SMT. LORETTA MASCARENHAS, MUMBAI V. ACIT - 15(1), MUMBAI

ITA 2584/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3282 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 14-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2013
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: MOHAN SRIHARSHA
• Keywords: Rectification of order; Opportunity of being heard
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO.2584/M/2013 (ASSESSMENT YEAR: 2008 - 2009 ) SMT. LORETTA MASCARENHAS, C/O. MOHAN SRIHARSHA & ASSOCIATES, CHARTERED ACCOUNTANTS, 302, B WING, MANGALYA, OFF MAROL MAROSHI ROAD, NEAR MAROL FIRE BRIGADE, ANDHERI (E), MUMBAI 400 059. / VS. ACIT (15)1, MATRU MANDIR, 1 ST FLOOR, TARDEO, MUMBAI 400 007. ./ PAN : AHMPM0427E ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MOHAN SRIHARSHA / RESPONDENT BY : SHRI A.B. KOLI, DR / DATE OF HEARING : 30.08.2016 / DATE OF PRONOUNCEMENT : 09 .09.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 4.4.2013 IS AGAINST THE ORDER OF THE CIT (A) - 26, MUMBAI DATED 18.1.2013 FOR THE ASSESSMENT YEAR 2008 - 2009. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING MAIN GROUNDS WHICH READ AS UNDER: - 1. THE LD CIT (A) WAS NOT JUSTIFIED IN CONSIDERING AS TAXABLE, INTEREST ON NRE ACCOUNTS OF RS. 3,14,302/ - WHICH IS EXEMPT FROM TAX UNDER SECTION 10(4)(II) OF THE ACT WHILE PASSING HIS APPELLATE ORDER, DATED JANUARY 18, 2013. FOLLOWING THE ORDER OF THE LD CIT (A), THE AO WHILE PASSING HIS ORDER DATED MARCH 4, 2013 AND IN THE NOTICE OF DEMAND U/S 156 DATED MARCH 5, 2013, HAS ALSO NOT GIVEN EFFECT, TO THE CLAIM OF THE ASSESSEE FOR TREATIN G AS EXEMPT, THE SAID INTEREST ON NRE ACCOUNTS. 2. THE OMISSION TO CLAIM EXEMPTION OF NRE INTEREST INCOME IN THE TAX RETURN AND IN THE ASSESSMENT PROCEEDINGS WITH THE LD AO WAS INADVERTENT AND THE ASSESSEE HAS FILED APPLICATION DATED NOVEMBER 12, 2010 WITH THE LD AO FOR RECTIFICATION OF MISTAKE U/S 154 OF THE ACT ON WHICH NO ORDER HAS BEEN PASSED BY THE LD AO TILL DATE. 3. THE ASSESSEE HAS PLEADED BEFORE THE CIT (A) TO ALLOW THE SAID EXEMPTION WITH DETAILED JUSTIFICATION WHICH HAS BEEN TURNED DOWN BY THE CI T (A). 2 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BRIEFLY NARRATED THE FACTS OF THE CASE . BRINGING OUR ATTENTION TO THE GROU ND NO. II RAISED BY THE ASSESSEE BEFORE THE CIT (A), LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT WAS COMPLETED BY THE AO WITHOUT TAXING THE INTEREST AMOUNT OF RS. 3,14,302/ - , WHICH IS OTHERWISE EXPRESSLY EXEMPT FROM THE TAX IN VIEW OF THE PROVISIONS OF SECTION 10(4)(II) OF THE INCOME TAX ACT, 1961. CIT (A) DID NOT ADJUDICATE THIS ISSUE ON MERITS AND THE CONTENTS O F PARA 4.2 OF HIS ORDER ARE RELEVANT IN THIS REGARD. CIT (A) DISMISSED THE SAID GROUND NO. II STATING THAT THIS ISSUE IS RAISED FOR THE FIRST TIME BEFORE HIM . I N THE PROCESS CIT (A) IGNORED THE JUDGMENT OF THE HONBLE SUPREME COURT JUDGMENT IN THE CASE O F GOETZE (INDIA) LTD 284 ITR 323 , WHICH WAS RELIED UPON BY THE ASSESSEE IN THE WRITTEN SUBMISSIONS BEFORE HIM DATED 16.1.2013. LD COUNSEL FOR THE ASSESSEE ALSO MENTIONED THAT ALL THE FACTS RELEVANT FOR THE ADJUDICATION OF THIS GROUND NO.II ARE ALREADY ON THE RECORDS OF THE AO. BEING A LEGAL ISSUE, CIT (A) SHOULD HAVE ADMITTED, EXAMINE AND ADJUDICATE THIS ISSUE CONSIDERING THE EXPRESS PROVISIONS OF SECTION 10(4)(II) OF THE ACT. 3. ON HEARING BOTH THE PARTIES, WE FIND, THE ISSUE RAISED BEFORE THE CIT (A) AN D THE TRIBUNAL IS A LEGAL ISSUE AND IT DOES NOT CALL FOR ANY INVESTIGATION TO THE FACTS. THE PROVISIONS OF SECTION 10(4)(II) PROVIDE FOR E X E M P TION OF SUCH INTEREST RECEIPT ON NRE ACCOUNT. CONSIDERING THE SAME, AS REQUESTED BY THE LD COUNSEL FOR THE ASS ESSEE, WE REMAND THIS ISSUE TO THE FILE OF THE CIT (A) TO ADMIT THE GROUND CONSIDERING THE BINDING JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD (SUPRA) AND ADJU DICATE THE SAME AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUN CED IN THE O PEN COURT ON 9 T H SEPTEMBER, 2016. S D / - S D / - ( SAKTIJIT DEY ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 0 9 .09.2016 . . ./ OKK , SR. PS 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI