SHEENA TEXTILES LIMITED,CHANDIGARH vs. ACIT CIR. 10(3) (NOW DCIT CIR. 15(3)(2)), MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

ITA. NO.6425/M/2016 & 6426/M/2016 A.Y.2004-05 & 2005-06

2. That the ld. Commissioner of Income Tax Appeals —24 has wrongly and casually stated that the appellant has been very casual in his approach to his appeal. The counsel has attended the hearing and submitted adjournments whenever required.

3. That the Ld. Commissioner of Income Tax Appeals - 24 has erred in law in not adjudicating upon the fact that the assessment under section 153A(l)(b) 'as done by the Ld. Assistant Commissioner of Income Tax, Central Circle - Karnal subsequent to the order under section 143(3) passed earlier by Learned Assistant Commissioner of Income Tax, Mumbai wherein, all the additions made had been verified.

No. 3. the Ld. Commissioner of Income Tax Appeals - 24 has erred in law as well as on facts in treating the difference of Rs. 8,80,396/- between the total sales as per the profit & loss account and the details submitted at the time of hearing as unaccounted sales without appreciating the facts and evidences

5. Without prejudice to the Ground of Appeal No. 3. the Ld. Commissioner of Income Tax Appeals - 24 has erred in law as well as on facts in treating the difference of Rs. 82,08,814/- between the purchase as per the profit & loss account and the details submitted at the time of hearing in the purchase account as unexplained tinder section 69C without correctly appreciating the facts and evidences.

6. Without prejudice to the Ground of Appeal No. 3. the Ld. Commissioner of Income Tax Appeals - 24 has erred in law as well as on facts in arbitrarily disallowing 10 percent of the total expenditure amounting to Rs. 65,54,387/- as non-genuine expenditure and wrongly claimed without correctly appreciating the facts and evidences.

& 6426/M/2016 A.Y.2004-05 & 2005-06

No. 3, the Ld. Commissioner of Income Tax Appeals - 24 has erred in law as well as on facts in treating a sum of Rs. 3.11,50,000/- development expenses as capital expenditure as the said expenditure is totally revenue in nature pertaining to travelling, staff welfare etc. which has to be claimed in the relevant Assessment Year as per the Income Tax Act and has been rightly claimed.

8. Without prejudice to the Ground of Appeal No. 3, the Ld. Commissioner of Income Tax Appeals - 24 has erred in law as well as on facts in disallowing the exemption under section 10(B) on the grounds that report under section 56G has not been filed whereas the report dated 22'd October, 2004 has been filed alongwith Annexure A with the return of income.

9. Without prejudice to the Ground of Appeal No. 3, the Id. Commissioner of Income Tax Appeals -24 has erred in law as well as on facts in disallowing a sum of Rs. 8,80,281/- as prior period expenses wrongly as the income had been claimed on the mercantile basis in the Financial Year 200-01, 2001-02. 2002-03 but the actual claim from the Government had been received in the current Financial year hence, the amount less received has been rightly claimed as an expense.

10. Without prejudice to the Ground of Appeal No. 3, the appellant craves leave to add, to alter, to amend or vary from the aforesaid grounds of appeal at or before the time of hearing of the said appeal.”

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 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, therefore, the finding of the CIT(A) is not justifiable, hence, is liable to be set aside in the interest of justice. However, 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 01.07.2016 passed by the CIT(A) we find that the CIT(A) has decided the matter of controversy in absence of the assessee/Representative of the Assessee & 6426/M/2016 A.Y.2004-05 & 2005-06 without giving an opportunity of being heard to the assessee in the accordance with law. A proper and reasonable opportunity is required to be given to the assessee before the deciding the matter of controversy in accordance with law.

5. For this proposition we place reliance upon the following case laws. (1) CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 154 DTR (Bom) 302 (2) CIT Vs. S Chenniappa Mudaliar (1969) 74 ITR 1 (SC) 6. Accordingly in the interest of justice, we remit the issue raised in the appeal to the file of the Ld. CIT(A). Ld. CIT(A) is directed to consider the issue afresh and pass an order on the merits of the case after giving after giving an proper opportunity of being heard to the assessee 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 restore the matter before the CIT(A) to decide the matter afresh by giving an opportunity of being heard to the assessee in accordance with law.

ITA. NO.6426/M/2016 7. The finding given above while deciding the appeal of the assessee bearing for the A.Y.2004-05 is quite applicable to the instant case being the matter of controversy is quite same, therefore, we restored all the issue before the CIT(A) to decide the issue raised in the appeal in accordance with law on similar lines. Accordingly, we set aside the finding of the CIT(A) on this issue and restored the issues before the & 6426/M/2016 A.Y.2004-05 & 2005-06

CIT(A) to decide the matter of controversy afresh by giving an opportunity of being heard to the assessee in accordance with law.