TARIKA SHAH, MUMBAI V. DCIT 24(3), MUMBAI

ITA 3672/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3723 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 19-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKESH KUMAR AGRAWAL
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause
• Section: 142(1); 133A; 147; 148; 144; 139

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 3672 /MUM/2013 ( / ASSESSMENT YEAR : 2008-09) MRS. TARIKA SHAH, 304, RISHABH MANSION -3, S.V. ROAD, JAWAHAR NAGAR, GOREGAON WEST, MUMBAI 400 062. / V. DCIT 24(3), C-11, 7 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI 400 051. ( / APPELLANT ) .. ( / RESPONDENT ) PAN : ASOPS3910M ASSESSEE BY NONE REVENUE BY : SHRI RAKESH KUMAR AGRAWAL (D.R.) / DATE OF HEARING : 17-2-2016 / DATE OF PRONOUNCEMENT : 29-4-2016 O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER:- THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 34, MUMBAI ( HEREINAFTER CALLED THE CIT(A) ), DATED 07-02-2013 FOR THE ASSESSMENT YEAR 2008-09, THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) ARISING FROM THE ASSE SSMENT ORDER DATED 15-12- 2011 PASSED BY THE ASSESSING OFFICER (HEREINAFTER C ALLED THE AO) U/S 144 READ WITH SECTION 147 OF THE INCOME TAX ACT,1961(HE REINAFTER CALLED THE ACT). ITA 3672/MUM/2013 2 2. THE GROUNDS RAISED BY THE ASSESSEE IN THE MEMO O F APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI (HEREINAFTER CALLED 'THE TRIBUNAL') READ AS UNDER:- '1. UNDER THE FACTS AND CIRCUMSTANCES OF YOUR APPEL LANT, THE LEARNED CIT (A)-34 HAS ERRED IN CONFIRMING THE ADDITION/ DISALLOWANCE MADE BY THE LEARNED DCIT, WITHOUT GIVING ASSESSEE REASONABLE OPPORTUNITY OF BEING HEA RD. 1.01 THE LD. DCIT HAS MADE ADDITIONS & DISALLOWANCE S SOLELY ON THE BASIS OF THE STATEMENT RECORDED DURING THE SURVEY OF APPELLANT'S HUSBAND MR. TEJAS SHAH WITHOUT GIVING APPELLANT REASONABLE OPPORTUNITY TO MAKE SUB MISSION ON ITS BEHALF. 2. THE LEARNED CIT(A)-34 ERRED IN CONFIRMING TREATM ENT OF LOANS TAKEN BY THE APPELLANT OF RS. 6,322,332 AS THE INCOME OF THE APPELLANT TAX ABLE UNDER THE PROVISIONS OF THE INCOME TAX ACT. 3. THE LD. DCIT FAILED TO APPRECIATE THE FACT THAT THE ABOVE LOANS OF RS. 6,322,332 WERE TAXED IN THE HANDS OF THE APPELLANT'S HUSBAND MR. T EJAS SHAH IN COURSE OF HIS ASSESSMENT PROCEEDINGS. 3.01 THE LD. DCIT FAILED TO APPRECIATE THE FACT THA T THE SAME AMOUNT HAS BEEN TAXED TWICE I. E. IN THE HANDS OF BOTH APPELLANT AND MR. TEJAS SHAH. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A)-34 ERRED IN CONFIRMING LD. DCIT'S ASSUMPTION OF RS. 145,000 BEI NG BASIC EXEMPTION LIMIT AS THE INCOME OF THE APPELLANT. 5. THE LD. CIT(A)-34 HAS NOT GIVEN ADEQUATE OPPORTU NITY TO EXPLAIN THE FACTS OF YOUR APPELLANT. 6. THE APPELLATE ORDER IS PASSED AGAINST THE PRINCI PLES OF NATURAL JUSTICE & EQUITY. 7. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER OR DEL ETE ANY OF THE ABOVE GROUNDS OF APPEAL.' 3. A SURVEY ACTION U/S. 133A OF THE ACT WAS CONDUCT ED BY THE REVENUE ON 13.08.2007 IN THE CASE OF M/S. SUNTECK REALTY & INF RASTRUCTURE LTD., M/S. NATRAJ FINANCIAL & SERVICES LTD., SHRI TEJAS SHAH A ND SMT. TARIKA SHAH ON 13.8.2007. REPORT OF SURVEY PROCEEDINGS WAS FORWARD ED TO THE AO IN WHICH IT IS REPORTED THAT SHRI TEJAS SHAH(HUSBAND OF THE ASS ESSEE) IS RENDERING CONSULTANCY SERVICE IN THE MATTERS RELATED TO FORMA TION, SALE AND TRANSFER AND ITA 3672/MUM/2013 3 TAKEOVER OF THE LISTED COMPANIES AND ATTENDANT ACCO UNTING AND ALLIED SERVICES. HE WAS ALSO FOUND TO BE DRIVING FORCE IN PRICE RIGGING ACTIVITIES. IT WAS REPORTED THAT THE ASSESSEE HAS OFFERED INCOME I N THE FORM OF INTEREST INCOME, INTEREST ON PO MIS, PROFIT ON COMMODITY/SHA RE TRADING AND MISCELLANEOUS INCOME, AGGREGATING TO RS.2,49,508/ - FOR THE YEAR UNDER CONSIDERATION. IT WAS REPORTED THAT THE ASSESSEE HA S CLAIMED TO HAVE OBTAINED UNSECURED LOANS FROM DIFFERENT PARTIES WHICH WERE N OT GENUINE. DURING THE COURSE OF SURVEY PROCEEDINGS, THE ASSESSEE HAS OFFE RED THE FOLLOWING INCOME FOR THE PREVIOUS YEAR 2007-08 RELEVANT TO THE ASSES SMENT YEAR 2008-09 AS UNDER: INTEREST INCOME RS. 846/- INTEREST ON POST OFFICE MIS RS. 9,000/- PROFIT/LOSS ON COMMODITY/SHARE TRADING RS. 1,99,662/ - MISCELLANEOUS INCOME RS. 40,000/- LOAN RS. 63,22,332/- TOTAL RS. 65,71,840/- THE ASSESSEE DID NOT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09. THEREFORE, THE CASE OF THE ASSESSEE WAS REOPENED U/ S 148 OF THE ACT AFTER RECORDING REASONS FOR REOPENING. IN RESPONSE TO THE NOTICE ISSUED BY THE AO U/S 148 OF THE ACT, THE ASSESSEE DID NOT FILED ANY RETURN OF INCOME. NO COMPLIANCE WHATSOEVER WAS MADE BY THE ASSESSEE EVEN TO NOTICE ISSUED U/S 142(1) OF THE ACT AND THE ASSESSEE INTENTIONALLY AV OIDED THE PROCEEDINGS WITHOUT REASONABLE CAUSE. IN THE ABSENCE OF ASSESSE E OFFERING THE AFORE-STATED INCOME OF RS. 65,71,840/- TO TAX AS THE ASSESSEE DI D NOT FILED ANY RETURN FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSMENT WAS COM PLETED U/S 144 OF THE ACT RELYING ON THE REPORT OF THE SURVEY WHEREBY AN AMOUNT OF RS. 65,71,840/- WAS TREATED AS UNDISCLOSED INCOME FOR THE ASSESSMEN T YEAR 2008-09, WHICH WAS OFFERED DURING THE COURSE OF SURVEY PROCEEDINGS ON 13.8.2007 AS UNDER :- INTEREST INCOME RS. 846/- INTEREST ON POST OFFICE MIS RS. 9,000/- PROFIT/LOSS ON COMMODITY/SHARE TRADING RS. 1,99,662/ - MISCELLANEOUS INCOME RS. 40,000/- LOAN RS. 63,22,332/- TOTAL RS. 65,71,840/- ITA 3672/MUM/2013 4 THE ASSESSEE DID NOT FILED ANY RETURN OF INCOME FO R THE ASSESSMENT YEAR 2008- 09, THEREFORE THE INCOME OF THE ASSESSEE IS TAKEN A T RS. 1,45,0001- WHICH IS MAXIMUM AMOUNT NOT CHARGEABLE TO TAX. THUS, THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 WAS ASSESSED AT RS.67,16,8401- BY THE AO VIDE ASSESSMEN T ORDER DATED 15.12.2011 PASSED U/S 144 READ WITH SECTION 147 OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 15.12.20 11 PASSED BY THE AO U/S 144 READ WITH SECTION 147 OF THE ACT, THE ASSES SEE FILED AN APPEAL BEFORE THE CIT(A). 5. THE APPEAL WAS DISMISSED BY THE CIT(A) VIDE ORDE R DATED 07.02.2013 AS DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE RE WAS NO SUBMISSIONS MADE BY THE ASSESSEE ON MERITS, WHILE APPEARANCE WA S ENTERED BY THE ASSESSEE AND LETTER OF ADJOURNMENTS WERE FILED FROM TIME TO TIME BEFORE THE CIT(A) BY THE ASSESSEE. HOWEVER, APPEAL WAS DISMISS ED BY THE CIT(A) INLIMINE WITHOUT ANY DISCUSSIONS ON MERITS, VIDE ORDERS DATE D 07-02-2013. 6. AGGRIEVED BY THE ORDERS OF THE CIT(A) DATED 07-0 2-2013, THE ASSESSEE FILED THE SECOND APPEAL BEFORE THE TRIBUNAL. 7. THERE IS NO COMPLIANCE ON THE PART OF THE ASSESS EE BEFORE THE TRIBUNAL ALSO, WHEN THIS APPEAL WAS CALLED FOR HEARING ON 17 TH FEBRUARY 2016. 8. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT SURVEY WAS CONDUCTED U/S 133A OF THE ACT ON 13.08.2007 AGAINST THE ASSESSEE AND THE ASSESSEE DISCLOSED RS.65,71840/- AS INCOME DURING T HE SURVEY PROCEEDINGS. THE RETURN OF INCOME HAS NOT BEEN FILED U/S 139 OF THE ACT NOR IN PURSUANCE TO NOTICE ISSUED U/S 148 OF THE ACT. THE ASSESSEE W AS NOT ATTENDING THE HEARING BEFORE THE AO. THE ASSESSMENT ORDER WAS PAS SED BY THE AO U/S. 144 READ WITH SECTION 147 OF THE ACT. HE ALSO SUBMITTED THAT THERE WAS NO COMPLIANCE BEFORE THE CIT(A) ALSO, NO REPLIES ON ME RITS WERE SUBMITTED. ITA 3672/MUM/2013 5 HOWEVER, THE CIT(A) HAS NOT DECIDED THE ISSUES ON M ERITS BUT DISMISSED THE APPEAL IN LIMINE. 9. WE HAVE HEARD THE ID. DR AND PERUSED THE MATERIA L ON RECORD. IN OUR CONSIDERED VIEW, THE CIT(A) HAS NOT DECIDED THE APP EAL ON MERITS BUT IN FACT INSTEAD THE CIT(A) HAS DISMISSED THE APPEAL IN LIMI NE, WHILE THE CIT(A) IS REQUIRED TO DECIDE THE APPEAL ON MERITS. ATTENTION IS DRAWN TO THE PROVISIONS OF SECTION 250(6) OF THE ACT, WHEREBY THE CIT(A) IS REQUIRED TO DISPOSE OF THE APPEAL ON MERITS. REFERENCE IS DRAWN TO SECTION 250 (6) OF THE ACT AS UNDER: ' PROCEDURE IN APPEAL. SECTION 250 **** **** (6) THE ORDER OF THE 21[* * *] 92[COMMISSIONER (APP EALS)] DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POIN TS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. **** ****' IN OUR CONSIDERED VIEW AND IN THE INTEREST OF JUSTI CE, THE CIT(A) SHOULD HAVE DECIDED THE APPEAL ON MERITS. HENCE KEEPING IN VIEW PECULIAR FACTS AND CIRCUMSTANCE OF THE CASE AND IN THE INTEREST OF JUS TICE ,WE SET ASIDE - THE ORDER DATED 07.02.2013 OF THE CIT(A) AND RESTORE BACK THE ENTIRE MATTER OF THE ASSESSMENT TO THE FILE OF CIT(A) FOR DE-NOVO AND FR ESH ASSESSMENT ON MERITS AFTER CONSIDERING ALL THE EXPLANATIONS AND EVIDENCE TO BE FILED BY THE ASSESSEE IN HER DEFENSE, IF SO DESIRED BY THE ASSESSEE. NEED LESS TO SAY PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD SHALL BE GRANTE D TO THE ASSESSEE BY THE CIT(A) IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE AND IN ACCORDANCE WITH LAW BEFORE FRAMING FRESH ASSESSMENT IN ACCORDA NCE WITH LAW. WE ORDER ACCORDINGLY. ITA 3672/MUM/2013 6 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29-04-2016. SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; /0 DATED 29-04-2016 [ .1../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 2 ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. 2 / CIT- CONCERNED, MUMBAI 5. 567 1189 , 89 , / DR, ITAT, MUMBAI E BENCH 6. 7;< = / GUARD FILE. / BY ORDER, 5 1 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI