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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
The Captioned appeal has been filed by the assessee against the order dated 16/01/2023, of the Ld. CIT(A) National Faceless Appeal Centre (NFAC), in respect of Assessment Year: 2011-12, challenging therein the orders of the authorities below passed ex parte qua the assesse.
At the outset, the Ld. Counsel submitted that the Ld. CIT(A)/NFAC has grossly erred in confirming the addition without going into merits of the case and that the said addition was made by the AO in an ex parte assessment order passed u/s 144 of the act in violation of principles of Natural Justice. He further submitted that the worthy CIT(A) has grossly erred in confirming the same without appreciating the facts that the assesse was an agriculturist and the disputed deposits were made out of the sale proceeds of agricultural land, agricultural produce etc. He further stated that neither the AO nor the Ld. CIT(A) has addressed the relevant matter regarding appellants claim of source being the sale proceeds of agricultural land and agricultural produce etc which goes to the root of the matter. Accordingly, he pleaded that the matter may be remanded back to the AO to pass de novo assessment after granting adequate opportunity of being heard to enable the appellant assesse to file appropriate the submission with documentary evidences in the fresh assessment proceeding. In support, he placed reliance on Judgement of Delhi High Court in the case of “Bharat Aluminium Company Ltd. vs.Union of India”, [2022] 134 taxmann.com 187 (Delhi) where it was observed that Assessee would have a vested right to personal hearing in faceless assessment proceeding under section 144B and granting of personal hearing would not be discretionary as per individual facts of each case.
Per contra, the Ld DR although supported the impugned order, however, he has no objection to the request of the appellant in iew of principles of natural justice.
Heard rival contentions, perused the material on record, impugned order, written submissoin and case law cited before us. Admittedly, the revenue authorities have passed orders ex parte qua the assesse. The Ld. AR argued that the worthy CIT(A) decided the case exparte without granting opportunity of the hearing against the ex parte assessment order passed under section 144/147 of the act and that while deciding the case ex-parte, the Ld. CIT(A) has not appreciated the facts of the case and arbitrary confirmed the assessment order passed u/s 144 r.w.s. 147 of the I.T. Act. It is seen that neither the AO nor the Ld. CIT(A) has addressed the relevant issue regarding appellants claim of source of cash deposit being sale proceed of agricultural land and agricultural produce. The lower authorities ought to have disproved the claim of the assesse by granting adequate opportunity of being heard in view of principles of natural justice.
The Hon’ble Supreme Court of India in the case of Tin Box Company vs. CIT reported in 249 ITR 216 in which their Lordships of Supreme Court of India observed as under:
“Assessment - Opportunity of being heard - Setting aside of assessment - Assessment order must be made after the assessee has been given reasonable opportunity of setting out his case - Same not done - Fact that the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is assessment order that counts — Assessment order set aside and matter remanded to assessing authority for fresh consideration.”
The Hon’ble Delhi High Court in the case of “Bharat Aluminium Company Ltd. vs. Union of India”, (Supra) has held as under:
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.
Consequently, this Court is of the view that the word "may" in Section 144B(viii) should be read as "must" or "shall" and requirement of giving an 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. 23. The argument of the respondent/Revenue that personal hearing would be allowed only in such cases which involve disputed questions of fact is untenable as cases involving issues of law would also require a personal hearing. This Court is of the view that the classification made by the respondents/Revenue by way of the Circular dated 23rd November, 2020 is not legally sustainable as the classification between fact and law is not founded on intelligible differentia and the said differentia has no rational relation to the object sought to be achieved by Section 144B of the Act.
Also, if the argument of the respondent/Revenue is accepted, then this Court while hearing an appeal under section 260A (which only involves a substantial question of law) would not be obliged in law to grant a personal hearing to the counsel for the Revenue! 25. Consequently, this Court is of the opinion that an assessee has a vested right to personal hearing and the same has to be given, if an assessee asks for it. The right to personal hearing cannot depend upon the facts of each case.
In the instant case, the assessee could have placed evidences either before the AO or the first appellate authority, if he has been provided adequate opportunity of being heard. The argument of the Ld. DR that personal hearing would be allowed only in such cases which involve disputed questions of fact is untenable as cases involving issues of law would also require a personal hearing. In our view, the classification made by the Revenue by way of the Circular dated 23rd November, 2020 is not legally sustainable as the classification between fact and law is not founded on intelligible differentia and the said differentia has no rational relation to the object sought to be achieved by Section 144B of the Act.
In view of the principles of natural justice, we consider it deem fit to restore back the matter to the file of the Ld. AO to pass de novo assessment after considering the written submission and evidences filed on record and may be filed before him during the fresh proceedings after granting sufficient opportunity of being heard to the assesse with a direction that the AO who shall issue a Show Cause Notice and thereafter pass a reasoned order in accordance with law.
Accordingly, Assessment order set aside and matter remanded to assessing authority to pass de novo assessment as per law.
In the result, the appeal of the assesse is allowed for statistical purpose.
Order pronounced in the open court on 09/06/2023