What did the Tribunal hold?

The Tribunal restored the issue to the Assessing Officer to allow the assessee to furnish additional evidence, adhering to the principles of natural justice. The Assessing Officer is directed to decide the issue on merits after considering the assessee's submissions.

The assessee, a partnership firm dealing in metals, claimed a loss of Rs. 4,36,70,626/-. The Assessing Officer disallowed this loss for failure to substantiate it with documentary evidence. The CIT(A) upheld this disallowance in an ex parte order.

What were the issues?

Whether the disallowance of current year's loss was justified without providing the assessee an opportunity to substantiate the claim with additional evidence.

Jindutt Steel vs ITO | s.144 | ITAT Mumbai 2023

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI OM PRAKASH KANT, AM & MS. KAVITHA RAJAGOPAL, JM

For Appellant: Shri M Subramniam

For Respondent: Shri Sunny Mathews

Hearing: 10.07.2023Pronounced: 23.08.2023

O R D E R Per Kavitha Rajagopal, J M:

This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18.

The assessee has challenged the assessment order passed u/s. 144 of the Act and the addition/disallowance of current year losses at Rs.4,36,70,626/-.

The brief facts are that the assessee is a partnership firm engaged in the business of trading of Ferrous and Non Ferrous Metals and had filed its return of income dated 31.10.2017, declaring loss of Rs.4,36,70,626/- and was processed u/s. 143(1) of the Act.

(A.Y. 2017-18) Jindutt Steel vs. ITO The assessee’s case was selected for scrutiny and the assessment order dated 26.12.2019 was passed u/s. 144 of the Act where the A.O. made a disallowance of current year’s loss at Rs.4,36,70,626/- on the ground that the assessee has failed to substantiate the loss claimed by it by furnishing documentary evidences.

The assessee was in appeal before the ld. CIT(A), challenging the impugned addition made by the A.O. and the ld. CIT(A) vide an ex parte order dated 03.03.2023 upheld the order of the A.O.

Aggrieved the assessee is in appeal before us.

We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has been non compliant before the A.O. and also before the ld. CIT(A). The assessee has not furnished any supporting evidences by way of written submission and documentary evidences to substantiate the loss claimed by the assessee amounting to Rs.4,36,70,626/-.

The learned Authorised Representative ('ld. AR' for short) for the assessee stated that the assessee may be given one more opportunity to file additional evidences before the A.O. in respect of its claim. The learned Departmental Representative ('ld.DR' for short), on the other hand, vehemently opposed to setting aside the matter for the reason that the assessee has been given various opportunities to present its case before the lower authorities.

On considering the rival submissions, we deem it fit to restore this issue back to the file of the A.O. for the assessee to furnish additional evidences in support of its claim

(A.Y. 2017-18) Jindutt Steel vs. ITO inorder to adhere to the principles of natural justice. We hereby direct the assessee to co- operate with the proceeding without any undue delay and the ld. A.O. is directed to decide the issue on the merits of the case based on the submissions proposed to be made by the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 23.08.2023

JINDUTT STEEL,MUMBAI vs. ITO WD 19(2) (1), MUMBAI

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