Sh. Anil Mehra, Amritsar. V. The Income Tax Officer, Amritsar.

ITA 272/ASR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5624 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-04-2017
• Assessment Year: 1996-1997
• Appeal Filed On: 03-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Salary income; Opportunity of being heard

Judgement Text

ITA NO.272 (ASR)/2015 ASST. YEAR: 1996-97 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER I.T.A NO.272(ASR)/2015 ASSESSMENT YEAR:1996-97 SH. ANIL MEHRA 973/X, KATRA BHAI SANT SINGH, AMRITSAR. PAN: AGLPM-7017L VS. INCOME TAX OFFICER-1, MOGA. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE. RESPONDENT BY: SH. RAHUL DHAWAN (DR.) DATE OF HEARING: 18.04.2017 DATE OF PRONO UNCEMENT:19 TH APRIL, 2017. ORDER PER DIVA SINGH: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 27.03.2015 OF CIT(A) -1, AMRITSAR PERTAINING TO 1996-97 ASSESSMENT YEAR ON VARIOUS GR OUNDS INCLUDING GROUND NOS.4 & 5 WHICH READ AS UNDER: 4. THAT THE LD. A.O ON THE MATTER BEING RESTORED BA CK TO HIM BY THE HONBLE ITAT HAS NEITHER FOLLOWED THE DIRECTIONS OF HONBLE ITAT BOTH WITH REGARD TO AFFORDING THE REASONABLE OPPORTUNITY OF BEING HEARD NOR CONSI DERING THE EXPLANATION TENDERED BY HIM TO THE LD. A.O. 5. THAT THE GROUND NO.4 IS ESTABLISHED BY THE FACTS THAT THE PROCEEDING WERE TAKEN UP JUST BEFORE THE LIMITATION SET IN AND AFTER AFFO RDING ONLY ONE SEMBLANCE OF OPPORTUNITY. 2. IT IS PERTINENT TO MENTION THAT AN ADJOURNMENT A PPLICATION HAD BEEN MOVED ON BEHALF OF THE COUNSEL, HOWEVER, CONSI DERING THE AFORESAID GROUNDS, IT WAS CONSIDERED APPROPRIATE TO REJECT TH E SAME AND PROCEED IT TO DECIDE THE APPEAL EX-PARTE QUA THE ASSESSEE APPE LLANT ON MERITS AFTER HEARING THE LD. SR. DR. ITA NO.272 (ASR)/2015 ASST. YEAR: 1996-97 PAGE 2 OF 4 3 . A PERUSAL OF THE RECORD SHOWS THAT THE ASSESSEE DER IVED INCOME FROM SALARY, HOUSE PROPERTY, AND INCOME FROM OTHER SOURCES. THE ASSESSEE WAS FOUND TO HAVE TAKEN A LOAN OF RS.25,00 ,000/- FROM M/S SHRI RAM INDUSTRIAL ENTERPRISES FINANCIAL SERVICES LTD, DELHI ON 21.04.1995. THE SAID LOAN AMOUNT WAS TRANSFERRED T O M/S S.D. SULPHITE LTD., IN WHICH THE ASSESSEE WAS STATED TO BE A DIRE CTOR. ACCORDING TO THE AO IN THE ORIGINAL PROCEEDINGS, THE INTEREST OF RS. 5,46,890/- ON THE SAID LOAN WAS NOT ALLOWABLE EXPENDITURE U/S 36(1)(III) O F THE ACT AS THE AMOUNT WAS HELD TO BE NOT UTILIZED FOR THE PURPOSES OF BUSINESS OF THE ASSESSEE. ACCORDINGLY THE SAID INTEREST WAS DISALLO WED BY THE AO VIDE ORDER DATED 23-2-1999. 3.1 THE ASSESSEE FILED AN APPEAL BEFORE THE CIT( A), WHEREIN THE DISALLOWANCE WAS SUSTAINED BY THE CIT(A), JAMMU VID E HIS ORDER DATED 10-10-2000 IN APPEAL NO. A003/99/00. AGAINST THE OR DER OF THE CIT(A), THE ASSESSEE FILED AN APPEAL BEFORE THE ITAT, AMRIT SAR, AND THE ITAT VIDE ORDER DATED 11-11-2005 IN ITA NO. 578 AND 579(ASR)/ 2000 RESTORED THE MATTER TO THE FILE OF THE AO WITH THE DIRECTIONS, T O RE DECIDE THE ISSUE. THE RELEVANT EXTRACT FROM THE AFORESAID ORDER IS REPROD UCED HEREUNDER: 5.4 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND M ATERIAL AVAILABLE ON RECORD. I FIND FROM THE ABOVE SUBMISSIONS AND MATERIAL ON REC ORD THAT THE AO MAINLY ON THE BASIS OF FINDING NO CLAUSE IN THE PARTNERSHIP DEED FOR PAYMENT OF INTEREST ON DEBIT BALANCE MADE THE DISALLOWANCE. THE CIT(A) DID NOT C ONSIDERED THIS REASON FOR DISMISSING THE APPEAL OF THE ASSESSEE. THE CIT(A) H AS MADE OUT ALTOGETHER A NEW CASE BY USING SECTION 36(L)(III) OF THE INCOME TAX ACT WITHOUT NOTICES TO THE ASSESSEE. THEREFORE, THE MATTER REQUIRES RECONSIDER ATION. THE SUBMISSIONS OF THE BOTH THE PARTIES CLEARLY SHOW THAT THE MATTER SHOUL D BE INVESTIGATED BY THE AO AS CONTRARY VIEW IS TAKEN IN THE CASE OF THE FIRM M/S MEHRA ASSOCIATES BY THE SAME AO. I AM, ACCORDINGLY OF THE VIEW THAT THE CIT(A) SH OULD HAVE GIVEN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN HIS CASE ON THE BASIS OF TH E REASONS AS GIVEN BY THE CIT(A) IN THE IMPUGNED ORDER. I ACCORDINGLY SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND RESTORE THE MATTER IN ISSUE TO THE FILE OF THE AO WITH DIRECTION TO RE-DECIDE THIS ISSUE BY GIVEN REASONABLE SUFFICIE NT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS A RESULT, THE APPEAL OF THE A SSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. (EMPHASIZES PROVIDED) ITA NO.272 (ASR)/2015 ASST. YEAR: 1996-97 PAGE 3 OF 4 3.2 THE RECORD FURTHER SHOWS THAT THE ASSESSEE AGGRIEVED BY THE ORDER DATED 26.12.2016 OF THE ASSESSING OFFICER IN THE SE T ASIDE PROCEEDINGS AGAIN CAME IN APPEAL BEFORE THE CIT(A) RAISING THE FOLLOW ING GROUNDS. THESE GROUNDS ARE SEEN TO BE IDENTICAL TO WHAT HAS BEEN A GITATED BEFORE ITAT. THE GROUNDS BEFORE THE CIT(A) ARE EXTRACTED AT PAGE-2 O F THE IMPUGNED ORDER, THESE ARE REPRODUCED HEREUNDER:- 4. THAT THE LD. A.O ON THE MATTER BEING RESTORED BA CK TO HIM BY THE HONBLE ITAT HAS NEITHER FOLLOWED THE DIRECTIONS OF HONBLE ITAT BOTH WITH REGARD TO AFFORDING THE REASONABLE OPPORTUNITY OF BEING HEARD NOR CONSI DERING THE EXPLANATION TENDERED BY HIM TO THE LD. A.O. 5. THAT THE GROUND NO.4 IS ESTABLISHED BY THE FACTS THAT THE PROCEEDING WERE TAKEN UP JUST BEFORE THE LIMITATION SET IN AND AFTER AFFO RDING ONLY ONE SEMBLANCE OF OPPORTUNITY. 3.3 IN THE LIGHT OF THE AFORESAID FACTS, IT IS SEEN THAT THE ISSUE HAS BEEN DECIDED BY THE CIT(A) ON MERITS WITHOUT ADJUDICATIN G ON THE ISSUE AGITATED IN GROUND NOS.4 & 5 RAISED BEFORE HIM. TH E LD. SR. DR WAS REQUIRED TO ADDRESS THE SAID SHORT COMING. THOUGH R ELIANCE WAS PLACED UPON THE IMPUGNED ORDER BY HIM, HOWEVER, ON GOING T HROUGH THE SAME, DUE TO NON DISCUSSION IN THE ORDER ON THE ISSUE, IT COULD NOT BE SHOWN THAT THE SAID GROUND HAD BEEN ADJUDICATED. I FIND O N A CAREFUL READING OF THE ENTIRE ORDER THAT THE GRIEVANCE OF THE ASSESSEE PERSISTS. THE LD. CIT(A), IN THE FACTS OF THE PRESENT CASE, HAS FAILE D TO ADJUDICATE ON GROUND NOS. 4 & 5 RAISED BY THE ASSESSEE BEFORE HIM . THE FACT THAT THERE WAS A SPECIFIC DIRECTION BY THE CO-ORDINATE BENCH O F HONBLE ITAT, IS EVIDENT FROM THE AFORESAID EXTRACT OF THE ORDER HIG HLIGHTED HEREINABOVE. ACCORDINGLY, IN VIEW THEREOF, THE IMPUGNED ORDER IS SET ASIDE AND THE ISSUE IS RESTORED BACK TO THE FILE OF LD. CIT(A) WI TH A DIRECTION TO DECIDE THE AFORESAID GROUNDS IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. SINCE THE DE CISION ON THE AFORESAID GROUND GOES TO THE ROOT OF THE MATTER THE IMPUGNED ORDER IS SET ASIDE IN TOTO AND THE LD. CIT(A) IS DIRECTED TO FIR ST ADJUDICATE GROUND NOS.4 & 5 AND THEREAFTER, PROCEED TO DECIDE THE ISS UE ON MERITS OF THE ITA NO.272 (ASR)/2015 ASST. YEAR: 1996-97 PAGE 4 OF 4 ADDITION. NEEDLESS TO STATE THAT A REASONABLE OPPOR TUNITY OF BEING HEARD SHALL BE AFFORDED TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES WITH THE AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH APRIL, 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER /PK/PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER