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Facts
The Assessing Officer made various additions/disallowances in the assessment order for AY 2014-15. The Commissioner of Income Tax (Appeals) dismissed the assessee's first appeal ex-parte due to non-compliance despite multiple opportunities, thereby affirming the additions. The assessee contended that its non-compliance was due to being entangled in amalgamation proceedings.
Held
The Tribunal remanded the case back to the Commissioner of Income Tax (Appeals) for a fresh decision, directing consideration of documents submitted by the assessee and a remand report from the AO. The remand is conditional on the assessee depositing Rs. 22,000/-. The Tribunal also directed the CIT(A) to verify the fact of amalgamation, as the original orders were in the name of the erstwhile company.
Key Issues
The key issues are the CIT(A)'s ex-parte dismissal of the appeal due to the assessee's non-compliance regarding various additions/disallowances, the assessee's explanation of amalgamation proceedings, and the need to verify the amalgamation fact itself.
Sections Cited
250, 143(3), 40A(7), 43B, 41(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “C” BENCH : MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI BIJAYANANDA PRUSETH
For Assessee : Shri Niraj Sheth, Ld. AR For Revenue : Shri Virabhadra S.Mahajan, Ld. Sr.DR Date of Hearing : 18-12-2025 Date of Pronouncement : 18-12-2025 O R D E R
PER NARENDER KUMAR CHOUDHRY, JM:
This appeal has been preferred by the Assessee against the order dated 12-09-2025 impugned herein passed by the Ld. Commissioner of Income Tax (A)-49, Mumbai (in short „Ld. Commissioner‟) u/s. 250 of the Income Tax Act 1961 (in short „the Act‟) for the AY. 2014-15.
In the instant case, the AO vide assessment order dt. 28- 11-2016 u/s. 143(3) of the act has made the following additions/disallowances.
i. Rs. 6 lakhs Disallowance of legal and professional fees ii. Rs. 31,58,220 Un-paid gratuity u/s. 40A(7) iii. Rs. 18,47,879 Un-paid leave encashment salary u/s. 43B iv. 52,33,553 Un-explained liability u/s. 41(1)
The Assessee though being aggrieved with the aforesaid additions/disallowances, challenged the same by filing first appeal before the Ld. Commissioner. However, as it appears from the para No. 2 of the impugned order that despite affording numerous opportunities, the Assessee made no compliance and/or not replied the notices except seeking adjournments on three occasions.
As the Assessee failed to make any compliance and file the relevant documents and submissions, therefore, the Ld. Commissioner was constrained to decide the appeal as ex-parte and ultimately, dismissed the same, affirming the aforesaid additions/disallowances.
Thus, the Assessee being aggrieved has preferred the instant appeal.
Heard the parties and perused the material available on record. On being asked specifically, as to why the Assessee has not complied with the notices issued by the Ld. Commissioner, the Ld. Counsel for the Assessee has submitted that the Assessee is a successor on Future Tech Construction and Free Cost Pvt. Ltd., as the said company amalgamated with the present Assessee. The Assessee was entangled with the amalgamation proceedings.
On perusing para no. 2 of the impugned order it appears that majority of the appellate proceedings were carried out by the Ld. Commissioner during Covid-19 period, when the entire nation was on hold. However, thereafter on three occasions, the Ld. Commissioner fixed the case for hearing, however, on all the three occasions, the Assessee except seeking adjournment, made no compliance.
At this stage, the Assessee has filed certain documents, such as audited financial statements of the Assessee for the year ended 26-03-2014, tax audit report ending 26-03-2014, submissions dt. 26-11-2016 filed before the AO, copy of bank statement, highlighting certain payments, certificate of chartered accountant certifying break-up of salary expenses incurred during period 01-04-2013 to 26-03-2014 and actuarial valuation report certifying the liabilities of gratuity and leave encashment transferred to the Assessee by its group companies.
The documents mentioned above prima facie appears to be essential for just and proper decision of the case, as also not in denial of the Ld. DR.
Thus, considering the peculiar facts and circumstances of the case for proper and just decision of the case and substantial justice, we deem it appropriate to remand the matter back to the file of the Ld. Commissioner for decision afresh, by taking into consideration the documents referred to above as well as any other relevant documents and the remand report from the AO, if he desires so.
Thus, the case is remanded to the file of the Ld. Commissioner for decision afresh in the above terms, however, considering the conduct of the Assessee qua various non- compliances, subject to deposit of Rs. 22,000/- in the Revenue Department under “Other Heads” within 15 days from the date of receipt of this order.
The Assessee is also directed to strictly comply with the notices to be issued by the Ld. Commissioner and shall file the relevant submissions and documents already filed and any other documents additionally, as would be essential for proper and justice of the case. We clarify that in case of subsequent default, the Assessee shall not be entitled for any leniency.
We also observe that the assessment order and the impugned order are in the name of Future Tech Construction and Free Cost Pvt. Ltd., however, still the appeal has been preferred by the Assessee i.e., Cowtown Infotech Services Ltd., and there is no material available on record qua amalgamation of the erstwhile company, nor produced by the Assessee. Thus, we direct the Ld. Commissioner to verify the said fact qua amalgamation, as well.
In the result, Assessee‟s appeal is allowed for statistical purposes.
In the result, Assessee‟s appeal is allowed for statistical purposes. Order pronounced in the open court on 18-12-2025 Sd/- Sd/- [BIJAYANANDA PRUSETH] [NARENDER KUMAR CHOUDHRY] ACCOUNTANT MEMBER JUDICIAL MEMBER TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order
Dy./Asst. Registrar I.T.A.T, Mumbai