Gujarat State Co.Op. Marketing Federation Ltd., Ahmedabad V. The ACIT.Circle-2, Ahmedabad

ITA 380/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80281 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 25-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SONIA KUMAR
• Assessee Lawyers: S N DIVETIA
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO.380/AHD/2013 A.Y.2009-10 GUJARAT STATE CO-OP. MARKETING FEDERATION LTD., SAHAKAR BHAVAN, RELIEF ROAD, AHMEDABAD. PAN: AAAAG 2927K VS ACIT CIRCLE 2, AHMEDABAD. (APPELLANT) (RESPONDENT) REVENUE BY : MRS. SONIA KUMAR, SR.D.R., ASSESSEE(S) BY : SHRI S.N. DIVETIA, AR / // / DATE OF HEARING : 25/07/2014 / DATE OF PRONOUNCEMENT: 27/08/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FRO M AN ORDER OF THE LD. CIT(APPEALS)-VI, AHMEDABAD, DATED 14/11/201 2 AND THE GROUNDS RAISED BEFORE US ARE AS UNDER: 1.1 THE ORDER PASSED U/S.250 ON 14.11.2012 FOR A.Y.2009-10 BY CIT(A)- VI, AHMEDABAD UPHOLDING THE DISALLOWANCE OF DEDUCTI ON OF INTEREST INCOME OF RS. 1,46,85,425/- MADE BY AO IS WHOLLY ILLEGAL, UNL AWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS FAILED TO APPRECIATE THA T THERE WAS A SUFFICIENT CAUSE FOR FAILURE TO ATTEND ON THE LAST TWO DATES O F HEARING SO THAT THE APPEAL SHOULD NOT HAVE BEEN DISPOSED OFF EXPARTY BUT A FUR THER OPPORTUNITY SHOULD HAVE BEEN GRANTED TO THE APPELLANT. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND O N FACTS IN CONFIRMING THAT THE INTEREST INCOME OF RS.1,46,85,425/- WAS NOT ELI GIBLE FOR DEDUCTION U/S 80P(2). 2.1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE DISALLOWANCE OF DEDUCTION U/S. 80P(2) IN RESPECT OF INTEREST INCOME OF RS.1,46,85,425/-. ITA NO.380/AHD/2013 GUJARAT STATE CO.-OP. MARKETING FEDERATION LTD. VS. ACIT, CIRCLE-2, AHMEDABAD FOR A.Y. 2009-10 - 2 - 2. AT THE OUTSET, WE HAVE BEEN INFORMED THAT NONE W AS PRESENT BEFORE LEARNED CIT(A) FROM THE SIDE OF THE APPELLANT. FACT S OF THE CASE IN BRIEF AS DISCUSSED IN THE ASSESSMENT ORDER PASSED U/S.143 (3) DATED 29.12.2011 WERE THAT THE ASSESSEE IS A CO-OPERATIVE MARKETING FEDERATION AND ENGAGED IN DISTRIBUTION OF AGRICULTURE PRODUCTS, I. E., EDIBLE OIL FOOD GRAINS, AGRICULTURE SEEDS, ETC. IT WAS NOTED BY THE AO THAT THE ASSESSEE HAD EARNED INTEREST INCOME OF RS.2,26,43,740/-. THE ASSESSEE HAS ALSO RECEIVED GODOWN RENT INCOME. FURTHER, IT WAS ALSO N OTED BY THE AO THAT THE ASSESSEE HAD RECEIVED INTEREST FROM NATIONALIZE D BANK AS UNDER: PARTICULARS AS PER INTEREST A/C. STATE BANK OF INDIA F.D. INTEREST RS. 9115631.00 SYNDICATE BANK F.D. INTEREST RS. 134427.02 BANK OF BARODA RS. 6435367.00 TOTAL RS. 1,46,85,425.02 3. A QUERY WAS RAISED THAT WHY THE AFOREMENTIONED I NTEREST EARNED FROM NATIONALIZED BANK SHOULD NOT BE DISALLOWED AS PER SECTION 80P OF IT ACT. AFTER DISCUSSING THE FEW CASE LAWS, THE AO HAS HELD THAT THE ASSESSEE HAD EARNED INTEREST INCOME FROM NATIONALIZED BANK I NSTEAD OF CO- OPERATIVE SOCIETY; HENCE DO NOT QUALIFY FOR DEDUCTI ON U/S. 80P(2)(D) OF IT ACT. RESULTANTLY, AN ADDITION OF RS.1,46,85,425.02/ - WAS MADE. 3.1 ALTHOUGH, AN APPEAL WAS FILED BY LEARNED CIT(A) BUT THAT WAS NOT PURSUED SERIOUSLY. LEARNED CIT(A) HAS GRANTED FEW O PPORTUNITIES OF HEARING BUT REMAIN UNATTENDED. LEARNED CIT(A) HAS, THEREFORE, PROCEEDED EX-PARTE QUA THE ASSESSEE AND CONFIRMED THE ACTION OF THE AO. 4. FROM THE SIDE OF THE APPELLANT, LEARNED AR HAS V EHEMENTLY PLEADED THAT ON ACCOUNT OF CERTAIN UNAVOIDABLE CIRCUMSTANCE S; FEW ADJOURNMENTS ITA NO.380/AHD/2013 GUJARAT STATE CO.-OP. MARKETING FEDERATION LTD. VS. ACIT, CIRCLE-2, AHMEDABAD FOR A.Y. 2009-10 - 3 - WERE SOUGHT, HAS PLACED IN THE COMPILATION WHICH SH OWS THAT THE ASSESSEE WAS KEEN TO REPRESENT THE APPEAL BEFORE LEARNED CIT (A). FURTHER HE HAS PLEADED THAT THE IMPUGNED ADDITION WAS WRONGLY MADE AND IF THE ASSESSEE WAS GRANTED AN OPPORTUNITY THEN THE CORRECT POSITIO N OF ACCOUNTS COULD HAVE BEEN EXPLAINED. HE HAS ALSO MENTIONED THAT THI S ISSUE IS TO BE DECIDED IN THE LIGHT OF HONBLE ITAT B BENCH AHME DABAD PRONOUNCED IN THE CASE OF M/S. JAFRI MOMIN VIKAS CO-OP. CREDIT SOCIETY LTD., IN ITA NO.1491/AHD/2012, A.Y. 2009-10 ORDER DATED 31.10.20 12. LEARNED AR HAS ALSO INFORMED THAT HONBLE GUJARAT HIGH COURT I N TAX APPEAL NOS.442, 443, 863 OF 2013 ORDER DATED 15.01.2014 IN THAT VERY CASE OF M/S. JAFRI MOMIN VIKAR CO-OP. CREDIT SOCIETY LTD. H AS UPHELD THE VIEW TAKEN BY THE TRIBUNAL. 5. FROM THE SIDE OF THE REVENUE, LEARNED DR HAS ARG UED THAT THIS ASSESSEE SHOULD NOT BE GIVEN ANY RELIEF SINCE HE HA S IGNORED THE PROCEEDINGS BEFORE LEARNED CIT(A) AND NO EVIDENCE, I.E., THE BALANCE SHEET AND OTHER ACCOUNTS SHOULD BE ALLOWED TO BE PL ACED NOW AT THE STAGE OF SECOND APPEAL. 6. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUM STANCES OF THE CASE AND THE OVER ALL CIRCUMSTANCES UNDER WHICH THE ASSE SSEE REMAINED ABSENT BEFORE LEARNED CIT(A), WE DEEM IT PROPER TO HOLD TH AT THE NATURAL JUSTICE DEMANDS TO RESTORE THIS ISSUE BACK TO THE STAGE OF LEARNED CIT(A). BY RESTORING THIS APPEAL BEFORE LEARNED CIT(A) AT LEAS T THIS ASSESSEE CAN GET AN OPPORTUNITY TO EXPLAIN HIS CASE ON MERITS AND SU CH RESTORATION OF APPEAL SHALL NOT CAUSE ANY PREJUDICE TO THE REVENUE . WE ALSO STRONGLY FEEL THAT SUCH CARELESS BEHAVIOUR OF A TAX PAYER SH OULD NOT BE ENCOURAGED, ITA NO.380/AHD/2013 GUJARAT STATE CO.-OP. MARKETING FEDERATION LTD. VS. ACIT, CIRCLE-2, AHMEDABAD FOR A.Y. 2009-10 - 4 - THEREFORE, WE HEREBY DIRECT THIS ASSESSEE TO APPEAR SUO MOTU WITHOUT FAIL WITHIN 20 DAYS ON RECEIPT OF THIS ORDER OF THE TRIB UNAL. THE ASSESSEE IS DIRECTED TO PLACE ALL RELEVANT INFORMATION BEFORE L EARNED CIT(A) SO THAT THE MATTER SHOULD BE DECIDED AT AN EARLY DATE. THE ASSESSEE SHALL NOT FAIL IN ANY CIRCUMSTANCES AND FULLY CO-OPERATE WITH THE APPELLATE PROCEEDINGS BEFORE LEARNED CIT(A). SIMULTANEOUSLY, LEARNED CIT( A) IS AS WELL FULLY EMPOWERED TO PROCEED WITH THE MATTER AS REQUIRED UN DER LAW. LEARNED CIT(A) CAN EXAMINE THE FACTS OF THE PRECEDENTS AS C ITED BEFORE US AND SEE WHETHER THOSE PRECEDENTS ARE APPLICABLE ON THE FACT S OF THIS CASE. WITH THESE DIRECTIONS, THIS GROUND IS RESTORED BACK FOR RE-ADJUDICATION; HENCE MAY BE TREATED AS ALLOWED ONLY FOR STATISTICAL PURP OSE. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE ONLY. SD/- SD/- (ANIL CHATURVEDI) (MUKUL KR . SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 27/08/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD