CIT must give proper opportunity of being heard to AO to explain the reason of his decision

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH “A”, KOLKATA

Before  Shri Mahavir Singh, Judicial Member. And

Shri C.D.Rao, Accountant Member

ITA No.784/Kol/2010

Assessment Year: 2004-05

A.C.I.T., Circle-7, Kolkata

(APPELLANT)

M/s.Bengal Waterproof

Ltd., Kolkata.

(PAN: AABCB 2876 R)

(RESPONDENT)

For the Appellant: Shri B.K.Das

For the Respondent: Shri Keshav Binani

Date of Hearing: 09.05.2012.

Date of Pronouncement: 11.05.2012.

ORDER

Per Shri C.D.Rao, AM

The above appeal is filed by the Revenue against order dated 27.01.2010 of the ld. CIT-(A)-XIII, Kolkata pertaining to A.Yr. 2004-05.

2. In this appeal the revenue has raised the following grounds :-.

“1. That the Ld. CIT(A) erred on facts and circumstances of the case and in law, in deleting the addition of Rs.50,80,452/- as unexplained liabilities despite the fact that the assessee failed to furnish full details of the same

2. That the Ld. CIT(A) erred on facts and circumstances of the case and in law, in deleting the addition of Rs. 9,03,030 on account of foreign travel despite the fact that the assessee failed to substantiate properly that the same were incurred for the business purposes.

3. That the Ld. CIT(A) erred in granting relief to the assessee ion account of addition made regarding disallowance of Debts and advances written off despite the fact that the assessee failed to fully disclose the details.”

3. At the time of hearing before us, the ld. DR appearing on behalf of revenue by pointing out the various observations made by AO and the ld. CIT(A) contended that ld.CIT(A) has given only 7 days for giving the Remand Report in respect of unexplained liabilities as well as the disallowance of debts and advances written off. As regarding ground no.2 which relates to deletion of addition on account of foreign travel, ld. CIT(A) has accepted the additional evidences of Board Resolution which was not placed before AO. Since AO has not been given sufficient opportunity of being heard he requested to set aside to the file of AO to re-decide all the three issues afresh.

4. On the other hand, the ld. Counsel appearing on behalf of assessee though relied on the orders of ld.CIT(A) could not contradict the submissions made by the ld.DR. He further fairly conceded that part of the information submitted by assessee has not been forwarded to AO for the Remand Report.

5. After hearing the rival submissions and on careful perusal of materials available on record, keeping in view of the fact that sufficient opportunity of being heard to AO has not been given by ld. CIT(A) for preparation of Remand Report and further keeping in view of the fact that all the materials placed before ld. CIT(A)has not been sent to AO for his consideration, in our considered opinion, the order of ld. CIT(A) is not in accordance with the principles of natural justice. Therefore we set aside the order of ld. CIT(A) and restore the matter to the file of AO to re-decide all the three issues afresh by taking into consideration of the various submissions and documents placed before ld. CIT(A) and after giving a reasonable opportunity of being heard to assessee.

6. In the result the appeal of revenue is allowed for statistical purposes.

Order pronounced in the court on 11.05.2012.

                                                            Sd/-                   Sd/-

                                                   Mahavir Singh,       C.D.Rao,

                                                 Judicial Member  Accountant Member.

Date: 11.05.2012.

R.G.(P.S.)

Copy of the order forwarded to:

1. M/s.Bengal Waterproof Limited, 4th floor, Duckback House, 41, Shakespeare Sarani, Kolkata-700017.

2. A.C.I.T., Circle-7, Kolkata.

3. The C.I.T.

4. CIT (A)-XIII, Kolkata.

5. The CIT (DR), Kolkata Benches, Kolkata

True Copy,

By order,

Deputy /Asst. Registrar, ITAT, Kolkata Benches