Shri. S. Linganna, Bellary V. DCIT, Bellary

ITA 283/BANG/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0249 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS JT
• Assessee Lawyers: B S N PRASAD
• Keywords: Opportunity of being heard; Question of law; Deemed dividend
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.283/BANG/2016 ASSESSMENT YEAR : 2009-10 SHRI S. LINGANNA, PROPRIETOR, M/S RAGHAVENDRA FILLING STATION, 9/18, II CROSS, GANDHI NAGAR, BALLARI 583 103. PAN: AARPL 3545N VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, BALLARI. APPELLANT RESPONDENT APPELLANT BY : SHRI B.S.N. PRASAD, ADVOCATE RESPONDENT BY : SMT. SWAPNA DAS, JT. CIT(DR) DATE OF HEARING : 29.06.2016 DATE OF PRONOUNCEMENT : 30.06.2016 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS), GULBARGA DATED 29.12.2015 FOR THE ASS ESSMENT YEAR 2009- 10 INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE IMPUGNED APPELLATE ORDER PASSED BY THE LEAR NED CIT(A) IS ARBITRARY, ERRONEOUS, UNREASONABLE AND OP POSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW AND DESERVES TO BE ANNULLED. 2. THE LEARNED CIT(A) HAS ERRED IN DISMISSING THE A PPEAL FILED BY THE APPELLANT MERELY ON A TECHNICAL GROUND OF NON- APPEARANCE BY THE APPELLANT, WITHOUT GOING INTO THE MERITS OF THE CASE. ITA NO.283/BANG/2016 PAGE 2 OF 4 3. THE LEARNED CIT(A) HAS ERRED IN RELYING ON THE D ECISION IN THE CASE OF CIT V. MULTIPLAN INDIA (P.) LTD. [1991] 38 ITD 320 TO DISMISS THE APPEAL, WITHOUT APPRECIATING THAT THE HON'BLE DELHI BENCH OF THE TRIBUNAL HAS ONLY RULED IN THAT CASE T HAT NO QUESTION OF LAW ARISES FROM ITS ORDER AND THAT THE DECISION HAS NO APPLICATION TO THE APPELLANT'S CASE. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT( A) HAS ERRED IN NOT DELETING THE ADDITION OF RS. 15,98,290 MADE BY THE LEARNED AO AS DEEMED DIVIDENDS, WITHOUT THE CONDITI ONS PRECEDENT TO THE INVOKING OF SECTION 2(22)(E) BEING SATISFIED, VIZ., PRESENCE OF A RUNNING ACCOUNT BETWEEN THE PAYER AND THE PAYEE REFLECTING COMMERCIAL AND BUSINESS TRANSACTIONS AND ABSENCE OF ANY LOAN OR ADVANCE CARRYING AN OBLIGATION ON THE P ART OF THE APPELLANT TO REPAY. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT( A) HAS ERRED IN NOT DELETING THE ADDITION OF RS. 11,17,701 MADE BY THE LEARNED AO UNDER SECTION 14A READ WITH RULE 8D, IN THE ABSENCE OF ANY INCOME CLAIMED AS EXEMPT FROM TAX AND IGNORI NG THAT THE APPELLANT HAD HIMSELF MADE THE DISALLOWANCE WARRANT ED UNDER SECTION 40(A)(IA) IN THE STATEMENT OF COMPUTATION O F INCOME AND THERE WAS NO SCOPE FOR ANY FURTHER DISALLOWANCE EVE N UNDER SECTION 40(A)(IA). FOR THESE AND ANY OTHER ADDITIONAL GROUNDS WHICH TH E APPELLANT CRAVES LEAVE TO URGE AT THE TIME OF HEARING, THE HO N'BLE TRIBUNAL MAY BE PLEASED TO GRANT, IN THE INTEREST OF EQUITY AND JUSTICE, APPROPRIATE RELIEF BY DELETING THE ADDITION AND THE DISALLOWANCE MADE BY THE LEARNED AO. 2. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDER OF THE CIT(APPEALS) WITH THE SUBMISSION THAT THE CIT(APPEALS) HAS AFFORDED ONLY ONE OPPORTUNITY TO THE ASSESSEE AND ON THAT DATE THE ASSESSEE COULD NOT AP PEAR ON ACCOUNT OF HIS ILLNESS AND THE CIT(APPEALS) DISMISSED THE APPE AL IN LIMINE, WITHOUT DEALING WITH THE ISSUES ON MERIT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER ITA NO.283/BANG/2016 PAGE 3 OF 4 CONTENDED THAT UNDER THE INCOME-TAX ACT, THE CIT(AP PEALS) IS REQUIRED TO ADJUDICATE THE APPEAL ON MERITS, EVEN IF NONE APPEA RED ON BEHALF OF THE ASSESSEE. THEREFORE, THE ORDER OF THE CIT(APPEALS) DESERVES TO BE SET ASIDE AND THE MATTER BE RESTORED TO HIM WITH A DIRE CTION TO ADJUDICATE THE ISSUES AFRESH, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. THE LD. DR SIMPLY PLACED RELIANCE UPON THE ORDER OF THE CIT(APPEALS). 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES, WE FIND THAT UNDISPUTEDLY THE CIT(APPEALS) HAS DISMISS ED THE APPEAL IN LIMINE WITHOUT DEALING WITH THE ISSUES ON MERIT, WHEREAS H E IS NOT EMPOWERED TO DO SO. UNDER THE INCOME-TAX ACT, HE IS REQUIRED TO ADJUDICATE THE APPEAL ON MERITS, EVEN IF NONE APPEARS ON BEHALF OF THE AS SESSEE. IN LIGHT OF THESE FACTS, WE SET ASIDE THE ORDER OF THE CIT(APPEALS) A ND RESTORE THE MATTER TO HIM WITH A DIRECTION TO READJUDICATE THE APPEAL ON MERITS, AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2016. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 30 TH JUNE, 2016. /D S/ ITA NO.283/BANG/2016 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.