Chandrakumar K Jain, Mumbai V. ITO, CHENNAI

ITA 6530/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7868 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 15-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJITKUMAR SRIVASTAVA
• Assessee Lawyers: HARSHAD DOSHI
• Keywords: Opportunity of being heard; Set aside
• Section: 144; 250; 201; 251; 246A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI BEFORE S HRI G. MANJUNATHA (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 6530 /MUM/2018 ASSESSMENT Y EAR: 2015 - 16 SHRI CHANDRAKUMAR K. JAIN, FLAT NO. 1101, 11 TH FLOOR, DR. NANASAHEB DESHMUKH BUILD ING, V.P. ROAD, GIRGAON, MUMBAI - 400004 PAN: AAFPJ8043F VS. THE ITO 19(1)(3), MATRU MANDIR, TARADEO ROAD, MUMBAI - 400007 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARSHAD DOSHI (AR) REVENUE BY : SHRI AJIT KUMAR SRIVASTAVA ( CIT DR ) DATE OF HEARING: 23 /07 /201 9 DATE OF PRONOUNCEMENT: 26 / 0 7 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 03.08.2018 PASSED BY THE COMMISSIONE R OF INCOME TAX (APPEALS) - 13 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2015 - 16 , WHEREBY THE LD. CIT(A) HAS DISMISSED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 144 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 2. IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 6,00,210/ - . SINCE, THE CASE WAS SELECTED FOR LIMITED SCRUTINY. THE AO ISSUED NOTICES U/S 143 (2) AND 142 (1) OF THE A CT. SINCE, T HE AO DID NOT RECEIVE ANY RESPONSE TO THE SAID NOTICES, THE AO ISSUED LETTER AND DIRECTED THE ASSESSEE TO APPEAR BEFORE HIM. HOWEVER, NEITHER THE ASSESSEE APPEARED BEFORE THE AO NOR FILED ANY DETAILS. ACCORDINGLY, THE AO COMPLETED THE ASSESSMEN T U/S 144 OF THE ACT DETERMINING THE TOTAL INCOME OF RS. 1,25,48,755/ - AFTER MAKING DISALLOWANCE OF INCREASED 2 ITA NO. 6530 / MUM/2018 ASSESSMENT YEAR: 2015 - 1 6 UNSECURED LOAN RS. 97,95,733/ - AND RS. 21,52,182/ - AS UNDISCLOSED EXPENDITURE. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A) . THE LD. CIT (A) PROCEEDED EX PARTE AND DISMISSED THE APPEAL AND CONFIRMED THE ADDITION MADE BY THE AO ON THE BASIS OF MATERIAL ON RECORD AS T HE ASSESSEE DID NOT APPEAR BEFORE THE LD. CIT (A) ON THE DATE FIXED FOR HEARING. THE ASSESSEE IS IN APPEAL BEFORE THE ITAT AGAINST THE SAID FINDINGS OF THE LD. CIT(A). 3 . THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. THE LEARNED ASSESSING OFFICER HAS ERRED IN ADDING RS. 97,95,733 ON ACCOUNT OF INC REASE IN UNSECURED LOANS AS UNEXPLAINED MONEY TO TOTAL INCOME. 2. THE LEARNED ASSESSING OFFICER HAS ERRED BY DISALLOWING AND ADDING RS. 21,52,812/ - AS UNDISCLOSED EXPENDITURE TO TOTAL INCOME. 4. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE AO HAS PASSED THE ASSESSMENT ORDER U/S 144 OF THE ACT. IN THE FIRST APPEAL, THE LD. CIT (A) ALSO PROCEEDED EX - PARTE AND CONFIRMED THE ADDITIONS MADE BY THE AO . THE LD. COUNSEL FURTHER POINTED OUT THAT THE LD. CIT (A) HAS DISMISSED THE APPEAL R ELYING ON THE DECISION OF THE HONBLE MP HIGH COURT AND THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE ASSESSEE DID NOT RECEIVE ANY NOTICE, THE ASSESSEE COULD NOT APPEAR BEFORE THE LD. CIT (A) ON THE DATES FIXED FOR HEARING. THE LD. COUNSEL FURTHER SUBMITTED THAT UNDER THESE CIRCUMSTANCES, ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO PRESENT ITS CASE BEFORE THE LD. CIT (A). 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT SINCE THE ASSESSEE FAILED TO APPEAR BEFORE THE LD. CIT (A) THE LD. CIT (A) HAS RIGHTLY DISMISSED THE APPEAL AND CONFIRMED THE ASSESSMENT ORDER. THE LD. DR FURTHER SUBMITTED THAT SINCE THERE IS NO EVIDENCE ON RECORD TO SHOW THAT THE ASSESSEE DID NOT RECEIVE NOTICE, T HERE IS NO MERIT IN THE CONTENTION OF THE ASSESSEE. 6. WE HAVE PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE RIVAL CONTENTIONS OF THE PARTIES. WE NOTICE THAT THE LD. CIT(A) HAS DISMISSED THE 3 ITA NO. 6530 / MUM/2018 ASSESSMENT YEAR: 2015 - 1 6 APPEAL OF THE ASSESSEE BY RELYING ON THE JUDGMENTS OF HON BLE MP HIGH COURT IN THE CASE OF ESTATE OF LATE TUKOJIRAO HOLKAR VS. CIT 223 ITR 480 (MP) AND THE DECISION OF THE DELHI BENCH OF THE ITAT IN THE CASE OF CIT VS. MULTIPLAN INDIA (P) LTD. (38 ITD 320 ) (DELHI). 7 . AS IS APPARENT FROM THE IMPUG NED ORDER THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE HOLDING THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING ITS CASE. EVEN IF IT IS ASSUMED THAT THE ASSESSEE DID NOT APPEAR DESPITE SERVICE OF NOTICE, THE LD . CIT(A) SHO ULD HAVE DECIDED THE APPEAL ON MERITS TAKING INTO CONSIDERATION THE ENTIRE EVIDENCE ON RECORD IN THE LIGHT OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT (CENTRAL) NAGPUR VS. PREMKUMAR ARJUNDASLUTHRA(HUF) 29 7 CTR 614 (BOM). IN THE SAID CASE, THE HONBLE HIGH COURT HAS HELD THAT THE LAW DOES NOT EMPOWER THE CIT (A) TO DISMISS THE APPEAL FOR NON PROSECUTION. THE OPERATIVE PART OF THE JUDGMENT OF THE HONBLE HIGH COURT READS AS UNDER: - FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED BEFORE THE CIT (A), THEN IN DISPOSING OF THE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQUIRY THAT HE THINKS FIT FOR DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REP ORT THE RESULT OF THE SAME TO HIM AS FOUND IN SECTION 250 (4) OF THE ACT. FURTHER SECTION 250(6) OF THE OBLIGES THE CIT (A) TO DISPOSE OF AN APPEAL IN WRITING AFTER STATING THE POINTS FOR DETERMINATION AND THEN RENDER A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CONSIDERATION WITH REASONS IN SUPPORT. SECTION 251(1)(A) AND (B) OF THE ACT PROVIDE THAT WHILE DISPOSING OF APPEAL THE CIT (A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL AN ASSESSMENT AND/OR PENALTY. BESIDE S EXPLANATION TO SUB - SECTION (2) OF SECTION 251 OF THE ACT ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT (A) WOULD BE ENTITLED TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFORE HIM IN APPEAL FILED FOR ITS CONSIDERATION, E VEN IF THE ISSUE IS NOT RAISED BY THE APPELLANT IN ITS APPEAL BEFORE THE CIT (A). THUS ONCE AN ASSESSEE FILES AN APPEAL UNDER SECTION 246A OF THE ACT, IT IS NOT OPEN TO HIM AS OF RIGHT TO WITHDRAW OR NOT PRESS THE APPEAL. IN FACT THE CIT (A ) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT WITH EFFECT FROM 1STJUNE, 2001 THE POWER OF THE CIT (A) TO SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND 4 ITA NO. 6530 / MUM/2018 ASSESSMENT YEAR: 2015 - 1 6 RESTORE IT TO THE ASSESSING OFFICER FOR PASSING A FRESH ORDER STANDS WITHDRAWN. THEREFORE , IT WOULD BE NOTICED THAT THE POWERS OF THE CIT (A) IS CO - TERMINUS WITH THAT OF THE ASSESSING OFFICER I.E. HE CAN DO ALL THAT ASSESSING OFFICER COULD DO. THEREFORE JUST AS IT IS NOT OPEN TO THE ASSESSING OFFICER TO NOT COMPLETE THE AS SESSMENT BY ALLOWING THE ASSESSEE TO WITHDRAW ITS RETURN OF INCOME, IT IS NOT OPEN TO THE ASSESSEE IN APPEAL TO WITHDRAW AND/OR THE CIT (A) TO DISMISS THE APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE APPEAL BY THE ASSESSEE. THIS IS AMPLY CLEAR FROM THE SECTION 251(1)(A) AND (B) AND EXPLANATION TO SECTION 251 (2) OF THE ACT WHICH REQUIRES THE CIT (A) TO APPLY HIS MIND TO ALL ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFORE HIM WHETHER OR NOT THE SAME HAS BEEN RAISED BY THE APPELLA NT BEFORE HIM. ACCORDINGLY , THE LAW DOES NOT EMPOWER THE CIT ( A ) TO DISMISS THE APPEAL FOR NON - PROSECUTION AS IS EVIDENT FROM THE PROVISIONS OF ACT. 8 . SO IN OUR CONSIDERED OPINION, THE ACTION OF THE LD. CIT(A) IS CONTRARY TO THE JUDGMENT OF THE HON BLE HIGH COURT DISCUSSED ABOVE. HENCE, IN THE LIGHT OF THE AFORESAID JUDGMENT OF THE HONBLE HIGH COURT, WE SET ASIDE THE EX - PARTE ORDER PASSED BY THE LD. CIT (A) IN THE INTEREST OF JUSTICE AND SEND THE APPEAL BACK TO THE LD . CIT (A) FOR DECIDING THE SAME ON MERITS AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT/ASSESSEE. HOWEVER, WE DIRECT THE APPELLANT/ASSESSEE NOT TO SEEK ADJOURNMENTS ON FRIVOLOUS GROUNDS DURING THE PROCEEDINGS BEFORE THE APPELLATE AUTHORITY. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2015 - 2016 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH J ULY , 2019 . SD/ - SD/ - ( G. MANJUNATHA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 26 / 07 / 201 9 ALINDRA, PS 5 ITA NO. 6530 / MUM/2018 ASSESSMENT YEAR: 2015 - 1 6 / COPY OF THE ORDE R 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