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Income Tax Appellate Tribunal, HYDERABAD BENCH “SMC”, HYDERABAD
Surendranath Majety, VS. ACIT, Vijayawada. Circle-1(3), PAN: ABYPM 1199 B Hyderabad. (Appellant) (Respondent) Assessee by: Sri S. Rama Rao Revenue by: Sri B. Ramakrishna, Sr. AR Date of hearing: 03/01/2022 Date of pronouncement: 10/01/2022 ORDER The captioned appeals are filed by the assessees against the orders of the Ld. CIT(A)-11, Hyderabad in appeal No.1084/2018-19, dated 09/03/2021 (in the case of Majety Madhavi) and No.10200/2018-19, dated 28/07/2021 (in the case of Surendranath Majety) passed U/s. 143(3) r.w.s 250(6) of the Act for the A.Y. 2016-17. 2. Grounds of appeal in 2.1. The assessee has raised four grounds in her appeal and they are extracted herein below for reference: “1. The Ld. CIT erred in fact and law disallowing the interest claimed by the assessee ignoring the act that the utilization of loans was done in earlier assessment years and not in the relevant assessment year 2016-17 of scrutiny. Loans are brought forward balances for which interest was claimed since past years and continued into the relevant assessment year 2016-17.
2. The CIT had erred in fact and law in disallowing the interest expenses claimed and had not applied the rationale of section 14A of Income Tax Act to the said circumstances of the case.
3. The Ld. CIT erred in not considering the fact that the assessee is a proprietary concern with many business divisions and the business has to be viewed in a totality instead of a isolated business division.
4. Pray to allow any other ground raised during the course of appeal hearing.”
3. Grounds of appeal in 3.1. The assessee has raised four grounds in his appeal and they are extracted herein below for reference: “1. The Ld. CIT erred in fact and law not considering the fact that the assessee is a proprietor and the payment of interest (disallowed) has to be viewed in light of overall business and investments of the assessee instead of an viewing it in light of an individual unit / branch of business.
The Ld. CIT appeals erred in fact and law in disallowing the interest expenditure and no applying the rationale of section 14A of the Income Tax Act to the said circumstances of the case.
The Ld. CIT(A) erred in fact and law in not considering the fact that the funds applied for investments and advances are not from interest bearing funds. 4. Pray to allow any other ground raised
during the course of hearing of appeal.”
4. At the outset, the Ld. AR submitted that there is a delay of 158 days and 18 days in the case of Majety Madhavi and Surendranath Majety respectively in filing their respective appeals before the Tribunal. The Ld. AR further submitted that due to the pandemic situation during the relevant period, both the appeals of the assessees (ITA No. 413/Hyd/2021 and ) were filed beyond the prescribed time limit and therefore it is prayed that the delay occurred in both the cases may be condoned. Considering the pandemic situation prevailed during the relevant period of time, delay of 158 days and 18 days in the case of Majety Madhavi and Surendranath Majety respectively is hereby condoned and I proceed to adjudicate the appeals on merits.
Before me, the Ld. AR submitted that the Ld. CIT (A)-11, Hyderabad has passed ex-parte orders in the case of both the assessees without providing proper opportunity to the assessees of being heard. It was therefore pleaded that both the matters may be remitted back to the file of the Ld CIT (A) in order to provide one more opportunity to the assessees of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that several opportunities had been provided to both the assessees however, on the given dates of hearing, neither the assessees nor their Representatives appeared before the Ld. CIT (A). It was further submitted that the Ld. CIT (A) had no other option but to pass ex-parte orders based on the materials available on record. Hence, it was pleaded that the orders passed by the Ld. CIT(A) do not call for any interference.
I have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, I find merit in the submissions of the Ld. DR. The Ld. CIT (A) had posted the cases for hearing on several occasions. However, none appeared on behalf of the assessees before the CIT(A) on the dates of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeals ex-parte. In this situation, I do not find much strength in the arguments advanced by the ld. AR. However, considering the prayer of the Ld. AR, in the interest of justice, I hereby remit both the appeals back to the file of Ld. CIT (A) in order to consider the appeals afresh on merits by providing one more opportunity to the assessees of being heard. At the same breath, I also hereby caution both the assessees to promptly co- operate before the Ld. CIT (A) in their proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate orders in accordance with law and merit based on the materials available on the record. It is ordered accordingly.
In the result, both the appeals of the assessees are allowed for statistical purposes as indicated hereinabove.
Pronounced in the open Court on the 10th January, 2022.