M/s Channapala Chit Fund , Davangere V. Income Tax Officer Ward-1(1), Davangere

ITA 2440/BANG/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0106 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-12-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 27-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARUPPUSAMY
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Principle of natural justice; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.2440/BANG/2018 ASSESSMENT YEAR : 2015-16 M/S CHANNAPALA CHIT FUND, NO.324/2, SRINIVASA COMPLEX, 2 ND MAIN, P.J EXTENSIN, DAVANAGERE. PAN AAIFC 2034 N VS. THE INCOME-TAX OFFICER, WARD-1(1), DAVANGERE. APPELLANT RESPONDENT APPELLANT BY : SHRI R CHANDRASHEKAR, ADVOCATE RESPONDENT BY : SHRI KARUPPUSAMY, ADDL. CIT (DR) DATE OF HEARING : 18.12.2019 DATE OF PRONOUNCEMENT : 26.12.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 26/3/2018 PASSED BY LD CIT(A), DAVANGERE AND IT REL ATES TO THE ASST. YEAR 2015-16. 3. THE APPEAL IS BARRED BY LIMITATION BY 65 DAYS. THE ASSESSEE HAS MOVED A PETITION REQUESTING THE BENCH TO CONDON E THE DELAY. WE HEARD THE PARTIES ON THIS PRELIMINARILY ISSUE. HAVING REGARD TO ITA NO.2440 /BANG/2018 PAGE 2 OF 4 THE SUBMISSIONS MADE IN THE PETITION WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.15.91 LAKHS RELATING TO OUTSTANDING CURRENT LIABILITY. 4. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING CHIT FUNDS. THE AO NOTICED THAT THE ASSESSEE HAS SHOWN A SUM OF RS.15.91 LAKHS AS L IABILITY UNDER THE HEAD CURRENT LIABILITIES CHITS PAYABLE. SI NCE THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT OR ANY OTHER MATERIAL TO PROVE THE GENUINENESS OF THE LIABILITY, THE AO TREATED THE SA ME AS UNPROVED LIABILITY AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE LD CIT(A) ALSO CONFIRMED THE SAME. 5. THE LD AR SUBMITTED THAT THE AO WAS NOT CORRECT IN OBSERVING THAT THERE WAS NO BOOKS OF ACCOUNT. HE SUBMITTED T HAT THE ASSESSEE HAS BEEN MAINTAINING THE BOOKS OF ACCOUNT. HE FURTHER SUBMITTED THE AMOUNT OF RS.15.91 LAKHS CONSISTED OF CHIT AMOUNT PAYABLE TO THE SUBSCRIBERS AND ALSO INCLUDES A SUM OF RS.11.19 LAKHS RECEIVED FROM CHIT MEMBERS AS ADVANCE PAYMENT . SINCE THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT, HE SUBMIT TED THAT THE ASSESSEE WOULD BE IN A POSITION TO FURNISH ALL THE DETAILS THAT MAY BE REQUIRED BY THE AO TO PROVE THE LIABILITY. THE L D A.R SUBMITTED THAT HE HAS ALSO BROUGHT THE BOOKS OF ACCOUNT. ACCO RDINGLY HE SUBMITTED THAT THE ASSESSEE MAY BE PROVIDED WITH AN OPPORTUNITY IN THIS REGARD. ITA NO.2440 /BANG/2018 PAGE 3 OF 4 6. WE HEARD THE LD DR AND PERUSED THE RECORD. SINC E THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNT, WE ARE OF THE VIEW THAT THE ASSESSEE MAY PROVIDED WITH AN OPPORTUNITY, IN T HE INTEREST OF NATURAL JUSTICE, TO EXPLAIN THE ISSUE BEFORE THE AO . ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF AO FOR EXAMINING IT AFRESH. 7. IN THE RESULT, ALL THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DECEMBER, 2019. SD/ - (PAVAN KUMAR GADALE) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, THE 26 TH DECEMBER , 2019. /VMS/ COPY TO: 1. APPELLANT (S) / CROSS OBJECTOR(S) 2. RESPONDENT(S) 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, BANGALORE ITA NO.2440 /BANG/2018 PAGE 4 OF 4 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. . 14. DICTATION NOTE ENCLOSED