SUJATHA SUDHAKAR SHETTY , MUMBAI V. ITO-6(3)(4), MUMBAI

ITA 635/MUM/2023

AI Insights

The case involves Sujatha Sudhakar Shetty, the appellant, who contested the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2012-13. The primary grievances included the lack of sufficient hearing opportunity by the CIT(A), the legality of the notice issued under sections 147/148 for reopening the assessment, and disputes over disallowances related to depreciation on vehicles and interest charges under section 234D of the Income Tax Act. The Tribunal found that the CIT(A) had not adequately served notices to the appellant, leading to the decision to remand the case for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302272 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 02-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Salary income; Opportunity of being heard; Set aside
• Section: 147; 148; 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘ SMC‘ BENCH MUMBAI BEFORE: SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.635/Mum/2023 (Assessment Years :2012-13) Sujatha Sudhakar Shetty D-1A Wing, Sun-N-Dew, Sundar Nagar, Kalina Santacruz (E), Mumbai- 400098. V s. ITO-6(3)(4) 5 th Floor, Room No. 524, AAyakar Bhavan, M.K. Road, Mumbai. P A N /G IR N o. AAOPS8640J (Appellant) . . (Respondent) Assessee represented by Shri Ravikant S. Pathak Revenue represented by Shri Joginder Singh, Sr. AR Date of Hearing 08/05/2023 Date of Pronouncement 08/05/2023 O R D E R PER KULDIP SINGH (J.M) : The Appellant, Sujatha Sudhakar Shetty (hereinafter referred to as the ‘assessee’) by filing the present appeal, sought to set aside the impugned order dated 10.01.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] qua the assessment order for Assessment year 2012-13 on the grounds inter-alia that:- “1. The Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi ['CIT(A)'] erred in passing the order, without providing sufficient opportunity of being heard to the Appellant to represent its case. The Appellant submit that the CIT(A) ought to have given sufficient opportunity of being heard to the Appellant, and on the facts and ITA No. 635/Mum/2023 2 circumstances of the case the appeal shall be set aside to the file of CIT(A) for fresh adjudication. 2. The CIT(A) erred in confirming the action of AO in assessing the total income u/s 143(3) r.w.s.147 of the LT. Act at Rs.7,92,390/- as against returned income of Rs.4,39,820/- under normal provisions declared by the Appellant in her return of income. The Appellant submits that the notice issued u/s 148 and reopening of assessment u/s 147 is bad in law, illegal, ultra- virus and contrary to the provision of the I.T. Act and shall be quashed. 3. (a) The CIT(A) erred in confirming the disallowance of depreciation on vehicles to the extent of Rs.3,52,572/- (correct figure Rs. 2,59,498/-), being depreciation on assets treated by the AO as not in the name of the appellant herself. The Appellant submits that vehicles was registered in the name of the appellant herself. The vehicles were exclusively and wholly used for the purpose of business and the depreciation claimed be allowed as deducible expense for the year. (b) In the alternative and without prejudice to the above ground, the AO has not disputed the income earned by renting of the vehicles considered as not to be the assets of the Appellant and thus depreciation on the same should be allowed to the Appellant. 4. The CIT(A) erred in confirming the action of AO in charging interest of Rs. 28,880/- u/s 234D of the IT. Act. Your Appellant craves leave to add, to alter, or to amend the aforesaid grounds of Appeal.” 2. Briefly stated, facts necessary for consideration and adjudication of the issues at hand are: The assessee is an individual and Director in company M/s Kohinoor Printer Private Limited and is also into the business of renting of vehicles owned by her, claimed income from salary, business and other sources. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 (in short, “the Act”), which was reopened on perusal of ITS details available on ITD system that the ITA No. 635/Mum/2023 3 assessee had received rental income and salary to the tune of Rs. 21,50,072/- which was not fully offered for taxation. The assessee had offered only salary income to the tune of Rs. 4,69,157/- along with business and other income. Thus the AO had reason to believe that the income earned by the assessee to the tune of Rs. 16, 80,915/- has escaped assessment and thereby reopened the same by initiating proceedings under section 147/148 of the Act. Declining the contentions raised by the assessee the AO proceeded to make the addition of Rs. 3,52,572/- by way of disallowance of depreciation of asset and thereby framed assessment under section 143(3) r.w.s. 147 of the Act. 3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has confirmed the disallowance by dismissing the appeal filed by the assessee. Feeling aggrieved with the impugned order passed by the Ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeal. 4. I have heard the Ld. Authorised representative of the parties to the appeal, perused the order passed Ld. Lower Revenue Authorities and material available on record in the light of the case law applicable. 5. At the very outset, it is brought to the notice of the Bench by the Ld. AR for the assessee that Ld. CIT(A) has passed the impugned order at back of the assessee without serving any notice upon him, which fact has not been controverted by the ld. DR for the Revenue. ITA No. 635/Mum/2023 4 6. We have perused the impugned order passed by the Ld. CIT(A) particularly para-4, which goes to prove that the ld. CIT(A) reported to have been issued 3 notices to the assessee dated 13.01.2021, 24.03.2022 and 04.11.2022, but failed to bring on record if such notices were ever served upon the assessee nor the mode of issuance of such notice has been brought on record by the ld. CIT(A). 7. We are of the considered view that effective opportunity of being heard has not been given to the assessee by the ld. CIT(A) which is a sine qua non for imparting justice. So the impugned order passed by the ld. CIT(A) is not sustainable in the eyes of law hence, set aside. The appeal is remanded back to the ld. CIT(A) to decide afresh after by providing adequate opportunity of being heard to the assessee 8. Resultantly, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 08/05/2023. Sd/- (KULDIP SINGH) JUDICIAL MEMBER Mumbai ; Dated 08/05/2023 Santosh, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT ITA No. 635/Mum/2023 5 BY ORDER, (Sr. Private Secretary / Asstt. Registrar) ITAT, Mumbai Date Initial 1. Draft dictated on 09/05/2022 Sr.PS 2. Draft placed before author 10/05/2023 Sr.PS 3. Draft proposed & placed before the second member JM/AM 4. Draft discussed/approved by Second Member. JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. File sent to the Bench Clerk Sr.PS 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed Yes 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//