SMT. KARUNA MALHOTRA,DELHI vs. ACIT, NEW DELHI

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ITA 1723/DEL/2014Status: DisposedITAT Delhi05 May 2016AY 2011-124 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the AO and CIT(A) did not provide sufficient opportunity to the assessee, violating principles of natural justice. The matter was set aside to the AO for a fresh order after providing a full opportunity for hearing and producing evidence.

What were the facts?

The assessee's application under Section 154 was rejected by the AO without notice, and the CIT(A) dismissed the appeal. The assessee claimed that interest on compensation received for land acquisition was added to her income, and a deduction under Section 57(iv) should have been allowed.

What were the issues?

Whether the rejection of the Section 154 application and the subsequent dismissal of the appeal were in violation of natural justice. Whether the assessee was legally entitled to a deduction under Section 57(iv) on interest income from land acquisition compensation.

Which sections of the Income-tax Act were involved?

Section 154,Section 56,Section 57

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “D”, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI J.S. REDDY

For Respondent: MS. RASHMITA JHA, SR. DR

Date of Hearing : Date of Hearing : 04 Date of Hearing : Date of Hearing : 04 04-05-201 04 201 2016 201 Date of Order : Date of Order : 05 Date of Order : Date of Order : 05 05-05-201 05 201 2016 201

ORDER ORDER ORDER ORDER

PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM PER H.S. SIDHU : JM

1.

This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-XXIII, New Delhi dated 28.1.2014 pertaining to assessment year 2011-12 on the following grounds.

“1. That the A.O. has erred in facts and law in rejecting the Application dated 28.8.2012 u/s. 154 of the I.T. Act, 1961 vide his order dated 30.8.2012.

2. That the Rejection orders are against the Principles of Natural Justice because no notice for fixing the date of hearing was issued / served upon the assessee. The unilateral rejection of the Application by the AO vide his orders is illegal.

3.

That when interest on compensation received against land acquisition is added in the income of the assessee u/s. 56(viii) of the I.T. Act, 1961 then deduction u/s. 57(iv) should have been legally allowed. The assessee should not be denied his statutory Right by the AO when statutory duty has been considered by adding the interest on compensation in the income of the assessee.

4.

That the AO wrongly and illegally denied the statutory Right and the Ld. CIT(A) has wrongly and illegally dismissed the appeal.

2.

The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of brevity.

3. At the time of hearing, Ld. Counsel of the Assessee stated that assessee has not received any notice from the AO before passing the order dated 30.8.2012 u/s. 154/143(1) of the I.T. Act. He further stated that the AO as well as Ld. CIT(A) has not provided sufficient opportunity to the assessee for substantiating her claim before the revenue authorities and made the addition in dispute which is contrary to the principles of natural justice. He further stated that assessee is having all the relevant documentary evidences for substantiating her claim, as filed in the shape of Paper Book before this Bench containing pages 1 to 12 attaching therewith the photocopy of Form No. 35 together statement of facts and ground of appeal filed before CIT(A), New Delhi; copy of written submission filed before CIT(A); photocopy of acknowledgement for filing the return of income for AY 2011-12; computation of income filed alongwith return of income; photocopy of certificate of tax deducted of source for enhanced compensation against land acquisition; photocopy of acknowledgement for filing corrected return; photocopy of letter dated 10.2.2012 filed with the corrected return; photocopy of computation of income filed with corrected return; intimation of assessment u/s. 143(1) dated 15.3.2012 and photocopy of application dated 28.8.2012 u/s. 154 of the I.T. Act, 1961. He requested that the issue in dispute may be set aside to the file of the AO to pass the order after providing full opportunity to the assessee of hearing as well as producing the evidence.

4. On the contrary, Ld. DR strongly opposed the request of the assessee and stated that AO as well as Ld. CIT(A) has provided sufficient opportunity to the assessee for substantiating her claim before them, but the assessee did not avail the same. Therefore, the issue may be decided by this Bench on merits only.

5.

We have heard both the parties and perused the relevant records especially the orders passed by the Revenue Authorities. We find force in the assessee’s counsel contention that AO as well as Ld. CIT(A) has not provided sufficient opportunity to the assessee for substantiating her claim before the revenue authorities and made the addition in dispute which is contrary to the principles of natural justice. We further find that the before us, the Ld. Counsel of the assessee has filed a small paper Book containing pages 1 to 12 attaching therewith various documents, as referred in para no. 3 of this order, which are very essential and needs to be examined at the level of the AO. These documents also goes to the root of the matter. Therefore, in the interest of justice, the issues in dispute may be set aside to the file of the AO to pass a fresh order after providing full opportunity to the assessee of hearing as well as producing the evidence. We hold and direct accordingly.

6.

In the result, the Appeal filed by the Assessee stands allowed for statistical purposes.

Order pronounced in the Open Court on 05/05/2016.

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