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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI LAXMI PRASAD SAHU
Per George George K, Judicial Member :
This appeal at the instance of assessee is directed against the CIT(A)’s order dated 21.11.2022 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2014-15.
The grounds raised by the assessee read as follows:
The impugned order is opposed to law and facts of the case insofar as it is prejudicial to the interest of the Appellant.
2. The Ld. CIT(A) erred in law by concluding the assessment ex-parte without appreciating that the assessee was not aware of the notice being sent for reasons beyond his control.
The Ld. CIT(A) erred in law insofar as he failed to consider the merits of the case while disposing appeal ex-parte.
The action of the Ld. AO in treating the writing off of irrecoverable advances as irrecoverable as unexplained Cash Credit u/s 68 is invalid, bad in law and untenable and in doing so: A. The Ld. AO has misdirected himself with regard in invoking Sec 68 of the act which requires there to be an unexplained credit entry in the books of the assessee whereas in the instant case the entry is actually a debit in the books of the assessee. B. The Ld. AO failed to appreciate that the adjusting entry is a tax-neutral entry and the amount of advance written off was inadvertently presented as an adjustment to "changes in inventory" accounts which did not have the effect of distorting the profits. C. The Ld. AO failed to appreciate that the amount written off in the books of accounts was a normal loss incurred in the ordinary course of business which is deductible under Sec 28 of the Income Tax Act. 5. The Ld. AO failed to consider the confirmation given by the Landowner to the effect that the amount was not refunded to the appellant in view of the changed sharing ratio warranting the write-off in the books of accounts
3. At the outset, we notice the impugned order of the CIT(A) is ex-parte order for non-compliance of notices issued. The learned AR submits that he had provided an email when he was doing his articles in the CA Firm. Subsequent to he leaving the CA firm, the above said email address to which these notices were sent by the First Appellate Authority’s (FAA) Office had become defunct and was not aware of the notices being sent online. The learned AR submitted that the impugned order of the CIT(A) came to the notice of the assessee only when the same was served. Therefore, in the interest of justice and equity, the issue may be restored to the files of the CIT(A) for an effective representation of the case.
4. Learned DR was duly heard.
We heard the rival submissions and perused the material on record. Assessee has not complied with 5 notices issued by the FAA’s Office. The learned AR submits that he had provided email for service of notices and the same had become defunct, hence, was not aware of the notices being issued. In the interest of justice and equity, we are of the view that one more opportunity should be provided to the assessee for proper representation of its case. Hence, the matter is restored to the file of the CIT(A).
The CIT(A) is directed to issue a fresh notice and take on record the written submissions of the assessee before a decision is rendered in the matter. The assessee is directed to co-operate with the Revenue for furnishing the written submissions and shall not seek unnecessary adjournments in the matter. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Pronounced in the open court on the date mentioned on the caption page.