RAJESH G.MEHTA, MUMBAI V. ASST CIT CEN CIR 36, MUMBAI

ITA 270/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1934 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 14-01-2016
• Court: TRIBUNAL
• Department Lawyers: SANJAY BAHADUR
• Assessee Lawyers: MRS V M GADGIL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A. NO.270/M/2016 (ASSESSMENT YEAR: 2007 - 2008) SHRI RAJESH G. MEHTA, C - 901, PANCHSEEL HEIGHTS, MAHAVIR NAGAR, KANDIVALI, MUMBAI 400 067. / VS. ACIT, CENTRAL CIRCLE - 36, MUMBAI. ./ PAN : AAFPM9963R ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MRS. V.M. GADGIL / RESPONDENT BY : SHRI SANJAY BAHADUR, CIT - DR / DATE OF HEARING : 08.11.2016 / DATE OF PRONOUNCEMENT : 08.11.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 14.1.2016 IS AGAINST THE ORDER OF THE CIT (A) - 53, MUMBAI DATED 24.9.2015 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL, ASSESSEE RAISED SEVEN GROUNDS IN TOTO AND APART FROM OTHER ISSUES, THEY INCLUDE CERTAIN LEGAL ISSUES VIZ CORRECTNESS OF THE ASSESSMENT ORDER MADE U/S 143(3) R.W.S 153A OF THE ACT AND THE DECISION OF THE AO ON THE APPLICABILITY OF THE PROVISIONS OF SECTION 153A OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. ASSESSEE FURTHER ARGUES I N THE GROUNDS THAT THIS IS THE CASE OF UNABATED ASSESSMENT AND THE AO DOES NOT HAVE FREE HAND IN MAKING ADDITIONS WHICH ARE SUPPORTED BY THE INCRIMINATING MATERIAL. FURTHER, ASSESSEE ALLEGES THAT THE ADJUDICATION BY THE CIT (A) WAS MADE EXPARTE AND THEREF ORE, THE CIT (A) VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. THE OTHER ISSUES RAISED IN THIS APPEAL RELATE TO THE MERITS OF THE ASSESSMENT ORDER AND THE ADDITIONS MADE THEREIN. 3. BEFORE US, THERE IS A LETTER FOR ADJOURNMENT DATED 7.11.2016, WHEREIN ASSES SEE SEEKS CERTAIN TIME TO COMPILE THE DETAILS. IN THIS REGARD, IN RESPONSE TO THE 2 QUESTIONS FROM THE BENCH REGARDING THE DETAILS LIKELY TO BE FILED, THERE IS NO RESPONSE FROM THE ASSESSEES SIDE. ACCORDINGLY, THE REQUEST FOR ADJOURNMENT IS REJECTED AND WE PROCEED TO HEAR THE CASE ON THE GROUNDS RAISED BEFORE US. 4. BRINGING OUR ATTENTION TO THE GROUNDS NO.4 AND 6, IT IS SUBMITTED THAT THE CIT (A) PASSED ORDER WITHOUT ATTENDANCE OF THE ASSESSEE OR ANY REPRESENTATION ON BEHALF OF THE ASSESSEE. THEREFORE, THERE IS A REQUEST FOR REMANDING THIS APPEAL TO THE FILE OF THE CIT (A) WITH A DIRECTION TO GRANT FURTHER OPPORTUNITY IN ADDITION TO THE DETAILS PROVIDED IN PARA 3.2 OF THE IMPUGNED ORDER. IT IS ALSO BROUGHT TO OUR NOTICE THAT THE ISSUE RELATING TO MAKING OF ASSESSMENT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL U/S 153A OF THE ACT IS UNSUSTAINABLE IN LAW. 5. ON HEARING BOTH THE PARTIES, WE HAVE PERUSED THE ORDER OF THE AO DATED 26.3.2014 AND FIND THE ASSESSEE FILED THE RETURN OF INCOME ORIGINALLY ON 2.6. 2008 DECLARING THE TOTAL INCOME OF RS. 6.6 LAKHS (ROUNDED OFF). CONSEQUENT TO THE SEARCH ACTION CONDUCTED ON SHRI RAJESH G. MEHTA, THE DIRECTOR OF M/.S KARMA INDUSTRIES LIMITED, IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT, ASSESSEE FILED THE RETURN OF I NCOME DECLARING THE INCREASED TOTAL INCOME OF RS. 33,65,021/ - . ON THE FACT OF IT, THE A SSESSMENT ORDER DOES NOT INDICATE ANY INCRIMINATING MATERIAL / EVIDENCE IN ANY FORM FOR THIS INCREASED TOTAL INCOME. ASSESSEE DECLARED AN AMOUNT OF RS. 28,12,544/ - AS SHORT TERM CAPITAL GAINS AND CLAIMED BENEFIT OF THE PROVISIONS OF SECTION 111A OF THE ACT RELATING TO THE TAX ON SHORT TERM CAPITAL GAINS SUO MOTO IN CERTAIN CASES. AO NEVER MENTIONED THAT THE ABOVE ADDITIONAL INCOME IS ATTRIBUTABLE TO ANY INCRIMINATIN G MATERIAL SEIZED U/S 132 OF THE ACT. ASSESSING OFFICER CONSIDERED THE CLAIM OF THE ASSESSEE AND FOUND, ASSESSEE DOES NOT ESTABLISH THE APPLICABILITY OF THE SAID PROVISIONS OF THE ACT AND THE CONDITIONS ARE SATISFACTORILY MET BEFORE CLAIMING THE CONCESSIO NAL TAX RATES. ACCORDINGLY, THE SAID INCOME WAS TREATED AS NORMAL INCOME. AO ALSO DENIED THE CLAIM OF DEDUCTION UNDER CHAPTER VI - A AMOUNTING TO RS. 1,10,000/ - . ON APPEAL, CIT (A) CONFIRMED THE SAME IN HIS EXPARTE ADJUDICATION. THUS, IT IS EVIDENT FROM T HE RECORD THAT THE AO DID NOT HAVE EVIDENCE / INCRIMINATING MATERIAL TO SHOW THAT THE SAID INCOME OF RS. 28,12,544/ - OR DEDUCTION OF RS. 1,10,000/ - HAS A BASIS OF ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTION. HOWEVER, THIS IS THE CASE WHERE ADJUDICATION BY THE CIT (A) IS DONE IN THE 3 ABSENCE OF THE ASSESSEE OR HIS REPRESENTATIVE. CONSIDERING THE FAIRNESS OF THE REQUIREMENT OF THE ADJUD ICATION OF ISSUES INVOLVED, WE ARE OF THE OPINION, THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL ARE REQUIRED TO BE REMANDED TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICATION AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ASSES SEE IS ALSO DIRECTED TO MAKE ATTENDANCE WITHOUT FAIL THIS TIME IN THE SECOND ROUND OF PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY. WE ORDER ACCORDINGLY. THUS, GROUND S RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APP EAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH NOVEMBER, 2016. S D / - S D / - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 08.11 .2016 . . ./ OKK , SR. PS / 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