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Income Tax Appellate Tribunal, “A” BENCH KOLKATA
Before: SHRI SAJNAY GARG & SHRI GIRISH AGRAWAL
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA BEFORE SHRI SAJNAY GARG, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.62/Kol/2021 Assessment Year: 2011-12
Sunag Engineering Pvt. Ltd. Deputy Commissioner of Sukhsagar Apartment, 9th Income Tax, Circle-12(2), Vs. floor, 2/5, Sarat Bose Road, Kolkata. Kolkata-700020. (PAN: AAECS6105M) (Appellant) (Respondent)
Present for: Appellant by : Shri Manish Tiwari, FCA Respondent by : Smt. Ranu Biswas, Addl. CIT, DR Date of Hearing : 10. 01.2023 Date of Pronouncement : 27.03.2023 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CITA)-4, Kolkata vide Appeal No. 871/CIT(A)-4/W-1(2)/15-16 dated 06.11.2017 passed against the order of DCIT, Circle-12(2), Kolkata u/s. 263/143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 17.03.2015.
The sole issue in this appeal is in respect of disallowance Rs.6,06,650/- by holding it as bogus claim of expenditure.
At the outset, we note that there is a delay of 298 days in filing the present appeal for which petition for condonation of delay is placed on record. The impugned order of Ld. CIT(A) is dated
2 ITA No.62/Kol/2021 Sunag Engineering Pvt. Ltd, AY: 2011-12 06.11.2017 which is claimed to have been communicated to the assessee on 02.03.2020 as stated in Form 36. In respect of the time gap of almost 30 months from the date of order of the Ld. CIT(A) and its date of service, on an earlier occasion the Bench had directed to obtain necessary details from the office of ld. CIT(A) as to when the impugned order was served on the assessee. To this effect, Ld. Sr. DR has placed on record a letter from the office of Ld. AO/Ld. CIT(A) which affirms that the impugned order was communicated to the assessee on 20.03.2020 as claimed by it in Form 36. Copy of the said letter is reproduced as under:
3 ITA No.62/Kol/2021 Sunag Engineering Pvt. Ltd, AY: 2011-12 4. Thus, based on the above letter, when this date of service of the order i.e. 02.03.2020 is considered for the purpose of computing the limitation for filing this present appeal, it falls within the period of Pandemic of Covid-19. Petition for condonation of delay is placed on record by assessee, explaining the reasons for delay owing to Pandemic of Covid-19 during that time. It is noted that the period of delay falls during the time of Pandemic of Covid-19 which has been excluded by the Hon’ble Supreme Court in the case of suo moto Writ Petition (C) No. 3 of 2020 dated 10.01.2022 by which the period from 15.03.2020 to 28.02.2022 has been directed to be excluded for the purpose of limitation. Vide this order a further period of 90 days has been granted for providing the limitation from 01.03.2022. Accordingly, we condone the delay and proceed to admit the appeal for hearing. 5. Further, from the perusal of the order of Ld. CIT(A), we note that the appeal has been dismissed for want of prosecution without dealing with the issue on merits of the case on the basis of material available on record. Section 250 of the Act provides for procedure to be adopted in 6. 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:
4 ITA No.62/Kol/2021 Sunag Engineering Pvt. Ltd, AY: 2011-12 “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].
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.
5 ITA No.62/Kol/2021 Sunag Engineering Pvt. Ltd, AY: 2011-12 8. 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 Company Vs. CIT (2001) 249 ITR 216 (SC), it is incumbent upon the Ld. CIT(A) to pass a speaking order on the merits of the case by examining, verifying and analyzing the material on record. Since there are no meritorious finding given by the Ld. CIT(A) 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.
Thus, in view of above, we find it proper to remit the matter back to the file of Ld. CIT(A) for afresh adjudication so as to afford a reasonable opportunity of being heard to the Ld. AO by way of calling a remand report on the material placed on record in respect of the claim made by the assessee towards issue of share capital and share
6 ITA No.62/Kol/2021 Sunag Engineering Pvt. Ltd, AY: 2011-12 premium. We also direct the Ld. AO to be diligent in expeditious compliance on furnishing the remand report as and when called by the Ld. CIT(A) in this respect. Needless to say, that the assessee be also given a reasonable opportunity of being heard to make any further submission, if the situation so demands. Further, in the present regime of faceless procedure adopted by the Department for assessments and first appeals, we also direct that office of ld. Jurisdictional Assessing Officer (JAO) should facilitate transmission of case records of the assessee to the appropriate first appellate authority through National Faceless Appeal Centre (NFAC), for the purpose of efficacious execution of our aforesaid directions. Accordingly, appeal of the revenue is allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 27th March, 2023. Sd/- Sd/- (Sanjay Garg) (Girish Agrawal) Judicial Member Accountant Member
Dated: 27th March, 2023 JD, Sr. P.S. Copy to: The Appellant: 1. Appellant: 2. The Respondent: 3. CIT(A)-4, Kolkata 4. DCIT, Circle-12(2), Kolkata. 5. DR, ITAT, Kolkata Bench, Kolkata //True Copy// By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata