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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI SANJAY GARG & SHRI GIRISH AGRAWAL
Present for: Appellant by : Shri Rajeeva Kumar, Advocate Respondent by : Shri L. N. Dash, JCIT Date of Hearing : 31.08.2023 Date of Pronouncement : 08.09.2023 O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide Order No. ITBA/NFAC/S/250/2023-24/1052650106(1) dated 08.05.2023 passed against the assessment order by ITO, Ward-56(2) u/s.144 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 21.03.2013 for AY 2010-11.
Appeal of assessee is time barred by 10 days. From the condonation of delay petition filed by assessee on 19.07.2023, the reason for the delay as explained by the assessee is as per instruction of his Ld. AR Sri Pradip Kapoor, Chartered Accountant, assessee handed over the documents to Shri Sudip Majumdar, his assistant for preparation of the memorandum of appeal. However, Shri Majumdar fell sick and admitted to hospital where he unfortunately
Imran Ahmad, AY: 2010-11 expired on 11.07.2023. After perusing the petition for condonation of delay, we find that cause of the delay in filing of appeal is reasonable and we condone the delay and admit the appeal for hearing.
At the outset, the learned AR drew our attention to the fact that ex-parte assessment order was passed by the Ld. AO dated 21.03.2013 u/s. 144 of the Act [though on the body it is mentioned as 143(3)] assessing business income at Rs.22,89,127/-. However, while passing the impugned order, Ld. AO observed that on 21.02.2013 assessee appeared and filed (i) Bank Statements (ii) Computation of total income, (iii) freight receivable details & (iv) freight payable details.
Aggrieved, assessee preferred an appeal before the Ld. CIT(A), who in absence of compliance, confirmed the addition made by Ld. AO. Aggrieved, assessee is in appeal before the Tribunal.
According to the Ld. AR, assessee did not get proper opportunity before the Ld. AO and also before the Ld. CIT(A) to represent his case. Therefore, citing the decision of the Hon’ble Supreme Court in the case of Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC), the Ld. AR pleads that the matter be remanded back to the Ld. AO for fresh adjudication. Ld. CIT, DR opposed the remanding of the proceedings, however, contended that even if the Tribunal remands the matter back to Ld. AO, assessee should undertake to participate in the proceedings before the Ld. AO.
Having heard both the parties and perused the records, we note that Ld. AO made the assessment u/s. 143(3)/144 of the Act. We further note that Ld. CIT(A) also passed the appellate order ex parte. According to Ld. AR, action of Ld. AO and Ld. CIT(a) is in gross violation of Natural Justice. Therefore, the Ld. AR pleads that the Imran Ahmad, AY: 2010-11 assessee did not get proper opportunity before the AO to represent his case. According to Ld. AR, by giving assessee an opportunity, he assures to participate and produce all the documents to represent his case properly before the AO. By citing the decision of Hon’ble Supreme Court in the case of Tin Box Company (supra), the assessee pleads that the matter may be remanded back to the AO since there was no proper opportunity to discharge the onus upon the assessee. We note that the Hon’ble Supreme Court in Tin Box Company, supra 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. Thaat order must be made after the assessee has been given a reasonable opportunity of setting 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 assessee. 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.”
Imran Ahmad, AY: 2010-11 7. We also find that no effective cognizance of the submissions made by the assessee in the course of the appellate proceedings have been taken by the Ld. CIT(A) while disposing of the appeal. The Act provides for the powers of Commissioner (Appeal) u/s. 251 which adequately deals with the powers in disposing of the appeal by the Ld. CIT(A). The section is reproduced as under:
Powers of the Commissioner (Appeals) 251. (1) In disposing off an appeal, the Commissioner (Appeals), shall have the following powers: (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty — he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case — he may pass such orders in the appeal as he thinks fit. The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation – In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, not- withstanding that such matter was not raised before the Commissioner (Appeals) by the appel- lant.
Section 250 of the Act provides for procedure to be adopted and disposing of the appeal by the Ld. CIT(A). Sub-section (4) of section 250 of the Act provides that the Ld. CIT(A) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing officer to make further inquiry and report the result of the same to the Commissioner (Appeals). Further, sub-section (6) provides that the CIT(A) shall pass an order in writing and shall set the points for determination, the decision thereon and the reasons for the decision. The section is reproduced as under:
Imran Ahmad, AY: 2010-11 “250. Procedure in appeal (1) The 7 Deputy Commissioner (Appeals)] 8 or, as the case may be, the Commissioner (Appeals)] shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the 9 Assessing] Officer against whose order the appeal is preferred. (2) The following shall have the right to be heard at the hearing of the appeal- (a) the appellant, either in person or by an authorised representative; (b) the 10 Assessing] Officer, either- in person or by a representative. (3) The 1 Deputy Commissioner (Appeals)] 2 or, as the case may be, the Commissioner (Appeals)] shall have the power to adjourn the hearing of the appeal from time to time. (4) The 3 Deputy Commissioner (Appeals)] 4 or, as the case may be, the Commissioner (Appeals)] may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the 5 Assessing] Officer to make further inquiry and report the result of the same to the 6 Deputy Commissioner (Appeals)] 7 or, as the case may be, the Commissioner (Appeals)]. (5) The 8 Deputy Commissioner (Appeals)] 9 or, as the case may be, the Commissioner (Appeals)] may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if the 10 Deputy Commissioner (Appeals)] 11 or, as the case may be, the Commissioner (Appeals)] is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable. (6) The order of the 12 Deputy Commissioner (Appeals)] 13 or, as the case may be, the Commissioner (Appeals)] disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. (7) On the disposal of the appeal, the 14 Deputy Commissioner (Appeals)] 15 or, as the case may be, the Commissioner (Appeals)] shall communicate the order passed by him to the assessee and to the 16 Chief Commissioner or Commissioner].
9. Principles governing the exercise of powers by the First Appellate Authority are contemplated under sections 250 and 251 of the Act, breach of which has far reaching consequences on the administration of justice culminating in the litigant approaching the higher appellate authority. It is required that the first appellate authority viz. CIT(A) will appreciate the evidence, consider the arguments and apply the law on the given set of facts and circumstances and arrive at findings.
10. Keeping in mind the provision of sections 250 and 251 of the Act and the decision of the Hon’ble Supreme Court in the case of Tin Box Ltd. (supra) referred as above it is incumbent upon the Ld. CIT(A) to pass a speaking order on the merits of the case by examining,
Imran Ahmad, AY: 2010-11 verifying and analyzing the material on record. Since there are no meritorious finding given by the Ld. CIT(A) on the submissions made by the assessee and also considering the grounds raised by the assessee where the Ld. CIT(A) has passed an ex parte order without giving opportunity of being heard, we find it fit to remit the matter back to the file of the Ld. CIT(A) for his objective and meritorious observations and findings on the submissions made by the assessee. Needless to say the assessee be given reasonable opportunity of being heard and the assessee shall also be cooperating for the effective disposal of the appeal and will be at liberty to make further submissions as deem fit. Since the matter is restored to the file of Ld. CIT(A) for meritorious adjudication by passing a speaking order in terms of our observations made hereinabove, we are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld. CIT(A). The observations herein made by us in remanding the matter back to the file of Ld. CIT(A) will not impair or injure the case of the Revenue nor will it cause any prejudice to the defense/explanation of the assessee. Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the matter back to the file of the Ld. CIT(A) to decide afresh after affording reasonable opportunity of being heard to the assessee and the assessee is directed to be diligent in the appellate proceedings.