V.G.MORARJI FAMILY TRUST, MUMBAI V. DCIT, CIRCLE -17(3), MUMBAI

ITA 458/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5383 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 09-03-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Maximum Marginal Rate; Set aside
• Section: 143(1)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL “SMC” Bench, Mumbai Shri B.R. Baskaran (AM) I.T.A. No. 458/Mum/2022 (A.Y. 2018-19) V.G. Morarji Family Trust C/o. G.P. Mehta & Co. CAs 807, Tulsiani Chambers Nariman Point Mumbai-400 021. PAN : AAATV8402B Vs. DCIT, Circle-17(3) Kautilya Bhavan 1 st Floor Bandra Kurla Complex, Bandra East, Mumbai 400 051. (Appellant) (Respondent) Assessee by Shri G.P. Mehta Department by Ms. Naina Krishnakumar Date of Hearing 20.07.2022 Date of Pronouncement 20.07.2022 O R D E R The assessee has filed this appeal challenging the order dated 1.12.2021 passed by learned CIT(A), National Faceless Centre, Delhi and it relates to A.Y. 2018-19. The assessee is aggrieved by the decision of learned CIT(A) in confirming the computation of tax at maximum marginal rate by the Assessing Officer while processing return under section 143(1) of the Act. 2. Learned AR appearing for the assessee submitted that the assessee is a discretionary trust deriving income from capital gain, interest income and dividend income. He submitted that the assessee has been levied tax at normal rates in view of proviso to section 161(1A) of the I.T. Act for all earlier years. However, while processing return of income filed by the assessee for the year under consideration, the Assessing Officer has levied tax at maximum marginal rate ignoring the fact that the proviso to section 161(1A) of the Act is applicable to the assessee. V.G. Morarji Family Trust 2 3. The Ld A.R submitted that the assessee challenged the assessment order by filing appeal before learned CIT(A). However, for the reasons beyond the control of the assessee, it could not appear before the first appellate authority. Hence, learned CIT(A) has dismissed the appeal of the assessee. The Learned AR submitted that the assessee has levied tax at normal rate only in all the earlier years and there is no change in facts and circumstances of the case. Hence there is no reason to deviate from the said practice for the year under consideration. He submitted that the tax authorities have not considered the provisions of section 161(1A) of the Act along with the proviso thereunder. Accordingly he submitted that the assessee may be provided with an opportunity to present its case properly before the Assessing Officer. 4. I have heard learned DR and perused the record. Having regard to the submissions made by learned AR, in the interest of natural justice, I am of the view that the assessee may be provided with an opportunity to present its case properly before the Assessing Officer, since the Assessing Officer has not considered the applicability of the provisions of section 164(1A) of the Act along with the proviso thereunder to the assessee. It is the submission of the Ld A.R that the above said provisions were applied to the assessee in the earlier years. Accordingly, I set aside the order passed by learned CIT(A) and restore the issues contested before the Tribunal to the file of the Assessing Officer for examining them afresh in accordance with law. After providing with adequate opportunity of being heard to the assessee, the Assessing Officer may take appropriate decision in accordance with law. V.G. Morarji Family Trust 3 5. In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 20.07.2022. Sd/- (B.R. BASKARAN) ACCOUNTANT MEMBER Mumbai; Dated : 20/07/2022 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. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai