What did the Tribunal hold?

The Tribunal found merit in the assessee's plea for a fresh opportunity. It remitted the appeals back to the CIT(A) to consider the matters afresh after providing the assessee with a hearing.

The assessee appealed against the CIT(A)'s ex-parte orders for AYs 2010-11 and 2011-12. The assessee argued that the CIT(A) did not provide sufficient opportunity to be heard, while the revenue contended that opportunities were given but the assessee failed to appear.

What were the issues?

Whether the CIT(A) erred in passing ex-parte orders without providing adequate opportunity to the assessee to present its case.

Knr Contractors Pvt.Ltd., Hyd vs ITO | ITAT Hyderabad 2020

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI A. MOHAN ALANKAMONY

For Appellant: Shri Vikas

For Respondent: Shri Sunil Kumar Pandey

Hearing: 24/11/2020Pronounced: 26/11/2020

PER A. MOHAN ALANKAMONY, A.M:

Both the appeals are filed by the assessee against the orders of the Ld. CIT(A)-2, Hyderabad in & 0103/2014-15, dated 30/11/2015 passed U/s. 143(3) r.w.s 250(6) of the Act for the AYs 2010-11 and 2011-12.

The assessee has raised five similar grounds in each of its appeals which are identical in nature and they are extracted herein below for reference:

“1. On the facts and in the circumstances of the case, the order of the Ld. CIT(A)-2, Hyderabad dismissing the appeals of the appellant for any A.Y. 2010-11 & 2011-12 is perverse, illegal and unsustainable in law.

2. The Ld. CIT(A) erred in dismissing the appeals ex-parte. The CIT(A) ought to have provided sufficient opportunity to the appellant to put forth its case.

On the facts and in the circumstances of the case, the Ld. CIT(A) erred in sustaining the order of the A.O. in rejecting the books of account on the mere ground that the vouchers in respect of some of the expenditure is supported only by self-made vouchers. The CIT(A) failed to appreciate that the A.O. without pointing out the discrepancy in the books of account could not have rejected the books of account and resort to estimation of income.

4. The CIT(A) erred in sustaining the action of the A.O. making addition of Rs. 10,96,468/- and Rs. 80,68,121/- for the AYs 2010-11 and 2011-12 respectively to the income returned by the appellant. The CIT(A) failed to appreciate that the income declared by the appellant was reasonable and that there was no need to enhance income declared by the appellant.

5. Without prejudice, the CIT(A) and the A.O. failed to appreciate that the turnover of the appellant contained both direct and sub- contracts and the rate adopted by the A.O. at 9% uniformly to the entire turnover is unreasonable.”

3. The Ld. AR at the beginning of the hearing submitted before us that the Ld. CIT (A) has passed ex-parte orders without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld. CIT (A) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that proper opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee nor its Representative appeared before the Ld. CIT (A). It was further submitted that in this circumstance, the Ld. CIT (A) had no other option but to pass ex-parte orders based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.

We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, We find merit in the submissions of the Ld. DR. The Ld. CIT (A) had posted the cases on several occasions. However, none appeared on behalf of the assessee before the CIT(A) on the date of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal ex-parte based on the material available on record. In this situation, We do not find much strength in the arguments advanced by the ld. AR. However, considering the prayer and submissions of the Ld. AR, in the interest of justice, We hereby remit both the appeals back to the file of Ld. CIT (A) in order to consider the matters involved in the appeals afresh by providing one more opportunity to the assessee of being heard and to pass appropriate Order in accordance with merits and law. At the same breath, We also hereby caution the assessee and its Representative to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order based on the materials on the record. It is ordered accordingly.

In the result, appeals filed by the assessee are allowed for statistical purposes as indicated hereinabove.

Pronounced in the open Court on Twenty Sixth November, 2020.

KNR CONTRACTORS PVT.LTD., HYD,HYDERABAD vs. ITO, WARD-2(1), HYDERABAD, HYDERABAD

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