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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD
Before: SMT. P. MADHAVI DEVI & SHRI A. MOHAN ALANKAMONY
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER (Through Virtual Hearing) & 703/Hyd/2019 Assessment Year:2013-14 & 2014-15 K.K.S. Organics, Vs. Income Tax Officer, Hyderabad. Ward-1, PAN: AAEFK 9479 M Sangareddy. (Appellant) (Respondent) Assessee by: Sri K.A. Sai Prasad Revenue by: Sri Narayana Murthy Naik, DR Date of hearing: 28/09/2020 Date of pronouncement: 29/09/2020 ORDER PER A. MOHAN ALANKAMONY, AM.:
These two appeals are filed by the assessee against the orders of the Ld. CIT (A)-12, Hyderabad in appeal Nos. 10103 & 10179/2018-19, dated 18/02/2019 passed U/s. 143(3) r.w.s 250(6) of the Act for the AYs 2013-14 & 2014-15.
The grounds raised by the assessee in its appeals for the AYs 2013-14 & 2014-15 are extracted herein below for reference:-
“Grounds of appal for the AY 2013-14:
1. 1. The order of the Ld. First Appellate Authority is not correct either on the facts or in law and in both.
2. The Ld. First Appellate Authority is not justified in confirming the disallowance of Rs. 7,73,688/- U/s. 40(a)(ia) of the Act.
(a) The Ld. First Appellate Authority is not justified in confirming a total amount of Rs. 1,82,52,655/- as ‘unconfirmed sundry creditors’ U/s. 68 of the IT Act. (b) The Ld. First Appellate Authority is not justified in confirming the closing balances in the accounts of the sundry creditors, especially when the purchases were not disputed. (c) Without prejudice to the above grounds (a) and (b), the learned First Appellate Authority is not justified in accepting the inclusion of the opening balances also as addition during the assessment year under appeal.
The Ld. First Appellate Authority failed to appreciate the disallowance of Rs. 10,16,105/- U/s. 14A, is unwarranted and unjustified. 5. The appellant craves leave to add, amend or alter any of the above grounds.”
“Grounds of appal for the AY 2014-15:
1. 1. The order of the Ld. First Appellate Authority is not correct either on the facts or in law and in both.
2. The Ld. First Appellate Authority is not justified in confirming the disallowance of Rs. 2,32,454/- U/s. 40(a)(ia) of the Act.
3. The Ld. First Appellate Authority is not justified in confirming the addition of Rs. 2,43,463/- being the difference in outstanding loan amount due to Standard Chartered Bank.
4. (a) The Ld. First Appellate Authority is not justified in confirming a total amount of Rs. 30,15,616/- as ‘unconfirmed sundry creditors’ U/s. 68 of the IT Act. (b) The Ld. First Appellate Authority is not justified in confirming the closing balances in the accounts of the sundry creditors, especially when the purchases were not disputed. (c) Without prejudice to the above grounds (a) and (b), the learned First Appellate Authority is not justified in accepting the inclusion of the opening balances also as addition during the assessment year under appeal.
5. The Ld. First Appellate Authority failed to appreciate the settled legal position that in the absence of any dividend receipt, disallowance of Rs. 15,68,244/- U/s. 14A, is unwarranted and unjustified.
6. The appellant craves leave to add, amend or alter any of the above grounds.”
3. At the outset, the Ld. AR submitted before us that the Ld. CIT (A) has passed ex-parte orders for the relevant Assessment Years 2013-14 & 2014-15 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 sufficient 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 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 orders passed by the Ld. CIT(A) do not call for any interference.
4. 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. It is apparent from the orders the Ld. CIT (A) that the Ld. CIT (A) had posted the cases for hearing on number of occasions. However, none appeared on behalf of the assessee before the CIT(A) on the given dates of hearing for both the AYs 2013-14 and 2014-15. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeals 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 of the Ld. AR, and in the interest of justice, We hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeals afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee 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 orders in accordance with law and merit based on the materials on the record. It is ordered accordingly.
In the result, both the appeals filed by the assessee are allowed for statistical purposes as indicated hereinabove.
Pronounced in the open Court on 29th September, 2020.