M/S. JUHI INVESTMENT CO. (P) LTD.,NEW DELHI vs. DCIT, NEW DELHI

We have heard arguments of both the sides. Learned counsel of the assessee submitted that before first appellate authority, the assessee raised 1 I.T.A. 4419 & 4420/D/2012 ASSESSMENT YEAR 2005-06 additional ground alleging violation of principles of natural justice by the Assessing Officer as from the second page para 3, it is apparent that the assessee asked some time to reply to questionnaire dated 30.11.2007 but the Assessing Officer rejected the prayer of the assessee dated 24.12.2007 and passed impugned assessment order in haste without providing due opportunity of hearing for the assessee which was a clear violation of principles of natural justice because the assessee was denied opportunity of being heard by the Assessing Officer. Learned counsel of the assessee further submitted that the assessee’s additional ground before CIT(A) was filed in written submissions and the same was not adjudicated by the first appellate authority. Learned counsel of the assessee further elaborated that while framing appeal before this Tribunal, the counsel omitted to raise this legal ground which was necessary and goes to the root of the matter and also relevant facts and documents are already on record, hence, additional grounds of the assessee may kindly be admitted for adjudication.

Ld. DR fairly accepted that the CIT(A) did not adjudicate additional ground of the assessee which was submitted in written submissions and pertained to violation of principles of natural justice by the Assessing Officer.

On careful consideration of above submissions, we are of the view that the allegation/ground of the assessee, alleging the denial of opportunity of being heard by the Assessing Officer was raised but the same was not adjudicated by I.T.A. 4419 & 4420/D/2012 ASSESSMENT YEAR 2005-06 the CIT(A). Now, the assessee wants to raise this issue before this Tribunal as the same could not be raised in the original grounds. This additional ground is necessary for proper adjudication of allegations of the assessee and all relevant facts and documents are already on record before us and the issue goes to the root of the validity of the Assessing Officer’s order, thus, we admit the additional grounds of the assessee for adjudication which read as follows:-

We have heard arguments of both the sides and carefully perused the relevant material placed on record on above additional grounds. Learned counsel of the assessee reiterated that the assessee was not provided due opportunity of being heard by the Assessing Officer and the Assessing Officer passed the assessment order without providing due opportunity of being heard for the assessee. Hence, the assessment order passed by the Assessing Officer on 28.12.2007 deserves to be cancelled and annulled in view of the fact that the appellant had not been provided sufficient opportunity to explain its case and the Assessing Officer has violated the principles of natural justice. Learned I.T.A. 4419 & 4420/D/2012 ASSESSMENT YEAR 2005-06 counsel of the assessee vehemently contended that the CIT(A) also erred in not adjudicating this issue of violation of principles of natural justice which was specifically raised by the assessee by way of additional ground.

Ld. DR strongly opposed the allegation of the assessee that the Assessing Officer violated the principles of natural justice. However, subsequently, learned Departmental Representative submitted that if it is found necessary, then the department has no serious objection if the matter is restored to the file of the Assessing Officer for a fresh de novo reassessment to the file of the Assessing Officer.

On careful consideration of above submissions, we are of the opinion that the assessee was not provided due opportunity to explain his case during assessment proceedings and the Assessing Officer denied opportunity to explain its case and passed the assessment order in a hasty manner which is a clear violation of principles of natural justice at the assessment stage. Hence, additional ground no. 1 & 2, as set out above, of the assessee are allowed and the case is restored to the file of the Assessing Officer for a fresh de novo reassessment. Needless to say that the Assessing Officer shall provide due opportunity of being heard for the assessee and shall pass reassessment order without being prejudiced from the earlier order and impugned order of the CIT(A).

We have heard the rival submissions and carefully perused the relevant additional evidence sought to be admitted by this Tribunal spread over 23 pages.

Learned counsel of the assessee submitted that valuation report of the Equity shares of M/s Somdutt Breweries Ltd. and immovable property being land is necessary for adjudication of the issue and allegations levelled by the Assessing Officer and the CIT(A) during first round of proceedings.

Reiterating assessee’s written submissions and contents of application under Rule 29 of IT(AT) Rules 1963, learned counsel of the assessee contended that the additional evidence being vital document in the case of the appellant are necessary to be admitted in the interest of justice and proper adjudication of the dispute involved in the grounds of appeal. It was also contended that the appellant may please be allowed opportunity of being heard on merit to present the aforementioned document and details before this Tribunal. Learned counsel of the assessee finally parted with his arguments with a prayer that since the matter needs to be restored to the file of the Assessing Officer, hence the Assessing Officer may kindly be directed to look into the said additional evidence which could not be submitted during earlier round of proceedings and I.T.A. 4419 & 4420/D/2012 ASSESSMENT YEAR 2005-06 mainly due to two reasons viz. first the authorities below never directed the assessee to produce the said valuation reports and secondly, the CIT(A) raised the query regarding valuation of shares of M/s Somdatt Breweries Ltd. as on 31.12.2004 which is germane to decide the issue. On the other hand, learned Departmental Representative strongly objected to the admission of additional evidence. However, he submitted that if it is found just and proper, then the department has no serious objection towards admission of additional evidence and the Department should also give right to rebut the same by way of relevant material. Learned Departmental Representative also contended that there is no name of M/s Omaxe Investments & Finance (P) Ltd. in the national data base.

Learned counsel of the assessee in the rejoinder submitted that the assessee has no serious objection if the Assessing Officer decided the issue de novo considering all the relevant material after providing due opportunity of hearing to the assessee.

On careful consideration of above, we safely infer that there is no serious objection to both the parties if additional evidence which could not be submitted due to sufficient reasons, as set out above, before authorities below, which is vital for adjudication of the issues involved in this case. Since by the earlier part of this order, we have allowed additional ground of the assessee and the case has been restored to the file of the Assessing Officer for de novo and a fresh adjudication, hence, we admit additional evidence because the assessee could I.T.A. 4419 & 4420/D/2012 ASSESSMENT YEAR 2005-06 not get an opportunity of being heard and to explain his case before Assessing Officer and additional evidence sought to be admitted is relevant and vital for proper and just adjudication of the entire case. Therefore, for the reasons set out above, we admit the additional evidence of the assessee and the Assessing Officer is directed to consider the same during de novo reassessment. At the same time, we also direct the Assessing Officer to consider documents, details and evidence brought on record by the ld. Ld. DR as stated above. Accordingly, application of the assessee/appellant under Rule 29 of the IT(AT) Rules, 1963 is hereby allowed with said directions to the Assessing Officer.

Since we have restored case to the file of the Assessing Officer for de novo adjudication and a fresh framing of assessment, hence, other grounds of the assessee on merits become academic and infrucutous and we dismiss the same being infructuous.

This appeal has been directed against the order of the CIT(A) dated 23.5.2012 in Appeal No. 36/2010-11 for same assessment year 2005-06 by which the first appellate authority has upheld penalty levied by the Assessing Officer u/s 271(1)( c) of the Act.

Both parties are agreed that since quantum appeal has been allowed by restoring the case to the assessment stage, hence this appeal becomes I.T.A. 4419 & 4420/D/2012 ASSESSMENT YEAR 2005-06 infructuous and we dismiss the same being infructuous. Before we part with the order, we further make it clear that as per the outcome of the reassessment order, if the Assessing Officer finds it appropriate to initiate penalty proceedings, if required, the issue of levy of penalty us/ 271(1) (c) of the Act is left open to his wisdom as per results of the reassessment.

In the result, quantum appeal of the assessee is allowed for statistical purposes and penalty appeal of the assessee is dismissed being infructuous.