ARANKARI RISK MANAGEMENRT SERVICES PVT LTD,GHAZIABAD vs. DCIT CIRCLE-3(1), GHAZIABAD

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ITA 1544/DEL/2020Status: DisposedITAT Delhi22 November 2022AY 2014-153 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in passing an ex parte order without considering the assessee's written submissions and by dismissing the appeal for non-prosecution while also discussing merits. The order of the CIT(A) was set aside.

What were the facts?

The assessee, engaged in share trading, filed a return declaring a loss. The Assessing Officer made additions for disallowance under Section 14A and for unsecured loans and trade payables under Section 68. The CIT(A) dismissed the appeal ex parte.

What were the issues?

Whether the CIT(A) erred in passing an ex parte order without considering the assessee's submissions and providing an adequate opportunity of being heard. The validity of additions made by the AO under Section 68 was also implicitly in question.

Which sections of the Income-tax Act were involved?

Section 14A,Section 68,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI

Before: SHRI SHAMIM YAHYA & SHRI ANUBHAV SHARMA

For Appellant: Shri George Koshi, CA
For Respondent: Shri Kanav Bali, Sr. DR
Hearing: 21/11/2022Pronounced: 22/11/2022

O R D E R PER ANUBHAV SHARMA, J. M.: 1. The present appeal has been preferred by the Assessee against the order dated 28.02.2020 of Ld. CIT(A)-32, New Delhi (hereinafter referred as Ld. First Appellate Authority) arising out of an appeal before it against the assessment order dated 15.12.2016 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as „the Act‟) by the Assessing Officer, DCIT, Circle-3(1), New Delhi (hereinafter referred as the Ld. AO).

2.

Facts in brief are that the assessee filed return of income declaring loss of Rs. 9,87,69,937/- and scrutiny assessment was done of the assessee which is engaged in purchase and sale of shares and making investment and trading of shares. The ld AO had disallowed expenditure u/s 14A to the extent of Rs. 69,174/-. Further, in the absence of 3rd party confirmation and unsatisfactory reply, creditworthiness and genuineness of the unsecured loan parties were found suspicicious and addition u/s 68 of the Act of Rs. 9,49,46,999/- was made. Further, the ld AO on the basis of notice issued u/s 133 was unsatisfied with the trade payable reflected in the books of account and finding them to be not supported by confirmations. Addition u/s 68 to the extent of Rs. 2,51,95,243/- was made and the total loss was rounded off to Rs. 2,41,51,480/-. The ld CIT(A) dismissed the appeal ex parte.

3.

Heard and perused the record.

4.

The assessee has raised as many as 18 grounds however at time hearing the ld counsel restricted argument to the fact that the ld CIT(A) erred in passing ex parte order without providing to the assessee an opportunity of being heard.

5.

It can be appreciated from the order of the ld CIT(A) that although the assessee was given various opportunities of hearing and adjournment as sought. However, on 28.02.2020 the ld AR has sought adjournment but same was not considered and the ld CIT(A) has decided the matter vide order dated 28.02.2020. The ld CIT(A) in para No. 4.3 observed as under:-

“4.3 Appellant has been totally non-cooperative during the appellate proceedings. It is apparent that appellant is not interested in pursuing its appeal. In view of these facts, I am of the opinion that no interference is called for in the AO’s order, as such, the grounds of appeal are dismissed and the addition made by the AO is confirmed.”

6. Thereafter, in para No. 5 and 5.1 the ld CIT(A) discussed the merits of addition as appearing from the assessment order and again in para 5.2 observed as follows:-

“5.2 Before me also, during appellate proceedings, despite allowing opportunity of being heard in this regard, so as to justify its claim that no additions needed to be made in appellant’s present

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