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Assessee by Shri Hiren R. Vepari, C.A Revenue by Shri H.P.Meena, CIT-DR Date of hearing 08.11.2021 Date of pronouncement 08.11.2021 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre (in short ‘NFAC’), Delhi dated 23.09.2021, which in turn arises from DCIT Circle 2(1)(2) Surat passed order under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short ‘the Act’) dated 13.11.2017 for assessment year (AY) 2012-13. The assessee has raised the following grounds of appeal:- “(1) The National Faceless Appeal Centre (NFAC) was not justified in passing ex-parte order defying natural justice to the appellant. (2) Under the NFAC with the appellant served with solitary notice dated 7-1-2021 the appellant deserves to be given at least one more opportunity.
(A.Y. 12-13) Medinnova System Pvt. Ltd. (3) Without prejudice to the above, the NFAC dismissed the appeal in para 10 of the order without dealing with even basic facts of the matter. (4) The NFAC not having dealt with any of the grounds of appeal in the right earnest, the mater may be restored to the file of the CIT(A).”
The assessee vide its application dated 18.10.2021 raised following additional grounds of appeal.
(1) On the facts and circumstances of the case as well as law, the learned National Faceless Appeal Centre was not justified in not dealing the with grounds on reopening. (2) On the facts and circumstances of the case as well as law, the learned National Faceless Appeal Centre was not justified in confirming addition of Rs.4,92,46,152/-.
At the outset of hearing the Ld. Authorized Representative (AR) of the assessee submits that Ld. NFAC dismissed the appeal of assessee without affording reasonable and fair opportunity of hearing of assessee. Ld. AR of the assessee submits that on logging on the portal of NFAC the assessee came to know about the allegedly issuance of notice. The Ld. AR of the assessee submits that immediately move application for seeking time but no response to received from NFAC. The assessee ultimately received final order of dismissal of assessee’s appeal. Ld. AR of the assessee invited our attention on para-5 of the impugned order, wherein the reference of adjournment application is recorded by NFAC. The Ld. AR of the assessee contended that in the adjournment application the assessee sought two months’ time for preparation of documents and submissions, as there was severe Covid pandemic throughout the Nation of in the month of April 2021 2 (A.Y. 12-13) Medinnova System Pvt. Ltd. till June 2021. The assessee has not received any response and Ld. NFAC directly passed the impugned order. No order on grounds against the reopening was passed. The Ld. AR of the assessee submits that assessee has very good case on merit and will succeed if given opportunity of hearing and to furnish necessary documentary evidence before First Appellate Authority (FAA).
On the other hand, Ld. CIT-Departmental Representative, (DR) for the Revenue submits that the assessee was served with notice of Ld. NFAC for hearing. The Ld. CIT-DR further submits that assessee has not denied the receipt of notice of hearing dated 07.01.2021. The Ld. CIT-DR for the Revenue submits that even before taking the appeal in physical hearing the assessee was served with notice of hearing. Thus, the assessee was provided sufficient opportunity of hearing and to furnish necessary details and information with regard to various grounds of appeal
raised by assessee.
5. In short rejoinder submission, Ld. AR of the assessee submits that assessee moved application for seeking more time to make compliance vide application dated 06.04.2021, which is duly acknowledged by Ld. NFAC. Ld. AR of the assessee further reiterated point out that due to severe pandemic of Covid-19 it was not possible and working was absolutely hampered throughout the country, it was a valid and sufficient ground for seeking time. The seeking only right of fair hearing.
(A.Y. 12-13) Medinnova System Pvt. Ltd.
We have considered the submission of Ld. Authorized Representative (AR) of the assessee and Ld. CIT-DR for the Revenue and gone through the order of Ld. NFAC. We find that merit of the submission of Ld. AR of the assessee vide application dated 06.04.2021 sought adjournment for compilation of evidence and preparation of submission. We find that Ld. NFAC instead of considering the request of assessee passed impugned order dated 23.09.2021 by taking view that looking into the preparedness of probability the assessee has miserable failed to substantiate its claim of having either received the amount of said transaction as unexplained money and has not even been able to establish that he could himself accumulate such huge amount from source disclosed. There is no adjudication on the grounds of reopening. In our view, the Ld. NFAC passed the impugned order without giving reasonable opportunity to the assessee. Therefore considering the submission of Ld. AR of the assessee, the matter is restored back to the file of Ld. NFAC.
We do not find any merit in the submissions of ld CIT-DR for the revenue that assessee was given ample opportunity by CIT(A) or by MNFAC. The right of fair and reasonable opportunity is basic requirement of any adjudicatory process, which cannot be curtail in ordinary circumstances. Moreover, during the relevant period, when the assessee sought further time was a period of severe Covid pandemic all over the (A.Y. 12-13) Medinnova System Pvt. Ltd. country. Thus the assessee was entitled for reasonable and sufficient time for preparing of his case. Therefore, the order passed by NFAC new Delhi Dated 23.09.2021 is set aside and the matter is restored back to NFAC for adjudication all the grounds of appeal afresh in accordance with law. Needless to direct that before passing the order the ld NFAC shall grant fair and reasonable opportunity to the assessee. The assessee is also directed to provide complete details and information without any further delay and not to seek further adjournment without any valid reasons. Considering the fact that we have already restored the appeal to the file of Ld. NFAC on primary submission of the assessee, therefore adjudication on merit on other ground of appeal have become academic.