JSD Steel P Ltd vs ACIT

Anubhav Sharma, J

Heard and perused the record.

The appeal is preferred against the order dated 27.07.2019 of ld CIT(A)-2, New Delhi wherein, the ld CIT(A) had dismissed the appeal of the assessee against the impugned assessment order passed u/s 143(3) of the Income Tax Act, 1961 passed by the ld Assessing Officer, ACIT, Circle-5(2) dated 30.12.2016.

At the time of hearing it came up that amongst other grounds, the assessee has taken a ground no 6 of not being given due opportunity of hearing and relying ex parte evidence.

The perusal of the impugned order of the ld CIT(A) shows that the ground No. 1 of the challenge of assessment order before the ld CIT(A) was in regard to non service of notice and not giving opportunity of hearing and taking into consideration ex parte evidence. This was adjudicated by the ld CIT(A) with following finding:-

“The appellant has filed a written submission dated 14.11.2018. As non-service of notice was an important issue raised in the ground, the report was called for from the assessing officer vide letter dated 14.11.2018. After that, a reminder was sent vide letter dated 17.01.2019. Final reminder was sent on 10.07.2019 to submit the report/ comments on this issue by 19.07.2019. Reply has not been received in writing except a telephonic message that the case has been transferred out from the present AO. As the appeal is pending since long, the grounds are being decided on the basis of material available on record.”

The bench is of considered opinion that where the assessee had taken specific plea in regard to reopening of the case of assessment u/s 147/148 that ex parte evidence collected has been relied and the ld CIT(A) has called for remand report from ld AO, and if the ld AO had not replied then the presumption should have been drawn against the AO and accordingly the issue adjudicated. On the contrary what the ld CIT(A) has done is that having failed to receive report/ comments of the ld AO, proceeded to decide the appeal on merits and while deciding the issues on merits again observation were made that appellant could not provide satisfactory explanation to the show cause notice before the ld AO.

The bench is of considered opinion that if at all the ld CIT(A) was exercising his co terminus powers then at least an opportunity of hearing in terms of giving opportunity to the assessee to controvert the ex parte evidence relied by the ld AO should have been given. Having failed to do so, the assessee has been prejudiced.

Consequently, the ground No. 6, raising aforesaid defect in the proceedings of the ld CIT(A) is sustained. The appeal is allowed for statistical purposes and issue is restored to the files of the ld CIT(A) with a direction to give an opportunity of hearing to the assessee on the ground raised by the assessee of not providing opportunity of hearing and to lead evidence and failure of ld AO to provide documents/ statement relied upon by the ld AO.