted that serious prejudice has been caused to the assessee and the matter may be restored to the file of the learned CIT(A) for de-novo determination of the appeal on merits by the learned CIT(A). The ld. DR on the other hand relied on the orders of the authorities below and submitted that if the serious prejudice is caused to the assessee at the level of proceedings before the learned CIT(A) as per detailed reasons submitted by the assessee, the matter can be set aside and restored to the file of the learned CIT(A) for de-novo determination of the issue on merits.
We have considered the rival contentions and perused the material on record. We have observed that the assessee filed first appeal before the learned CIT(A) on 14-03-2011 and thereafter on 30-01-2012 , the assessee intimated to the learned CIT(A) about the new address and requested to the learned CIT(A) to record the new address and send correspondence at the new address , as the old address was wrongly written by the consultant while ITA 3861/Mum/2013 5 filing appeal which premises was already vacated by the assessee. The notices for the hearing sent from the office of the learned CIT(A) were stated to be not received by the assessee and the ex-parte order has been framed by the learned CIT(A) and the appeal of the assessee was dismissed ex-parte in limine by the learned CIT(A) without deciding the issues on merits. The learned CIT(A) was required to decide the appeal on merits in accordance with provisions of Section 251(6) of the Act, which in the instant case has not been done. In our considered view, interest of justice will be best served if the issues are restored to the file of the learned CIT(A) for de-novo determination of the issues on merits . Thus, we set-aside the orders dated 22.02.2013 passed by the learned CIT(A) and restore these issues to the file of the learned CIT(A) for de-novo determination of all the issues on merits. Needless to say that proper and adequate opportunity of hearing shall be given by the learned CIT(A) to the assessee in accordance with the principles of natural justice in accordance with law. We order accordingly.
In the result, the appeal filed by the assessee in ITA N0. 3861/Mum/2013 for the assessment year 2008-09 is allowed for statistical purpose.
Order pronounced in the open court on 20th May, 2016. आदेश क� घोषणा खुले �यायालय म� �दनांकः 20-05-2016 को क� गई ।