ETERNIS FINE CHEMICALS LIMITED ,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI

BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND Ms. PADMAVATHY. S, ACCOUNTANT MEMBER ITA No.2079/Mum/2023 Assessment Year: 2013-14 v. M/s.Eternis Fine Chemicals Ltd., The CIT(Appeals), B 1004, Peninsula Tower, NFAC, Peninsula Corporate Park, Mumbai. G.K.Marg, Lower Parel West, Mumbai-400 013. [PAN: AAACH 3757 J] (Appellant) (Respondent)

Appellant by : Shri Hitesh Jain, Ld.AR Respondent by : Shri P.D.Chougule, Sr.DR Date of Hearing : 26.09.2023 Date of Pronouncement : 27.09.2023

O R D E R PER KULDIP SINGH, JM:

The appellant, M/s.Eternis Fine Chemicals Ltd., (hereinafter referred to

as ‘the assessee’) by filing the present appeal, sought to set aside the impugned

order dated 24.04.2023 passed by National Faceless Appeal Centre (NFAC)

[Commissioner of Income Tax (Appeals), Delhi], qua the assessment year

2013-14 on the ground, inter alia that -

ITA No.2079 /Mum/2023

:: 2 :: 2. The learned CIT(A) has erred in confirming the action of Ld. AO of disallowing Rs. 18,85,296/- under section 40(a)(i) of the Act. On the facts and circumstances of the case and in law, the disallowance made under section 40(a)(i) ought to be deleted. 3. The learned CIT(A) has erred in confirming the action of Ld. AO of not allowing the weighted deduction of Rs.33,75,754/- (Addition of Rs. 3,20,69,123/- rectified by AO u/s 154 subsequently) u/s.35(2AB) of the Act. On the facts and circumstances of the case and in law, the weighted deduction of Rs.33,75,754/- claimed under section 35(2AB) of the Act ought to be allowed. 4. The learned CIT(A) has erred in confirming the action of Ld. AO by making disallowance of Rs.2,05,853/- u/s 14A of Act. On the facts and circumstances of the case and in law, addition made under section 14A of the Act ought to be deleted. 5. The learned CIT(A) has erred in confirming the action of Ld. AO by not allowing the claim for additional depreciation u/s32(l)(iia). Of the Act amounting to Rs.42,30,341/- being the 10% additional depreciation on the assets purchased and put to use for less than 180 days in AY 2012-13 which were eligible for additional depreciation. On the facts and circumstances of the case and in law, the appellant ought to have been allowed additional depreciation amounting to Rs. 42,30,341/- and addition made by the Ld. AO ought to be deleted. 6. The appellant craves leave to add, alter, amend and/or rescind any grounds of appeal during the A course of the hearing. 2. Briefly stated facts necessary for consideration and adjudication of the

issues at hand are: the assessee is into manufacturing industry. During the

scrutiny proceedings, the AO noticed from Form No.15 CA/CB that the

assessee has made certain payments in foreign currency to the tune of

Rs.18,85,296/- on account of professional charges without deducting TDS

u/s.195 of the Act. Declining the contention raised by the assessee, the AO

proceeded to make disallowance of Rs.18,85,296/- u/s.40(a)(i) of the Act, and

made addition to thereof. The AO also denied the weighted deduction to the

tune of Rs.3,54,44,877/- u/s.35(2AB) of the Act, on the ground that the

assessee is not entitled for the weighted deduction. The AO also made

disallowance of Rs.2,05,853/- u/s.14A of the Act, by invoking the provisions

contained u/r.8D(2) of the IT Rules, 1962, and thereby, framed the assessment

u/s.143(3) of the Act.

ITA No.2079 /Mum/2023 :: 3 :: 3. Assessee carried the matter before the ld.CIT(A) who has confirmed the addition by dismissing the appeal for want of prosecution. Feeling

aggrieved by the impugned order passed by the ld.CIT(A), assessee has come

up before the Tribunal by way of filing the present appeal

appeal, perused the orders passed by the Ld. Lower Revenue Authorities and

documents available on record in the light of the facts and circumstances of the

case and law applicable thereto.

order passed by the ld.CIT(A) is ex parte due to non-prosecution by the

assessee, for which, assessee has not received any notice. we have perused the

impugned order passed by the ld.CIT(A), wherein, it is recorded in Para No.4

that the notice was issued to the assessee on 30.12.2020, 10.08.2022 and

18.01.2023, but assessee has not filed any written submissions nor filed any

application seeking adjournment and consequently, he has proceeded to

dismiss the appeal for want of prosecution by the assessee.

issued to the assessee in faceless proceedings, but assessee at the same time

stated that he has not received any notice. We are alive to the fact that in the

faceless proceedings due to certain initial glitches noticed sometimes are not

served upon the assessee or they are not being noticed by the assessee and

resultantly, the assessee remain unrepresented in its own appeal.

ITA No.2079 /Mum/2023

:: 4 ::

upon in the appeal, the ld.CIT(A) was required to dispose of the appeal on

merits and not to dismiss for want of prosecution as has been held by the

Hon’ble Bombay High Court in the case of CIT (Central) Nagpur v.

Premkumar Arjundas Luthra (HUF) reported in 297 CTR 614 (Bombay) by

returning the following findings:

From reading of sections 250 and 251, it is very clear that once an appeal is preferred before the Commissioner (Appeals), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in section 250(4). Further, section 250(6) obliges the Commissioner (Appeals) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251 (1 )(a) and (b) provides that while disposing of appeal the Commissioner (Appeals) would have the power to confirm, reduce, enhance or annui an assessment and/or penalty. Besides Explanation to sub-section (2) of section 251 also makes it clear that while considering the appeal, the Commissioner (Appeals) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue "is not raised by the appellant in its appeal before the Commissioner (Appeals). Thus, once an assessee files an appeal under section 246A, it is not open to him as of right to withdraw or not press the appeal. In fact, the Commissioner (Appeals) is obliged to dispose of the appeal on merits. In fact, with effect from 1-6-2001 the power of the Commissioner (Appeals) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the power of the Commissioner (Appeals) is co-terminus with that of the Assessing Officer, i.e., he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the Commissioner (Appeals) to dismiss the appeal on account of non- prosecution of the appeal by the assessee. This is amply clear from section 251(1)(a) and (b) and Explanation to section 251(2) which requires the Commissioner (Appeals) to apply his mind to all the issues which arise from the impugned order before him whether or not the same had been raised by the appellant before him. Accordingly, the law does not empower the Commissioner (Appeals) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. [Para 8] 8. In view of what has been discussed above, the impugned order passed

by the ld.CIT(A) is not sustainable in the eyes of law and hence, set aside and

remanded back to him to decide afresh after providing opportunity of being

heard to the assessee. The assessee has ensured that he would put appearance

on each and every date of hearing before the ld.CIT(A).

ITA No.2079 /Mum/2023 :: 5 :: 9. Resultantly, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced on the 27th day of September, 2023, in Mumbai.

Sd/- Sd/- (PADMAVATHY. S) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 27th September, 2023. TLN, Sr.PS (on Tour)

Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The DR, ITAT, Mumbai 5. Guard File // True Copy // By Order

Dy./Asst. Registrar, ITAT, Mumbai