V & S PROJECTS PVT LTD,NEW DELHI vs. ITO WARD - 26(1), NEW DELHI

This appeal is filed by the Assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-16, New Delhi [hereinafter referred to CIT (Appeals)] dated 7.03.2019 for assessment year 2010-11. The assessee challenged the order of the Ld. CIT (Appeals) 1 in sustaining various additions/disallowances made by the Assessing Officer.

The Ld. Counsel for the assessee at the outset submits that the ld. CIT (Appeals) passed ex-parte order and, therefore, the appeal may be restored to the file of the ld. CIT (Appeals) for disposing of the appeal on merits on hearing the assessee. The Ld. Counsel further submits that the company was availing services of a chartered accountant viz. CA. Parmod Kr. Marwah for handling income tax matters including filing of income tax returns. However, the return of income for A.Y. 2010- 11 under consideration was not filed u/s 139 of the Income Tax Act, 1961 due to inadvertent omission of the chartered accountant. The management of the company was under bona-fide impression that the chartered accountant would have filed return of income for A.Y. 2010-11. Since, the company has not filed its return of income, the Ld. Assessing Officer has issued notice u/s 148 of the Act on 31.03.2017 for A.Y. 2010-11. The said notice u/s 148 was handed over to the chartered accountant for compliance. But he has not attended the assessment proceedings and assessment was completed u/s 144/147 of the Act vide order dated 01.12.2017 determining total income at Rs. 15,63,435/-. At that time, the chartered accountant assured that he would properly attend and represent the case in appeal and accordingly, the appeal was prepared by him and filed before the Ld. CIT(A). Subsequently, the address of the assessee company has been changed to new address i.e., H. No. 1, Ground Floor, Smalka Road, Old Delhi-Gurgaon Road, Delhi-110037. The Ld. CIT(A) has issued two hearing notices u/s 250 of the Act dated 13.02.2019 & 21.02.2019 which were not received as these were addressed at old address. Therefore, the counsel of the assessee company could not attend the appellate proceedings. The Ld. CIT(A) dismissed the appeal on account of nonprosecution. Thus, non- appearance before the Ld. AO was due to omission of the chartered accountant and before the Ld. CIT(A) due to change of address. It may also be mentioned that the flagship company of the group M/s V and S International Pvt. Ltd. was incurring losses and the bank loans have become NPA and the management of the group was deeply involved in organizing and managing the financial affairs of the companies. The management of this company was under bona- fide impression that the chartered accountant would be complying with the requirements of appellate proceedings. Hence, the non-compliance during assessment proceedings was on account of noncooperation of the authorized representative and during appellate proceedings due to change of address. Thus, there was sufficient cause with the assessee company for not complying with the notices during assessment proceedings before the Ld. AO and appellate proceedings before the Ld. CIT(A). There was no carelessness or mala fide or benefit/motivation for the assessee company not to comply with the statutory notices as the assessee company was rather entitled for refund of Rs. 16,140/-. Thus, there was sufficient cause for not furnishing the relevant documents before the Ld. Assessing Officer and Ld. CIT(A). Therefore, the ld. Counsel submitted that in the interest of justice the appeal of the assessee may be restored to the file of the ld. CIT (Appeals) for adjudication on merits after considering the additional evidences which were filed before the Tribunal. The ld. Counsel submits that the assessee has adduced additional evidences with an application for admission thereof as these evidences could not be furnished either before the Assessing Officer or before the ld. CIT (Appeals) for the reasons stated above.

On hearing both the sides and perusing the orders of the authorities below and the submissions of the assessee, I am of the view that this appeal should go back to the file of the ld. CIT (Appeals) for adjudicating the issues on merits after hearing the assessee. The assessee may furnish evidences in support of its claim before the ld. CIT (Appeals) and the ld. CIT (Appeals) is at liberty to admit the evidences. Thus, this appeal is restored to the file of the ld. CIT (Appeals) for de novo adjudication in accordance with law.

In the result, the appeal of the assessee is allowed for statistical purposes.