MMR Eye Institute, New Delhi V. ITO, New Delhi

ITA 1041/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3960 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Maximum Marginal Rate
• Section: 139

Judgement Text

ITA NO. 1041/DEL/2010 A.Y. 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1041/DEL/2010 A.Y. 2006-07 MMR EYE INSTITUTE VS. ITO, WARD 37(4), B-15, SWASTHAYA VIHAR, NEW DELHI NEW DELHI - 110092 (PAN:AAAF7961J ) [APPELLANT] (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. G.S. SAHOTA, SR. DR PER SHAMIM YAHYA: AM THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 4.1.201 0 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE FIRST GROUND RAISED READS AS UNDER:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS X XVIII), NEW DELHI HAS PROCEEDED TO PASS THE AGGRIEVED ORDER, EXPARTE, WIT HOUT GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE TO PRESENT I TS CASE. THIS IS DESPITE THE FACT THAT THE REPRESENTATIVE OF THE ASSESSEE WA S PRESENT AT HIS OFFICE FOR AN ADJOURNMENT AND WAS INFORMED THAT A FRESH NOTICE WAS HEARING WILL BE ISSUED IN THE CASE. THE LEARNED C.I.T. APPEALS HAS TAKEN A HARSH VIEW ON ITA NO. 1041/DEL/2010 A.Y. 2006-07 2 THE ADJOURNMENTS SOUGHT BY THE ASSESSEE WITHOUT CONS IDERING THE FACT THAT THE MONTH OF DECEMBER IS EXTREMELY HECTIC FOR THE COUNSEL FOR THE ASSESSEE AS SCRUTINY CASES WERE GETTING TIME BARRED IN SUCH MONTH. 3. THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 14 3(3) ON 19.12.2008 AT TOTAL INCOME OF RS. 42560/-. THE ASSESSEE FIRM WA S PROVIDING MEDICAL AID IN THE AREA OF OPHTHALMOLOGY IN THEIR CLINIC AND NURSING HOME BY THE PARTNERS OF THE FIRM AND VISITING DOCTORS. DURING THE YEAR UNDER C ONSIDERATION THE ASSESSEE HAD SHOWN GROSS PROFESSIONAL RECEIPTS AT RS. 2464965/-. 3.1 ASSESSING OFFICER FURTHER OBSERVED THAT AS TH E ASSESSEE FIRM WAS CARRYING ON THE PROFESSION OF NURSING HOME BY ITS PARTNERS W HO ARE ALSO THE DOCTORS BY PROFESSION AND PROVIDING MEDICAL FACILITIES. THE GROSS PROFESSIONAL RECEIPTS HAVE BEEN SHOWN AT RS. 2464965/- BY THE ASSESSEE FIRM. THE ASSESSEE-FIRM WAS REQUIRED TO GET HIS ACCOUNTS AUDITED AND SUBMIT THE REPORT AS REQUIRED U/S 44 AB OF THE IT ACT, 1961 IN THE PRESCRIBED FORMS U/S 139 (1). DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE COUNSEL OF THE ASSESSEE FIRM WAS REQUIRED TO EXPLAIN VIDE ORDER SHEET ENTRY DATED 14.11.2008 FOR NOT FUR NISHING AUDIT REPORT AS REQUIRED U/S 44 AB OF THE IT ACT. 3.2 ASSESSEE EXPLAINED THAT ASSESSEE-FIRM WAS RUNN ING A NURSING HOME BY PROVIDING MEDICAL FACILITIES TO THE PATIENTS IN TH E NURSING HOME. HENCE IT WAS ITA NO. 1041/DEL/2010 A.Y. 2006-07 3 CLAIMED THAT THE ASSESSEE WAS CONDUCTING BUSINESS N OT PROFESSION. ASSESSING OFFICER DID NOT ACCEPT THIS. HE HELD THAT ASSESSEE -FIRM WAS CARRYING OUT THE ACTIVITY OF THE NURSING HOME FOR THE PURPOSE OF TRE ATING THEIR PATIENTS, THE INCOME FROM NURSING HOME/HOSPITAL SHOULD BE TREATED AS THE IR PROFESSIONAL INCOME. HENCE ASSESSING OFFICER HELD THAT ASSESSEE HAD FAI LED TO GET ITS ACCOUNTS AUDITED AND FURNISH A REPORT AS REQUIRED U/S 44AB OF THE IT ACT. HENCE HE IMPOSED A PENALTY U/S 271B OF THE IT ACT. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOM E TAX (APPEALS) NOTED THAT SEVERAL NOTICES WERE ISSUED, BUT NONE APPEARE D ON BEHALF OF THE ASSESSEE. LD. COMMISSIONER OF INCOME TAX (APPEALS) PROCEEDED TO HOLD THAT INCOME FROM THE NURSING HOME WAS UNDER A PROFESSION RATHER THAN BUSINESS. HENCE HE UPHOLD THE ASSESSING OFFICER S ACTION. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. AT THE THRESHOLD THE ISSUE OF NOT GRANTING ADEQ UATE OPPORTUNITY OF BEING HEARD HAS BEEN RAISED. WE HAVE HEARD THE LD. DE PARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF THE ASSESSEE. UPON CAREFUL CONSIDERATION WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS PASSED THE EXPARTE ORDER. ASSESSEES CLAIM IS THA T ADEQUATE OPPORTUNITY OF BEING HEARD HAS NOT BEEN GRANTED. ON THE FACTS OF THE CASE, IN OUR CONSIDERED OPINION, ITA NO. 1041/DEL/2010 A.Y. 2006-07 4 THE INTEREST OF JUSTICE WILL BE SERVED, IF THE ASSES SEE IS GRANTED AN OPPORTUNITY OF BEING HEARD BEFORE THE LD. COMMISSIONER OF INCOME T AX (APPEALS). ACCORDINGLY, WE REMIT THE ISSUE TO THE FILES OF THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) TO GRANT THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HE ARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11/5/2010 UPO N CONCLUSION OF HEARING. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 11/5/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES