SPECIAL DEPUTY COLLECTOR (LA), NAVY ,ELAMANCHILLI vs. THE INCOME TAX OFFICER, WARD-6(2),, VISAKHAPATNAM

The assessee has raised five similar grounds in its two appeals for the AYs 2006-07 and 2007-08 and therefore for the sake of reference the grounds raised

Before us, on behalf of the assessee Shri Santhibhushan, Deputy Tahasildar appeared and submitted that this is the second round of proceedings before the Hon’ble Tribunal. In the first round of proceedings, in the case of the assessee the Ld. AO (Income Tax Officer, Ward-6(3), Visakhapatnam) had passed orders U/s. 201(1)/201(1A) of the Act, dated 15/07/2008 for both AYs 2006-07 and 2007-08 holding that the assessee has failed to make TDS on the compensation paid to ryots against acquisition of the lands other than agricultural lands in addition to the structures, if any and raised demands of Rs.1,57,63,161/- and Rs.64,73,794/- for the AYs 2006-07 and 2007-08 respectively. Aggrieved by the orders of the Ld. AO, the assessee filed appeals before the Ld. CIT(A) and the Ld. CIT (A) dismissed the appeals. On further appeal, the Hon’ble Tribunal considering the submissions of the assessee set-aside the orders of the Ld. CIT(A) and directed the Ld. AO to verify the nature and use of the lands relatable to the compensation paid to the Ryots and compute the liability U/s. 201(1)/201(1A) afresh. Consequently, giving effect to the order of the Hon’ble Tribunal, complying the directions of the Tribunal, the Ld. AO computed the tax liability U/s. 201(1)/201(1A) afresh and raised demand of Rs. 1,25,03,825 and Rs.87,34,775/- for the AYs 2006-07 and 2007-08 respectively. Aggrieved by the orders of the Ld. AO, the assessee filed appeals before the Ld. CIT(A). On appeal, the Ld. CIT (A)-2, Visakhapatnam had passed ex-parte orders without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. Deputy Tahasildar and argued that sufficient opportunities had been provided to the assessee however, on the given dates of hearing none appeared before the Ld. CIT (A). Therefore the Ld. CIT (A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.

We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find that at the time of hearing of the appeals before the Ld. CIT(A), none appeared on behalf of the assessee before the CIT(A) on the given dates of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeals ex-parte. In this situation, considering the nature of issues involved in the appeals and the prayer of Mr. Santhibhushan, Deputy Tahasildar appeared for the assessee, following the principles of natural justice as well as in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeals afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee being a Government Authority to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on record. It is ordered accordingly.

In the result, two appeals filed by the assessee are allowed for statistical purposes as indicated hereinabove.