HINSHITSU MANUFACTURING PRIVATE LIMITED,HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2(2), HYDERABAD

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ITA 244/HYD/2020Status: DisposedITAT Hyderabad16 September 2021AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found merit in the assessee's submission that an ex-parte order was passed without a proper opportunity to be heard. Therefore, in the interest of justice, the matter was remitted back to the CIT(A) for fresh consideration on merits.

What were the facts?

The assessee's appeal before the CIT(A) was decided ex-parte. The assessee contended that they were not given a proper opportunity to be heard, while the revenue argued that sufficient opportunities were provided. The ITAT considered the submissions of both parties.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without providing adequate opportunity to the assessee to be heard, and whether the valuation of shares and premium calculation were correctly handled.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 250(6),Section 56(2)(vii)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

For Respondent: Smt. V. Rajitha, DR
Hearing: 02/9/2021Pronounced: 16/9/2021

This appeal is filed by the assessee against the order of the Ld. CIT (A)-2, Hyderabad in appeal No. 10338/2018-19/CIT(A)- 2, dated 09/01/2020 passed U/s. 143(3) r.w.s 250(6) of the Act for the A.Y. 2016-17.

2.

The assessee has raised five grounds in its appeal and they are extracted herein below for reference: - “1. The order of the Ld. CIT (A) is contrary to law, facts and circumstances.

2. The Appellate Commissioner erred in confirming the order of the A.O. who rejected the discounted cash flow method followed by the assessee for valuing quality shares and premium thereon.

3.

The Appellate Commissioner erred in confirming the A.O.’s decision to calculate the fair market value of shares based on book value method.

4. The Appellate Commissioner erred in confirming the addition of Rs. 12,70,42,580/- made by the A.O. for calculation premium on shares U/s. 56(2)(vii)(b).

5. Any other grounds which the appellant may urge at or before the date of hearing.”

3. At the outset, the Ld. AR submitted before us by stating that the Ld. CIT (A) has passed ex-parte order without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that sufficient opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee nor his Representative appeared before the Ld. CIT (A) except filing the written submissions. Therefore, the Ld. CIT (A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.

4.

We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, We find merit in the submissions of the Ld. DR. Before the Ld. CIT (A) when the case was posted for hearing, none appeared on behalf of the assessee on the given date of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal ex-parte based on the written submissions filed by the assessee as well as the material available on record. In this situation, We do not find much strength in the arguments advanced by the ld. AR. However, considering the prayer of the Ld. AR and taking into consideration of the issues involved in the appeal, in the interest of justice, We hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, We also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. It is ordered accordingly.

5.

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

Pronounced in the open Court on the 16th September, 2021.

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