DILIP GHANSHAMDAS MOHATTA, MUMBAI V. ACIT- 21 (1), MUMBAI

ITA 5596/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7533 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 03-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 142(1); 143(1); 143(2); 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL , AM / I .T.A. NO. 5596 /MUM/201 8 ( / ASSESSMENT YEAR: 20 14 - 15 ) DILIP GHANSHAMDAS MOHATTA 1, PARIKH CHAMBERS, 205, PA NDURANG NAIK ROAD, SHIVAJI PARK, MAHIM, MUMBAI - 400016 . / VS. ACIT - 21(1) PIRAMAL CHAMBERS, LALABAUG, PAREL MUMBAI - 400012. ./ ./ PAN/GIR NO. : AABPM6743P ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 11/02/2020 / DATE OF PRONOUNCEMENT : 19 /03 /2020 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 30 . 08 .201 8 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 48 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 14 - 1 5 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 48, MUMBAI (HEREINAFTER, FOR THE SAKE OF BREVITY, REFERRED TO AS 'THE CIT(A)') ERRED ON FACTS AND IN LAW IN DISMISSING THE APPEAL OF THE APPELLANT ON THE GROUND THAT THE APPELLANT HAS NOT APPEARED BEFORE HIM WITHOUT APPRECIATING THE FACT ASSESSEE BY : NONE REVENUE BY: MS. JOTHILAKSHMI NAYAK (DR) ITA NO. 5596 / M/201 8 A.Y.20 14 - 15 2 THAT THE APPELLANT HAD ALREADY UPLOADED, UNDER HIS DIGITAL SIGNATURE, THE SUBMISSIONS ON WHICH THE APPELLANT CHOSE TO RELY, AT THE DESIGNATED INCOM E TAX PORTAL WHERE A PROVISION FOR SUBMISSION TO THE CIT(A) HAS TO BE MADE. 2. CONSIDERING THE, FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED ON FACTS AND IN LAW IN DISMISSING THE APPEAL OF THE APPELLANT WITHOUT CONSIDERING THE FACTS OF THE CASE AND GROUNDS OF APPEAL BEFORE THE CIT(A). 3. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER OF THE CIT(A) DISMISSING THE APPEAL BE SET ASIDE AND THE CIT(A) BE DIRECTED TO REH EAR THE APPELLANT BEFORE DECIDING THE APPEAL. 4. CONSIDERING THE F ACTS AND CIRCUMSTANCES OF THE CASE, THE CITA) AFTER ADMITTING THAT THE STATEMENT OF FACTS HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED THE STATEMENT OF FACTS AND DECIDE THE APPEAL IN FAVOUR OF THE APPELLANT. 5. CONSIDERING T HE FACTS AND CIRCUMSTANCES OF THE CASE, THE CITA) OUG HT TO HAVE DELETED THE ADDITION MADE TO THE INCOME OF THE APPELLANT OR ALTERNATELY HAVE REDUCED THEM SUBSTANTIALLY 6. THE APPELLANT CRAVES LEAVE TO ADD AND /OR ALTER AND /OR AMEND ANY GROUND(S) OF AP PEAL. . 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 28 . 09 .20 14 DECLARING TO TAL LOSS TO THE TUNE OF RS ( - ) 41,95,874/ - FOR THE A.Y. 2014 - 15 . T HE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961. THEREAFTER, THE RETU RN WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTIC E U/S 143(2) OF THE ACT DATED 31.08.2015 WAS ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, NOTIC E U/S 142(1) OF THE ACT DATED 12 . 04 .201 6 WAS ALSO ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE IS AN IN DIVIDUAL DERIVING INCOME FROM BUSINESS AND PROFESSION AND HOUSE PROPERTY . THE ASSESSEE WAS THE OWNER OF THREE FIRMS VIZ, TECHOLITE ENTERPRISE, BI - ORIENTED ITA NO. 5596 / M/201 8 A.Y.20 14 - 15 3 PLASTIC TUBES AND PYROCHEM. HE HAS SUBMITTED AUDITED FINANCIAL STATEMENTS IN RESPECT OF THESE FIRMS. UNSECURED LOAN AND INTEREST EXPENSE IN RESPECT OF THE ABOVE FIRMS IS AS UNDER.: - S. NO. FIRM UNSECURED LOAN AMOUNT (RS.) INTEREST (RS.) 1 TECHOLITE ENTERPRISES 74,10,752 8,49,178 2 BI - ORIENTED PLASTIC TUBES NIL NIL 3 PYROCHEM NIL NIL THE ASSESSEE HAS S HOWN THE UNSECURED LOAN OF RS.68,26,964/ - IN HIS PERSONAL NAME AND HAS CLAIMED INTEREST DEDUCTION OF RS.5,52,674/ - TOWARDS IT AS WELL. NOTHING WAS FOUND THAT THE PERSONAL LOAN WAS USED FOR BUSINESS PURPOSE , THEREFORE, THE INTEREST WAS DECLINED AND ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE DEBITED A SUM OF RS.44683/ - MADE IN RESPECT OF LATE PENALTY SUPPLY IN HIS P & L ACCOUNT. AFTER THE REPLY OF THE ASSESSEE, THE SAME WAS DECLINED AND ADDED TO THE INCOME OF THE ASSESSEE. THE TOTAL INCOME OF THE ASSES SEE WAS ASSESSED TO THE TUNE OF RS.( - )35,98,520/ - . THE ASSESSEE FILE D AN APPEAL BEFORE THE CIT(A) 48 , MUMBAI WHO DISMISSED THE APPEAL OF THE ASSESSEE, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE DEPARTMENT AND HAS GONE THROUGH THE CASE CAREFULLY . IN FACT, THE LD. REPRESENTATIVE OF THE ASSESSEE DID NOT ARG UE THE CASE ON MERITS BUT ARGUE ON THIS POINT THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY IN ABSENCE OF THE ASSESSEE AND WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. THEREFORE, THE ORDER OF THE CIT( A) I N QUESTION IS WRONG AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. ITA NO. 5596 / M/201 8 A.Y.20 14 - 15 4 HOWEVER, ON THE OTHER HAND, THE LD. REPRESENT ATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE ORDER OF THE CIT(A) DATED 30 . 08 .201 8 , WE NOTICED THAT THE CIT(A) DECIDED THE MATTER OF CONTROVERSY IN ABSENCE OF THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE . A PROPER AND REASONABLE OPPORTUNITY IS NOT REQUIRED TO BE GIVEN TO THE ASSESSEE BEFORE THE DECIDING THE MATTER OF CONTROVERSY IN ACCORDANCE WITH LAW. 5. FOR THIS PROPOSITION WE PLACED RELIANCE UPON THE FOLLOWING CASE LAWS. ( 1 ) CIT VS. PREMKUMAR ARJUNDAS LUTHRA (HUF) (2017) 154 DTR (BOM) 302 ( 2 ) CIT VS. S CHENNIAPPA MUDALIAR (1969) 74 ITR 1 (SC) 6. THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) IS NOT LIABLE TO BE SUSTA INABLE IN THE EYES OF LAW, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON ALL THE ISSUES AND RESTORED THE MATTER BEFORE THE CIT(A) TO DECIDE THE MATTER AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. 5 . IN THE R ESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE S . ORDER PRONOUNCED IN THE OPEN COURT ON 19 / 03/ 2020 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 19 /03 / 2020 VIJAY PAL SINGH/SR. PS ITA NO. 5596 / M/201 8 A.Y.20 14 - 15 5 / 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// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI