2014 (7) TMI 1257 - AT - Income Tax

Allowing the deduction u/s 80IA - Held that - This is an undisputed fact that the assessee made a claim u/s 80IA of the Act for the first time in A.Yr.2004-05 which was disallowed by the AO. Before the ld. CIT(A) the assessee has filed an appeal for A.Yr.2004-05 but the ld.CIT(A) has for the first time allowed the eligibility of the claim of the assessee u/s 80IA of the Act during A.Yr.2006-07 as that appeal was heard first. In the appellate order for A.Yr.2006-07, the CIT(A) after examining the claim of the assesee took a view that the assessee is eligible for the claim of deduction u/s 80IA. The order for A.Yr.2006-07 had been followed in A.Yr.2004-05, 2005-06, 2007-08 and 2008-09 by the CIT(A). In view of this fact in A.Yr.2006-07 in which the claim of the assessee u/s 80IA was examined on merit for the first time by the CIT(A). The CIT(A) not serving the notice to the AO has violated the provision of sub-sections (1) and (2) of section 250 of the IT Act and thus denied the natural justice to the Revenue so that the Revenue could have placed its case before the ld. CIT(A). Therefore we hold that the order passed by the ld. CIT(A) is in violation of principles of natural justice and we therefore set aside the matter to the file of the ld. CIT(A) with the direction to the ld.CIT(A) to give the AO proper and sufficient opportunity of being heard and to decide the issue afresh in accordance with law. Since we have set aside the order of the ld. CIT(A) for A.Yr.2006-07 in which the CIT(A) for the first time allowed the claim of the assesse u/s 80IA of the Act and in subsequent year CIT(A) allowed the claim of the assessee u/s 80IA of the Act by following the order for A.Yr.2006-07. We, therefore, set aside the order of the ld. CIT(A) for A.Yr.2004-05, 2005-06, 2007-08 and 2008-09 also and restore the issue involved to the file of the ld. CIT(A) with the direction that the ld. CIT(A) shall redecide the appeal for all these assessment years afresh after deciding the appeal for the A.Yr.2006-07. - Appeals filed by the Revenue are allowed for statistical purposes.

Summary

Issues:
Appeal against CIT(A) orders allowing deduction u/s 80IA & penalty for late safety arrangement; Additional ground of violation of natural justice by not sending notice to AO in Form NO.ITNS-51 by CIT(A).

Analysis:
1. The Revenue filed appeals against CIT(A) orders allowing deduction u/s 80IA & penalty for late safety arrangement. The Revenue raised a common ground in each year against CIT(A) directions for deduction u/s 80IA. An additional ground was raised in A.Yr. 2006-07 regarding the violation of natural justice by not sending notice in Form NO.ITNS-51 to the Assessing Officer (AO).

2. The Revenue contended that the failure to serve notice to the AO violated principles of natural justice, citing the decision in NTPC vs CIT. The Senior Advocate for the assessee objected to the admission of the additional ground.

3. The Tribunal admitted the additional ground, stating that legal grounds can be raised at any time. The Tribunal decided to first address the legal ground raised in A.Yr. 2006-07. The Revenue argued that the CIT(A) allowed deduction u/s 80IA for the first time in A.Yr. 2006-07 without serving notice to the AO.

4. The AR for the assessee argued that there was no affidavit proving non-service of Form NO.ITNS-51 to the AO. The Tribunal examined the original file of the CIT(A) and noticed discrepancies in the service of notices to the AO for A.Yr. 2006-07.

5. The Tribunal observed that for A.Yrs. 2004-05, 2005-06, and 2008-09, notices were served to the AO along with Form NO.ITNS-51, but for A.Yr. 2006-07, there was no mention or service of the notice to the AO. The Tribunal dismissed the Senior Counsel's plea and held that the CIT(A) violated natural justice principles.

6. The Tribunal set aside the CIT(A) order for A.Yr. 2006-07 and subsequent years, directing the CIT(A) to re-decide the appeals after giving the AO proper opportunity to be heard. Consequently, the orders for A.Yrs. 2004-05, 2005-06, 2007-08, and 2008-09 were also set aside for fresh consideration.

7. Ultimately, all appeals filed by the Revenue were allowed for statistical purposes, with the direction to re-decide the appeals in accordance with the law and principles of natural justice.