2019 (12) TMI 1678 - AT - Income Tax

Tribunal Overturns Order: Delay Excused, Fair Hearing for Assessee Ordered; Income Addition Reconsideration Allowed.

The ITAT condoned a 167-day delay in the Assessee's appeal, citing valid reasons such as custody issues and lack of direct service of the order. It set ... Dismissal of appeal of the assessee for non-appearance on various dates - as alleged CIT(A) Passed non speaking order - HELD THAT:- It was the duty of the CIT(A) to pass a speaking order while disposing the appeal ex-parte. The principle audi alteram partem is the basic concept of the natural justice. The expression audi alteram partem implies that a person must be given an opportunity to defend himself which is sin qua non of every civilized society the right to notice, the right to present case and evidence, right to refer advert evidence, right to examine, right to legal representation, disclosure of evidence to party, report of enquiry be shown to the other party and reasoned decision or speaking order is must. We find that in the instant case, though hearings were fixed on various dates but the assessee could not avail the proper hearing because of owing to the fact that an FIR was lodged against the assessee and he was taken into custody from 07.08.2018. The Hon'ble Gujarat High Court had granted bail to the assessee vide order dated 07.01.2019. And in this way the assessee was not aware regarding the passing the order of by the ld.CIT(A). Therefore, we are of the view that the assessee must be given one more opportunity of being heard and to represent his case. Therefore, in exercise of the powers conferred under Rule 28 of Tribunal Rules, we restore back to the file of the learned ld.AO to provide one more opportunity and also thereby to consider all the points so raised by the assessee. The assessee will file necessary evidences on which he wants to rely upon. Appeal filed by the Assessee is allowed for statistical purposes. Issues:1. Delay in filing the appeal2. Ex-parte order by the Commissioner of Income Tax (Appeals)3. Addition of Rs. 2,50,00,000 on account of alleged disclosure of income during survey proceedingsIssue 1: Delay in filing the appealThe appeal by the Assessee was found to be barred by limitation due to a delay of 167 days in filing the appeal against the order of the Commissioner of Income Tax (Appeals). The Assessee sought condonation of the delay, attributing it to being taken into custody following an FIR, and subsequently being granted bail by the Gujarat High Court. The delay was also due to the Assessee not being aware of the order passed by the Commissioner of Income Tax (Appeals) as it was not served directly to him. The Tribunal, considering the reasons presented, decided to condone the delay and provided the Assessee with an opportunity to be heard.Issue 2: Ex-parte order by the Commissioner of Income Tax (Appeals)The Assessee raised concerns regarding the ex-parte order passed by the Commissioner of Income Tax (Appeals) without providing sufficient opportunity for the Assessee to present their case. The Tribunal emphasized the importance of natural justice principles, specifically the right to be heard, and highlighted that the Assessee was unable to attend hearings due to being in custody. The Tribunal directed the Assessing Officer to provide the Assessee with another opportunity to be heard and to consider all points raised by the Assessee. The Assessee was instructed to cooperate in the appeal proceedings and submit necessary evidence.Issue 3: Addition of Rs. 2,50,00,000 on account of alleged disclosure of incomeThe Assessing Officer had made an addition of Rs. 2,50,00,000 on account of alleged disclosure of income during survey proceedings. The Assessee contested this addition, stating that the case was meritorious and required consideration. The Tribunal, while allowing the appeal for statistical purposes, directed the Assessing Officer to reconsider the matter and provide the Assessee with an opportunity to present their case and evidence. The Assessee was reminded of the importance of attending hearings to avoid confirmation of the impugned addition.In conclusion, the Tribunal addressed the issues of delay in filing the appeal, ex-parte order by the Commissioner of Income Tax (Appeals), and the addition of income during survey proceedings. The Assessee was granted an opportunity to be heard, emphasizing the principles of natural justice and the right to present a case. The decision highlighted the importance of providing a fair chance for the Assessee to defend their position and submit relevant evidence.