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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI MANJUNATHA. G
आयकर अपीलीय अिधकरण, ‘बी’ �यायपीठ, चे�ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI �ी एबी टी. वक�, �ाियक सद� एवं एवं एवं एवं �ी मंजूनाथा .जी, लेखा सद� के सम� BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI MANJUNATHA. G, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.718, 719, 720, 721 & 722/Chny/2022 िनधा�रण वष� /Assessment Years: 2007-08, 2008-09, 2010-11, 2011-12 & 2014-15 M/s.First STP Pvt. Ltd., v. The Income Tax Officer, 30-A, South Phase, VI Cross Road, Ward-II (1), Thiru Vi Ka Industrial Estate, Chennai. Guindy, Chennai.
[PAN: AAACF 5287 F] (अपीलाथ�/Appellant) (��यथ�/Respondent)
अपीलाथ� क� ओर से/ Appellant by : Mr.T. Chaitanya Kumar, Adv. ��यथ� क� ओर से /Respondent by : Mr.D. Hema Bhupal, JCIT सुनवाई क� तारीख/Date of Hearing : 21.03.2023 घोषणा क� तारीख /Date of Pronouncement : 24.03.2023 आदेश / O R D E R PER ABY T. VARKEY, JM: At the outset, it is noted that even though, the Ld.CIT(A) disposed
off the aforesaid appeals filed by the assessee vide separate orders dated
16-18.09.2019, the assessee had filed the appeals before this Tribunal only
on 23.08.2023; and thus, per-se there is a delay of 1010 days in filing of
the captioned appeals. The Ld.AR of the assessee explained the delay by
stating that the assessee had to file the appeal before Tribunal on or before
18.11.2019, but could not file the same on or before that date because of
mis-communication between assesse and the Ld AR; and thereafter, within
two months Covid-19 pandemic caused lock down and the assessee’s office
ITA Nos.718-722/Chny/2022 :: 2 ::
could not function during the period of lock down and thereafter the Hon’ble
Supreme Court passed suo-moto orders that up to May, 2022, the limitation
period needs to be excluded. In such a scenario (excluding the Covid-19
period i.e. March, 2022 to May, 2022), the delay caused in these cases will
only be six months i.e. not more than 180 days. The assessee brought to
our notice that the assessee company was under tremendous financial
stress due to operational reasons being engaged in the infra development
projects. According to the Ld.AR, the parent company M/s.IVRCL
Infrastructures & Projects Ltd., is undergoing proceedings under Insolvency
Act and therefore, key persons of the assessee company could not take
timely decisions and therefore, the same may be condoned. For supporting
the aforesaid submissions, the assessee had filed affidavit to support its
averments. After hearing both the parties, we note that the parent
company is undergoing insolvency proceedings before the NCLT,
Hyderabad and the assessee’s key persons could not take timely decisions
to file appeals before this Tribunal, which is not intentional and therefore,
the delay of 180 days is condoned and appeals are heard on merits.
ITA No.722/Chny/2022 for the AY 2014-15:
This is an appeal preferred by the assessee against the order of the
Commissioner of Income Tax (Appeals)-6, Chennai, dated 18.09.2019, for
the Assessment Year (AY) 2014-15.
ITA Nos.718-722/Chny/2022 :: 3 ::
At the outset, the Ld.AR of the assessee brought to our notice that
the impugned order of the CIT(A) dated 18.09.2019 as well as the order of
the AO dated 31.10.2016 are ex-parte orders and therefore, prayed that
since the assessee did not get proper opportunity, the matter may be
restored back to the file of the AO for de-novo assessment and for that
relied on the decision of the Hon’ble Supreme Court in the case of M/s Tin
Box Company v. CIT reported in [2001] 249 ITR 216 (SC), wherein the
Hon’ble Supreme Court has held that if the assessee did not get proper
opportunity before the AO, then, the assessment has to be framed de-novo.
The Hon’ble Supreme Court has held as under:
It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus :
"We will straightaway agree with the assessee's submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard."
That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of selling out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard.
Two questions were placed before the High Court, of which the second question is not pressed.
The first question reads thus:
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income- tax Officer had not given a proper opportunity of hearing to the assessee?"
In our opinion, there can only be one answer to this question which is inherent in the question itself: in the negative and in favour of the asses-see.
The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated. No order as to costs.
ITA Nos.718-722/Chny/2022 :: 4 ::
We note that the order passed by the Ld.CIT(A) is an ex-parte order
and even the AO has passed order u/s.144 of the Act (best judgment
assessment) without participation of the assessee. Since, the assessee did
not get proper opportunity before the AO due to dire financial stress and
difficulties noted (supra) during that time, for the ends of the justice and
fair play, we set aside the impugned order of the Ld.CIT(A) and restore the
matter back to the file of the AO for de-novo framing of assessment.
Needless to say that the assessee may be given proper opportunity of
hearing; and the Ld.AR of the assessee has undertaken before us that the
assessee would be diligent and will participate during the course of
assessment proceedings, and if advised to do so, file relevant
evidences/documents to substantiate its claim as well as file written
submissions to support its claim. The AO is directed to frame assessment
in accordance to law.
In the result, appeal filed by the assessee is allowed for statistical
purpose.
ITA No.721/Chny/2022 for the AY 2011-12:
This is an appeal preferred by the assessee against the order of the
Commissioner of Income Tax (Appeals)-6, Chennai, dated 16.09.2019, for
the Assessment Year (AY) 2011-12.
We note that this is an ex-parte order passed by the Ld.CIT(A)
without condoning thirteen days (13 days) delay. We note that even
ITA Nos.718-722/Chny/2022 :: 5 ::
though, the assessee pleaded that it could not file the appeal due to
intervening holidays like Pongal/Republic day, etc., the Ld.CIT(A) taking
note that the assessment order was passed on 05.12.2017 and therefore,
according to him, assessee ought to have filed the appeal on or before
17.01.2018 and did not accept the plea of the assessee to condone 13 days
delay and he dismissed the appeal of the assessee. This action of the
Ld.CIT(A) cannot be countenanced and after having gone through the
contents of the application for condonation of delay, we condone the delay
and admit the appeal and since, the Ld.CIT(A) has not passed order on
merits in respect of grounds of appeal raised by the assessee, we set aside
the impugned order of the Ld.CIT(A) and restore the appeal back to the file
of the Ld.CIT(A) by condoning the delay, with a direction to decide the
grounds of appeal raised by the assessee in accordance to sec.250(6) of
the Act.
In the result, appeal filed by the assessee is allowed for statistical
purpose.
ITA Nos.718, 719 & 720/Chny/2022 for the AYs 2007-08, 2008-09
& 2010-11:
The Ld.CIT(A)-6 has passed a consolidated order dated 17.09.2019,
in respect of these three (3) appeals. The impugned order also is an ex-
parte order. However, it is noted that the Ld.CIT(A) has given sufficient
opportunities to the assessee which fact is discernable from the perusal of
ITA Nos.718-722/Chny/2022 :: 6 ::
the impugned order. We note that the assessee had taken time and again
adjournment on several occasions citing different reasons through several
lawyers/ARs before the Ld.CIT(A). In such a scenario, the Ld.CIT(A)
passing an ex-parte order per-se cannot be faulted. However, the Ld.AR
appearing for the assessee, Mr.T.Chaitanya Kumar, Adv., has pleaded the
assessee company as well as its holding company was going through dire
financial constraints stress and there was certain severe health issues of
the key persons of the assessee company which prevented proper
supervision of the litigation, which omission caused failure to supply the
relevant documents timely to the Ld.AR due to missing/misplacement of
files. According to the Ld.AR, if one opportunity is given to the assessee,
it would submit all relevant documents as well as its submissions before
the Ld.CIT(A). The Ld.AR undertakes to be present himself before the
Ld.CIT(A) or file written submissions as well as the Paper Book in support
of its grounds of appeal regarding both issues i.e. (i) Earnest Money Deposit
(EMD) (ii) the deduction u/s.80IA of the Act (iii) depreciation. Per contra,
the Ld.DR opposes the restoration of the matter before the Ld.CIT(A).
According to him, the assessee has been given several opportunities, but
failed to comply, so the assessee should not be given another innings before
the Ld.CIT(A).
We have heard both the parties and perused the material available
on record. We note that the assessee’s holding company, M/s.IVRCL
Infrastructures & Projects Ltd., is undergoing insolvency proceedings before
ITA Nos.718-722/Chny/2022 :: 7 ::
the Ld.NCLT, Hyderabad Bench, and the assessee was facing problem with
the management as well as facing severe finance stress. It was brought to
our notice that the assessee’s relevant files pertaining to the issues raise in
the appeal in respect of Income Tax got misplaced, since the officers
handling this portfolio left job and did not hand over the documents to the
assessee. Therefore, the assessee was not able to trace the files and
couldn’t give it timely to the Ld.AR of the assessee. Coupled with the
aforesaid facts, the key persons suffered from serious health issues, which
prevented them from supervising the litigations and giving instructions to
the Ld.AR of the assessee, which facts caused non-
representation/compliance before the Ld.CIT(A). Having gone through the
contents of the affidavit in support of contents raised before us and the
undertaking given by the Ld.AR, Mr.T.Chaitanya Kumar, Adv., that he will
personally appear before the Ld.CIT(A)/file written submissions as well as
Paper Book in support of grounds of appeal raised by the assessee, for the
ends of the justice and fair play, we set aside the impugned order of the
Ld.CIT(A) and restore the matter back to the file of the Ld.CIT(A) for fresh
adjudication of appeals and the assessee not to seek adjournment without
just cause.
In the result, appeals filed by the assessee in ITA Nos.718, 719 &
720/Chny/2022 for the AYs 2007-08, 2008-09 & 2010-11 are allowed for
statistical purposes.
ITA Nos.718-722/Chny/2022 :: 8 ::
In the result, all the appeals filed by the assesse in ITA No.721 &
722/Chny/2022 for the AYs 2011-12 & 2014-15 and the appeals filed by
the assesse in ITA Nos.718, 719 & 720/Chny/2022 for the AYs 2007-08,
2008-09 & 2010-11 are allowed for statistical purpose.
Order pronounced on the 24th day of March, 2023, in Chennai. Sd/- Sd/- (मंजूनाथा.जी) (एबी टी. वक�) (MANJUNATHA.G) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER चे�ई/Chennai, �दनांक/Dated: 24th March, 2023. TLN आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 4. आयकर आयु�/CIT 2. ��यथ�/Respondent 5. िवभागीय �ितिनिध/DR 3. आयकर आयु� (अपील)/CIT(A) 6. गाड� फाईल/GF