IN INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA no.2014/Mum./2015 (Assessment Year : 2010 11) Mrs. Vidya K. Gaonkar 504/505, Natasha Garden N. Dutt Marg, Four Bungalows . Appellant Andheri (E), Mumbai 400 053 PAN ACBPG2296F v/s Asstt. Commissioner of Income Tax . Respondent Circle 19(2), Mumbai Assessee by : Ms. Sanjukta Chaudhary Revenue by : Shri H.M. Wanare Date of Hearing 20.09.2016 Date of Order 30.09.2016 ORDER PER SAKTIJIT DEY, J.M. Instant appeal by assessee is directed against order dated 10th March 2015, passed by learned Commissioner (Appeals) 34, Mumbai, for assessment year 2010 11, on following grounds: Insufficient opportunity- Failure of Natural Justice-Impugned Order may be quashed. Id. CIT(A) erred in passing Order ex-parte without appreciating that for bonafide reasons, Chartered Accountant being authorized representative, could not make it to hearing; therefore, Impugned Order deserves to be set-aside. 2 Mrs. Vidya K. Gaonkar MERITS 2. Share investment - short term capital gain allegedly treated as Business Income - Rs.28,78,937/-. Id. CIT(A) erred in confirming STCG as Business Income without appreciating that 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 character of gain as Business Income is bad-in-law and facts; therefore, surplus arising may be treated as STCG. 3. Levy of Penal Interests Appellant, on merits, denies her liability to penal interest. 2. Brief facts are, assessee individual filed her return of income for impugned assessment year originally on 29 th July 2010, declaring total income of ` 16,74,343. Subsequently, assessee filed revised return of income on 18th November 2011, declaring total income of ` 30,77,260. During assessment proceedings, Assessing Officer noticed that assessee in 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. Assessing Officer after calling for details of share transactions and verifying same was of view that assessee is involved in share transaction not as investor but as trader, therefore, gain derived from share transaction has to be treated as business income and accordingly, he completed assessment by treating amount received from sale of shares 3 Mrs. Vidya K. Gaonkar amounting to ` 28,78,937, as business income of assessee. Being aggrieved of such decision of Assessing Officer, assessee preferred appeal before learned Commissioner (Appeals). 3. learned Commissioner (Appeals) disposed off assessee s appeal ex parte vide impugned order upholding decision of Assessing Officer. 4. We have considered submissions of parties and perused material available on record. sole grievance of assessee before us is learned Commissioner (Appeals) has disposed off assessee s appeal ex parte without affording reasonable opportunity of being heard to assessee. She has, therefore, requested for opportunity of being heard before learned Commissioner (Appeals). Learned Departmental Representative is not opposed to one more opportunity being granted to assessee for hearing of appeal before learned Commissioner (Appeals). Undisputedly, assessee s appeal was disposed off ex parte by learned Commissioner (Appeals). We have noted from impugned order of learned Commissioner (Appeals) that he has issued only one notice of hearing dated 22nd January 2015 to assessee and that notice also was not served on assessee but returned back by postal authorities with remark unclaimed . learned Commissioner (Appeals) 4 Mrs. Vidya K. Gaonkar without issuing any further notice of hearing to assessee or making any effort to contact assessee through Assessing Officer proceeded to dispose of assessee s appeal ex parte in cryptic and non speaking order. After going through order of learned Commissioner (Appeals), we are of considered opinion that he has decided appeal ex parte without following basic principles of nature justice. That being case, we are inclined to set aside impugned order of learned Commissioner (Appeals) and restore matter back to his file for deciding afresh after affording reasonable opportunity of being heard to assessee. We also direct assessee to comply to notice of hearing to be issued by first appellate authority and co operate in finalising appeal. As we have restored matter back to file of learned Commissioner (Appeals) for denovo adjudication, there is no need to adjudicate ground no.2. 5. In result, appeal is partly allowed for statistical purposes. Order pronounced in open Court on 30.09.2016 Sd/- Sd/- MANOJ KUMAR AGGARWAL SAKTIJIT DEY ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.09.2016 5 Mrs. Vidya K. Gaonkar Copy of order forwarded to: (1) Assessee; (2) Revenue; (3) CIT(A); (4) CIT, Mumbai City concerned; (5) DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary (Dy./Asstt. Registrar) ITAT, Mumbai Vidya K. Gaonkar v. Asstt. Commissioner of Income-tax Circle–19(2), Mumbai