M/s Mac Overseas Pvt. Ltd, New Delhi V. ITO, New Delhi

ITA 1559/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98022 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 31-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Business income; Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NOS. 1558 & 1559/DEL/2011 ASSESSMENT YEARS: 2005-06 & 2006-07 M/S MAC OVERSEAS PVT. LTD., VS. ITO, WARD 6(1), D-193, OKHLA INDUSTRIAL AREA, CR BUILDING, PHASE-I, NEW DELHI 20 NEW DELHI (PAN: AADCM1175E) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI SUNIL MATHUR REVENUE BY : SHRI P. DAM KANUNJNA, SR. DR DATE OF HEARING ON : 26/11/2015 ORDER PRONOUNCED ON: 01/12/20 15 PER H.S. SIDHU, JM ORDER THESE APPEALS ARE FILED BY ASSESSEE AGAINST THE SEP ARATE ORDERS PASSED BY THE LD. CIT(A), NEW DELHI RELATING TO ASS ESSMENT YEARS 2005-06 & 2006-07. SINCE THE ISSUES INVOLVED IN T HESE APPEALS ARE COMMON AND IDENTICAL HENCE, THEY ARE BEING CONSOLID ATED AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE, BY DEALING WITH ASSESSMENT YEAR 2005-06. 2. THE GROUNDS RAISED IN THE ITA NO. 1558/DEL/2011 (AY 2005-06) READ AS UNDER:- 1. THE ORDER IS BAD IN LAW, AS IT HAS BEEN PASSED IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2 2. THE LD. AO IN THE GIVEN FACTS AND CIRCUMSTANCES HAS ERRED IN TREATING THE INCOME OF THE ASSESSEE AS INCOME F ROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES AS A GAINST THE BUSINESS INCOME AS CLAIMED IN THE RETURN AND CONSEQUENTLY NOT ALLOWING THE VARIOUS EXPENDITURE A S CLAIMED. 3. THE LD. AO HAS ERRED IN NOT ALLOWING THE INTERES T ON LOAN TAKEN FOR THE RENOVATION OF PROPERTY AGAINST THE HO USE PROPERTY INCOME. 4. THE APPELLANT MAY BE PERMITTED TO ADD, ALTER OR AMEND ANY OF THE FOREGOING GROUNDS OF APPEAL. 3. THE GROUNDS RAISED IN THE ITA NO. 1559/DEL/2011 (AY 2006-07) READ AS UNDER:- 1. THE ORDER IS BAD IN LAW, AS IT HAS BEEN PASSED IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. THE LD. AO IN THE GIVEN FACTS AND CIRCUMSTANCES HAS ERRED IN TREATING THE INCOME OF THE ASSESSEE AS INCOME F ROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES AS A GAINST THE BUSINESS INCOME AS CLAIMED IN THE RETURN AND CONSEQUENTLY NOT ALLOWING THE VARIOUS EXPENDITURE A S CLAIMED. 3. THE LD. AO HAS ERRED IN NOT ALLOWING THE INTERES T ON LOAN TAKEN FOR THE RENOVATION OF PROPERTY AGAINST THE HO USE PROPERTY INCOME. 4. THE APPELLANT MAY BE PERMITTED TO ADD, ALTER OR AMEND ANY OF THE FOREGOING GROUNDS OF APPEAL. 3 4. THE FACTS NARRATED BY THE REVENUE AUTHORITIES A RE NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEA TED HERE FOR THE SAKE OF CONVENIENCE. 5. AT THE TIME OF HEARING, LD. A.R. OF THE ASSESSE E STATED THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE AS SESSEE EXPARTE WITHOUT AFFORDING SUFFICIENT OPPORTUNITY TO THE ASS ESSEE. HE REQUESTED THAT THE ISSUE IN DISPUTE MAY BE SET ASIDE TO THE F ILE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER GIV ING FULL OPPORTUNITY TO THE ASSESSEE. HE FURTHER UNDERTAKES ON BEHALF OF THE ASSESSEE THAT HE WILL FULLY COOPERATE IN THE APPELLATE PROCEEDING S AND ENSURED THAT HE WILL NOT TAKE ANY UNNECESSARY ADJOURNMENT. 6. ON THE OTHER HAND, LD. SR. DR RELIED UPON THE O RDERS PASSED BY THE LD. CIT(A) AND STATED THAT THE SUFFICIENT OPPOR TUNITY HAS BEEN GIVEN TO THE ASSESSEE BY THE LD. CIT(A), BUT ASSESS EE REMAINED NON- COOPERATIVE. THEREFORE, HE REQUESTED THAT THE IMPU GNED ORDER MAY BE UPHELD. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE ORDER OF THE APPELLATE AUTHORITY W E ARE OF THE CONSIDERED VIEW THAT THE REQUEST MADE BY THE LD. CO UNSEL FOR THE ASSESSEE SEEMS TO BE GENUINE, BECAUSE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS EXPARTE ORDER, WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE AND WITHOUT SERVING THE PROPER NOTI CE UPON THE ASSESSEE. WE FIND THAT LD. CIT(A) HAS ISSUED THE NOTICE TO THE ASSESSEE SEVEN TIMES, BUT ON TWO TIMES LD. COUNSEL FOR THE ASSESSEE FILED AN APPLICATION FOR ADJOURNMENT WHICH WAS GRAN TED BY THE LD. CIT(A). FOR THE SAKE OF CONVENIENCE, THE RELEVANT FINDINGS AT PARA NO. 2.0 4.0 AT PAGES 1 & 2 OF THE IMPUGNED ORDER OF TH E LD. CIT(A) IS REPRODUCED AS UNDER:- 2.0 AGAINST THE IMPUGNED ASSESSMENT ORDER, THE APP ELLANT HAS FILED STATEMENT OF FACTS AND GROUND OF APPEAL A LONG WITH FORM NO. 35. THE APPELLANT HAS BEEN PROVIDED WITH 4 OPPORTUNITIES OF BEING HEARD, DETAILS OF WHICH ARE GIVEN AS UNDER:- SL.NO. DATE OF ISSUE OF NOTICE DATE OF HEARING REMARKS 1 26.8.08 22.9.08 NOBODY ATTENDED. 2 25.11.08 2.12.08 NOBODY ATTENDED. 3 18.12.08 30.12.08 NOBODY ATTENDED BUT LETTER DATED 30.12.08 RECEIVED REQUESTED FOR ADJOURNMENT FOR THE REASON THAT THE APPELLANTS COUNSEL IS OUT OF STATION. FINAL ADJOURNMENT GRANTED FOR 13.1.08. 4. 13.1.09 AGAIN LETTER DATED 13.1.09 RECEIVED REQUESTED FOR ADJOURNMENT FOR THE REASON THAT THE APPELLANTS COUNSEL IS OUT OF STATION. ADJOURNMENT GRANTED FOR 21.1.09. 5. 21.1.09 NOBODY ATTENDED. 6. 10.2.09 23.2.09 NOBODY ATTENDED. 3.0 THE ABOVE FACTS SHOW THAT THE APPELLANT IS NOT INTEREST TO PURSUE ITS APPEAL FILED AGAINST THE ASSESSMENT O RDER DATED 31.12.07. EVEN THE ADJOURNMENT LETTERS RECEIV ED TWICE IN THIS OFFICE ON 30.12.208 AND 13.1.09 STATED THE SAME REASONS I.E. OUR COUNSEL IS OUT OF CITY WHICH SHO WS THE CASUAL ATTITUDE OF THE APPELLANT. AS THERE IS NO R ESPONSE FROM THE APPELLANT, I HAVE NO OTHER OPTION BUT TO C ONFIRM THE ADDITIONS MADE BY THE AO. 4.0 IN THE RESULT, THE APPEAL IS DISMISSED. 7.1 AFTER PERUSING THE AFORESAID IMPUGNED ORDER OF THE LD. CIT(A), WE FIND THAT LD. CIT(A) HAS NOT PASSED A SPEAKING ORDE R. HE SUMMARILY DISMISSED THE APPEAL BY HOLDING THAT AS THERE IS NO RESPONSE FROM THE APPELLANT, HE HAS NO OTHER OPTION BUT TO CONFIRM TH E ADDITIONS MADE 5 BY THE AO. IN OUR CONSIDERED OPINION, LD. CIT(A) HAS ERRED IN THIS REGARD. LD. CIT(A) SHOULD HAVE ADJUDICATED THE ISS UE ON MERITS. IT IS A SETTLED LAW THAT EVEN THE ADMINISTRATIVE ORDERS HAV E TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE. HENCE, WE ARE OF THE VIEW THAT IN THIS CASE THE ISSUES IN DISPUTE NEEDS TO BE REMITTE D BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH, AS PER LA W. ACCORDINGLY, LD. CIT(A) IS DIRECTED TO CONSIDER THE ISSUES IN DISPUT E AFRESH AND PASS A PROPER AND SPEAKING ORDER CONSIDERING THE MERITS OF THE CASE. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN A DEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/12/2015 . SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 01/12/2015 SRB COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES