SPICE OF LIFE HOTELS PRIVATE LIMITED,MUMBAI vs. CIT(APPEALS), NFAC, DELHI
What did the Tribunal hold?
The Tribunal found that the CIT(A) passed an ex parte order without considering the merits of the case. Therefore, the Tribunal decided to remand the issue back to the CIT(A) to allow the assessee an opportunity to present its case.
What were the facts?
The assessee filed a return of income declaring a loss. The case was selected for scrutiny, and later reopened under Section 147. The Assessing Officer made a disallowance under Section 14A. The CIT(A) passed an ex parte order confirming the disallowance.
What were the issues?
Whether the CIT(A) erred in passing an ex parte order without providing an adequate opportunity of hearing to the assessee. The validity of the reopening under Section 147 and the disallowance under Section 14A were also challenged.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM & MS. KAVITHA RAJAGOPAL, JM
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) 2014-15.
The assessee has challenged the grounds of reopening, disallowance made u/s. 14A of the Act along with the other consequential grounds.
The brief facts are that the assessee filed its return of income dated 27.09.2013, declaring total loss of Rs.19,15,726/-. The assessee’s case was selected for scrutiny and the assessment order dated 06.12.2017 was passed u/s. 143(3) of the Act where the A.O. determined the loss at Rs.1,46,31,252/-. The assessee’s case was reopened u/s. 147 of the (A.Y. 2014-15) Spice of Life Hotels Private Limited vs. CIT(A) Act for the reason that the income has escaped assessment thereby passing the impugned assessment order dated 28.03.2022 u/s. 147 r.w.s. 144B of the Act and determined the total income at a loss of (-)Rs.1,26,53,867/- where the A.O. made disallowance u/s. 14A amounting to Rs.19,77,385/-.
Aggrieved the assessee was in appeal before the ld. CIT(A), who confirmed the said addition/disallowance vide an ex parte order dated 22.12.2022. The assessee is in appeal before us, challenging the said order.
During the appellate proceeding, the ld. AR for the assessee prayed that the assessee may be given one more opportunity to present its case before the ld. CIT(A).
The ld. AR stated that the assessee has got a good case and further assured compliance before the ld. CIT(A).
The learned Departmental Representative (ld. DR for short) for the Revenue had nothing to controvert the same.
We have heard the rival submissions and perused the materials available on record. It is observed that the ld. CIT(A) has passed an ex parte order without going into the merits of the case. As the assessee has sought for to present its case before the ld. CIT(A), we are of the considered view that on the principles of natural justice, the assessee may be given one more opportunity to present its case before the ld. CIT(A).
We, therefore, remand this issue back to the file of the ld. CIT(A) and direct the assessee to present its case without any delay. Needless to say, the ld. CIT(A) may decide the appeal on merits after giving adequate opportunity of hearing to the assessee.
(A.Y. 2014-15) Spice of Life Hotels Private Limited vs. CIT(A)
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 04.05.2023
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