Shri Shabbirali F. Masani, Bhavnagar V. The ACIT.Circle-2, Bhavnagar

ITA 691/AHD/2012

• Counselvise Citation: 69120514 RSA 2012
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 22-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESHCHANDRA SHARMA
• Keywords: Opportunity of being heard; Principle of natural justice; Commercial expediency

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.691/AHD/2012 ( & ' & ' & ' & ' / / / / ASSESSMENT YEAR : 2003-04) SHRI SHABBIRALI F.MASANI C/O.S.S.TRADERS KHOJAWAD, AMBA CHOWK BHAVNAGAR-364 001 & & & & / VS. THE ACIT CIRCLE-2 BHAVNAGAR ( '# ./)* ./ PAN/GIR NO. : AARPM7165M ( (+ / // / APPELLANT ) .. ( ,-(+/ RESPONDENT ) (+ . '/ APPELLANT BY : -NONE- ,-(+ / . ' / RESPONDENT BY : SHRI DINESHCHANDRA SHARMA &0 / #/ // / DATE OF HEARING : 15/05/2012 12' / # / DATE OF PRONOUNCEMENT : 25/5/12 '3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-XX, AHMEDABAD DAT ED 25/01/2012 AND THE MAIN GROUND OF ASSESSEE IS THAT THE ORDER OF LEARNE D CIT(APPEALS) WAS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. FOR REFERENCE, G ROUND NOS.1 & 2 ARE REPRODUCED BELOW:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN GRANTING AN APPROPRIATE OPPORTUNITY OF BEING HEARD AND ACCORDINGLY ERRED IN LAW IN PASSING EX-PARTE ORDER. ITA NO .691/AHD/2012 SHRI SHABBIRALI F.MASANI VS. ACIT ASST.YEAR - 2003-04 - 2 - 2. THE LD.CIT(A) HAS FURTHER ERRED IN LAW AND ON TH E FACTS OF THE CASE IN CONFIRMING THE ACTION OF LD.AO IN MAKING DI SALLOWANCE OF INTEREST AMOUNTING TO RS.7,56,930/- U/S.36(1)(III) OF THE ACT. 2. ALTHOUGH, ON THE DATE OF HEARING, NO ONE HAS APP EARED FROM THE SIDE OF THE APPELLANT, BUT CONSIDERING THE SMALLNESS OF THE ISSUE INVOLVED WE HAVE DECIDED TO PROCEED EX-PARTE QUA THE ASSESSEE, AFTER HEARING LD.DR. WE HAVE PERUSED THE ORDER OF THE LEARNED CIT(APPEALS) WHO H AS NOTICED FEW DATES OF HEARING AS WELL AS THE DATES ON WHICH THE ASSESSEE HAD SOUGHT ADJOURNMENT. SINCE THERE WAS NO COMPLIANCE OR INSUFFICIENT COMPL IANCE, HENCE THE LEARNED CIT(APPEALS) HAS DECIDED TO PROCEED EX-PARTE AND DISMISSED THE ASSESSEES APPEAL. THE ISSUE OF DISALLOWANCE OF INTEREST OF R S.7,56,930/- COULD HAVE BEEN DECIDED IF THE DIRECTIONS OF THE ITAT ORDER DATED 5 .12.2008 WOULD HAVE BEEN CORRECTLY FOLLOWED BY THE AUTHORITIES BELOW. ON ON E HAND, THE ASSESSEE WAS DIRECTED TO ESTABLISH THAT THE ADVANCES WERE GIVEN FOR COMMERCIAL EXPEDIENCY, HOWEVER, ON THE OTHER HAND, IT WAS ALSO DIRECTED T HAT THE ASSESSING OFFICER CAN DISALLOW THE INTEREST IF HE ARRIVES AT A CONCLUSION THAT THE INTEREST-FREE ADVANCE WAS NOT GIVEN FOR COMMERCIAL EXPEDIENCY. THE ASSES SEE HAS FURNISHED THE DETAILS OF TRADE ADVANCES TO THE ASSESSING OFFICER AND ARGUED THAT IT WAS A BUSINESS PRACTICE TO EXTEND ADVANCES TO THE SHIP-BR EAKERS. IN ANY CASE, CONSIDERING PAST HISTORY OF THE CASE THAT THE MATTE R HAD GONE UPTO THE TRIBUNAL AND THE ASSESSEE HAS FURNISHED NUMBER OF DETAILS BE FORE THE ASSESSING OFFICER, WE ARE NOT OF THE VIEW THAT THIS ASSESSEE IS NOT SE RIOUS IN PURSUING THIS ISSUE. THERE COULD BE SOME REASON OF NON-APPEARANCE ON A P ARTICULAR DATE BEFORE LEARNED CIT(APPEALS). 3.1. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THIS ASSESSEE DESERVES AN OPPO RTUNITY OF HEARING BEFORE LD.CIT(A). NATURAL JUSTICE ALSO DEMANDS TO DECID E AN ISSUE AFTER GRANTING A REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE CONCERNED PARTIES. IN A REPORTED DECISION OF GUJARAT THEMIS BIOSYN LTD. 74 ITD 339(AHD.), A VIEW ITA NO .691/AHD/2012 SHRI SHABBIRALI F.MASANI VS. ACIT ASST.YEAR - 2003-04 - 3 - WAS TAKEN THAT THE PROVISIONS OF SECTION 250(6) PRE SCRIBES THAT AN APPELLATE ORDER IS TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE AUTHORITY THEREON AND THE REASONS FOR SUCH DECISION SO THAT T HROUGH A SPEAKING ORDER THE ASSESSEE IS ABLE TO PRECISELY KNOW THE POINTS OF IS SUE EITHER DECIDED IN FAVOUR OR AGAINST. FOLLOWING THE ABOVE PRECEDENT, WE HE REBY REMIT THE MATTER BACK TO LD.CIT(A) WITH THE DIRECTION TO DECIDE DE NOVO ON MERITS, NEEDLESS TO SAY AFTER PROVIDING AN ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE THAT INSTEAD OF WAITING FOR ANY NOTICE OF HEARING FROM THE SIDE OF THE REVENUE DEPARTMENT, THE AUTHORIZED REPR ESENTATIVE OF THE COMPANY SHOULD WITHIN 30 DAYS ON RECEIPT OF THIS ORDER OF T HE TRIBUNAL CONTACT THE OFFICE OF LD.CIT(A) AND SUO MOTU ASK FOR A CONVENIENT DATE OF HEARING, SO THAT THIS APPEAL CAN BE DECIDED AT AN EARLY DATE WITHOUT WAST ING FURTHER TIME FOR THE SERVICE OF NOTICE AND OTHER LIKE NATURE PROCEDURES. WITH THESE DIRECTIONS, THIS APPEAL MAY BE TREATED AS ALLOWED ONLY FOR STATISTIC AL PURPOSES. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 25 / 05 /2012 ..&, .&../ T.C. NAIR, SR. PS ITA NO .691/AHD/2012 SHRI SHABBIRALI F.MASANI VS. ACIT ASST.YEAR - 2003-04 - 4 - '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-XX, AHMEDABAD 5. 49: ,& , , / DR, ITAT, AHMEDABAD 6. :; <0 / GUARD FILE. '3& '3& '3& '3& / BY ORDER, -4 , //TRUE COPY// = == = / // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION16/5/12 (DICTATION-PAD PAGES 1 TO 3 ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S25/5/12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25/5/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER