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Income Tax Appellate Tribunal, “DB” BENCH, JABALPUR
Before: SHRI OM PRAKASH KANT & SHRI PAVAN KUMAR GADALE
O R D E R PER PAVAN KUMAR GADALE JM: These two appeals are filed by the assessee against the different orders of the National Faceless Appeal Centre, Delhi / CIT(A) and passed the order u/sec 250 of the Act.
Since the issues involved in these two appeals are common and identical for the sake of convenience, we shall take up the A.Y 2012-13 as lead case and facts narrated. The assessee has raised the following grounds of appeal.
&26/Jab/2023 Narendra Agrawal, Jabalpur. - 2 -
Addition of Rs.62,40,442/- is erroneous as the learned Commissioner of Income Tax (Appeal) was not justified in dismissing the appeal without entertaining the submission of adjournment request and erroneously treating enablement notice as Hearing Notice.
2. The learned Commissioner of Income Tax (Appeal) dismissed the appeal on 16.12.2022 relying on the judgement of Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) where it was held that "the appeal does not mean merely filing of the appeal but effectively pursuing it".
The said case law is clearly differentiable as the appellant duly made request for adjournment while he was pursuing the case. It was only because the case was taken up after very long, that the appellant requested for 7 days of adjournment. But the Hon'ble CIT(A) seems to be in some sort of hurry that made him pass the impugned order. Thus, For the lack of opportunity of being heard and in violation of the fundamental right, the present Appellate order dated 16/12/2022 is liable to be quashed.
Further, the appellant is willing to produce tax challans as evidence of payments made worth Rs.62,08,778/- with respect to Section 43B. Since, the said challans go to the root of the matter and is the most crucial evidence involved in the case, it is humbly requested before the Hon'ble Bench to accept Additional evidence under Rule 29 of the Income Tax Act.
4. The appellant craves for leave to amend, add to or omit any ground up to the time of hearing of the appeals.
&26/Jab/2023 Narendra Agrawal, Jabalpur. - 3 -
The brief facts of the case are that the assessee is engaged in the business as a C & F agent. The assessee has filed the return of income for the A.Y 2012-13 on 31.12.2012 disclosing a total income of Rs.9,09,810/- and the assessment was completed determine a total income of Rs.9,85,110/- u/sec143(3) of the Act on 18.11.2014. Subsequently, the rectification order u/s 154 of the Act was passed on 07.04.2016 assessing the total income of Rs. 9,95,105/-. Whereas, the Assessing Officer (AO) has received information that the assessee has claimed the entry tax, service tax and VAT payable aggregating to Rs. 60,40,442/- in the computation of income as per the Audited report and there is no clarity or supporting evidences to establish that they are paid before due date of filling of the return of income u/sec139(1) of the Act. Hence the AO has reason to believe that the income has escaped assessment and issued notice u/s 148 of the Act. Further the AO has issued notices u/s 142(1) of the Act and there was no compliance, hence- the A.O has invoked the provisions u/s 144 of the Act and made best judgment assessment making addition of entry tax, service tax and VAT payable aggregating to Rs. 60,40,442/- and assessed &26/Jab/2023 Narendra Agrawal, Jabalpur. - 4 - the total income of Rs. 72,35,550/- and passed the order u/s 144 r.w.s 147 of the Act dated 14.11.2019.
3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A),whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance/submissions by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal.
4. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the facts of assessment proceedings. Further the assessee has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A).
We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no appearance/submissions in spite of providing adequate &26/Jab/2023 Narendra Agrawal, Jabalpur. - 5 - opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld.CIT(A) has issued the notices of hearing on various dates referred at Page 2 Para 4 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. When a query was raised to Ld.AR for the reasons for non appearance before the CIT(A),the explanations are not convincing. Whereas the assessee has raised grounds of appeal challenging the additions of the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) and remit the entire disputed issues to the file of the Assessing Officer to adjudicate afresh and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. &26/Jab/2023 Narendra Agrawal, Jabalpur. - 6 - Accordingly, allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
ITA No. 26/Jab/2023, A.Y 2016-17.
The assessee has raised the following grounds of appeal:
1. Without providing a specific final hearing Notice, the AO erred in making addition of Rs. 10,18,518/- which was 30% of Rs. 33,95,061/- being amount paid towards interest on loan to Magma Fincorp Limited.
2. The learned Commissioner of Income Tax (Appeal) dismissed the appeal on 16.12.2022 relying on the judgement of Hon'ble Supreme Court in the case of B.N.Bhattachargee, 118 ITR 461 (SC) where it was held that "the appeal does not meanmerely filing of the appeal but effectivelypursuing it".
The said case law is clearly differentiable as the fundamental right of final opportunity of being heard was not given to the appellant, thus, the present Appellate order dated 16/12/2022 is liable to be quashed. 3. Further, the appellant is willing to produce evidences such as Form 26A and provide explanations on the non-applicability of TDS provisions. Since, the said evidence and explanation &26/Jab/2023 Narendra Agrawal, Jabalpur. - 7 - goes to the root of the matter, it is humbly requested before the Hon'ble Bench to accept Additional evidence under Rule 29 of the Income Tax Act.
Lastly, the Appellant craves leave to amend, alter, add or delete all or any of the above grounds of appeal 8. The brief facts of the case are that assessee has filed the return of income for the A.Y 2016-17 on 31.03.2017 disclosing a total income of Rs. 5,55,460/-. Subsequently the case was selected for scrutiny under CASS and the Assessing officer (AO) has issued notice u/s 143(2) and 142(1) of the Act and there was no proper compliance and the assessee has submitted the details on 19.11.2018 i.e the audit report, cash book, bank account statement etc. Whereas the AO found that the assessee could not substantiate with the complete details of payments made to NBFC. Further in respect of interest payment of Rs.33,95,061/- on loans from Bank and Magna Housing Financial Ltd. which was obtained to construction of warehouse the assessee has submitted the ledger account but the assessee has not deducted the TDS on interest payment and the A.O. has invoked the provisions u/sec 40(a)(ia) of the Act and made disallowance of 30% of interest payment which worked out to Rs.10,18,518/- and &26/Jab/2023 Narendra Agrawal, Jabalpur. - 8 - assessed the total income of Rs.15,73,978/- and passed the order u/s 143(3) of the Act dated 24.12.2018.
Aggrieved by the order, the assessee has filed an appeal before the CIT(A),whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of the AO and has issued notices of hearing and since there was no compliance/submissions by the assessee to notices. Therefore the CIT(A) considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal before the Hon’ble Tribunal.
10. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer overlooking the submissions made in the assessment proceedings. Further the assessee has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A).
We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no &26/Jab/2023 Narendra Agrawal, Jabalpur. - 9 - appearance/submissions in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. The Ld.CIT(A) has issued the notices of hearing on various dates referred at Page 2 Para 4 of the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. When a query was raised to Ld.AR for the reasons for non appearance before the CIT(A),the explanations are not convincing. Whereas the assessee has raised grounds of appeal challenging the additions of the A.O and there could be various reasons for non appearance which cannot be overruled. Therefore, considering the principles of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the Assessing Officer to adjudicate afresh subject to the payment of cost of Rs.1000/- to the Income Tax Department within two months from the date of receipt of &26/Jab/2023 Narendra Agrawal, Jabalpur. - 10 - the order. Further the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. Accordingly, we allow the grounds of appeal of the assessee for statistical purposes.
In the result, the both the appeals filed by the assessee are allowed for statistical purposes.
Orders pronounced in the open court on 15.09.2023