SUPARNA MODY TRUST,MUMBAI vs. WARD 19(3)(1), MUMBAI

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ITA 4326/MUM/2023Status: DisposedITAT Mumbai30 April 2024AY 2021-223 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the appeal filed by the assessee was allowed for statistical purposes. The primary reason for this decision was that the CIT(A) had dismissed the assessee's appeal in limine without providing an adequate opportunity of being heard. The Tribunal found this to be against the principles of justice and fair play. Therefore, the Tribunal restored the appeal to the file of the CIT(A) with a direction to decide the appeal afresh on its merits. The CIT(A) was instructed to afford a reasonable and adequate opportunity of being heard to the assessee and to issue a proper notice before proceeding. The specific grounds raised by the assessee regarding LTCG set-off and surcharge computation were not decided on merits by the ITAT, as the matter was remanded back to the CIT(A) for a fresh adjudication.

What were the facts?

The assessee, Suparna Mody Trust, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, against an order dated 04.10.2023 passed by the National Faceless Appeal Centre, Delhi (CIT(A)). The appeal pertained to Assessment Year 2021-2022. The assessee's grounds of appeal included a grievance that the CIT(A) dismissed the appeal without providing an opportunity of being heard and without deciding on the merits. The assessee also raised grounds regarding the computation of Long Term Capital Gains (LTCG) under Section 112A, specifically the non-allowance of set-off of long-term capital loss, and the computation of surcharge on total assessed income. The ITAT noted that none appeared for the assessee, and the Departmental Representative was heard. The ITAT observed that the CIT(A) had dismissed the assessee's appeal in limine.

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal without providing due opportunity of being heard and without deciding on the merit of the case, thereby violating principles of natural justice, as argued by the assessee. The revenue did not record any arguments on this point. 2. Whether the CIT(A) erred in confirming the Assessing Officer's action of computing LTCG chargeable at 10% under Section 112A at Rs. 8,07,055/- without allowing set-off of a long-term capital loss of Rs. 3,20,275/-, as argued by the assessee. The revenue did not record any arguments on this point. 3. Whether the CIT(A) erred in confirming the Assessing Officer's action of computing surcharge at 37.89% on total assessed income instead of slab-wise rates, specifically restricting the surcharge on Dividend and Capital Gains under Sections 112A and 111A to 15% and on the balance income to 25%, as argued by the assessee. The revenue did not record any arguments on this point.

Which sections of the Income-tax Act were involved?

Section 112A,Section 111A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, HONBLEAND

For Respondent: Shri Dr. Kishor Dhule

O R D E R PER NARENDRA KUMAR BILLAIYA (AM)

1.

This appeal by the assessee is preferred against the order dated 04.10.2023 by National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] pertaining to A.Y.2021-2022.

(A.Y: 2021-22) SUPARNA MODY TRUST 2. The grievance of the assessee read as under: - “1. The National Faceless Appeal Centre Commissioner of Income-tax (Appeals) [CIT(A)] has erred in dismissing the appeal without providing due opportunity of being heard and also not deciding on merit of the case. On the facts and circumstances of the case and in law, order passed by the CIT(A) is unjustified, illegal, against the provision of the Act and against the principles of natural justice. The below grounds are without prejudice to ground no 1: 2. The learned CIT (A) has erred in confirming the action of AO of computing LTCG chargeable @10% under section 112A at Rs. 8,07,055/- without allowing set off of loss under section 112A Rs. 3,20,275/-. On the facts and circumstances of the case, the long-term capital loss of Rs. 3,20,275/- ought to be set off against the long-term capital gain of the year.

3. The learned CIT (A) has erred in confirming the action of AO of computing surcharge of Rs. 24,39,738/- (@37.89% on total assessed income), instead of slab wise rate provided in the Act. On the facts and circumstances of the case, the surcharge on Dividend and Capital gains u/s 112A& 111A should be restricted to 15% and on balance income the surcharge has to be restricted to 25% as computed by appellant.

4. The appellant craves leave to add, alter, amend and/or rescind any grounds of appeal during the course of the hearing.”

3.

None appeared on behalf of the assessee, in spite of the notice. We decide to proceed exparte. Ld. DR was heard at length. Case records carefully perused.

4.

On perusal of the order of the First Appellate Authority show that the appeal of the assessee has been dismissed in limine. In the interest

Page No. 2

(A.Y: 2021-22) SUPARNA MODY TRUST of justice and fair play, we deem it fit to restore the appeal to the file of the Ld. CIT(A). The Ld. CIT(A) is directed to decide the appeal afresh on merits of the case, after affording a reasonable and adequate opportunity of being heard to the assessee and after serving a proper notice.

5.

In the result, appeal filed by the assessee is allowed for statistical purpose.

Order pronounced in the open court on 30th April, 2024.

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