Mono Herbicides Pvt. ltd., Kolkata V. ITO, WD-4(2), KOLKATA, Kolkata

ITA 746/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4348 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 19-04-2016
• Court: TRIBUNAL
• Department Lawyers: MD G HYAS UDDIN
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Opportunity of being heard; Principle of natural justice; Non-deduction of tax
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & DR.ARJUN LAL SAINI, AM ] ITA NO.746/KOL/2016 ASSESSMENT YEAR : 2010-11 MONO HERBICIDES (P).LTD. -VERSUS- I.T.O., WARD-4( 2), KOLKATA KOLKATA [PAN: AADCM 2725 L] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI MIRAJ D.SHAH, AR FOR THE RESPONDENT : MD.GHYAS UDDIN, JCIT DATE OF HEA RING : 23.09.2016 DATE OF PRONOUNCEMENT : 19.10.2016. ORDER PER DR.ARJUN LAL SAINI, AM THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINING TO A.Y.2010-11, IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSION ER OF INCOME TAX (A)-2, KOLKATA IN APPEAL NO.1203/CIT(A)-2/2014-15, DATED 05.02.201 6, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE LD. ASSESSING OFFICER U/S 1 43(3) OF INCOME TAX ACT, 1961 (IN SHORT, THE ACT) DATED 19.03.2013. 2. THE FACTS OF THE CASE ARE AS STATED IN BRIEF. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR A.Y.2010-11 ON DATED 21.09.2010 FOR A TOTAL INCOME OF RS.29,670/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT, BUT SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY U/S 143(3) OF THE ACT. THE AO HAS COMPLETED THE ASSESSMENT U/S 143(3) BY MAKING THE ADDITION U/S 40(A)(IA) OF THE ACT, AND THE OTHER DISALLOWANCES. THE AO NOTICED THAT AN AMOUNT OF RS.2,92,116/- HAD BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD INTEREST PAID ON UNSEC URED LOAN. IT WAS ALSO FOUND THAT NO TDS HAD BEEN MADE ON SUCH PAYMENTS. IT WAS THUS A CLEAR VIOLATION OF THE PROVISIONS OF SECTION 194A OF THE ACT AND CONSEQUEN TLY ATTRACTED THE PENAL PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. SINCE THE ASSESSEE COULD NOT FILE THE REPLY ON TIME ITA NO .746/KOL/2016 MONO HERBICIDES PVT.LTD. A..Y.2010-11 2 THEREFORE THE AO HAS DISALLOWED THE ENTIRE AMOUNT A ND ADDED TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. AGGRIEVED FROM THE ORDER OF THE LD. AO THE ASSESSEE HAS FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAD ALSO CONFIRMED THE ADDITION MADE B Y AO BY OBSERVING THE FOLLOWINGS :- IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CONTEST ED ADDITION OF RS.2,92,116/- MADE U/S. 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TAX AT SOURCE ON PAYMENT OF INTEREST FOR UNSECURED LOANS. THIS APART, GROUNDS ARE TAKEN STAT ING THAT AO ERRED IN COMPUTATION OF TAX. THE APPEAL WAS FIXED FOR HEARING FIRST ON 11/1 2/2015. THE DIRECTOR OF THE ASSESSEE- COMPANY FILED A LETTER ON 10/12/2015, SEEKING ADJOU RNMENT OF THE HEARING FOR THREE WEEKS. THE HEARING WAS RE-FIXED ON 22/12/2015 AND D ULY ACKNOWLEDGED. NOBODY ATTENDED OR FILED ANY WRITTEN SUBMISSION TILL DATE. IT IS THUS PRESUMED THAT THE ASSESSEE IS NOT INTERESTED TO PURSUE THE APPEAL AND HAS NOTHING TO SAY IN DEFENCE OF THE GROUNDS TAKEN. THE AO MADE THE ADDITION OF RS.2,92,116/- FO R NON-DEDUCTION OF TAX AT SOURCE ON PAYMENTS OF INTEREST AFTER DUE DELIBERATION. THERE IS NOTHING ON RECORD TO CONTROVERT THE DECISION OF THE AO. THEREFORE, THE ADDITION OF RS. 2,92,116/- IS CONFIRMED. SO FAR AS TAX CALCULATION IS CONCERNED, NO CORROBORATIVE EVIDENCE IS FOUND ON RECORD AND THEREFORE, ASSESSEES CLAIM CANNOT BE ENTERTAINED. 3. NOT BEING SATISFIED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL. 4. ALTHOUGH THE ASSESSEE HAS RAISED IN THIS APPE AL MULTIPLE GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING THE GRIEVANCE OF THE ASSESSE HA S BEEN CONFINED TO THE ISSUE THAT THE ORDER HAS BEEN PASSED BY THE LD. CIT(A) WITHOUT GIV ING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE SOLITARY GRIEVANCE OF THE ASSE SSEE IS THAT THE ORDER PASSED BY THE LD. CIT(A) IS WITHOUT GIVING AN OPPORTUNITY OF BEIN G HEARD AND THEREFORE AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRE SENTATIVE FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE AO, WHI CH WE HAVE ALREADY NOTED IN OUR EARLIER PARA, AND IS NOT BEING REPEATED FOR THE SAK E OF BREVITY. 6. HAVING HEARD THE RIVAL SUBMISSIONS, AND PER USED THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN T HE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY THE LD. AR FOR THE ASSESS EE ARE SUPPORTED BY THE FACTS ITA NO .746/KOL/2016 MONO HERBICIDES PVT.LTD. A..Y.2010-11 3 NARRATED BY HIM ABOVE. AS LD AR HAS RIGHTLY EXPL AINED BEFORE US THAT NO PROPER OPPORTUNITY OF BEING HEARD, HAS BEEN GIVEN TO HIM B Y THE LD. CIT(A).WHILE GOING THROUGH THE ORDER OF THE LD. CIT(A), WE NOTICED THA T HE HAD NOT GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND HE P ASSED THE ORDER IN A HURRY, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE DIRE CTOR OF THE ASSESSEE COMPANY FILED A LETTER ON 10.12.2015, SEEKING ADJOURNMENT FOR THE H EARING FOR THREE WEEKS BEFORE THE LD. CIT(A). THE HEARING WAS RE-FIXED ON 22.12.2015 AND DULY ACKNOWLEDGED. NOBODY ATTENDED OR FILED ANY WRITTEN SUBMISSION TILL THAT DATE. THEREFORE THE LD. CIT(A) PRESUMED THAT THE ASSESSEE IS NOT INTERESTED TO PUR SUE THE APPEAL AND HAS NOTHING TO SAY IN DEFENCE OF THE GROUNDS TAKEN BY HIM. THIS WA Y, HE HAS PASSED THE ORDER BY CONFIRMING THE ACTION OF THE LD. AO. AS WE HAVE SEE N FROM THE ORDER OF THE LD. CIT(A) THAT HE SHOULD HAVE PROVIDED MORE OPPORTUNITY TO TH E ASSESSEE AND HE IS SUPPOSED TO SEND ONE MORE REMINDING LETTER/SERVING THE FINAL DA TE OF HEARING TO THE ASSESSEE. BUT HE HAS FAILED TO DO SO. THE ASSESSEE HAD TAKEN THE ADJOURNMENT AND HE WAS SUPPOSED TO FILE THE WRITTEN SUBMISSIONS BUT HE COULD NOT CO ME ON THAT DATE FIXED FOR HEARING BECAUSE OF SOME REASONS. AT THIS JUNCTURE, IT WAS THE DUTY OF THE LD. CIT(A) TO SEND ANOTHER NOTICE STATING THAT FINAL OPPORTUNITY TO TH E ASSESSEE FOR HEARING, BUT THE SAME HAS NOT BEEN DONE BY THE LD. CIT(A). THEREFORE WE A RE OF THE VIEW THAT THE ORDER PASSED BY THE LD. CIT(A) IS AN EXPARTE ORDER WITHOU T GIVING AN OPPORTUNITY TO THE ASSESSEE FOR HEARING, I.E. NO SUFFICIENT OPPORTUNIT Y HAS BEEN GIVEN TO THE ASSESSEE OF BEING HEARD. CONSIDERING THE FACTUAL POSITION, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION OF THE FACTS BY THE LD.C IT(A). THEREFORE WE DEEM IT FIT AND APPROPRIATE TO SEND BACK /REMIT THE ISSUE BACK TO T HE LD. CIT(A) TO DECIDE THE APPEAL AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19.10.2016 SD/- SD/- [N.V.VASUDEVAN] [DR.ARJUN LAL SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 19.10.2016. R.G.(.P.S.) ITA NO .746/KOL/2016 MONO HERBICIDES PVT.LTD. A..Y.2010-11 4 COPY OF THE ORDER FORWARDED TO: 1 . MONO HERBICIDES PVT. LTD., C/O D.J.SHAH & CO., KALY AN BHAVAN, 2, ELGIN ROAD, KOLKATA-700020. 2 I.T.O., WD-4(2), KOLKATA. 3 . CIT(A)-2, KOLKATA 4. CIT-2, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES