NARENDRA ISHWARLAL GANDHI, MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 10(2)(1), MUMBAI

ITA 7316/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5451 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 22-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Earning of tax free income; Revised return
• Section: 142(1); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 7316 / MUM/ 201 7 ( / ASSESSMENT YEAR: 20 13 - 14 ) NARENDRA ISHWARLAL GANDHI 3C, RIDGE APARTEMENT, B.G KHER MARG, MALABAR HILL, MUMBAI - 400006. / VS. THE ASST. COMMISSIONER OF INCOME TAX CIRCLE 10(2)(1) ./ ./ PAN/GIR NO. : ADNPG 4447 P ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 05 . 0 7 .201 8 / DATE OF PRONOUNCEMENT : 25.07. 201 8 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 15 .0 5.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 17 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 13 - 14 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 THE LD CIT(A) HAS ERRED IN LAW AND O N THE FACTS OF THE CASE IN DISMISSING THE APPEAL ON TECHNICAL GROUND. THE APPEAL WAS F ILED WITHIN 30 DAYS FROM THE DAT E OF THE RECEIPT OF THE ORDER, THE ACTION IS UNJUSTIFIED AND UNWARRANTED. 2. THE LD. C1T(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS - 840,000 NOTIONAL INCOME REVENUE BY : SHRI SUMAN KUMAR (DR) ASSESSEE BY: MS. SH EBALI GARG ITA NO. 7316 /M/201 7 A.Y.20 13 - 14 2 FROM HOUSE PROPERTY. THE ADDITION IS BASED MORE ON SUSPICION THAN ON FACTS. WITHOUT PREJ UDICE THE ADDITION IS EXCESSIVE. 3. THE LD CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING RS, 14,23,092 U/S 14A READ WITH RULE 8D. THE ACTION IS UNJUSTIFIED AND UNWARRANTED PARTICULARLY WHEN THE APPELLANT HAS NOT CLAIMED ANY EXPENDITURE IN HIS RETURN. X WITHOUT PREJUDICE THE ADDITION IS EXCESSIVE. 4. YOUR PETITION CRAVES LEAVE TO ADD, AMEND, ALTER AND/OR WITHDRAW ALL OR ANY OF AFORESAID GROUNDS OF APPEAL. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 22 .0 7 .201 3 DECLARING TO TA L INCOME TO THE TUNE OF RS.32,25,100/ - FOR THE A.Y. 2013 - 14 . THE ASSESSEE ALSO FILED THE REVISED RETURN OF INCOME ON 22.07.2013 DECLARING TOTAL INCOME TO THE TUNE OF RS.32,22,600/ - . THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE S U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. ON VERIFICATION , IT WAS FOUND THAT THE ASSESSEE DID NOT SHOW HIS RENTAL INCOME FROM HIS OFFICE HIMALAYA HOUSE, THEREFORE, THE NOTIONAL RENTAL INCOME WAS ASSESSED TO THE TUNE OF RS.8,40,000/ - . THE ASSESSEE EARNED THE EXEMPT INCOME TO THE TUNE OF RS. 61,813/ - U/S 10 OF THE I.T. ACT, 1961. THE ASSESSING OFFICER APPLIED THE PROVISION OF SECTION 14A R.W. RULE 8D OF THE I.T. ACT, 1961 AND ASSESSED THE EXPENSES TO EARN THE EXEMPT INCOME TO THE TUNE OF RS.1 4,23,092/ - THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.54,82,690/ - . THEREAFTER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. IN FACT, THE LD. REPRESENTATIVE OF THE ITA NO. 7316 /M/201 7 A.Y.20 13 - 14 3 ASSESSEE DID NOT ARGUE THE CASE ON MERITS BUT ARGUED 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, T HEREFORE, IN THE SAID CIRCUMSTANCES, THE ORDER OF THE CIT( A) IN QUESTION IS WRONG AND AGAINST LAW AND FACTS AND IS LIABLE TO BE SET ASIDE. H OWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. ON APPRAISAL OF THE ORDER OF THE CIT(A) DATED 31.10.2017 , WE NOTICED THAT THE CIT(A) DECIDED THE MATTER OF CONTROVERSY IN ABSENCE OF THE ASSESSEE WITHOUT G IVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE . A PROPER AND REASONABLE OPPORTUNITY IS REQUIRED TO BE GIVEN TO THE ASSESSEE BEFORE THE DECIDING THE MATTER OF CONTROVERSY IN ACCORDANCE WITH LAW. THEREFORE , IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) IS NOT LIABLE TO BE SUSTAINABLE 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 MAT TER AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. 5 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 25.07 . 2018 . SD/ - SD/ - ( R. C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 25. 07 . 2018 . VIJAY ITA NO. 7316 /M/201 7 A.Y.20 13 - 14 4 / 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