THRESIA P. JOHNY, MUMBAI V. ASST CIT 23(3), MUMBAI

ITA 286/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5874 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 144

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNALE BENCH, MUMB AI BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI AMIT SHUK LA, JM ITA NO. 286/MUM/2013 ASSESSMENT YEAR-2006-07 MRS. THRESIA P. JOHNY, 404, AJIT APARTMENT, SARVODAYA NAGAR, MULUND,(W), MUMBAI-400080 / VS. THE ASST. CIT(23)(3), PRATYAKSHAKAL BHAVAN, BANDRA-KURLA COMPLEX, BANDRA(E), MUMBAI -400050 ./ PAN :AACPP5339B ( /ASSESSEE ) .. ( / RESPONDENT ) ! / ASSESSEE BY : SHRI SAMEER DALAL '# ! / REVENUE BY : S HRI ASHOK SURI # $ / DATE OF HEARING : 26/03/2014 %&' $ / DATE OF PRONOUNCEMENT : 26/03/2014 () () () () / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 09/01/2013 IS AGAINST THE ORDER OF THE CIT(A)-34, MUMBAI, DATED 17/10/201 2 FOR THE ASSESSMENT YEAR 2006-07. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUN DS WHICH READ AS UNDER:- I. NOT GIVING PROPER OPPORTUNJTY 1.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) 34, MUMBAI [THE ID. CIT (A)] ERRED IN PASSING THE ORDER UNDER SECT ION 250 OF THE INCOME TAX ACT, 196! (THE ACT) IN BREACH OF THE PRINCIPLES O F NATURAL JUSTICE, IN AS MUCH AS NO PROPER AND EFFECTIVE OPPORTUNITY OF BEIN G HEARD GIVEN TO THE APPELLANT. 1.2 IT IS SUBMITTED THAT IN THE FACT AND CIRCUMSTAN CE OF THE CASE AND IN LAW, THE ACTION OF THE ID. CIT (A) WAS BAD AND ILLEGAL. WITHOUT PREJUDICE TO THE ABOVE : 2. BEST JUDGMENT ASSESSMENT U/S. 144 OF THE ACT : 2 ITA NO.286/MUM/2013 MRS. THRESIA P. JOHNY 2.1 THE ID. CIT (A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER (THE A.O.) IN FRAMING THE BEST JUDGMENT ASSESSMENT BY I NVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. 2.2 WHILE DOING SO, THE LD. CIT(A) FAILED TO APPRECIA TE: THE NECESSARY CONDITIONS FOR INVOKING THE PROVISION S OF SECTION 144 OF THE ACT WERE NOT FULFILLED; A. NO SUFFICIENT AND EFFECTIVE OPPORTUNITY WAS PROVIDE D TO THE APPELLANT AT THE ASSESSMENT STAGE; AND B. IN ANY CASE, THAT THE APPELLANT WAS PREVENTED BY TH E REASONS BEYOND ITS CONTROL TO REPRESENT ITS CASE PROPERLY A ND FULLY BEFORE THE A.O. 2.3 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRC UMSTANCES OF THE CASE AND IN LAW, NO SUCH ACTION ON THE PART OF THE ID. C IT (A) WAS CALLED FOR. WITHOUT FURTHER PREJUDICETO TUE ABOVE : 3.1 THE ID. CIT (A) ERRED IN PARTLY CONFIRMING THE ADDITION MADE BY THE A.O. TO THE EXTENT OF RS 5,85,191/-, ALLEGING THAT THE APPELLANT WAS NOT ABLE TO EXPLAIN THE SOURCE OF INVESTMENT IN VAR IOUS ASSETS MENTIONED IN THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME. 3.2. WHILE DOING SO, THE CIT (A) FAILED TO APPRECIATE THAT THE SOURCE OF INVESTMENT IN THE ASSETS WERE DULY EXPLAINED TO HIM DURING THE APPELLATE PROCEEDINGS. 3.3 WHILE SUSTAINING THE ADDITION, THE ID. CIT (A) ERRED IN: (I) TAKING INTO ACCOUNT IRRELEVANT AND IMPERMISSIBL E CONSIDERATIONS WHILE IGNORING RELEVANT CONSIDERATIONS; AND (II) TOTALLY IGNORING AND BYPASSING THE COGENT EVID ENCES BROUGHT ON RECORD BY THE APPELLANT. 3.4 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMST ANCES OF THE CASE AND IN LAW, NO SUCH ADDITION WAS CALLED FOR. 4.1 THE ID CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE TO THE EXTENT OF 10% (TEN PERCENT) MADE BY THE A.O. ON ADHOC BASIS AMOUN TING TO RS. 46,057/- OUT OF~ (A) LABOUR CHARGES; (B) TELEPHONE EXPENSES; AND (C) CONVEYANCE AND TRAVELING EXPENSES 4.2 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMST ANCE OF THE CASE, AND IN LAW, NO SUCH DISALLOWANCES WERE CALLED FOR. 5.1 THE ID. CIT (A) ERRED IN CONFIRMING THE ADDITI ON OF RS. 40,000/- MADE BY THE A.O. ON ACCOUNT OF ALLEGED LOW WITHDRAWAL / DRA WING MADE DURING THE YEAR. 5.2 IT IS SUBMITTED THAT IN THE FACTS AND CIRCUMSTANCE OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED FOR. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELET E OR MODIFY & ALL OR ANY OF 3 ITA NO.286/MUM/2013 MRS. THRESIA P. JOHNY THE ABOVE GROUNDS AT THE TIME OF HEARING . 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE BROU GHT OUR NOTICE TO THE FACT THAT THE ASSESSMENT WAS ORIGINALLY COMP LETED BY INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. IT IS ALSO MENTIONED THAT AO MADE BEST JUDGMENT ASSESSMENT AND DETERMINED THE TOTAL INCOME AT RS.10,13,700/- AGAIN ST THE RETURNED OF INCOME OF RS.1,48,200/-. IT IS BROUGHT TO OUR NOTICE THAT THE ASSESSING OFFICER DISALLOWED ALL THE LOANS AND OTHER ASSETS WITHOUT EXAMINING THE ASSESSEES BOOKS OF ACCOUNTS. IT IS MENTIONED THAT THE ASSESSEE IS A PROFESSIONAL AS IN TERIOR DESIGNER. AGGRIEVED BY THE SAID BEST JUDGMENT ASSESSMENT, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). IN THE FIRST APPELLAT E PROCEEDINGS, ALSO THERE WAS SOME PROBLEM IN MATTERS OF MAKING APPEARA NCE BY THE ASSESSEE BEFORE THE CIT (A). HOWEVER, EVENTUALLY, THE ASSESSEE REPRESENTED BEFORE THE CIT (A) AND FURNISHED VARIOU S PAPERS AND EVIDENCES AS COPIES OF THE RETURNS OF INCOME OF THE ASSESSEE FOR THE EARLIER ASSESSMENT YEARS 2002-03 TO 2006-07AND ENC LOSED THE RELEVANT COPIES OF THE PROFIT & LOSS ACCOUNT. HOWE VER, IT IS ERRONEOUSLY HELD BY THE CIT(A) THAT THE PROFIT AND LOSS ACCOUNT WERE NOT ENCLOSED/FILED. IN THIS REGARD, THE LD. CO UNSEL BROUGHT OUR ATTENTION TO THE SAID COPIES OF THE RETURNS WHERE T HERE IS A CLEAR REMARK UNDER THE ENCLOSURES COLUMNS, AND EVIDENCE D THE FACT OF ENCLOSING THE RELEVANT PROFIT & LOSS ACCOUNT. THER EFORE, THE ORDER OF THE CIT(A) ARE ERRONEOUS. IN OUR OPINION IT IS AN E RRONEOUS FINDING OF THE CIT(A) WHICH REQUIRES REVISIT BY AUTHORITIES . IT IS IN THE INTEREST OF JUSTICE THAT THE ISSUE RAISED IN THE GR OUND RAISED BY THE ASSESSEE IN THIS APPEAL SHOULD BE REMANDED TO THE F ILE OF THE AO FOR FRESH EXAMINATION AND THE CONCLUSION. THE AO IS DI RECTED TO GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE BY FILING ALL 4 ITA NO.286/MUM/2013 MRS. THRESIA P. JOHNY THE PAPERS AND EVIDENCES IN SUPPORT OF ITS CLAIM IN THE RETURN OF INCOME. ACCORDINGLY GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 3. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 26/03/ 201 4. () %&' * +(, 26/03/2014 & - . SD/- SD/- AMIT SHUKLA D.KARUNAKARA RAO (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) MUMBAI , +( +( +( +( DATED: 26/03/2014 F{X~{T? P.S. () /$01 21'$ / COPY OF THE ORDER FORWARDED TO : (1) / 34$ / THE ASSESSEE; (2) '# / THE REVENUE; (3) 5() / THE CIT(A); (4) 5 / THE CIT, MUMBAI CITY CONCERNED; (5) 1#8- /$/ , , / THE DR, ITAT, MUMBAI; (6) -93 : / GUARD FILE. 1$ /$ / TRUE COPY () / BY ORDER ; / < ' / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI,