SHRI MUZAFFAR JAN PAMPORI ,SRINAGRAR vs. INCOME TAX OFFICER WARD -3 ( 2), SRINAGAR

Per Dr. M. L. Meena, AM:

This appeal has been filed by the assessee against the order of the Ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated

2 I.T.A. No. 134/Asr/2023 Muzaffar Jan Pampori v. ITO 03.03.2023 in respect of Assessment Year 2009-10 challenging therein the

ex-parte orders passed by the authorities below in view of the principle of

natural justice.

of 8 days. He has filed a condonation application which reads as under:

“On 03/03/2023 I received the order of Commissioner (Appeals) National Faceless Appeal Centre, in my case for assessment year 2009-10. Being aggrieved by the said order I requested to one of the legal advisor, to prefer an appeal to the Hon'ble Appellate Tribunal. He undertook to do the needful after providing him the information /documents as required for filing of Appeal .Meanwhile my Wife got ill and she was in a very critical situation with whom I got busy. Soon after I got a little relief from her I went back for filing of appeal and I was late by 8 days. My affidavit detailing the aforesaid facts may kindly be placed before the Hon'ble Appellate Tribunal for condonation of the short delay in submission of the appeal.

I have already requested for condonation of delay in submission of appeal in my original Appeal along with Affidavit in support of the same.”

2.1 Considering the reasonable cause, duly supported with the affidavit

narrating the facts, the short delay of 8 days is hereby condoned. The

appeal is admitted to be heard on merits.

assessment order was passed u/s 144 of the Income Tax by the AO ex-

parte qua the assessee without granting an adequate opportunity of being

3 I.T.A. No. 134/Asr/2023 Muzaffar Jan Pampori v. ITO heard and non service of show cause notice. He further submitted that the

ld. CIT(A) has erred in confirming the action of the AO without appreciating

the merits of the case ignoring the written submissions filed regarding

explaining the source of deposits made through the credit card accounts

were out of the business receipts. The counsel further stated that the ld.

CIT(A) has decided the appeal by drawing adverse inference without

granting opportunity of being heard. The ld. AR has contended that during

the months of September, 2004 the business records of the assessee were

destroyed in devastating floods in the Kashmir Valley. The counsel

submitted that the transactions have been made through the banking

channels for the payment in the credit card account which was used for

carrying out business of Tour and Travel operator as evident from the

transaction itself in the credit card account that reflects purchases of air

tickets. It is evident from the TDS deducted by the vendors for whom the

assessee has been registered as their ticketing agent. He pleaded that the

assessee earned only commission income on the sale of tickets and the

said income is duly declared in the return income. If he has granted an

opportunity of being heard, we would demonstrate its claim with the

supporting evidences before the AO in the denovo assessments

proceedings. Accordingly, he requested that the matter may be remanded

4 I.T.A. No. 134/Asr/2023 Muzaffar Jan Pampori v. ITO back to the AO with the direction to grant proper opportunity of being heard

to assessee, in view of the principle of natural justice.

however, he failed to rebut the contentions of the ld. AR.

and the impugned order. Admittedly, the AO has passed the assessment

order ex-parte qua the assessee which has been confirmed by the ld.

CIT(A) merely on the premise that furnishing the copies of bank statement

and credit card statement without maintaining any books of account,

balance-sheet and profit and loss account will not quantify the actual

income of the assessee. Accordingly, the ld. CIT(A) hold that the assessee

did not explain the source of the said credit payments and so, he confirmed

the additions.

statement, credit card account and TDS deducted by vendors which has

not been addressed by either of the authorities below. It is evident that the

appellant is a registered Travel Agent who is running Travel Agency since

2006 under the Trade name of Prime Tour & Travels registered with the

department of Tourism of the Government of J & K since 2006. The

5 I.T.A. No. 134/Asr/2023 Muzaffar Jan Pampori v. ITO authorities below ought to have been granted adequate opportunity of

being heard to the appellant and rebutted his claim regarding the

commission income earned out of the business of running Travelling

Agency by way of booking tickets by the use of alleged credit card with

current account in the HDFC Bank. In our view, the appellant assessee

was engaged in buying the tickets by way of making payments through

credit cards to the vendors and sold them to the customers and the

proceeds generated from the sale of such tickets was being used to pay

the credit card bills, a fact needs to be verified with reference to the TDS

deducted by the vendors and the respective current and credit card bank

accounts.

Company Ltd. vs. Union of India”, (Supra) has held as under:

“21. This Court is further of the view that a quasi-judicial body must normally grant a personal hearing as no assessee or litigant should get a feeling that he never got an opportunity or was deprived of an opportunity to clarify the doubts of the assessing officer/decision maker. After all confidence and faith of the public in the justness of the decision making process which has serious civil consequences is very important and that too in an authority/forum that is the first point of contact between the assessee and the Income-tax Department. The identity of the assessing officer can be hidden/protected while granting personal hearing by either creating a blank screen or by decreasing the pixel/density/resolution.

6 I.T.A. No. 134/Asr/2023 Muzaffar Jan Pampori v. ITO assessee a reasonable opportunity of personal hearing is mandatory. THE CLASSIFICATION MADE BY THE RESPONDENTS/REVENUE BY WAY OF A CIRCULAR DATED 23RD NOVEMBER, 2020 IS NOT LEGALLY SUSTAINABLE. AN ASSESSEE HAS A VESTED RIGHT TO PERSONAL HEARING AND THE SAME HAS TO BE GIVEN, IF AN ASSESSEE ASKS FOR IT.

the matter back to the file of the AO to adjudicate the issue of source of

cash deposits in the bank account of the appellant after granting adequate

opportunity of being heard. The AO is further directed to issue a show

cause notice to the assessee on the issue of cash deposits and thereafter

passed a reasoned order in accordance with law, accordingly, the

impugned order is set aside and the matter is remanded to the Assessing

Authority to pass a denovo assessment order as per law.

7 I.T.A. No. 134/Asr/2023 Muzaffar Jan Pampori v. ITO 9. In the result, the appeal filed by the assessee is allowed for statistical

purposes.

Order pronounced in the open court on 22.06.2023

Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr./P.S.* Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order