MOHAN B. THADANI, MUMBAI V. ITO 24(3)(2), MUMBAI

ITA 5391/MUM/2009

• Counselvise Citation: 539119914 RSA 2009
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-08-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 24-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Keywords: Salary income; Opportunity of being heard; Set aside
• Section: 142(1); 14A; 37(1); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B , MUMBAI BEFORE S/SHRI D.K.AGARWAL (JM) AND RAJENDRA SINGH A.M ) ITA NO.5391/MUM/2009 (ASSESSMENT YEAR: 2002-03) MOHAN B.THADANI 2, GANGA BHAVAN 24 TH ROAD BANDRA (W), MUMBAI-400050 PAN:ACCPT7294B, INCOME TAX OFFICER 24 (3)(2), MUMBAI. APPELLANT V/S RESPONDENT DATE OF HEARING : 1.8.2011 DATE OF PRONOUNCEMENT : 1.8.2011 APPELLANT BY : ADJOURNMENT APPLICATION NOT PRESSED. RESPONDENT BY: SHRI P.C.MAURYA O R D E R PER D.K.AGARWAL (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 7.7.2009 PASSED BY THE LEAR NED COMMISSIONER OF INCOME TAX (A) FOR THE ASSESSMENT YEAR 2002-03. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN INDIVIDUAL DERIVES INCOME FROM SALARY, CONSULTAN CY CHARGES AND OTHER RECEIPTS. HE FILED RETURN DECLAR ING TOTAL INCOME OF RS.1,65,184/-. AFTER PROCESSING OF THE RETURN UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT), THE AO SELECTED THE CASE FOR SCRUTINY A ND ISSUED NOTICE UNDER SECTION 143(2) AND 142(1) ALONG WITH ITA NO.5391/MUM/2009 (ASSESSMENT YEAR: 2002-03) 2 QUESTIONNAIRE. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS THE AO NOTED THAT THE ASSESSEE HAS CLAIMED INTERES T PAID OF RS.14,636/- TO BANK AND RS.6,64,750/- TO OTHERS AG AINST REMUNERATION FROM THE FIRM, CONSULTANCY RECEIPTS, SUPERVISION, SUNDRY RECEIPTS. IN RESPONSE, TO EXPLA IN THE ALLOWABILITY OF INTEREST, THE ASSESSEE FILED CERTAI N DETAILS, CONFIRMATION OF MOST OF THE PARTIES AND SUBMITTED THAT THE INTEREST PAID ON LOANS TAKEN IN PAST FOR BUSINESS N EEDS AND THUS ALLOWABLE UNDER SECTION 37(1) OF THE ACT. HO WEVER, THE AO WAS OF THE VIEW THAT IN THE ABSENCE OF BANK PASS BOOK, CASHBOOK, BALANCE SHEET, THE MODE OF TRANSACTION, THE AMOUNT OUTSTANDING AND SINCE WHEN WHICH IS NOT VERI FIABLE AND ALSO IN VIEW OF THE PROVISIONS OF SECTION 14A N O DEDUCTION OF INTEREST SHALL BE ALLOWED AND ACCORDI NGLY, HE DISALLOWED, THE CLAIM OF INTEREST OF RS.6,64,750/ AND THEREBY COMPLETED THE ASSESSMENT AT AN INCOME OF RS.8,29,9 34/- VIDE ORDER DATED 28.2.2005 PASSED UNDER SECTION 143 (3) OF THE ACT. 3. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (A) VIDE HIS EX-PARTE ORDER WHILE AGREEING WITH THE VIEWS OF THE AO UPHELD THE DISALLOWANCE OF INTEREST MADE BY THE AO. ITA NO.5391/MUM/2009 (ASSESSMENT YEAR: 2002-03) 3 4. BEING AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A), THE ASSESSEE IS I N APPEAL BEFORE US TAKING THE FOLLOWING GROUND OF APPEAL : 1. EX-PARTE ORDER PASSED BY THE CIT(A)-XXII, MUMBA I WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD 5. AT THE TIME OF HEARING, THE LEARNED REPRESENTATI VE OF THE ASSESSEE INITIALLY ASKED FOR THE ADJOURNMENT WH ICH WAS NOT PRESSED. IT WAS SUBMITTED THAT SINCE THE PROP ER OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE, THERE FORE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE LEA RNED COMMISSIONER OF INCOME TAX (A). 6. ON THE OTHER HAND, THE LEARNED D.R. WHILE SUPPO RTING THE ORDER OF THE AO AND THE LEARNED COMMISSIONER OF INCOME TAX (A) SUBMITS THAT HE HAS NO OBJECTION IF THE MAT TER IS RESTORED BACK TO THE FILE OF THE LEARNED COMMISSIO NER OF INCOME TAX (A). 7. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON REC ORD, WE FIND THAT DURING THE COURSE OF HEARING OF THE APP EAL, THE LEARNED COMMISSIONER OF INCOME TAX (A) ASKED THE AO TO VERIFY THE REASONS FOR SERVICE OF NOTICE UNDER SECT ION 143(2) BY AFFIXTURE VIDE LETTER DATED 29.3.2006. HE ALSO A SKED THE AO TO FURNISH THE EVIDENCE OF SERVICE OF NOTICE AND TO ESTABLISH THAT IT WAS SERVED WITHIN THE PRESCRIBED PERIOD. ITA NO.5391/MUM/2009 (ASSESSMENT YEAR: 2002-03) 4 AFTER SO-MANY REMINDERS, THE AO SENT HIS REPORT DAT ED 3.6.2009. THE COPY OF THIS REPORT WAS SENT TO THE ASSESSEE ON 10.6.2009 BY SPEED-POST ACKNOWLEDGEMENT FOR MA KING SUBMISSIONS THEREON. HOWEVER, THE POSTAL AUTHORITY HAS RETURNED THE LETTER ALONG WITH THE REPORT OF THE AO WITH THE COMMENTS UNCLAIMED. UNDER THE CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (A) PR ESUMED THAT THE APPELLANT IS NOT INTERESTED IN PURSUING TH E APPEAL AND HENCE, THE LEARNED COMMISSIONER OF INCOME TAX (A) ON THE BASIS OF MATERIAL AVAILABLE ON RECORD DECIDED T HE APPEAL AND DISMISSED THE SAME. AFTER CONSIDERING THE TOT ALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, KEEPING IN VIE W THAT THE REPORT OF THE AO WAS NOT SERVED TO THE ASSESSEE A ND IN THE INTERESTS OF JUSTICE, WE CONSIDER IT FAIR AND REAS ONABLE THAT ONE MORE OPPORTUNITY BE PROVIDED TO THE ASSESSEE T O REPRESENT HIS CASE BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (A) AND ACCORDINGLY, WE SET ASIDE THE O RDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A ) AND RESTORE THE SAME TO HIS FILE TO DECIDE THE SAME AFR ESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASESEEE. THE GROUND TAKEN BY TH E ASSESSEE IS, THEREFORE, ALLOWED FOR STATISTICAL PUR POSES. ITA NO.5391/MUM/2009 (ASSESSMENT YEAR: 2002-03) 5 8. IN THE RESULT, THE ASSESSEES APPEAL STANDS ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 1.8.2011. SD SD (RAJENDRA SINGH) (D.K. AGARWAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 1ST AUGUST, 2011 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI