O.MAHENDRA KUMAR,CHENNAI vs. ITO, CHENNAI

This appeal by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-5, Chennai dated 21.10.2016 in IT Appeal No.128/CIT(A)-5/15-16 for the assessment year 2015-16. The appeal was filed by the assessee with a delay of 6 days. The Ld. AR submitted that the delay had occurred due to the misplacement of the files by the counsel of the assessee. The Ld. AR further pleaded that since the assessee was at no fault, the delay may be condoned. The Ld. DR strongly objected to the submission of the Ld. AR. After hearing both sides, we are of the considered view that the delay of 6 days in filing the appeal should be condoned because it was due to no fault of the assessee. Accordingly we hereby condone the delay and proceed to hear the appeal on merits.

The assessee has raised several grounds in its appeal, however the crux of the issue is that the Ld. CIT(A) has erred in upholding the order of the Ld. AO, who had disallowed the interest payment of Rs.71,68,427/-.

The brief facts of the case are that the assessee is an individual engaged in business, filed his return of income for the assessment year 2013-14 belatedly on 01.12.2013 and subsequently filed revised return on 22.12.2014. Thereafter order u/s.143(1) of the Act was passed on 28.04.2014 by the Centralized Processing Centre.

The Ld.AR submitted before us that one more opportunity may be provided to the assessee to present his case before the Ld.CIT(A), because the assessee has a fair chances to succeed in his appeal. He further submitted that the issue was related to deduction of interest expenses incurred by the assessee towards borrowings which was deployed in his partnership firm by charging interest. The Ld.AR therefore pleaded that the matter may be remitted to the file of Ld.CIT(A) for fresh consideration. The Ld.DR strongly objected to the submission of the Ld.AR.

We have heard the rival submission and carefully perused the materials available on record. From the facts of the case, it appears that there was an omission on the part of the assessee while filing the return of income. When the omission was pointed out before the Ld.AO, it was rejected because the assessee had not claimed the expenditure in his return of income. Since the assessee had filed belated return he was not entitled to file revised return. For the above stated reasons the Revenue Authorities denied the benefit of 4 deduction towards the interest expenses incurred by him. Considering the facts and circumstances of the case, we are of the opinion that when the assessee has pointed out certain errors in the computation before the Ld.AO, he ought to have considered the same in accordance with law and merits. Therefore, in the interest of justice we hereby remit the matter back to the file of Ld.AO with direction to admit and examine the issue afresh and thereafter pass appropriate order in accordance with law and merits. While doing so we strongly place reliance in the decision of the case NTPC V/s. CIT reported in 229 ITR 383 wherein it was held that it is open to the assessee to raise points of law even for the first time before the Appellate Tribunal.