Commissioner Of Income Tax vs M/S Shivam Complex on 19 August, 2011

IN THE HIGH COURT OF JHARKHAND AT RANCHI
                 Tax Appeal No. 10 of 2009
The Commissioner of Income Tax, Ranchi      .... ...        Appellant
                            Versus
M/s Shivam Complex, Hazaribagh              ..... ...       Respondent
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       CORAM       :  HON'BLE THE ACTING CHIEF JUSTICE
                      HON'BLE MR. JUSTICE H.C. MISHRA
                         ------
For the Appellant        : Mr. Deepak Roshan, Advocate
For the Respondent       : Mr. Ajay Poddar, Advocate
                         ------
                                     Dated: 19th of August, 2011

Heard learned counsel for the parties on the question of law that

whether, in case where as per the provisions of Section 251(2) of the Income

Tax Act, 1961, the Commissioner of Income Tax (Appeal) has not given an

opportunity of hearing to the assessee to show cause against any enhancement

in the liability of the assessee, than the Income Tax Tribunal was justified in

not remanding the matter to the appellate authority to give opportunity of

hearing to the assessee and pass fresh order and was justified in setting aside

the addition.

Learned counsel for the respondents has submitted that the

Income Tax Tribunal not only allowed the appeal of the assessee on that legal

ground alone, but also considered the merits of the case in paragraph-6.

We have perused paragraph-6 of the impugned judgment dated

25th September 2008 and we are of the considered opinion that in paragraph-6,

only the argument of the counsel were taken note of and in paragraph-7, the

Tribunal has specifically held that in view of the illegality in the order passed

by the Commissioner (Appeal), which is in violation of Section 251(2) of the

Act of 1961, the Tribunal is not going into the merits of the addition made by

the C.I.T (Appeal). Therefore, the Tribunal has not decided the question of fact

on merit and decided the appeal only on the question of law.

We are of the considered opinion that in a case where an

opportunity of hearing was not given under Section 251 (2) of the Act of 1961,
then instead of setting aside the addition, the matter should have been

remanded to the Commissioner of Income Tax (Appeal) for giving an

opportunity of hearing to the assessee and to pass an order. Therefore, this tax

appeal is allowed. The impugned order dated 25th September 2008 is set aside

and the matter is remanded to the C.I.T.(Appeal) to comply with the provisions

of Section 251(2) of the Act of 1961 and afford an opportunity of hearing to

the assessee and pass an order.

(Prakash Tatia, A.C.J.)

( H.C. Mishra, J.)
R.Kr./B.S.