TMI Blog2023 (4) TMI 1104X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 46A of the 1962 Rules and even no opportunity of heard was granted as prescribed u/s 250(1) and 250(2) of the 1961 Act, and granted substantial relief to the assessee. The assessee did not filed any appeal before tribunal against the additions confirmed by ld. CIT(A).We have set aside the appellate order of ld. CIT(A) on the grounds raised by Revenue in its appeal before tribunal, and appeal is now restored at its original level. Needless to say that powers of ld. CIT(A) are coterminus with the powers of ld. AO - Thus the appeal of the Revenue is allowed for statistical purpose, in the manner indicated above - ITA No. 139/VNS/2020 - - - Dated:- 13-4-2023 - Shri Ramit Kochar, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Revenue : Sh. Amalendu Nath Mishra, CIT DR For the Assessee : Sh. Mohammad Ashraf, C.A. ORDER PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by Revenue, has arisen out of the appellate order passed by learned Commissioner of Income-Tax(Appeals)(hereinafter called the CIT(A) ) in Appeal No. CIT(A),Varanasi/10359/2019-20/70, dated 07.09.2020 u/s 250 of the Income-tax Act, 1961(hereinafter ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(2), dated 21.09.2018 and 09.10.2018 to the assessee, which were claimed by AO to have been duly served on the assessee . But the assessee did not comply with said notices and no response/reply was filed by assessee before the AO. Thereafter, the AO issued several notices u/s 142(1), dated 21.01.2019, 02.08.2019, 20.09.2019, 16.10.2019 and 23.11.2019 to the assessee, asking assessee to file details in support of income filed. The aforesaid notices u/s 142(1) were also claimed by the AO to have been duly served on the assessee. But again, the assessee did not comply with the aforesaid notices issued by AO u/s 142(1), and no response/reply was filed by the assessee before the AO. Thereafter, a detailed Show Cause Notice(SCN) was issued by AO on 08.12.2019 to the assessee, which was also claimed by the AO to have been duly served on the assessee. The assessee did not comply with aforesaid SCN also, as no reply/submissions/explanations were filed by the assessee before the AO during the course of assessment proceedings . Since the assessment was getting time barred, the AO framed an ex-parte assessment against the assessee vide order dated 18.12.2019 u/s 144, computing /assessing i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation/submissions/replies/evidences etc. before the Assessing Officer, which led AO to pass an ex-parte assessment order against the assessee u/s 144, computing income of the assessee at Rs. 13,21,93,610/- as against the returned income of Rs. 70,57,470/-. The learned CIT DR drew our attention to several additions being made by the Assessing Officer while passing an ex-parte assessment order, as the assessee did not give any reply/submissions/explanations/evidences etc. before the AO to the queries raised vide several notices issued by the AO to the assessee. The learned CIT DR submitted that the matter reached ld. CIT(A) wherein the assessee filed first appeal before ld. CIT(A), and the learned CIT(A) partly allowed the appeal of the assessee granting substantial relief to the assessee, wherein ld. CIT(A) deleted as many as four additions completely and deleted the fifth addition substantially out of the aforesaid six additions, while only addition of Rs. 11,19,380/- was sustained by ld. CIT(A). It was submitted by learned CIT DR that the assessee filed some evidences/explanations etc. before ld. CIT(A) which were in the nature of additional evidences filed by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no need for ld. CIT(A) to call for any comments/remand report from the AO on these additional evidences filed by the assessee before ld. CIT(A) for the first time. The ld. Counsel prayed that the appellate order of ld. CIT(A) be upheld and the appeal filed by Revenue be dismissed. The ld. Counsel for the assessee relied upon the following judicial precedents, in support of his contentions, as under:- i. Judgment and order of Hon ble Supreme Court in the case of CIT v. McMillan Co., reported in (1958) 33 ITR 182(SC) ii. Judgment and order of Hon ble Supreme Court in the case of CIT v. Kanpur Coal Syndicate, reported in (1964) 53 ITR 225(SC) iii. Judgment and order of Hon ble Kerala High Court in the case of K. Mohammed v. ITO, reported in the case of (1977)107 ITR 808(Ker.) iv. Judgment and order of Hon ble Calcutta High Court in the case of CIT v. Ranicherra Tea Co. Limited, reported in (1994)75 TAXMAN 164(Cal.) v. Judgment and order of Hon ble Madras High Court in the case of CIT v. T.T. Krishnamachari Co.., reported in (1997)90 TAXMAN 88(Mad.HC) 6. We have considered rival contentions and perused the material on record including cited case laws. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to the notice of the assessee s Director/Management, which was the reason for non compliance by the assessee in not filing any reply/explanations etc. before the AO. It is claimed that the said accountant is no more working with the assessee and has left the organization. This is merely a balled statement now made for the first time before the Bench, and no affidavit of the Directors/Management to aver this contention is filed during the course of appellate proceedings before the tribunal or ld. CIT(A). Nor any details of the accountant or affidavit from the said accountant is filed. It is an admitted position that all the aforesaid notices issued/sent by the AO by sending to the registered email id of the assessee, were received by the assessee, and the assessee cannot take this plea now at this stage that the accountant of the assessee did not brought these notices to the Knowledge of the Directors/management of the assessee. The assessee has filed Paper Book containing 130 pages, which also carries reply filed by the assessee before ld. CIT(A), and we have observed that the assessee never raised this issue of the accountant having not brought to the knowledge of Directors/Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for the first time before ld. CIT(A). The ld. CIT(A) also failed to appreciate that the assessee did not filed any reply/ explanation/submissions/evidences etc. before the AO and the AO was compelled to pass an ex-parte assessment order u/s 144 of the 1961 Act in the absence of the assessee and to meet the time barring limitation as prescribed by statute. Adherence to principles of natural justice and grant of effective hearing to both the litigating parties is not a mere empty formality a mere ritual, rather is cardinal to a robust and effective judicial delivery system. These evidences / replies / explanations / submissions etc. filed by the assessee for the first time before learned CIT(A) also never stood the verification by the AO as to their truthfulness and correctness before being accepted, while substantial relief was granted by ld. CIT(A). Under these circumstances, the grievance of the Revenue is legitimate and Revenue has rightly raised the grounds of appeal nos. 1 to 6 in the memo of appeal filed with tribunal, and under the facts and circumstances of the case, we are of the considered view that the appellate order of ld. CIT(A) is required to be set aside on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made, to finally arrive at income chargeable to tax and compute tax liability of the tax-payer within the mandate of the provisions of the 1961 Act. In case of non compliances of various applicable provisions of the 1961 Act, consequential penal provisions are prescribed in the 1961 Act itself which will get attracted and which has direct bearing on computing income chargeable to tax. The ld. CIT(A) in the first round of appeal accepted replies/explanations/submissions/ evidences etc. filed by the assessee without calling for remand report/comments from the AO in breach of Rule 46A of the 1962 Rules and even no opportunity of heard was granted as prescribed u/s 250(1) and 250(2) of the 1961 Act, and granted substantial relief to the assessee. The assessee did not filed any appeal before tribunal against the additions confirmed by ld. CIT(A).We have set aside the appellate order of ld. CIT(A) on the grounds raised by Revenue in its appeal before tribunal, and appeal is now restored at its original level. Needless to say that powers of ld. CIT(A) are coterminus with the powers of ld. AO. It is relevant to refer at this stage to the decision of Hon ble Supreme Court in the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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