M/s KOSHA CHEMTECH PRIVATE LIMITED, MUMBAI V. ACIT 12 (3)(1), MUMBAI

ITA 2845/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3238 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Appeal Filed On: 06-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURUBINDER SINGH
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 2845/MUM/2019 ASSESSMENT Y EAR: 2014 - 15 M/S KOSHA CHEMTECH PRIVATE LIMITED, 304, WESTERN EDGE - 1, WESTERN EXPRESS HIGHWAY, BORIVALI (EAST) - 400066 PAN: AAECK0886F VS. ASSISTANT COMMISSIONER OF INCOME TAX 12(3)(1), 5 TH FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. NEHA PARA N JPE (A R) REVENUE BY : SHRI GURUBINDER SINGH (D R ) DATE OF HEARING : 30 /09 /202 1 DATE OF PRONOUNCEMENT: 08 / 10 /202 1 O R D E R PER SAKTIJIT DEY , JM THIS IS AN APPEAL BY TH E ASSESSEE AGAINST ORDER DATED 25.03.2019 OF LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - 20 , MUMBAI FOR THE ASSESSMENT YEAR 2014 - 15 . 2 . THE BASIC GRIEVANCE OF THE ASSESSEE IS AGAINST EX - PARTE DISPOSAL OF THE APPEAL FILED BEFORE LEARNED COMMISSIONER (APP EALS) , THAT TO O, IN LIMINE. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A RESIDENT COMPANY ENGAGED IN MANUFACTURING OF ORGANIC CHEMICAL PRODUCTS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, ASSESSEE FILED ITS RETURN OF INCOME ON 21.11.2014 DECLARING TOTAL INCOME OF RS. 1,18,35,410/ - . SUBSEQUENTLY, BASED ON INFORMATION RECEIVED 2 ITA NO. 2845 / MUM/2019 ASSESSMENT YEAR: 2014 - 1 5 FROM THE INVESTIGATION (WING) AT KOLKATA THAT DEDUCTION CLAIMED BECAUSE OF DONATION GIVE N TO A PARTICULAR ENTITY IS IN GENUINE, THE ASSESSING OFFICER (AO) REOPENED THE ASSESSMENT UNDER SECTI ON 147 OF THE INCOME TAX ACT , 1961 . ULTIMATELY, THE AO COMPLETED THE ASSESSMENT UNDER SECTION 147 OF THE ACT ADDING BACK THE DONATION OF RS. 42,50,000/ - . AGAINST THE ASSESSMENT ORDER SO PASSED, ASSESSEE PREFERRED AN APPEAL BEFORE LEARNED COMMISSIONER (APPE ALS). BEING OF THE VIEW THAT THE APPEAL FILED BY THE ASSESSEE IS DEFECTIVE , SINCE , THE MEMORANDUM OF APPEAL IN FORM NO. 35 HAS NOT BEEN SIGNED BY THE MANAGING DIRECTOR OR ANY OTHER DIRECTOR, L EARNED COMMISSIONER (APPEALS) TREATED THE APPEAL AS INVALID AND ACCORDINGLY DISMISSED IT WITHOUT GOING INTO THE MERITS. 4 . BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MEMORANDUM OF APPEAL WAS SIGNED BY ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY. SHE SUBMITTED , WITHOUT PROVIDING EVEN A SINGLE OPPOR TUNITY TO THE ASSESSEE TO EXPLAIN THE SO CALLED DEFECT, L EARNED COMMISSIONER (APPEAL S ) HAS DISMISSED THE APPEAL PURELY ON TECHNICAL GROUND WITHOUT GOING INTO THE MERITS. THUS, S HE SUBMITTED , THE ORDER PASSED BEING IN VIOLATION OF RULES OF NATURAL JUSTICE , SHOULD BE SET ASIDE. 5. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY SUBMITTED , THE ASSESSEE CAN BE GIVEN ONE MORE OPPORTUNITY TO REPRESENT THE CASE BEFORE LEARNED COMMISSIONER (APPEALS) AFTER RECTIFYING THE DEFECT. 6 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. UNDISPUTEDLY, LEARNED COMMISSIONER (APPEALS) HAS DISMISSED ASSESSEES APPEAL IN LIMINE PURELY ON A TECHNICAL GROUND THAT THE MEMORANDUM OF APPEAL IN FORM NO. 35 WAS NOT SIGNED BY THE MANAGING DIRECTOR OR ANY OTHER 3 ITA NO. 2845 / MUM/2019 ASSESSMENT YEAR: 2014 - 1 5 DIREC TOR. HOWEVER, ON PERUSAL OF MATERIAL ON RECORD, PRIMA FACIE, WE ARE SATISFIED THAT ONE OF THE DIRE CTORS OF THE ASSESSEE COMPANY HAS VERIFIED AND SINGED THE MEMORANDUM OF APPEAL . E VEN , ASSUMING THAT THERE WAS SOME DEFECT IN T HE APPEAL FILED BY THE ASSESSEE, L EARNED COMMISSIONER (APPEALS) SHOULD HAVE ADHERED TO THE PRINCIPLE S OF NATURAL JUSTICE AND GRANTED A FAIR OPPORTUNITY TO THE ASSESSEE TO RECTIFY THE DEFECT, IF ANY. HOWEVER, ON A CAREFUL SCRUTINY OF THE IMPUGNED ORDER OF LEARNED COMMISSIONER (APPEALS) AS WELL AS OTHER MATERIALS ON RECORD, WE DO NOT FIND ANY SUCH OPPORTUNITY BEING GRANTED TO THE ASSESSEE BY LEARNED COMMISSIONER (APPEALS). IN FACT, A CURSORY GLANCE AT THE IMPUGNED ORDER OF LEARNED COMMISSIONER (APPEALS) WOULD MAKE IT CLEAR THAT WITHOUT PROV IDING ANY OPPORTUNITY TO THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) HAS DISMISSED THE APPEAL IN LIMINE WITHOUT GOING INTO THE MERITS OF THE CASE. IN OUR VIEW, THIS IS IN GROSS VIOLATION OF RULES OF NATURAL JUSTICE. 7 . IN VIEW OF THE AFORESAID, WE ARE INC LINED TO SET ASIDE THE IMPUGNED ORDER OF LEARNED COMMISSIONER (APPEALS) AND RESTORE THE MATTER BACK TO HIM FOR DE NOVO ADJUDICATION. I N CASE , THERE IS ANY DEFECT IN THE APPEAL FILED BY THE ASSESSEE, L EARNED COMMISSIONER (APPEALS) MUST PROVIDE REASONABLE OP PORTUNITY TO THE ASSESSEE TO REMOVE THE DEFECT AND THEREAFTER DECIDE THE APPEAL ON MERIT S AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NO. 2845 / MUM/2019 ASSESSMENT YEAR: 2014 - 1 5 ORDER PRONOUNCED IN THE OPEN COU RT ON 8 TH OCTOBER , 2021 . SD/ - SD/ - ( M. BALAGANESH ) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER MUMBAI ; DATED: 08 / 10 /202 1 ALINDRA, 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 . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI