Income Tax Appellate Tribunal - Ahmedabad
Sureshbhai Chhaganbhai Patel, ... vs Dcit, Circle-3(1)(1),, Ahmedabad on 4 October, 2018
आयकर अपील य अ
धकरण, अहमदाबाद यायपीठ - अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD - BENCH 'C'
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.774/Ahd/2018
नधा रण वष /Asstt. Year: 2013-14
Sureshbhai Chhaganbhai Patel Vs. DCIT, Cir.3(1)(1)
A-1, Nandeswar Apartment Ambawadi,
Nr. Sun-N-Step Club Ahmedabad.
Sola Road
Ahmedabad.
PAN : AASPP 5973 D
अपीलाथ / (Appellant) तयथ
् / (Respondent)
Assessee by : Shri S.N. Divetia, AR
Revenue by : Shri B.P. Srivastava, Sr.DR
सन
ु वाई क तार ख/Date of Hearing : 11/09/2018
घोषणा क तार ख /Date of Pronouncement: 4/10/2018
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
Assessee is in appeal before the Tribunal against order of ld.CIT(A)-9, Ahmedabad dated 1.3.2018 passed for the assessment year 2013-14.
2. The assessee has taken five grounds of appeal along with sub- grounds. However, in brief, his grievance is that the ld.CIT(A) has erred in upholding additions/disallowances of Rs.10,22,10,43/- by an order passed ex parte without providing proper opportunity of hearing to the assessee.
ITA No.774/Ahd/2018 23. The ld.counsel for the assessee at the very outset submitted that the ld.CIT(A) has dismissed the appeal of the assessee ex parte without providing proper opportunity of hearing, hence on this short ground, impugned order deserves to be set aside. He further contended that even the AO has not provided full opportunity to the assessee and started proceedings when the assessment is going to be time barred. Therefore, proceedings deserve to be re-instituted at the level of the AO.
4. On the other hand, the ld.DR on the strength of Hon'ble Gujarat High Court decision in the case of Pr.CIT Vs. Ashokji Chanduji Thakor and others rendered in Tax Appeal Nos.710 to 717 of 2018 contended that the Tribunal should not set aside orders of the Revenue authorities and remit issues for re-adjudication in a routine manner. He pointed out that in this case, the Tribunal has remitted the issue back to the file of the ld.CIT(A) for re-adjudication. Hon'ble High Court has reversed the order of the Tribunal and restored the additions. He contended that perusal of CIT(A)'s order would indicate that notices to the assessee were issued on three occasions, but he failed to appear before the ld.CIT(A). Therefore, there is no reason to set aside well reasoned order of the ld.CIT(A). He further contended that even before the AO, the assessee did not prosecute his income-tax proceedings in an appropriate manner, and the ld.AO has rightly made the addition. On our direction, the ld.DR placed on record copy of order sheet passed by the AO during the assessment proceedings.
5. We have duly considered rival submissions and gone through the record carefully. The assessee has filed his return of income on 14.10.2013 declaring total income at Rs.10,27,930/-. An assessment order passed on 31.3.2016 whereby income of the assessee has been determined at Rs.10,32,38,360/-. The ld.AO has made addition of Rs.10,22,10,434/-. In other words, income of the assessee has been ITA No.774/Ahd/2018 3 determined at hundred times more than the one declared by him. Section 143(2) authorizes the AO to issue a notice providing opportunity to the assessee as to what he wants to submit in support of return. This section infuses jurisdiction in the AO for scrutinising the return filed by the assessee. Time limit provided in the proviso appended to this section authorizes him to issue such notice within six months from the end of the financial year in which return was filed. In the present case, return was filed on 14.10.2013. It means notice under section 143(2) could be issued before the end of September, 2014. The notice was issued on 3.90.2014 i.e. well in time. Thereafter, proceedings remained dormant for one year. Thereafter, notice was issued on 24.9.2015 i.e. exactly after one year and 21 days. The AO then took the proceedings seriously and issued questionnaire on 27.11.2015. In compliance to the order of the AO, the assessee has put his appearance and submitted part details on 9.12.2015. After 31.12.2015, the AO has not given next date. He again issued notice on 14.3.2016. All of a sudden on 18.3.2016 he called for certain details, which were routinely mentioned in the first notice issued on 27.11.2015. He passed assessment order on 31.3.2016. We have perused this order sheet and in our opinion, the ld.AO has seriously applied his mind only for last 10 to 15 days. He had allowed the assessment proceedings to remain dormant for more than one year, then at a fag end started investigation and expected the assessee to submit voluminous details which could not be submitted in such a short period of time. To our mind, this is not a proper manner in which the assessment order ought to be conducted. On appeal, no doubt the ld.CIT(A) has issued notice on 19.7.2017, which according to him not responded by the assessee. Thereafter on 31.8.2017, and lastly on 26.9.2017. The version of the assessee was that he became little late on the last date of hearing. He approached the ld.CIT(A) for entertaining of the written submissions and other details, but the ld.CIT(A) informed him that according to the standard norms applied by ITA No.774/Ahd/2018 4 him universally on all appeals, he did not grant more than four opportunities. If the assessee failed to appear, then he would decide the appeal ex parte. The assessee has submitted details on the receipt counter of the department. These details have been recognized by the ld.CIT(A) in his order (para-3), but did not take cognizance of the details. We have visualized all these circumstances. Sub-section(6) of section 250 of the Income Tax Act contemplates that the ld.CIT(A) would state point in dispute, and thereafter record reasons in support his conclusions. The impugned order was passed on 1.3.2018 i.e. almost after five months from the last date of hearing. It means, the appeal remained pending before the ld.CIT(A) for orders for more than 5 months. We failed to appreciate this approach at the end of the ld.CIT(A). If it has no time to adjudicate the appeal and dictate the order, then atleast in the interest of justice, he should have granted one or two more opportunities to the assessee. It should have taken cognizance of the details filed by the assessee. Quasi-judicial authorities are not being respected on account of their powers to legalise injustice on technical grounds, but because they are capable of removing injustice and is expected to do so. Let us for argument's sake assume that the assessee was negligent in prosecuting his income tax proceedings before the ld.Revenue authorities, then also it is to be kept in mind that return declaring income of Rs.10,27,930/- was submitted whereas addition to the extent of Rs.10.22 crores has been made to his income. Punishment in the shape of tax liability on this addition of Rs.10.20 crores is disproportionate to the negligence, which otherwise appears to be a contributory negligence. The AO could impose penalty under section 271(b) for not furnishing the details. Interest would be chargeable upon the assessee on the additional income assessed in his hand. But the authorities ought to be little live to the expectation and concern of the litigants. They cannot frame assessment order in routine manner without taking cognizance to the difficulties faced by an assessee. As far as judgment of the Hon'ble Gujarat High Court relied ITA No.774/Ahd/2018 5 upon the ld.DR is concerned, we are of the view that it is a decision on the facts of that case. It does not lay down any proposition that Tribunal cannot restore issues to the file of the CIT(A) or AO for re- adjudication. Whenever circumstances demand that some injustice has been done to an assessee by not providing proper opportunity, then the Tribunal would be justified in remitting issue to the file of lower authorities for re-adjudication. Therefore, taking into consideration all these aspects, we are of the view that orders of the Revenue authorities deserve to be set aside. We remit all these issues to the file of the AO for re-adjudication. The ld.AO shall take up the proceedings within 15 days from the receipt of our order, fix the date and conduct the proceedings at an interval of fifteen days or earlier to them, according to his convenience. We further direct the assessee to cooperate with the AO and submit requisite details. He should restrain himself from lingering the proceedings before the ld.AO. With the above observations, this appeal of the assessee is allowed for statistical purpose.
Our observations will not impact or impair the explanation/defence of the assessee and will not cause any prejudice to the stand of the AO. He shall pass the order in accordance with law.
6. In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 4thOctober, 2018 at Ahmedabad.
Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 4/10/2018