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Income Tax Appellate Tribunal, KOLKATA BENCH “D” KOLKATA
Before: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi
O R D E R
PER Waseem Ahmed, Accountant Member:
- This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-1, Kolkata dated 31.05.2016. Assessment was framed by DCIT, Circle-1, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 22.05.2007 for assessment year 2005-06. The grounds raised by the assessee per its appeal are as under:- “1. That, on the facts and in the circumstances of the case, the Ld. CIT(A) erred and acted against the principal of natural justice in having passed the ex parte appellate order without affording adequate opportunity of being heard to the appellant.
2. That, therefore, as the order of the Ld. CIT(A) is a nullity for the failure to conform to the principle of natural justice leading to unfair play in action, the same was arbitrary, unwarranted. invalid and not sustainable in law and the same is liable to be quashed.
3. That, without any prejudice to the above, the Ld. CIT(A) erred in having presumed for alleged non- compliance on two dates that the appellant did not want to pursue M/s Payal Nivesh & Viniyog Pvt. Ltd. Vs. DCIT cir-1(2) Kol. Page 2 the appeal, leading to dismissal of all the grounds without adjudicating the same on merits and facts of the case already on record and this action of Ld. CIT(A) is not only arbitrary, uncalled for but also bad in law.
That, reliance made by the Ld. CIT(A) on the decision in the case of H.M.Esufali H.M. Abdulali (1973) 90 ITR 271 (SC) is totally misplaced on the facts and circumstances of the assessee's case. inasmuch the impugned order has been passed ex parte qua the assessee without any supporting evidence in support of the case and hence a true and impartial decision about biasness or otherwise of the action of the A.O. was not possible to be taken.
That, even on merits of the case, the Ld. A.O. on his purported understanding of utilization of loan amount converted from share application money for the purpose of investment in shares disallowed interest of Rs.13,08,1601- on some cumbersome formula and the Ld. C.l.T.(A) erred in upholding such arbitrary and erroneous action of the Ld. A.O. without recording any justification thereof.
That, the Ld. CIT(A) grossly erred in having upheld the estimated disallowance of expenditure of Rs.88,599/- u/s. 14A of the Act made by the Ld. A.O., being 5% of the dividend income, in spite of the settled position in law that to enforce provision of sec. 14A(1) of the Act, the A.O. was duty bound to determine the expenditure which had been incurred in relation to the exempt income, which exercise is totally missing in the instant case.
That, even otherwise also the Ld. CIT(A) has violated his own order dated 29.02.2016 on 14A issue in the case of the assessee itself for A. Y. 2006-07, wherein disallowance was restricted to 1 % of the dividend income and that being so, the action of the Ld. CIT(A) for the assessment year under appeal in upholding estimated disallowance at 5% on the same set of facts and circumstances of the case was misleading and liable to be quashed.
That as the impugned ex parte order of Ld. CIT(A) suffers from illegality and is devoid of any merit, the same should be quashed and your appellant be given such relief(s) as prayed for.
That the appellant craves leave to amend, alter, modify, substitute, add to, abridge and / or rescind any or all of the above grounds.
Sghri S.K. Tulsiyan, Ld. Advocate appeared on behalf of assessee and Shri Arindam Bhattacherjee, Ld. Departmental Representative appeared on behalf of Revenue.
The first issue raised by the assessee in ground no. 1 is that ld. CIT(A) erred in passing the ex-parte order without hearing its points of contentions on merits.
At the outset, it was observed from the order of Ld. CIT(A) that the case was fixed for hearing on 24.02.2014 and 26.05.2016 but none appeared on behalf of assessee. Therefore, the appeal was decided by Ld. CIT(A) as ex parte on 31.05.2016.