PREMLATA STANLEY PALANNA, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX-20(2), MUMBAI

ITA 4482/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0986 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 19-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Keywords: Opportunity of being heard; Principle of natural justice; Peak credit

Judgement Text

P A G E | 1 ITA NO. 4482/MUM/2017 A.Y. 2012 - 13 SMT. PREMLATA STANLEY PALANNA VS. DCIT - 20(2) IN THE INCOME TAX APPELLATE TRIBUNAL ' C ' BENCH, MUMBAI BEFORE SHRI PRADIP KUMAR KEDIA , ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 4482/MUM/2017 (ASSESSMENT YEAR: 2012 - 13 ) SMT. PREMLATA STANLEY PALANNA PROP. INTERNATIONAL CABLE T.V. NETWORK, 41/3047, ABHYUDAYA NAGAR, KALACHOWKY, MUMBAI - 400033 VS. DCIT - 20(2) PIRAMAL CHAMBER, PAREL, MUMBAI - 12 PAN AAJPP4981G APPELLANT RESPONDENT APPELLANT BY: SHRI DEEPAK TRALSHAWALA A.R RESPONDENT BY: SHRI V.VIDHYADHAR D.R DATE OF HEARING: 27 .11 .2018 DATE OF PRONOUNC EMENT: 2 8 . 11.2018 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 32, MUMBAI, DATED 22.03.2017 , WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC.143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 23.03.2015 FOR A.Y. 2012 - 13. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN PASSING EX - PARTE ORDER MERELY ON LIMITED TECHNICAL GROUND HOLDING THAT THE CASE WAS FIXED FOR HEARING ON 06/03/2017 WHEN NOBODY ATTENDED, WHEREAS, IN FACT MR. STANLEY PALANNA , HUSBAND OF THE APPELLANT PERSONALLY ATTENDED AND SEEKED FURTHER TIME AND THIS REQUEST WAS ALSO PUT ON RECORD IN WRITING VIDE LETTER DT.06/03/2017, COPY ENCLOSED. P A G E | 2 ITA NO. 4482/MUM/2017 A.Y. 2012 - 13 SMT. PREMLATA STANLEY PALANNA VS. DCIT - 20(2) 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) DISPOSED OF APPEAL BY CONFIRMING ADDITION OF RS.1,45,24,571/ - ON LIMITED TECHNICAL GROUND AND THE MERITS OF THE CASE ARE NOT DELIBERATED AT ALL WHICH IS CONTRARY TO THE PRINCIPAL OF NATURAL JUSTICE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT ( A) DISPOSED OF APPEAL EX - PARTE BY CONFIRMING ADDITION OF RS.37,80,000/ - , ALLEGED TO HAVE BEEN DEPOSITED IN SAVINGS A/C, WITHOUT DELIBERATING MERITS OF THE CASE WHICH IS CONTRARY TO THE PRINCIPAL OF NATURAL JUSTICE. 3.1 ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE, THE LEARNED CIT (A) DISPOSED OF EX - PARTE APPEAL BY CONFIRMING ADDITION OF RS.37,80,000/ - BEING CASH DEPOSIT IN BANK A/C WITHOUT APPLYING THE THEORY OF PEAK CREDIT AND OR ON ERRONEOUS BELIEF IN TREATING THE DEPOSITS AS UNEXPLAINED WITHOUT CONSIDERING THE REGULAR WITHDRAWALS ON THE VERY DATE OF DEPOSIT FROM OTHER BANK A/C. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) DISPOSED OF APPEAL BY CONFIRMING ADDITION OF RS.2,55,247/ - BEING 10% OF RS.25,52,471/ - IN CURRED ON MOTOR CAR & TELEPHONE EXPENSES WITHOUT DELIBERATING MERITS OF THE CASE WHICH IS CONTRARY TO THE PRINCIPAL OF NATURAL JUSTICE. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE FINDING OF CIT(A) THAT APPELLANT IS NOT CO - OPERATIVE WITH DEP ARTMENT IS PERVERSE. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, DELETE, SUBSTITUTE ANY OF THE GROUNDS OR TAKE ADDITIONAL GROUND AT ANY TIME AS ADVISED. 2. BRIEFLY STATED, THE ASSESSEE HAD E - FILED HER RETURN OF INCOME FOR A.Y. 2012 - 13 ON 31.03.2014, DECLARING TOTAL INCOME AT RS.45,56,690/ - . SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2). THE A.O WHILE FRAMING THE ASSESSMENT MADE THE FOLLOWING ADDITIONS/DISALLOWANCE S IN THE HANDS OF THE ASS ESSEE: SR. NO. PARTICULARS AMOUNT 1. DISALLOWANCE UNDER SEC.40(A)(IA) RS.1,45,24,571/ - 2. DISALLOWANCE UNDER SEC. 68. RS.37,80,000/ - 3. DISALLOWANCE UNDER SEC. 37(1). RS.2,55,247/ - ON THE BASIS OF THE AFORESAID DELIBERATIONS THE A.O ASSESSED THE INCOME OF THE ASSESSEE AT RS.2,31,16,510/ - . P A G E | 3 ITA NO. 4482/MUM/2017 A.Y. 2012 - 13 SMT. PREMLATA STANLEY PALANNA VS. DCIT - 20(2) 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING ON THE FACTS OF THE CASE DISMISSED THE APPEAL FOR THE REASON THAT THE ASSESSEE DESPITE HAVING BEEN AFFORDED SUFFICIENT OPPORTUNITY TO ATTEND THE APPELLATE PROCEEDINGS , HAD HOWEVER CONSISTENTLY SOUGHT ADJOURNMENTS AND FAILED TO PUT UP AN APPEARANCE BEFORE HIM. FURTHER, IT WAS OBSERVED BY THE CIT(A) THAT NO WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE BEFORE HI M IN SUPPORT OF HIS CASE. ON THE BASIS OF THE AFORESAID DELIBERATIONS THE CIT(A) CONFIRM ED THE ADDITIONS/DISALLOWANCE MADE BY THE A.O WITHOUT ADVERTING TO THE MERITS OF THE CASE. 4. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET OF THE HEARING SUBMITTED THAT THE ADJOURNMENTS WERE SOUGHT BY THE ASSESSEE DUE TO COMPELLING CIRCUMSTANCES WHICH WERE BEYOND HER CONTROL . IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT IT WAS INCORRECT ON THE PART OF THE CIT(A) TO STATE THAT ON 06.03.2017 NOBODY HAD PUT UP AN APPEARANCE BEFORE HIM, AS THE FACT WAS THAT MR. STANELY PALANNA, HUSBAND OF THE ASSESSEE ON THE SAID DATE HAD PERSONA LLY ATTENDED AND HAD SOUGHT FURTHER TIME , VIDE LETTER DATED 06.03.2017. THE LD. A.R SUBMITTED THAT ADJOURNMENT S ON 25.01.2017 AND 06.03.2017 WERE SOUGHT BY THE ASSESSEE ON ACCOUNT OF MEDICAL REASONS. IN SUPPORT OF HIS AFORESAID CONTENTION THE LD. A.R TOOK US THROUGH CERTAIN MEDICAL REPORTS F ORMING PART OF THE ASSESSES P APER BOOK (FOR SHORT APB) , WHICH FORTIFIED HIS AFORESAID CONTENTION. IT WAS SUBMITTED BY THE LD. A.R , THAT THE CIT(A) HA D ERRED IN LAW BY DISMISSING THE APPEAL FOR NON - PROSECUTION , WITHO UT APPLYING HIS MIND AND DISPOSING OFF ON MERITS THE ISSUES WHICH WERE ASSAILED BY THE ASSESSEE BY PREFERRING THE APPEAL BEFORE HIM. IN SUPPORT OF HIS AFORESAID CONTENTION THE LD. A.R P A G E | 4 ITA NO. 4482/MUM/2017 A.Y. 2012 - 13 SMT. PREMLATA STANLEY PALANNA VS. DCIT - 20(2) RELIED ON THE JUDGEMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. PREM KUMAR ARJUNDAS LUTHRA (HUF) (2017) 297 CTR 614 (BOM). PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE OR DERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ON A PERUSAL OF THE ORDER OF THE CIT(A) , WE FIND THAT HE HA D SUMMARILY DISMISSED THE APPEAL OF THE ASSESSEE FOR NON - PROSECUTION , AND HAD FAILED TO APPLY HIS MIND TO THE ISSUES WHICH DID A RISE FROM THE IMPUGNED ORDER AND HAD BEEN ASSAILED BY THE ASSESSEE BEFORE HIM. INSOFAR THE ADJOURNMENTS THAT WERE SOUGHT BY THE ASSESSEE IN THE COURSE OF THE APPELLATE PROCEEDINGS ARE CONCERNED, WE ARE PERSUADED TO SUBSCRIBE TO THE CLAIM OF THE LD. A.R THA T THERE WERE SUFFICIENT REASONS FOR SEEKING THE SAME. BE THAT AS IT MAY, WE ARE NOT IMPRESSED WITH THE DISMISSAL OF THE APPEAL OF THE ASSESSEE BY THE CIT(A) FOR NON - PROSECUTION , WITHOUT APPLICATION OF MIND BY HIM TO THE ISSUE S WHICH WERE ASSAILED BY THE ASSESSEE BY PREFERRING THE APPEAL BEFORE HIM. IN OUR CONSIDERED VIEW ONCE AN APPEAL IS PREFERRED BEFORE THE CIT(A), THEN IT IS OBLIGATORY ON HIS PART TO DISPOSE OFF THE APPEAL ON MERITS. WE ARE OF A STRONG CONVICTION THAT IT IS NOT OPEN FOR THE CIT(A) TO SUMMARILY DISMISS THE APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE SAME BY THE ASSESSEE . RATHER, A PERUSAL OF SEC.251(1)(A) AND (B) , AS WELL AS THE E XPLANATION TO SEC. 251(2) REVEALS THAT THE CIT(A) REMAINS UNDER A STATUTORY OBLIG ATION TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISES FROM THE IMPUGNED ORDER BEFORE HIM . IN OUR CONSIDERED VIEW , AS IS DISCERNIBLE FROM THE PROVISIONS OF THE ACT, THE CIT(A) IS NOT VESTED WITH ANY POWER TO SUMMARILY DISMISS THE APPEAL FOR NON - PROSECUTION . OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. PREM KUMAR ARJUNDAS LUTHRA P A G E | 5 ITA NO. 4482/MUM/2017 A.Y. 2012 - 13 SMT. PREMLATA STANLEY PALANNA VS. DCIT - 20(2) (HUF) (2017) 297 CTR 614 (BOM). IN THE AFOREMENTIONED CASE THE HONBLE JURISDICTIONAL HIGH COURT HAD OBSERVED AS UNDER: 8. FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED BEFORE THE CIT(A), THEN IN DISPOSING OF THE APPEAL, HE IS O B LIGED TO MAKE SUCH FURTHER INQUIRY THAT HE THINKS FIT OR DIRECT THE AO TO MAKE FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME TO HIM AS FOUND IN SEC. 250 OF THE ACT. FURTHER, SEC. 250(6) OF THE ACT OBLIGES THE CIT(A) TO DISPOSE OF AN APPEAL IN WRITING AFTER STATING THE POINTS FOR DETERMINATION AND THEN RENDER A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CON SIDERATION WITH REASONS IN SUPPORT. SEC. 251(1)(A) AND (H) OF THE ACT PROVIDE THAT WHILE DISPOSING OF APPEAL THE CIT(A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL AN ASSESSMENT AND/OR PENALTY. BESIDES EXPLANATION TO SUB - S. (2) OF S. 251 OF THE ACT ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT(A) WOULD BE ENTITLED TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFORE HIM IN APPEAL FILED FOR ITS CONSIDERATION, EVEN IF THE ISSUE IS NOT RAISED BY T HE APPELLANT IN ITS APPEAL BEFORE THE CIT(A). THUS ONCE AN ASSESSEE FILES AN APPEAL UNDER S. 246A OF THE ACT, IT IS NOT OPEN TO HIM AS OF RIGHT TO WITHDRAW OR NOT PRESS THE APPEAL. IN FACT THE CIT(A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT W .E.F. 1ST JUNE, 2001 THE POWER OF THE CIT(A) TO SET ASIDE THE ORDER OF THE AO AND RESTORE IT TO THE AO FOR PASSING A FRESH ORDER STANDS WITHDRAWN. THEREFORE, IT WOULD BE NOTICED THAT THE POWERS OF THE CIT(A) ARE CO - TERMINUS WITH THAT OF THE AO I.E. HE CAN DO ALL THAT A . O COULD DO. THEREFORE , JUST AS IT IS NOT OPEN TO THE AO TO NOT COMPLETE THE ASSESSMENT BY ALLOWING THE ASSESSEE TO WITHDRAW ITS RETURN OF INCOME, IT IS NOT OPEN TO THE ASSESSEE IN APPEAL TO WITHDRAW AND/OR THE CI T(A) TO DISMISS THE APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE APPEAL BY THE ASSESSEE. THIS IS AMPLY CLEAR FROM THE S. 251(1)(A) AND (B) AND EXPLANATION TO SEC. 251(2) OF THE ACT WHICH REQUIRES THE CIT(A) TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFORE H IM WHETHER OR NOT THE SAME HAS BEEN RAISED BY THE APPELLANT BEFORE HIM. ACCORDINGLY, THE LAW DOES NOT EMPOWER THE CIT(A) TO DISMISS THE APPEAL FOR NON - PROSECUTION AS IS EVIDENT FROM THE PROVISIONS OF THE ACT. 6. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS , NOT BEING PERSUADED TO SUBSCRIBE TO THE DISMISSAL OF THE APPEAL BY THE CIT(A) FOR NON - PROSECUTION, THUS SET ASIDE THE SAME TO HIS FILE WITH A DIRECTION TO DISPOSE OFF THE APPEAL ON MERITS. NEEDLESS TO SAY , THE CIT(A) SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE COURSE OF THE DE NOVO APPELLATE PROCEEDINGS. THE GROUND S OF APPEAL NO. 1 TO 5 RAISED BY THE ASSESSEE ARE DISPOSED OFF IN TERMS OF OUR AFORESAID OBSERVATIONS. P A G E | 6 ITA NO. 4482/MUM/2017 A.Y. 2012 - 13 SMT. PREMLATA STANLEY PALANNA VS. DCIT - 20(2) 7. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN COURT ON 2 8 .11.2018 S D / - S D / - (PRADIP KUMAR KEDIA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 28.11.2018 PS. ROHIT / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI