Manish Garg, Surat vs Department Of Income Tax

ITO, Shri Manish Garg, Ward-2(4), Prop. of M/s. Patliputra Steels & Surat Ashish Steels, Plot No.103, Road No.2, GIDC, Sachin, Surat PAN : ADMPG 8252 D

अपीलाथ / अपीलाथ / (Appellant) ू यथ यथ / थ / (Respondent)

Revenue by : Shri M.K. Singh, Sr. DR.

Assessee(s) by : Shri Sunil Kedia, AR

सु नवाई क! तार#ख / Date of Hearing : 18/05/2015 घोषणा क! तार#ख / Date of Pronouncement: 22/05/2015

आदे श/O R D E R

PER G.D. AGRAWAL, VICE PRESIDENT:

This is an appeal filed by the Revenue and is directed against the order of the Commissioner of Income-tax (Appeals)-II, Patna dated 24.01.2011, pertaining to the Assessment Year 2005-06.

2. In this appeal by the Revenue, following grounds were raised:-

1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions made by the A.O. inspite of the fact that the assessee had furnished different bogus addresses thereby failing to comply with the directions issued in Notices u/s 142(1) and compelling the A.O. to finalize assessment order u/s 144 of the IT Act, 1961.

2. On the facts and circumstance of the case and in law, the Ld. CIT(A) has erred by not giving opportunity to present assessing Officer for submission of remand report.

ITA No.1006/Ahd/2011 ITO vs Shri Manish Garg AY: 2005-06 2

3. On the facts and in the circumstances of the case, the learned CIT(A) ought to have upheld the order of the Assessing Officer.

4. It is, therefore, prayed that the order of the CIT(A) may be set aside and that of Assessing Officer may be restored to the above extent.

3. At the time of hearing before us, it was submitted by the ld. Departmental Representative that the assessee did not appear before the Assessing Officer despite issuance of various notices. The ld. Departmental Representative was fair enough to accept that the notice was actually not served upon the assessee but all the notices were returned back, because the assessee was not available at the address given by him in the return of income or in the Audit Report. The assessee has not informed the change of address. Despite these facts, the CIT(A) admitted the additional evidence and without allowing opportunity to the Assessing Officer of Surat to whom the case records have been transferred, he passed the appellate order deleting all the additions. He, therefore, submitted that the order of the CIT(A) should be set aside and he should be directed to re-adjudicate the issue, after allowing opportunity to the ITO-Surat to whom the files of the assessee have been transferred.

4. The ld. Counsel for the assessee, on the other hand, pointed out that originally the assessee was residing at Patna, then he shifted to Varanasi and again shifted to Surat. That the assessee shifted from one place to another in search of better business opportunities and ultimately settled at Surat and his case records have also been subsequently transferred to Surat. He further submitted that none of the notice could be served upon the assessee and he was not aware about any assessment proceedings being taken by the Assessing Officer. It was also pointed out by the ld. Counsel that the CIT(A) called for the remand report from the Assessing Officer of ITA No.1006/Ahd/2011 ITO vs Shri Manish Garg AY: 2005-06 3

Patna, because at the relevant time the case record was available with the ITO-Patna and has not been transferred to ITO-Surat. He also submitted that even after the transfer of case records, if the CIT(A) called for the remand report from the ITO-Patna, he could have forwarded the matter to ITO-Surat. Therefore, merely because the CIT(A) did not allow opportunity to the ITO-Surat, the matter need not be set aside. He further submitted that the CIT(A) considered each and every facts in details and allowed the relief after considering the findings in the assessment order as well as assessee's written submission and the evidence furnished before him. Moreover, the Revenue has not taken up any specific ground against the deletion of various additions by the CIT(A). He, therefore, submitted that the order of the CIT(A) should be sustained.

6. In rejoinder, we asked the ld. Departmental Representative whether the date of transfer of the file from ITO-Patna to ITO-Surat is available on record? The ld. Departmental Representative informed that as per his records, file was transferred from ITO-Patna to ITO-Surat on 02.07.2010.

7. We have carefully considered the arguments of both the sides and perused the material placed before us. From the grounds of appeal as well as the arguments of ld. Departmental Representative at the time of hearing before us, it is clear that the main grievance of the Revenue is the acceptance of additional evidence by the CIT(A) without allowing opportunity to the ITO-Surat. We find that the CIT(A) discussed this issue in paragraph 3 of his order and we reproduce the same below for ready reference:-

"3. The A/R filed a petition for admission of evidence during appellate proceedings in terms of Rule 46A of the Income Tax rules 1962, in which it was submitted that the non compliance to the notices by the appellant was due to the fact that he had been forced to move out of Patna in view of the ITA No.1006/Ahd/2011 ITO vs Shri Manish Garg AY: 2005-06 4

extraordinary circumstances prevailing in Bihar at that point of time, and thereafter was, further forced to move to Surat from Varanasi for business viability. It was pleaded that the appellant was a law abiding citizen, and the default which occurred during assessment proceedings was occasioned by circumstances beyond his control. Permission was sought for introducing evidence which could not be filed before the AO. After considering the appellant's submissions, the plea that the appellant had been prevented by sufficient cause from producing the evidences, which he was called upon to produce by the AO, was accepted. Accordingly, a copy of the paper book filed by the A/R was forwarded to the AO, and he was asked to examine the evidences adduced on behalf of the appellant in support of the grounds of appeal, and, after making necessary enquiries and affording reasonable opportunity of being heard to the appellant, furnish a factual report within three weeks of receipt of the letter. This letter was dated 12.5.2009. When no response was received from the AO, a reminder was issued on 21.8.2009, requiring him to ensure submission of his report by 31.8.2009. Subsequently, another reminder was issued on 15.2.2010, requesting the AO to sent the remand report by 26.2.2010, failing which it would be considered that he had nothing to say in the matter. Despite issue of two reminders, no response has been received from the AO till date. No request for extension of time has been received either. The position which emerges is that the appellant's submissions had been forwarded to the AO on 12.5.2009, and the appellate order is being passed in January 2011, and two reminders had been issued in the interregnum, but the AO has not made any response. It is, accordingly, concluded that the AO has no contrary material against the submissions made by the A/R during appellate proceedings. The grounds of appeal are being disposed in this context. "

8. From the above, it is evident that the CIT(A) has given adequate reason for admitting the additional evidence. The reason given by the CIT(A) has not been controverted by the Revenue. We, therefore, hold that the CIT(A) was justified in admitting the additional evidence. Now the question remains whether the opportunity allowed to the Assessing Officer for submitting the remand report on the additional evidence was in accordance with law or not. From the order of the CIT(A), it is evident that vide letter dated 12.05.2009, he forwarded the additional evidence to the Assessing Officer and sought for a remand report within three weeks of the receipt of the letter. This letter was admittedly sent to ITO-Patna. Since no ITA No.1006/Ahd/2011 ITO vs Shri Manish Garg AY: 2005-06 5

response was received, a reminder was issued on 21.08.2009 and subsequently, another reminder was issued on 15.02.2010. Despite three letters, the Assessing Officer did not submit any remand report. From these dates, it is evident that the letters for the remand proceedings and reminders were issued between 12.05.2009 and 26.02.2010. Admittedly, during this period, files were with the Assessing Officer at Patna and the files were transferred to the Assessing Officer at Surat only in July 2010. Therefore, the grievance of the Revenue that the opportunity to the subsequent Assessing Officer was not given for submission of remand report is contrary to the facts on records. In view of above facts, we do not find any justification to interfere with the order of the CIT(A) which is sustained and the Revenue's appeal is dismissed.

9. In the result, the Revenue's appeal is dismissed.

Order pronounced in the Court on 22nd May, 2015 at Ahmedabad.

Sd/- Sd/-

(S. S. GODARA) (G.D. AGRAWAL) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 22/05/2015 Biju T., PS

षत Copy आदे श क! ूितिल)प अमे)षत/ of the Order forwarded to : 1. अपीलाथ / The Appellant 2. ू यथ / The Respondent. 3. संबंिधत आयकर आयु, / Concerned CIT 4. आयकर आयु,(अपील) / The CIT(A)

5. )वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

/ BY ORDER, आदे शानु सार

TRUE COPY

Dy./Asstt.Registrar) उप/सहायक पंजीकार ( उप/ अिधकरण, अहमदाबाद / आयकर अपीलीय अिधकरण, ITAT, Ahmedabad