Income Tax Appellate Tribunal - Amritsar
Avm Construction Co, Mansa vs Dcit, Circle 1, Bathinda on 20 September, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
(HYBRID COURT)
BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER
AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER
I.T.A. No. 380/Asr/2023
Assessment Year: 2013-14
AVM Construction Co., Vs. DCIT, Circle-1,
Arya Samaj Street Gaushala Bathinda
Road, Mansa-151505, Punjab
[PAN: AARFA4937F]
(Appellant) (Respondent)
Appellant by : Sh. Sudhir Sehgal, AR
Respondent by : Smt. Vandana Vijay Mohite, CIT-DR
Date of Hearing : 09.09.2024
Date of Pronouncement : 20.09.2024
ORDER
Per Dr. M. L. Meena, AM:
The captioned appeal has been filed by the assessee against the order of the ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi dated 22.11.2023 which is arising out of the Assessment Order dated 05.12.2018 2 ITA No. 380/Asr/2023 AVM Construction Co. v. DCIT passed by the Dy. CIT, Circle-1, Bathinda u/s 144 r.w.s. 147 of the Income Tax Act in respect of Assessment Year: 2013-14.
2. At the outset, the ld. counsel for the assessee has submitted that the ld. CIT(A) has dismissed the appeal of the assessee ex-parte qua the assessee without granting reasonable and sufficient opportunity and service of notice of hearing upon the appellant assessee as per law. He contended that the CIT(A) has confirmed the Assessment Order passed u/s 144 of the I.T. Act ex-parte qua the assessee in violation of principles of natural justice. The ld. counsel submitted that he has requested for adjournment to furnish certain documents which was sought for from the Assessing Officer, however the ld. CIT(A) has dismissed the grounds of appeal without granting the time for furnishing the necessary information to be received from the Assessing Officer to defend its case. The ld. AR contended since he has to file documentary evidences in support its claim of the grounds raised before the ld. CIT(A) which were not considered and pleaded that the matter may be remanded back to the ld. CIT(A) to decide the issue on merits of the case after considering the written submissions of the assessee by granting sufficient opportunity of being heard. In support, he has filed a brief synopsis which reads as under:
3ITA No. 380/Asr/2023
AVM Construction Co. v. DCIT "1. It is submitted that the Ld. CIT(A) has passed an ex-parte order against the appeal filed by the assessee and in this regard, the following facts are being submitted as under: -
(i) The CIT(A) had sent the Notices for hearing on 17.06.2022 and onfor which, the adjournments were sought as per chart referred to at page 1 of the Paper Book.
(ii) Thereafter, no compliance could be made for the date of hearing on and finally, the date was fixed for 03.05.2023 and the assessee required certain documents from the Assessing Officer and for which, a letter dated 22.08.2023 was written to the CIT (A), placed at page 15 of the Paper Book that we have requested the Assessing Officer for certain documents and, as such, the time may, please, be granted and alongwith that copy of the letter was also filed to the Assessing Officer, which is enclosed at page 16 of the Paper Book and even the Inspection fee was also paid as per evidence placed at page 18 of the Paper Book.
(iii) Though, the order was passed by the CIT(A) on 22.11.2023, meaning thereby that the application, dated 22.08.2023 was before him but he passed the ex-parte order. Further, neither the Assessing Officer supplied us copies of the documents as required by and, therefore, it is submitted that since the order was passed in the month of November 2023 and we had the moved the application on 22.08.2023, as per copy enclosed and, as such, there was no justification in passing the ex-parte order. We, therefore, request your godoself to kindly remand the matter to the Assessing Officer for deciding the issue afresh since as certain documents were also required from the Assessing Officer concerned as is evident from the order of the Assessing Officer."
3. Per contra, the ld. DR relied on the impugned order.
4. We have heard both the sides, perused the material available on record and the impugned order. Admittedly, the revenue authorities have passed orders ex parte qua the assessee. The Ld. AR argued that the worthy CIT(A) 4 ITA No. 380/Asr/2023 AVM Construction Co. v. DCIT decided the case ex-parte without granting opportunity of the hearing against the ex parte assessment order passed under section 144 of the act and that while deciding the case ex-parte, the Ld. CIT(A) has not appreciated the facts that the assessee required certain documents from the Assessing Officer(in short "the AO") and for which, a letter dated 22.08.2023 was written to the CIT (A), placed at page 15 of the Paper Book and that he had requested the AO for those documents and, as such, the time ought to be allowed to the appellant by the Ld. CIT(A). A copy of the letter written AO (APB, Pg. 16), alongwith the Inspection fee paid evidence filed on record (APB, Pg. 18).
5. Thus, the impugned order was passed by the CIT(A) dated 22.11.2023, without allowing time requested as per the application dated 22.08.2023, to enable it to furnish the documentary evidence required from AO to be filed before the Ld. CIT(A). But he passed the order ex-parte qua the assessee. Further, it is noted that the AO did not supply copies of the documents as required by appellant in time and, therefore, the contention of the appellant was found to be correct that the impugned order was passed in arbitrary manner without taking cognizance of the appellant application dated 22.08.2023. In our view, there was no justification in passing the ex-parte order in mechanical manner without appreciating facts of the case, in violation of principles of natural justice.
5ITA No. 380/Asr/2023
6. Thus, the Ld. CIT(A)'s order confirming the finding of the AO in an assessment order was passed u/s 144 of the I.T. Act, in arbitrary manner is liable to be set aside, as the Ld. CIT(A) has not addressed the relevant issues on merits of the case.
7. In view of the principles of natural justice, the authorities below ought to have granted adequate opportunity and disproved the claim of the assessee by way of rebutting its contention with support of corroborative documentary evidence on record. 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."
8. The Hon'ble Delhi High Court in the case of "Bharat Aluminium 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 6 ITA No. 380/Asr/2023 AVM Construction Co. v. DCIT 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.
22. 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.
24. 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.
9. In the instant case, the assessee could have placed evidences before the first appellate authority, if he has been provided adequate opportunity of being heard. In view of the principles of natural justice, we consider it deem fit to restore back the matter to the file of the Ld. CIT(A) to adjudicate the matter de novo after considering the written submission and evidences filed as claimed to be collected from the AO's record and may be filed before him 7 ITA No. 380/Asr/2023 AVM Construction Co. v. DCIT during the fresh Appellate Proceedings after granting sufficient opportunity of being heard to the assessee with a direction that the CIT(A) shall issue a Show Cause Notice and thereafter pass a reasoned order in accordance with law. No doubt, the appellant shall co-operate in the de-novo appeal proceedings before the ld. CIT(A).
10. Accordingly, impugned order is set aside and matter remanded to the ld. CIT(A)/NFAC, Delhi to adjudicate the de-novo matter as per law.
11. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 20.09.2024
Sd/- Sd/-
(Udayan Dasgupta) (Dr. Mitha Lal Meena)
Judicial Member Accountant Member
*GP/Sr.PS*
Copy of the order forwarded to:
(1) The Appellant:
(2) The Respondent:
(3) The CIT concerned
(4) The Sr. DR, I.T.A.T.
True Copy
By Order