NILESH Y SHAH,MUMBAI vs. ITO 5(2)(4), MUMBAI

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ITA 5579/MUM/2016Status: DisposedITAT Mumbai07 February 2017AY 2009-103 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the issues related to denial of natural justice and the validity of reopening of assessment should be remanded to the Assessing Officer (AO) for fresh adjudication. The AO was directed to decide these legal issues first after hearing the assessee.

What were the facts?

The assessee filed an appeal against the CIT(A)'s order concerning the assessment year 2009-2010. The appeal raised grounds related to denial of natural justice, validity of reopening assessment, disallowance of deduction under Section 10B, and levy of interest under Section 234B.

What were the issues?

Whether the reopening of assessment was valid and if the assessee was denied natural justice during the reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 10B,Section 234B,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO

For Respondent: Ms. Beena Santosh, DR
Hearing: 07.02.2017Pronounced: 07.02.2017

सुनवाई की तायीख / Date of Hearing : 07.02.2017 घोषणा की तायीख /Date of Pronouncement : 07.02.2017 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the assessee on 14.9.2016 is against the order of the CIT (A)-10, Mumbai dated 23.5.2016 for the assessment year 2009-2010. In this appeal, assessee raised four main grounds and they relate to (i) denial of natural justice; (ii) CIT (A)’s decision in holding that the reopening of assessment u/s 148 is a valid one; (iii) disallowance of deduction claimed u/s 10B of the Act and (iv) levy of interest u/s 234B of the Act.

2.

Before us, none appeared to represent the case of the assessee despite the notice of hearing served on the assessee on 9.1.2017. On perusal of the record, I find, there is a valid acknowledgement in the file to this extent. Therefore, considering the nature of the issues involved in the appeal as well as the casual approach of the assessee in pursuing its appeal, I proceed to adjudicate this appeal with the help of the Ld DR for the Revenue. 3. At the outset, Ld DR briefly narrated the facts of the case and mentioned that in the present appeal, assessee raised the grounds relating to both the legal as well as the merits relating to the breach of principles of natural justice and the claim of deduction u/s 10B of the Act. In the legal ground, assessee alleges that proper opportunity was not granted to the assessee in the re-assessment proceedings. However, in the grounds of appeal

, assessee raised the objection to the manner of re-assessment proceedings and failure of the Revenue Authorities to follow the judgment of the Hon’ble Supreme Court in the case of GKN Driveshart (India) Ltd vs. ITO and others in Civil Appeal No. 7731 of 2002, dated 25.11.2002 and desires that the reopening of the assessment is not done in a proper perspective. In fact, Ld DR relied on the orders of the AO and the CIT (A) and supported the view taken by the Revenue Authorities in their respective orders.

4. On hearing the Ld DR for the Revenue and after considering the above back ground facts of the case, I find, the issue raised in Ground no.1, relating to denial of natural justice and the second issue (Ground no.2) relating to the applicability of the judgment of the Hon’ble Apex Court in the case of GKN Driveshaft (India) Ltd (supra) are required to be remanded to the file of the AO for fresh adjudication. Accordingly I order and direct the AO to decide the issue afresh after hearing the assessee or it’s Authorized Representative in a proper perspective. Further, AO is also directed to comply with the judgment of the Apex Court in the case of GKN Driveshaft (India) Ltd (supra). In my view, the AO should adjudicate the legal issues first, before the claim u/s 10B of the Act and others are adjudicated in a proper perspective. Thus, Ground nos. 1 and 2 raised by the assessee are allowed for statistical purposes.

5. Considering my decision on the issues raised in Ground nos.1 and 2, I am of the opinion, the adjudication of Ground nos.3 and 4 becomes an academic exercise for the time being. Accordingly, Ground nos. 3 and 4 are dismissed as academic.

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