NILESH Y SHAH, MUMBAI V. ITO 5(2)(4), MUMBAI

ITA 5579/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8529 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Principle of natural justice
• Section: 234B; 10B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 5579/M/2016 (AY 2009 - 2010 ) MR. NILESH Y SHAH, A - 2, ADINATH APARTMENT, 281, TARDEO ROAD, TARDEO, MUMBAI 400 007. / VS. INCOME TAX OFFICER - 5(2)(4), R.NO.566, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AACPS7097 R ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : MS. BEENA SANTOSH, DR / DATE OF HEARING : 07 .02.2017 / DATE OF PRONOUNCEMENT : 07 .02.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 14.9.2016 IS AGAINST THE ORDER OF THE CIT (A) - 10, MUMBAI DATED 23.5.2016 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, ASSESSEE RAISED FOUR MAIN GROUNDS AND THEY RELATE TO (I) DENIAL OF NATURAL JUSTICE; (II) CIT (A)S DECISION IN HOLDING THAT THE REOPENING OF AS SESSMENT U/S 148 IS A VALID ONE; (III) DISALLOWANCE OF DEDUCTION CLAIMED U/S 10B OF THE ACT AND (IV) LEVY OF INTEREST U/S 234B OF THE ACT. 2. BEFORE US, NONE APPEARED TO REPRESENT THE CASE OF THE ASSESSEE DESPITE THE NOTICE OF HEARING SERVED ON THE ASSESSE E ON 9.1.2017. ON PERUSAL OF THE RECORD, I FIND, THERE IS A VALID ACKNOWLEDGEMENT IN THE FILE TO THIS EXTENT. THEREFORE, CONSIDERING THE NATURE OF THE ISSUES INVOLVED IN THE APPEAL AS WELL AS THE CASUAL APPROACH OF THE ASSESSEE IN PURSUING ITS APPEAL, I PROCEED TO ADJUDICATE THIS APPEAL WITH THE HELP OF THE LD DR FOR THE REVENUE. 3. AT THE OUTSET, LD DR BRIEFLY NARRATED THE FACTS OF THE CASE AND MENTIONED THAT IN THE PRESENT APPEAL, ASSESSEE RAISED THE GROUNDS RE LATING TO BOTH THE LEGAL AS WELL AS THE MERITS RELATING TO THE BREACH OF PRINCIPLES OF NATURAL JUSTICE AND THE CLAIM OF DEDUCTION U/S 10B OF THE ACT. IN THE LEGAL GROUND, ASSESSEE ALLEGES THAT PROPER 2 OPPORTUNITY WAS NOT GRANTED TO THE ASSESSEE IN THE RE - ASSESSMENT PROCEED INGS. HOWEVER, IN THE GROUNDS OF APPEAL, ASSESSEE RAISED THE OBJECTION TO THE MANNER OF RE - ASSESSMENT PROCEEDINGS AND FAILURE OF THE REVENUE AUTHORITIES TO FOLLOW THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHART (INDIA) LTD VS. ITO AND OTHERS IN CIVIL APP EAL NO. 7731 OF 2002, DATED 25.11.2002 AND DE SIRES THAT THE REOPENING OF THE ASSESSMENT IS NOT DONE IN A PROPER PERSPECTIVE. IN FACT, LD DR RELIED ON THE ORDERS OF THE AO AND THE CIT (A) AND SUPPORTED THE VIEW TAKEN BY THE REVENUE AUTHORITIES IN THEIR RES PECTIVE ORDERS. 4. ON HEARING THE LD DR FOR THE REVENUE AND AFTER CONSIDERING THE ABOVE BACK GROUND FACTS OF THE CASE, I FIND, THE ISSUE RAISED IN GROUND NO.1 , RELATING TO DENIAL OF NATURAL JUSTICE AND THE SECOND ISSUE (GROUND NO.2) RELATING TO THE APPLICA BILITY OF THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFT (INDIA) LTD (SUPRA) ARE REQUIRED TO BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. ACCORDINGLY I ORDER AND DIRECT THE AO TO DECIDE THE ISSUE AFRESH AFTER HEARING THE ASSESSEE OR ITS AUTHORIZED REPRESENTATIVE IN A PROPER PERSPECTIVE. FURTHER, AO IS ALSO DIRECTED TO COMPLY WITH THE JUDGMENT OF THE APEX COURT IN THE CASE OF GKN DRIVESHAFT (INDIA) LTD (SUPRA). IN MY VIEW, THE AO SHOULD ADJUDICATE THE LEGAL ISSUES FIRST, BEFORE THE CLAIM U/S 10B OF THE ACT AND OTHERS ARE ADJUDICATED IN A PROPER PERSPECTIVE. THUS, GROUND NOS. 1 AND 2 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. CONSIDERING MY DECISION ON THE ISSUES RAISED IN GROUND NOS.1 AND 2, I AM OF THE OPINION, THE ADJUDICATION OF GROUND NOS.3 AND 4 BECOMES AN ACADEMIC EXERCISE FOR THE TIME BEING. ACCORDINGLY, GROUND NOS. 3 AND 4 ARE DISMISSED AS ACADEMIC. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. OR DER PRONOU NCED IN THE OPEN COURT O N 0 7 T H FEBRUARY, 2017. S D / - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 07.02.2017 . . ./ OKK , SR. PS 3 / 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