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Income Tax Appellate Tribunal, C BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER (Assessment Year: 2016-17) Inducto Steel Limited, 156 Maker Chambers, 220, Jamnalal Bajaj Marg, Nariman Point, Mumbai - 400021 [PAN: AAACI1045E] …………… Appellant Vs Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Respondent ……………. Delhi Appearance For the Appellant/Assessee : Shri Yash Kakadiya For the Respondent/Department : Shri H.M. Bhatt Date Conclusion of hearing : 01.11.2023 Pronouncement of order : 29.11.2023
O R D E R Per Rahul Chaudhary, Judicial Member: By way of the present appeal the Appellant has challenged the order, 1. dated 27/05/2023, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] for the Assessment Year 2016-17, whereby the Ld. CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 12/12/2018, passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The Appellant has raised following grounds of appeal: 2.
(Assessment Year: 2016-17) 1. In law and in the facts and circumstances of the appellant's case, the hon'ble CIT(A) has erred in passing ex-parte order without providing sufficient opportunity of being heard to the appellant and passing the appellate order in haste. Thus the said order is bad in law and deserves to be annulled.
In law and in the facts and circumstances of the appellant's case, the hon'ble CIT(A) has erred in confirming the action the Ld. A.O. of enhancing disallowance u/s 14A by Rs.2,02,73,934, by invoking provisions of rule 8D arbitrarily, and without having regard to the favorable order passed by the erstwhile CIT(A) on the same issue in the appellants case for the AY 2011-12 and 2012-13. Thus the order passed in violation of the judicial discipline deserves to be quashed.
In law & in the facts and in the circumstances of the appellant's case, hon'ble CIT(A) erred in giving due regard to the assessment order passed wherein the appellant had claimed that it was having composite income from investments in partnership firm and also a perusal of the balance sheet would have revealed that the appellant was having sufficient interest free funds at its disposal for making investments. Thus the action of upholding of enhancement of disallowance is unjust/ unreasonable and deserves to be annulled.
In law and in facts and circumstances of the appellant's case, the hon'ble CIT(A) erred in confirming the action of the Ld. A.O. of affecting disallowance which is far in excess of exempt income earned which stands at Rs.8,57,399/- which ought to have been restricted to the amount of exempt income earned. Thus the disallowance confirmed needs to be reworked and relief be granted to the appellant.
In law and as per the facts and in the circumstances of the appellant's case, the hon'ble CIT(A) erred in confirming the action of the Ld. A.O. of charging interest u/s 234B in respect of the addition made.
In law and as per the facts and in the circumstances of the appellant's case, the hon'ble CIT(A) erred in confirming the action of the Ld. A.O. of initiating penalty u/s 271(1)(c) of the Income Tax Act, 1961 in respect of the addition made above.
(Assessment Year: 2016-17) The relevant facts in brief are that the Appellant, a public limited 3. company, filed its return of income for the Assessment Year 2016-17 on 28/11/2016 declaring total income of INR 1,49,82,640/-. The case of the Appellant was selected for scrutiny and notice under Section 143(2) of the Act was issued to the Appellant. Assessment was framed on the Appellant vide order dated 12/12/2018, passed under Section 143(3) of the Act whereby in addition/disallowance of INR 2,02,73,934/- was made in the hands of the Appellant under Section 14A of the Act.
Being aggrieved, the Appellant preferred appeal before CIT(A) 4. against the Assessment Order, dated 12/12/2018, which was dismissed by the CIT(A) vide order, dated 27/05/2023, on account of non-prosecution since the Appellant failed to file submissions/documents despite notice dated 30/12/2020, 20/04/2023 and 26/05/2023.
The Appellant has preferred the present appeal before the Tribunal 5. challenging the above dismissal order passed by the CIT(A). In Ground No. 1 raised in the appeal, the Appellant has contended that the order passed by the CIT(A) is bad in law as the same has been passed ex-parte without providing sufficient opportunity of being heard to the Appellant.
On perusal of the record, we found that the Appellant was proceeded 6. ex-parte and the CIT(A) had dismissed the appeal observing that the Appellant was not interested in prosecuting the appeal. The Ld. Departmental Representative supported the order passed by the CIT(A) and the Appellant had failed to comply with the notices issued during the appellate proceedings and therefore, the CIT(A) was justified in dismissing the appeal.
(Assessment Year: 2016-17) We note that in the case of Commissioner of Income Tax (Central), 7. Nagpur Vs. Premkumar Arjundas Luthra (HUF): [2016] 240 Taxman 133 (Bombay)/[2017] 297 CTR 614 (Bombay)[25-04-2016], it has been held by the Hon’ble Bombay High Court that the provisions of the Act do not empower the CIT(A) to dismiss the appeal preferred by an assessee on account of non-prosecution. Accordingly, the CIT(A) was required to dispose of the appeal on merits rather than dismiss the same on account of non-prosecution. Therefore, we set aside the order, dated 27/05/2023, passed by the CIT(A) and restore the appeal to the file of the CIT(A) with the direction to decide the appeal on merits as per law after granting the Appellant reasonable opportunity of being heard. The Appellant has directed to cooperate in the appellate proceedings and not seek unnecessary adjournment. Further, the Appellant is also directed to file all the relevant submissions/documents/details on which the Appellant wishes to place reliance before the CIT(A) forthwith on receiving notice of hearing. In terms of the above, Ground No. 1 raised by the Appellant is allowed for statistical purposes whereas all the other grounds raised by the Appellant are dismissed as being infructuous.
In result, the present appeal preferred by the Assessee is allowed for 8. statistical purposes.
Order pronounced on 29.11.2023.