VAGAD BUILDERS AND DEVELOPERS PVT. LTD., MUMBAI V. ITO 15 (3)(2), MUMBAI

ITA 5468/MUM/2018

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 6135 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 25-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR H. ANSARI
• Keywords: Opportunity of being heard; Principle of natural justice; TDS; Set aside
• Section: 37; 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENC H MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBE R & SHRI G. MANJUNATHA, ACCOUNTANT MEMBE R ITA NO.5468MUM/2018 ( ASSESSMENT YEAR :2015-16 ) VAGAD BUILDERS AND DEVELOPERS PVT. LTD. 230, BIG SPLASH, SECTOR-17 VASHI NAVI MUMBAI-400 703 VS. ITO-15(3)(2) AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AA DCV0768J APPELLANT ) .. RESPONDENT ) REVENUE BY AKHTAR H. ANSARI ASSESSEE BY ROSHAN OCHANI DATE OF HEARING 15/10/2019 DATE OF PRONOUNCEME NT 15 /10/2019 / O R D E R PER BENCH : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST, THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)24, MUM BAI, DATED 02/07/2018 AND IT PERTAINS TO ASSESSMENT YEAR 2015- 16. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. BECAUSE, ON THE FACTS AND CIRCUMSTANCES OF CAS E, IMPUGNED ORDER IS VOID-AB-INITIO SINCE SAME HAS BEEN PASSED WITHOU T PROVIDING PLAUSIBLE OPPORTUNITY OF BEING HEARD AND THEREBY MOCKING AUDI AFTERM PARTEM AND PRINCIPLE OF NATURAL JUSTICE. 2. BECAUSE, ON THE FACTS AND CIRCUMSTANCES OF CASE , ASSESSMENT ORDER DATED 29/12/2017 BASED ON WHICH IMPUGNED ORDER HAS BEEN PASSED, ITSELF HAS NO LEGS TO STAND IN EYES OF LAW ITA NO.5468/MUM/2018 VAGAD BUILDERS & DEVELOPERS PVT.LTD. 2 3. BECAUSE, ON THE FACTS AND CIRCUMSTANCES OF CASE , ENTIRE ASSESSMENT PROCEEDINGS AND CONSEQUENT FIRST APPEAL PROCEEDINGS ARE BASED ON ERRONEOUS AND MISINTERPRETATION OF JUDICIA L PRONOUNCEMENT LEADING TO UNWARRANTED OUTCOME. 4. BECAUSE, ASSESSMENT ORDER AND CONSEQUENT FIRST APPELLATE ORDER ARE AGAINST THE PROPOSITIONS LAID BY THE HONBLE AP EX COURT DELIVERED IN LACHMANDAS MATHURADAS VS. CIT BEARING CITATION [200 2] 254 ITR 799 (SC) 5. BECAUSE, DISALLOWANCE OF THE BELOW TABULATED DI SALLOWANCE IS ERRONEOUS AND AGAINST THE BINDING PRECEDENCE OF LAW LAID BY THEIR LORDSHIP IN LACHMANDAS MATHURADAS VS. CIT (SUPRA). SR. NO NATURE OF DISALLOWANCE AMOUNT 1 INTEREST ON LATE PAYMENT OF TDS RS.98,854/- 2 INTEREST AND PENALTY PAID ON SERVICE TAX RS.14,113/- . 6. BECAUSE, LOWER AUTHORITIES FAILED TO UNDERSTAND THAT THERE WAS NEITHER CONCEALMENT OF PARTICULAR OF INCOME NOR APP ELLANT HAS FURNISHED INACCURATE PARTICULAR OF INCOME, CONSEQUENT INITIATION OF PENAL PROVISION WAS INEXCUSABLE. HENCE THE APPEAL. THE APPELLANT COMPANY CRAVES TO LEAVE, ADD ALTER, M ODIFY OR / AND DELETE ANY OF THE ABOVE GROUND 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY WHICH IS ENGAGED IN THE BUSINESS OF BUILDERS AND D EVELOPERS, FILED ITS RETURN OF INCOME FOR AY 2015-16 ON 31/10/2015, DECLARING TOTAL INCOME OF RS. 5,12,550/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE I.T .ACT, 1961 ON 29/12/2017 AND DETERMINED TOTAL INCOME AT RS. 6,25, 517/-, BY MAKING ADDITIONS TOWARDS DISALLOWANCE OF INTEREST P AID ON TDS AMOUNTING TO RS. 98,854/- AND DISALLOWANCE OF INTER EST AND PENALTY PAID ON SERVICE TAX AMOUNTING TO RS. 14,113/-, ON T HE GROUND THAT INTEREST PAID ON LATE DEPOSIT OF TDS IS NOT ALLOWAB LE AS DEDUCTION U/S 37(1) OF THE I.T.ACT, 1961. ITA NO.5468/MUM/2018 VAGAD BUILDERS & DEVELOPERS PVT.LTD. 3 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESEE P REFERRED AN APPEAL BEFORE THE LD.CIT(A), BEFORE THE LD.CIT(A), THE ASSESSEE HAS FILED RETURNS SUBMISSION ON 29/05/2018 IN SUPPO RT OF ITS ARGUMENTS. THE LD.CIT(A), FOR DETAILED REASONS REC ORDED IN HIS ORDER, DATED 02/07/2018 CONFIRMED ADDITIONS MADE B Y THE AO TOWARDS DISALLOWANCES OF INTEREST PAID ON TDS, ON T HE GROUND THAT SAID EXPENDITURE IS NOT DEDUCTABLE AS BUSINESS EXPE NDITURE U/S 37 OF THE I.T.ACT, 1961. SIMILARLY, THE LD. AO HAS CONFIR MED DISALLOWANCES OF INTEREST AND PENALTY PAID ON SERVICE TAX AMOUNTI NG TO RS. 14,113/- BY HOLDING THAT INTEREST AND PENALTY PAID FOR VIOLA TION OF PROVISIONS OF ANY LAW IS NOT ALLOWABLE AS DEDUCTION U/S 37 OF THE I.T.ACT, 1961. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. AT THE TIME OF HEARING, THE LD. AR FOR THE ASSESEE SUBMITT ED THAT THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY IS VOID AB INITO, BECAUSE THE SAME HAS BEEN PASSED WITHOUT PROVIDING PLAUSIBLE OP PORTUNITY OF BEING HEARD AND THEREBY, MOCKING AUDI ALTERM PARTEM AND PRINCIPLES OF NATURAL JUSTICE. THE LD. AR, FURTHER SUBMITTED T HAT THE LD.CIT(A) HAD DISPOSED OF APPEAL FILED BY THE ASSESSEE, WITHO UT CONSIDERING CERTAIN JUDICIAL PRECEDENTS REFERRED BY THE ASSESSE E, DURING THE COURSE OF HEARING, WHICH VIOLATED THE PRINCIPLES OF NATURAL JUSTICE AND HENCE, THE APPEAL MAY BE SET ASIDE TO THE FILE OF T HE AO. WE FIND THAT ASSESEE HAS CITED THE DECISION OF HONBLE SUPR EME COURT, IN THE CASE OF BHARAT COMMERCE AND INDUSTRIES (1998) (SC) AND ALSO THE DECISION OF HONBLE KERALA HIGH COURT, IN THE ORIEN TAL INSURANCE COMPANY LTD. 183 TAXMANN 136 AND ORS TWO JUDGMENT O F GUJARATH HIGH COURT, IN SUPPORT OF ITS ARGUMENTS. WE FURTHER NOTED THAT THE LD.CIT (A) HAS CONFIRMED ADDITIONS MADE BY THE AO T OWARDS DISALLOWANCE OF INTEREST PAID ON TDS AND PENALTY ON SERVICE TAX ITA NO.5468/MUM/2018 VAGAD BUILDERS & DEVELOPERS PVT.LTD. 4 WITHOUT CONSIDERING CASE LAWS CITED BY THE ASSESEE AND ALSO, HOW THOSE CASE LAWS ARE NOT APPLICABLE TO THE FACTS OF PRESENT CASE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS CLAIMED BY THE ASS ESSEE, INSOFAR AS, NOT CONSIDERING THE CASE LAWS CITED BY THE ASSESEE. HENCE, WE SET ASIDE, THE APPEAL TO THE FILE OF THE LD.CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 /10/ 2019 SD/- (MAHAVIR SINGH) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 15/10/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//