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Shri Firay Singh U-141, Ground Floor, Shakar Pur Delhi-110092 Vs. ITO, Ward 36(3) New Delhi.
September, 06th 2014
                   DELHI BENCH: `B' NEW DELHI


                             I.T.A .No.-291/Del/2012
                            (Assessment Year-2007-08)

Shri Firay Singh                      Vs.                ITO,
U-141, Ground Floor,                                     Ward 36(3)
Shakar Pur                                               New Delhi.

(APPELLANT)                                              (RESPONDENT)

                    Assessee by:-Sh. Tarun Kumar, Adv. &
                                 Sh. Somil Aggarwal, CA.
                    Revenue by:-Mrs. Ashima Neb, Sr. DR



       This appeal has been preferred against the order of CIT (Appeals) ­

XXVII, New Delhi, dated 27.10.2011 in Appeal No. 25/10-11 for

Assessment Year 2007-08.

2.     Although the assessee has taken 9 grounds of this appeal but as

requested by both the parties, we take up ground no. 1 which read as under:

       "1.    That having regard to the facts and circumstances of the
              case, Ld. CIT(A) has erred in law and on facts in
              confirming the action of Ld. AO in framing the impugned
                                       2                  I.T.A .No.-291/Del/2012
                                                         (Assessment Year-2007-08)

             assessment order that too without assuming jurisdiction
             as per law and without giving adequate opportunity of
             being heard."
3.    Apropos ground no. 1, the ld. counsel for the assessee submitted that

the ld. CIT(A) has erred in law on facts in confirming the assessment order

which was passed without assuming valid jurisdiction as per law and without

giving an opportunity of being heard for the assessee.

4.    The ld. counsel for the assessee further submitted that the AO had

noticed that attendance of Shri Sachin Aggarwal, CA on behalf of the

assessee on 23.11.2009 but on 4.12.2009 the AO marked absent of assessee

as well as Representative of the assessee and passing the impugned order

without providing due opportunity of being heard for the assessee.

5.    The ld. counsel for the assessee also drawn our attention towards

impugned order and submitted that the assessee's Representative Shri Sachin

Aggarwal, CA attended the proceeding on various dates but only on account

of failure to attend the case on 4.12.2009 the case was decided on merits

exparte without providing due opportunity of being heard for the assessee

hence, the AO was not justified in passing exparte assessment order.

Therefore, the ld. CIT(A) has grossly erred in dismissing ground no. 1 and 2

of the assessee during first appellate proceedings.
                                      3                  I.T.A .No.-291/Del/2012
                                                        (Assessment Year-2007-08)

6.    Replying to the above, the ld. DR contended that the AO provided 14

opportunities of hearing for the assessee but the assessee's Representative

Shri Sachin Aggarwal, CA kept on asking adjournments without submitting

required explanation towards cash withdrawals. The ld. DR also submitted

that in above facts and circumstances, the AO had no option but to complete

assessment exparte on the basis of material placed before the AO, which

cannot be said to be an unreasonable action.

7.    On careful consideration of above contentions & submissions and

vigilant perusal of relevant material placed on record. We are of the view

that the main allegation and contentions of the Department during

assessment proceedings was that as per the AIR information assessee had

deposited cash amounting to Rs.13,61,200/- in his bank account operated

with Bank of Baroda, Sakarpur Branch, and despite of repeated requests the

assessee fail to provide the source of cash deposited in the bank account

before the AO. The ld. counsel for the assessee submitted that the assessee

was engaged in providing services of renovation and construction of houses

for which he took advances from his client to make the expenses on their

behalf and the amount of advances so received was deposited in the bank

account and withdrawals were made on this account from time to time to

meet expenses. During the first appellate proceedings the ld. CIT(A) granted
                                      4                    I.T.A .No.-291/Del/2012
                                                          (Assessment Year-2007-08)

partly relief by accepting received shown in the return of income but the ld.

CIT(A) rejected the additional evidences filed by the assessee without

calling any comments and remand report from the AO. The procedure

adopted by ld. CIT(A) is not according to the requirement of provisions of

Rule 46A of Income tax Rules, 1962 therefore, ware inclined to hold the

authorities below have not provided due opportunity of hearing for the

assessee. The first appellate authority has rejected the additional evidence

produced by the assessee without following due procedures as prescribed in

the Income tax Rules.

8.    Under these circumstances, we are of the considered opinion that the

assessee was not provided due opportunity of hearing to support his case

before the authorities below. Therefore, we find that an appropriate to

restore the entire controversy to the file of the AO, with a direction that the

AO shall frame afresh assessment order after providing due opportunity of

hearing for the assessee without being prejudiced with the earlier assessment

and impugned order. Thus orders of the authorities below are set aside and

the matter is remitted back to the file of the AO for framing fresh assessment

as per directions hereinabove. Accordingly, ground no. 1 of the assessee is


Ground nos. 2 to 9 of the assessee
                                     5                   I.T.A .No.-291/Del/2012
                                                        (Assessment Year-2007-08)

9.      Since by the earlier part of this order, we have restored all

proceedings to the file of the AO for fresh assessment, therefore, other

grounds of the assessee did not survive for adjudication on merits and we

dismiss the same without any elaborate adjudication on merits.

10.     In the result, appeal of the assessee is deemed to be allowed for

statistical purposes.

  Order pronounced in the open Court on 05/09/2014.

        Sd/-                                                      Sd/-

     (G. D. AGRAWAL)                                  (C. M. GARG)
     VICE-PRESIDENT                               JUDICIAL MEMBER

Dated: 05/09/2014

Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)

                                                   ASSISTANT REGISTRAR
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