2013 (11) TMI 1645 - AT - Income Tax

Opportunity of bearing heard - essence of principles of natural justice - Held that - CIT(A) has dismissed the appeal of assessee exparte by following ratio of Multiplan India Pvt. Ltd. 1991 (5) TMI 120 - ITAT DELHI-D which is not justified. According to us, due opportunity of hearing is essence of principles of natural justice which should be given by all administrative, quasi-judicial bodies and judicial bodies. In view of above, we set aside the order of CIT(A) and restore the matter to him with a direction to decide the appeal on facts and law after providing due opportunity of hearing to the assessee. Since, we are restoring the matter to the CIT(A) on preliminary issue, so we are refraining from commenting on the merits of the issue at hand.

Summary

Issues:
1. Dismissal of appeal for non-attendance before CIT(A)
2. Disallowance of amortization of premium paid on Govt. Securities

Issue 1: Dismissal of appeal for non-attendance before CIT(A):
The appeal was filed against the order of Commissioner of Income Tax (Appeals)-I for A.Y. 2008-09. The appellant contended that the CIT(A) erred in dismissing the appeal due to non-attendance without providing a proper opportunity for hearing, despite an adjournment letter being submitted. The ITAT Pune noted that the dismissal of the appeal by CIT(A) without due opportunity of being heard goes against the principles of natural justice. Referring to the case of Multiplan India Pvt. Ltd., the ITAT Pune emphasized that a fair hearing is essential in all judicial and quasi-judicial proceedings. Consequently, the ITAT Pune set aside the CIT(A)'s order and remanded the matter back to CIT(A) with directions to decide the appeal after affording the appellant a proper opportunity of being heard. The ITAT Pune refrained from commenting on the merits of the issue at hand as the focus was on ensuring due process.

Issue 2: Disallowance of amortization of premium paid on Govt. Securities:
The appellant challenged the CIT(A)'s confirmation of the additions made by the Assessing Officer (A.O) regarding the disallowance of amortization of premium paid on Govt. Securities amounting to Rs. 1511333 debited to the Profit & Loss Account. The appellant argued that the amortization of premium paid on Govt. Securities should be allowed in full as it constituted expenses incurred during the course of banking business, in accordance with RBI guidelines. However, the ITAT Pune did not delve into the merits of this issue as the appeal was allowed solely for statistical purposes related to the dismissal of the appeal for non-attendance before CIT(A).

In conclusion, the ITAT Pune allowed the appeal for statistical purposes, focusing primarily on the procedural aspect of the dismissal of the appeal for non-attendance before the CIT(A). The judgment underscored the importance of providing a fair opportunity for the appellant to be heard, in line with the principles of natural justice, and directed the CIT(A) to re-examine the appeal with due consideration to the appellant's right to a proper hearing.