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Income Tax Appellate Tribunal, MUMBAI BENCHES, ‘D’ MUMBAI
Before: Shri Joginder Singh, & Shri Manoj Kumar Aggarwal
आदेश / O R D E R Per Joginder Singh(Judicial Member) This bunch of five appeals is by the assessee against the impugned orders all dated 24/09/2015 of the Ld. First Appellate Authority, Mumbai, on the grounds as stated in the grounds of appeal.
2. During hearing, the ld. counsel for the assessee, Shri Prakash Jhunjhunwala along with Poojan Mehta filed addition evidence, which could not be filed before the First Appellate Authority as sufficient opportunity was not provided. The copy of the additional evidences was also given to the Ld. CIT-DR, Shri Naredra Singh Jangpangi. Assessee has also filed affidavit stating the compelling reasons due to which the evidences could not be furnished before the Ld. Commissioner of Income Tax (Appeal). It was explained that for Assessment Year 2007-08, vide order dated 08/11/2016 (ITA No.270/Mum/2016), identically the issue was remanded back to the file of the Ld. Commissioner of Income Tax (Appeal) for fresh adjudication. The assessee also filed photocopy of the aforesaid order of the Tribunal dated 08/11/2016. The Ld. CIT-DR contended that it was the duty of the assessee to make effective representation and to file the necessary evidence within the stipulated period.
2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion from the aforesaid order of the Tribunal dated 08/11/2016 for ready reference and analysis:-
“This appeal filed by the assessee on 14.1.2016 is against the order of the CIT (A)-53, Mumbai dated 24.9.2015 for the assessment year 2007-2008.
In this appeal, assessee raised seven grounds in toto and apart from other issues, they include certain legal issues viz correctness of the assessment order made u/s 143(3) r.w.s 153A of the Act and the decision of the AO on the applicability of the provisions of section 153A of the Act in the absence of any incriminating material. Assessee further argues in the grounds that this is the case of unabated assessment and the AO does not have free hand in making additions which are supported by the incriminating material. Further, assessee alleges that the adjudication by the CIT (A) was made exparte and therefore, the CIT (A) violated the principles of natural justice. The other issues raised in this appeal relate to the merits of the assessment order and the additions made therein.
Before us, there is a letter for adjournment dated 7.11.2016, wherein assessee seeks certain time to compile the details. In this regard, in response to the questions from the Bench regarding the details likely to be filed, there is no response from the assessee‟s side. Accordingly,
the request for adjournment is rejected and we proceed to hear the case on the grounds raised before us.
4. Bringing our attention to the grounds no.4 and 6, it is submitted that the CIT (A) passed order without attendance of the assessee or any representation on behalf of the assessee. Therefore, there is a request for remanding this appeal to the file of the CIT (A) with a direction to grant further opportunity in addition to the details provided in para 3.2 of the impugned order. It is also brought to our notice that the issue relating to making of assessment in the absence of any incriminating material u/s 153A of the Act is unsustainable in law.
5. On hearing both the parties, we have perused the order of the AO dated 26.3.2014 and find the assessee filed the return of income originally on 2.6.2008 declaring the total income of Rs. 6.6 lakhs (rounded off). Consequent to the search action conducted on Shri Rajesh G. Mehta, the director of M/.s Karma Industries Limited, in response to the notice u/s 153A of the Act, assessee filed the return of income declaring the increased total income of Rs. 33,65,021/-. On the fact of it, the assessment order does not indicate any incriminating material / evidence in any form for this increased total income. Assessee declared an amount of Rs. 28,12,544/- as „short term capital gains‟ and claimed benefit of the provisions of section 111A of the Act relating to the „tax on short term capital gains‟ suo moto in certain cases. AO never mentioned that the above additional income is attributable to any incriminating material seized u/s 132 of the Act. Assessing Officer considered the claim of the assessee and found, assessee does not establish the applicability of the said provisions of the Act and the conditions are satisfactorily met before claiming the concessional tax rates. Accordingly, the said income was treated as normal income. AO also denied the claim of deduction under Chapter VI-A amounting to Rs. 1,10,000/-. On appeal, CIT (A) confirmed the same in his exparte adjudication. Thus, it is evident from the record that the AO did not have evidence / incriminating material to show that the said income of Rs. 28,12,544/- or deduction of Rs. 1,10,000/- has a basis of any incriminating material found during the search action. However, this is the case where adjudication by the CIT (A) is done in the absence of the assessee or his representative. Considering the fairness of the requirement of the adjudication of issues involved, we are of the opinion, the grounds raised by the assessee in the appeal are required to be remanded to the file of the CIT (A) for fresh adjudication after granting a reasonable opportunity of being heard to the assessee. Assessee is also directed to make attendance without fail this time in the second round of proceedings before the first appellate authority. We order accordingly. Thus, grounds raised by the assessee are allowed for statistical purposes.
6. In the result, appeal of the assessee is allowed for statistical purposes.” 2.2. The facts, in brief, are that the assessee is a director in M/s Karma Industries Ltd. and was receiving remuneration and also income from other sources. For Assessment Year 2008-09, the assessee declared income of Rs.74,91,670/- in his return filed on 20/04/2009. A search was carried out u/s 132 of the Income Tax Act, 1961 (hereinafter the Act) upon the assessee, therefore, notice u/s 153A of the Act was issued. The Ld. Assessing Officer while framing the assessment u/s 143(3) r.w.s 153A of the Act made certain additions/disallowances broadly with respect to treating the Short Term Capital Gains of Rs.61,89,674/- as business income and charge the normal rate of tax. The Ld. Assessing Officer also made disallowance of deduction u/s chapter VIA of the Act amounting to Rs.1,10,000/-.
Likewise, for Assessment Year 2009-10, the amount of Rs.35,49,323/- was assessed at normal tax rate and also made addition of Rs.99,75,000/- on account of unexplained investment u/s 69 of the Act. Almost similar are the facts except the figures in different Assessment Years as is evidenced from the facts available on record. However, before us, the assessee filed additional evidence which could not be filed before the Ld. Commissioner of Income Tax (Appeal) within the specified time. The assessee has also filed an affidavit stating that the assessee could not attend the office of the Ld. Commissioner of Income Tax (Appeal) under the bona fide reasons/compelling circumstances as has been narrated in the said affidavit. Considering the aforesaid order of the Tribunal and the reasons explained before us/stated in the affidavit, we are of the view that even as per Article 265 of the Constitution of India, only due taxes has to be levied/collected. Even otherwise, no persons should be condemned unheard, thus, considering the principle of natural justice and the material facts available on record, in all fairness, we deem it appropriate to remand these files to the file of the First Appellate Authority to adjudicate the same afresh on merit. The assessee be given opportunity of being heard with further liberty to furnish evidence in support of his claim. The assessee is also directed to remain careful and to furnish the necessary evidence before the Ld. Commissioner of Income Tax (Appeal), thus, the appeals of the assessee are allowed for statistical purposes only.
Finally, appeals of the assessee are allowed for statistical purposes.
This Order was pronounced in the open court in the presence of Ld. representatives from both sides at the conclusion of hearing on 05/12/2017.