ASTORIA AGRO & ALLIED INDUSTRIES PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER-12(1)(2), MUMBAI

ITA 2024/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5336 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 03-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Opportunity of being heard; Principle of natural justice; Corroborative evidences; Rule 8D; Set aside
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 2024 / MUM . /2018 ( ASSESSMENT YEAR : 20 13 14 ) AST ORIA AGRO & ALLIED INDUSTRIES P. LTD. GAGTE NO.187, A/P KATFAL BARAMATI, PUNE 413 102 PAN AAICA4511H . APPELLANT V/S INCOME TAX OFFICER WARD 12(1)(2), MUMBAI . RESPONDENT ASSESS EE BY : SHRI AAMOD PRABHUDESAI REVENUE BY : SHRI S.K. JAIN DATE OF HEARING 11.04.2019 DATE OF ORDER 29.05.2019 O R D E R PER SAKTIJIT DEY. J.M. THE AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 8 TH NOVEMBER 2017 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 20 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 13 1 4 . 2 . THE GROUNDS RAISED BY THE ASSESSEE PERTAINS TO THE DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) R/W RULE 8D OF THE INCOME TAX RULES, 1962. 2 ASTORIA AGRO & ALLIED INDUSTRIES P. LTD. 3 . B RIEF FACTS ARE, FOR THE ASSESSMENT YEAR UNDER DI SPUTE THE ASSESSEE FILED ITS RETURN OF INCOME ON 28 TH SEPTEMBER 2018, DECLARING NIL INCOME. THE ASSESSMENT IN CASE OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143(3) OF THE ACT DETERMINING THE TOTAL INCOME NIL AFTER SET OFF OF LOSS. HOWEVER, WHILE DOING SO , THE ASSESSING OFFICER MADE A DISALLOWANCE OF ` 1,55,10,808, UNDER SECTION UNDER SECTION 14A R/W RULE 8D, THEREBY EFFECTIVELY REDUCING THE LOSSES CLAIMED BY THE ASSESSEE. THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHOR ITY. 4 . AS STATED BY LEARNED COMMISSIONER (APPEALS), THE ASSESSEE SOUGHT ADJOURNMENT ON TWO OCCASIONS AND DID NOT APPEAR THE THIRD TIME WHEN THE APPEAL WAS FIXED FOR HEARING. THEREFORE, HE PROCEEDED TO DECIDE THE APPEAL EX PARTE. WHILE DOING SO, HE SUSTAINE D THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U /S 14A R/W RULE 8D. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED BEFORE US , WITHOUT AFFORDING SUFFICIENT OPPORTUNITY OF BEING HEARD, LEARNED COMMISSIONER (APPEALS) HAS DISPOSED OFF T HE APPEAL EX PARTE I N COMPLETE VIOLATION OF RULES OF NATURAL JUSTICE. THEREFORE, HE SUBMITTED , THE ISSUE RAISED IN THE APPEAL SHOULD BE RESTORED BACK TO THE LEARNED COMMISSIONER (APPEALS) FOR DE NOVO ADJUDICATION. 3 ASTORIA AGRO & ALLIED INDUSTRIES P. LTD. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE , THOUGH , JUSTIFIED EX PARTE DISPOSAL OF THE APPEAL BY THE LEARNED COMMISSIONER (APPEALS), HOWEVER, HE SUBMITTED THAT ONE MORE OPPORTUNITY CAN BE GIVEN TO THE ASSESSEE TO REPRESENT ITS CASE BEFORE THE FIRST APPELLATE AUTHORITY. 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN DISPUTE IN THE PRESENT APPEAL IS WITH REGARD TO DISALLOWANCE MADE UNDER SECTION 14A R/W RULE 8D. BEFORE US, LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT THE DISALLOWANCE MADE UNDER SECTION 14A R/W RULE 8D IS LEG ALLY UNSUSTAINABLE FOR VARIOUS REASONS. HE HAS SUBMITTED , HAD LEARNED COMMISSIONER (APPEALS) NOT DECIDED THE ISSUE EX PARTE, ASSESSEE COULD HAVE CONVINCED HIM THAT NO DISALLOWANCE UNDER SECTION 14A R/W RULE 8D COULD BE MADE. CONSIDERING THE AFORESAID SUBMI SSIONS OF THE LEARNED AUTHORISED REPRESENTATIVE AND WITHOUT ENTERING INTO THE CONTROVERSY WHETHER THE EX PARTE DISPOSAL OF THE APPEAL BY THE LEARNED COMMISSIONER (APPEALS) IS JUSTIFIED OR NOT, WE ARE OF THE VIEW THAT THE ASSESSEE DESERVES AN OPPORTUNITY TO EXPLAIN ITS CASE RELATING TO DISALLOWANCE MAD UNDER SECTION 14A R/W RULE 8D BEFORE LEARNED COMMISSIONER (APPEALS). ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER OF LEARNED COMMISSIONER (APPEALS) AND RESTORE THE ISSUE RELATING TO THE DISALLOWANCE MADE UNDER SECTION 14A R/W RULE 8D FOR DE NOVO ADJUDICATION BY THE LEARNED COMMISSIONER (APPEALS) AFTER PROVIDING 4 ASTORIA AGRO & ALLIED INDUSTRIES P. LTD. DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FURTHER, WE DIRECT THE ASSESSEE TO APPEAR BEFORE LEARNED COMMISSIONER (APPEALS) AND REPRESENT ITS CASE I N AN EFFECTIVE MANNER WITH SUPPORTING EVIDENCES AND CO OPERATE IN FINALIZATION OF APPEAL PROCEEDINGS. WITH THE AFORESAID OBSERVATIONS, GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 29.05.2019 SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 29.05.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI