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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWAL
Instant appeal by the assessee is directed against the order dated 10th March 2015, passed by the learned Commissioner (Appeals)–34, Mumbai, for the assessment year 2010–11, on the following grounds:–
“Insufficient opportunity- Failure of Natural Justice-Impugned Order may be quashed. The Id. CIT(A) erred in passing the Order ex-parte without appreciating that for bonafide reasons, the Chartered Accountant being the authorized representative, could not make it to the hearing; therefore, the Impugned Order deserves to be set-aside.
2 Mrs. Vidya K. Gaonkar
MERITS Share investment - short term capital gain allegedly treated 2. as Business Income - Rs.28,78,937/-. The Id. CIT(A) erred in confirming the STCG as Business Income without appreciating that the individual appellant had not borrowed funds to buy investment stocks as all were against deliveries as reflected in her Balance Sheet as investment and where all payments were against delivery taken, changing the character of gain as Business Income is bad-in-law and facts; therefore, the surplus arising may be treated as a STCG. Levy of Penal Interests The Appellant, on merits, denies 3. her liability to penal interest.”
Brief facts are, the assessee an individual filed her return of income for the impugned assessment year originally on 29th July 2010, declaring total income of ` 16,74,343. Subsequently, assessee filed a revised return of income on 18th November 2011, declaring total income of ` 30,77,260. During the assessment proceedings, the Assessing Officer noticed that the assessee in the relevant previous year was involved in purchase and sale of shares and resultant gain from share transaction amounting to ` 28,78,937 was shown as short term capital gain. The Assessing Officer after calling for details of share transactions and verifying the same was of the view that the assessee is involved in share transaction not as an investor but as a trader, therefore, the gain derived from share transaction has to be treated as business income and accordingly, he completed the assessment by treating the amount received from sale of shares
3 Mrs. Vidya K. Gaonkar amounting to ` 28,78,937, as business income of the assessee. Being aggrieved of such decision of the Assessing Officer, the assessee preferred appeal before the learned Commissioner (Appeals).
The learned Commissioner (Appeals) disposed off assessee’s appeal ex–parte vide impugned order upholding the decision of the Assessing Officer.
We have considered the submissions of the parties and perused the material available on record. The sole grievance of the assessee before us is learned Commissioner (Appeals) has disposed off assessee’s appeal ex–parte without affording reasonable opportunity of being heard to the assessee. She has, therefore, requested for an opportunity of being heard before the learned Commissioner (Appeals). Learned Departmental Representative is not opposed to one more opportunity being granted to the assessee for hearing of appeal before the learned Commissioner (Appeals). Undisputedly, assessee’s appeal was disposed off ex–parte by the learned Commissioner (Appeals). We have noted from the impugned order of the learned Commissioner (Appeals) that he has issued only one notice of hearing dated 22nd January 2015 to the assessee and that notice also was not served on the assessee but returned back by the postal authorities with the remark “unclaimed”. The learned Commissioner (Appeals)
4 Mrs. Vidya K. Gaonkar without issuing any further notice of hearing to the assessee or making any effort to contact the assessee through the Assessing Officer proceeded to dispose of assessee’s appeal ex–parte in a cryptic and non–speaking order. After going through the order of the learned Commissioner (Appeals), we are of the considered opinion that he has decided the appeal ex–parte without following the basic principles of nature justice. That being the case, we are inclined to set aside the impugned order of the learned Commissioner (Appeals) and restore the matter back to his file for deciding afresh after affording reasonable opportunity of being heard to the assessee. We also direct the assessee to comply to the notice of hearing to be issued by the first appellate authority and co–operate in finalising the appeal. As we have restored the matter back to the file of the learned Commissioner (Appeals) for denovo adjudication, there is no need to adjudicate ground no.2.
In the result, appeal is partly allowed for statistical purposes. Order pronounced in the open Court on 30.09.2016