Twenty First Century Management Services Limited, CHENNAI V. ACIT, CHENNAI

ITA 639/CHNY/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9110 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 12-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D; Set aside
• Section: 14A; 20

Judgement Text

आयकर अपील य अ धकरण, ‘सी’ यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI ी वी .द ु गा राव, या यक सद य एवं ी जी.मंज ु नाथ, लेखा सद य के सम$ BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./I . T. A. No. 6 3 9/ Chn y/ 2 0 1 9 ( नधा रणवष / As s e s s m en t Ye a r : 20 15 - 1 6) M/s. Twenty First Century Management Services Ltd. G3, 67, Eldams Road, Alwarpet, Chennai-600 018. V s The Assistant Commissioner of Income Tax, Corporate Circle -3(1) Chennai. P AN: A A CT 2 3 9 7 L (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. R.Viswanathan, C.A. यथ क ओरसे/Respondent by : Mr. G.Johnson, Addl.CIT स ु नवाईक तार ख/D a t e o f h e a r i n g : 07.02.2022 घोषणाक तार ख /D a t e o f P r o n o u n c e m e n t : 09.02.2022 आदेश / O R D E R PER G.MANJUNATHA, AM: This appeal filed by the assessee is directed against order passed by the learned Commissioner of Income Tax (Appeals)-7, Chennai, dated 21.12.2018 and pertains to assessment year 2015-16. 2. The assessee has raised following grounds of appeal:- 1. The order dated 21.12.2018 of the Learned CIT(A)-7, Chennai in ITA No.102(T)/CIT-A-7/ 2017-18 for the Assessment year is contrary to facts, opposed to law and untenable. 2. The Learned Commissioner of Income tax (Appeals) grossly erred in dismissing the appeal, without affording reasonable opportunity 2 ITA No.639/Chny/2019 3. The Ld CIT(A) erred in disallowing the expenses u/s 14A without verifying the Investment amounts for computation for disallowance as per Rule 8D of the Income tax Rules 3.1 The Ld CIT(A) AC ought to have applied section 14A only if there is common expenditure in relation to taxable income and exempt income. 3.2 Ld CIT(A) grossly erred in not establishing the nexus between the expenditure incurred and earning of dividend income and invoking section 14A.” 3. Brief facts of the case are that the assessee is a limited company engaged in the business of share trading in capital market filed its return of income for assessment year 2015-16 declaring total income of Rs.33,10,46,080/-. The assessment has been completed u/s.143(3) of the Income Tax Act, 1961 on 08.12.2017 and determined total income of at Rs.32,82,22,152/- by making additions towards speculation loss of Rs.53,13,112/- and disallowance u/s.14A of the Act at Rs.18,62,960/-. The assessee carried the matter in appeal before first appellate authority, but neither appeared nor filed any details. Therefore, learned CIT(A) disposed off appeal filed by the assessee and sustained additions made by the Assessing Officer towards speculation loss and disallowance u/s.14A of the Act. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us. 3 ITA No.639/Chny/2019 4. We have heard both the parties, perused material available on record and gone through orders of the authorities below. Admittedly, the assessee neither appeared before the learned CIT(A) nor filed any details. We further noted that learned CIT(A) claims to have contacted the appellant telephonically on the telephone number given in Form 35, but could not be reached. Except this, order of the learned CIT(A) is silent on the issue, whether sufficient opportunity of hearing is granted to the assessee or not by issue of notice. No doubt, it is responsibility of the appellant to pursue its appeal with necessary evidences. In fact, the appellant is not interested in pursuing the appeal, the appellate authority has left with no option, but to dispose off appeal filed by the assessee, but such appeal should be disposed off on merits, on the basis of material available on record. In this case, although the learned CIT(A) has disposed off appeal ex-parte for non-appearance of the assessee, but such appeal has been disposed off on technical grounds without adjudicating issues on merits. In our consider view, the learned CIT(A) erred in not dealing with issues on merits. Therefore, we are of the considered view that 4 ITA No.639/Chny/2019 the issue needs to go back to the file of learned CIT(A) to give one more opportunity of hearing to the assessee to file necessary evidences and explain its case. Hence, we set aside order of the learned CIT(A) and restore appeal to the file of learned CIT(A) and direct the CIT(A) to reconsider the issue, after providing reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall appear before the learned CIT(A) and furnish necessary details without seeking any adjournment, unless otherwise warranted. 5. In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 9 th February, 2022 Sd/- Sd/- ( वी. द ु गा राव) ( जी. मंज ु नाथ) (V.Durga Rao) ( G.Manjunatha ) #या यक सद%य /Judicial Member लेखा सद%य / Accountant Member चे#नई/Chennai, (दनांक/Dated 9 th February, 2022 DS आदेश क त*ल+प अ,े+षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आय ु -त (अपील)/CIT(A) 4. आयकर आय ु -त/CIT 5. +वभागीय त न1ध/DR 6. गाड फाईल/GF.