M/s Madura Spinning & Manufacturing limited , Bangalore V. Income Tax Officer Ward-4(1)(3), Bangalore

ITA 3366/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7165 (ITAT-BANGALORE)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 21-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMESH KUMAR
• Assessee Lawyers: SHRUTIKA BAJORIA
• Keywords: Opportunity of being heard; Principle of natural justice; Earning of tax free income
• Section: 271(1)(c); 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO . 3366 /BANG/201 8 ASSESSMENT YEAR : 20 14 - 15 M/S. MADURA SPINNING & MANUFACTURING LTD., NO. 204, EASTERN BUILDING, 19, R N MUKHARJEE ROAD, KOLKATA 700 001. PAN: AAECM0595M VS. THE INCOME TAX OFFICER, WARD 4 (1) (3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : MS. SHRUTIKA BAJORIA , CA RESPONDENT BY : SHRI A. RAMESH KUMAR, JCIT (DR) DATE OF HEARING : 1 6 .01.2019 DATE OF PRONOUNCEMENT : 18 . 01 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT (A)-4, BANGALORE DATED 31.07.2018 FOR ASSES SMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, MADURA SPINNING & MANUFACTURING LIMITED ('MADURA' OR THE ' COMPANY' OR THE 'APPELLANT') RESPECTFULLY CRAVES LEAVE TO PREFE R AN APPEAL UNDER SECTION 253 OF THE INCOME-TAX ACT, 1961 ('ACT') AGA INST THE ORDER PASSED BY INCOME-TAX OFFICER-WARD - 4(1)(3) ('AO') WHICH WAS ALSO UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS) ('CIT(A)') ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED AO AND THE LEARNED CIT( A) ARE BASED ON INCORRECT INTERPRETATION OF LAW AND THEREFORE ARE B AD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED AO ERRED IN ASSESSING THE TOTAL INCOME OF T HE APPELLANT AT RS. 3,22,060 AS AGAINST RETURNED INCOME OF RS. 88,920, COMPUTED BY THE APPELLANT. 3. THE LEARNED AO HAS ERRED, IN LAW AND FACTS, BY D ISALLOWING THE EXPENSE OF RS. 2,33,140 UNDER SECTION 14A OF THE AC T. ITA NO. 3366/BANG/2018 PAGE 2 OF 3 4. THE LEARNED AO HAS ERRED, IN LAW AND IN FACTS, B Y MAKING A DISALLOWANCE UNDER SECTION 14A ALTHOUGH THE ASSESSE E HAS NOT EARNED ANY EXEMPT INCOME. 5. THE LEARNED AO HAS ERRED, IN LAW AND IN FACTS, B Y DISALLOWING AN AMOUNT IN EXCESS OF THE TOTAL ADMINISTRATIVE EXPENS ES CLAIMED BY THE ASSESSEE UNDER SECTION 14A. 6. THE LEARNED CIT(A) ERRED IN LAW BY DISMISSING AP PEAL FOR REPEATED ADJOURNMENTS AND NONAPPEARANCE WITHOUT ADJUDICATING ISSUES ON MERIT. 7. THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEA L FILED BY THE APPELLANT THEREBY CONFIRMING THE DISALLOWANCE OF EX PENSE OF RS. 2,33,140 UNDER SECTION 14A MADE BY THE AO. 8. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED AO, WHICH WAS SUBSEQUENTLY UPHELD BY THE LD . CIT (A) IS ARBITRARY, CONTRADICTORY TO THE PROVISIONS OF THE L AW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 9. THE LEARNED AO HAS ERRED, IN LAW AND FACTS, BY C ONSIDERING AN INCORRECT AMOUNT OF INTERESTUNDER SECTION 234B OF T HE ACT AND SECTION 234C OF THE ACT IN THE ASSESSMENT ORDER. 10. THE LEARNED AO ERRED, IN LAW AND IN FACTS, IN I NITIATING PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE APPELLANT SUBMITS THAT EACH OF THE ABOVE GROUND S IS INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO ADD. ALTER, AMEND, VARY. OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. SO AS TO ENABLE THE HON'BLE TRIBUNAL TO DEC IDE ON THE APPEAL IN ACCORDANCE WITH THE LAW. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS N OTED BY CIT (A) IN FIRST PARA OF HIS ORDER, HEARING WAS FIXED BY HIM ON TWO DATES AS PER TWO NOTICES ISSUED ON 07.07.2018 AND 19.07.2018 BUT THERE WAS N O COMPLIANCE AGAINST ANY OF THESE NOTICES. HE SUBMITTED THAT AS PER PAR A 4 OF HIS ORDER, CIT (A) HAS DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE WITHOUT DECIDING THE DISPUTED ISSUE ON MERIT. HE SUBMITTED THAT IN THE INTEREST OF JUSTICE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF CIT (A) FOR FRESH DECISION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). ITA NO. 3366/BANG/2018 PAGE 3 OF 3 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THIS IS TRUE THAT TWO NOTICES WERE ISSUED BY CIT(A) FOR HEARING ON 07.07. 2018 AND 19.07.2018 AND THERE WAS NO COMPLIANCE BY ASSESSEE BEFORE CIT( A) AND THE IMPUGNED ORDER WAS PASSED BY CIT(A) ON 31.07.2018. BUT HE H AS NOT DECIDED THE DISPUTED ISSUE ON MERIT. I DO NOT APPRECIATE THE A CTION OF ASSESSEE FOR NOT APPEARING BEFORE CIT (A) BUT AT THE SAME TIME, I DO NOT APPROVE THIS ACTION OF CIT (A) ALSO OF DISMISSING THE APPEAL IN LIMINE WITHOUT DECIDING THE ISSUE ON MERIT AND HENCE, IN THE INTEREST OF JUSTICE, I S ET ASIDE THE EX-PARTE ORDER OF CIT (A) AND RESTORE BACK THE MATTER TO HIS FILE FOR FRESH DECISION ON MERIT AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE BOTH SIDES. 5. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CAL LED FOR REGARDING THE MERIT OF THE CASE AT THE PRESENT STAGE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 18 TH JANUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.