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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeal), NFAC, Delhi, (in brevity ‘the CIT (A)’) order passed u/s 250 of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2018-19. The impugned order was emanated from the order of the NEAC, Delhi, (in brevity the ld. AO) order passed u/s 143(3) r.w.s. 143(3A) & 143(3B) of the Act.
2. The assessee has taken the following revised grounds:
That learned CIT (A) has erred in law and facts and circumstances of the case by sustaining the addition made by AO amounting to Rs. 36708767/-.
2. That learned CIT (A) has erred in law and facts and circumstances of the case by sustaining the addition made by AO in spite the fact that AO did not provide adequate opportunity of being heard and also did not consider the submissions of the assessee and also failed to appreciate the evidence Said before him and made observations not relevant to facts of the case.
3. That learned CIT (A)has erred in law and facts and circumstances of the case by sustaining the addition made by AO u/s 68 and not appreciating the fact that the addition was made by the Ld. AO u/s. 68 in spite of the fact that complete details of increase in capital on basis of which the limited scrutiny was initiated were provided to the AO.
4. That learned CIT (A) has erred in law and facts and circumstances of the case by replicating the order of Assessing officer without application of mind and rather by blatantly refusing to apply his mind.
5. That learned CIT (A) has erred in law and facts and circumstances of the case by not passing a reasoned and speaking order.
6. That learned CIT (A) has erred in law and facts and circumstances of the case by not hearing the matter as per section 250.
7. That learned CIT (A) has erred in law and facts and circumstances of the case by not even examining the facts and figures submitted before him.
That learned CIT (A) has erred in law and facts and circumstances of the case inspite the fact that addition made by AO is attributable to journal entries or transactions between concerns under same PAN only not involving any element of income.
The Ld. CITA and AO has erred in law and facts and circumstances of the case by disclosing their name in the proceedings under faceless assessment and faceless appeal and by not issuing notices u/s 144B.
That the appellant craves leave to add, alter, amend or vary the grounds of appeal here in above at or before hearing of appeal and to furnish the documentary evidence in support of the ground of appeal before the appeal is heard and decided.
11. The assessee craves leave and sanction of Hon'bie Bench of ITAT to file additional evidence, if so required for proper
prosecution of the case, based on facts and circumstances, which has not been or could not be adduced before lower authorities either because proper and sufficient opportunity was not provided or because it was not solicited or its need was not appreciated.”
Brief facts as culled out from the records are that the assessee in individual capacity filed the return and have a three organisation which are running simultaneously. The books of accounts were duly audited, and the addition was made on basis of the bank transaction related to payment of purchase, expenses and capital goods. As per the ld. AR there is intra head transactions among the assessee’s own concerns through banking channel. The ld. AO added back amount of Rs.3,67,08,767/- as unexplained credit u/s 68 and income from other sources amount of Rs.3,46,980/-. Aggrieved assessee filed an appeal before the ld. CIT(A) and the assessee has taken both the merit and legal grounds. The assessee pleaded that the reasonable opportunity was denied by the ld. AO during the assessment proceeding. Without considering the assessee’s contention, the appeal order was passed by upholding assessment order. Being aggrieved assessee filed an appeal before us.
The ld. AR vehemently argued and filed the written submissions which are kept in the record. The ld. AR first invited our attention, in the copy of the notice which is annexed in APB page no. 118. As per the notice the due date for response in assessment proceeding was dated 15th April 2021. The ld. AR invited our attention in assessment order where assessment order was passed on dated 13th April 2021. So, the assessment order was passed well in advance before due date of filing the reply in hearing which is violation of natural justice. The ld. AR respectfully relied on the order of the Hon’ble High Court of Madras in the case of Antony Alphonse Kevin Alphonse, vs. ITO NEAC,WP No. 8379 of 2021 dated 01/04/2021, the relevant paragraphs are reproduced as under:
“The petitioner has challenged the impugned order dated15.03.2021 which has been digitally signed by the second respondent at about 16:22:33 hours on the said date. In other words, the impugned order has been passed at about 4.22 PM in the evening on 15.03.2021.
The impugned order dated 15.03.2021 passed by the second respondent preceded a Show Cause Notice dated 04.03.2021. As per the said notice, the petitioner was required to file a reply on or before the end of the day on 15.03.2021 by 23.59 hours. In other words, the reply of the petitioner was to be filed digitally latest by 11.59 PM in the night.
3. It is the case of the petitioner that the petitioner had also sent a reply before the deadline for filing the reply had expired on 15.03.2021and therefore the impugned order passed by the second respondent was liable to be quashed. Opposing the prayer in the writ petition for quashing the impugned order dated 15.03.2021 passed by the second respondent, learned senior standing counsel for Income Tax Department submits that the petitioner has an alternate remedy by way of an appeal before the Appellate Commissioner and therefore the writ petition is liable to be dismissed.
4. I have considered the arguments advanced by the learned counsel for the petitioner and the learned senior standing counsel for the respondents.
Since the impugned order has been passed before the time prescribed for filing the reply, it is evident that the impugned order has been passed with pre-set mind. In any event, the order has been passed without considering the reply received from the petitioner. Therefore, this Court is inclined to grant the relief sought for by the petitioner as there is a manifest violation of business of justice while passing the impugned order.”
5. The ld. DR vehemently argued and relied on the order of revenue authorities. The ld. DR invited our attention in appeal order, the relevant part of the said order is extracted as below:
“Ground No.1&2
As regards the addition of Rs.3,67,08,767/-, I find that whatever submission made by the appellant to the undersigned was already furnished before the Ld. Assessing Officer also. The Ld. Assessing
Officer has already examined the facts and was not satisfied with the appellant’s submission and added the unexplained increase in capital to the total income of the appellant.
No further documents/submission was furnished by the appellant before the undersigned to explain the sudden increase in capital. Only the same reply which was made before the Ld. Assessing Officer was reiterated.
I find that no cogent explanation was furnished by the appellant in respect of sudden increase in its capital and source of money. Therefore, I found no reason to disapprove the findings of the Ld. Assessing Officer in this case. As such, on account of failure of the appellant to furnish any acceptable explanation, the above addition of Rs. 19,33,565/- is hereby confirmed.”
We heard the rival submission and considered the documents available in the record. The appeal was fixed for hearing on dated 15.04.2021. But before the due date of the filing documents the assessment order was passed on dated 13th April 2021. It is revealed that there is violation of natural justice and the ld. AO acted beyond the jurisdiction. We respectfully relied on the order of Hon’ble Madras High Court in the case of Antony Alphonse Kevin Alphonse(supra). The 1st appellate authority has not adjudicated this issue in his order. We are, therefore, of the opinion that interest of justice would be sub served if the impugned order is set aside and the matters are remitted back to the ld. AO for consideration thereof afresh. We are not expressing any views on the merits of the case so as to limit the set-aside assessment procedure before the ld. AO. Needless to say, the assessee should get a reasonable opportunity of hearing for setting aside proceedings.
In the result, the appeal of the assessee bearing is allowed for statistical purposes.
Order pronounced in the open court on 13.09.2023