Loading judgment…
Facts
The appeal for AY 2008-09 arose from an assessment order under Section 143(3) r.w. Section 147, subsequently reopened under Section 148, leading to additions of Rs. 28,92,724. The CIT(A) dismissed the assessee's appeal ex-parte due to non-compliance, without addressing the merits of the case.
Held
The Tribunal set aside the CIT(A)'s ex-parte order, holding that it was contrary to Section 250(6) as the CIT(A) is mandated to dispose of appeals on merits. The matter was restored to the CIT(A) for a de novo decision, with an expectation of the assessee's cooperation.
Key Issues
Whether the CIT(A) can dismiss an appeal ex-parte without deciding on merits, violating Section 250(6) of the Income Tax Act. Other issues included validity of assessment of a non-existent entity, reopening of assessment, and specific disallowances.
Sections Cited
143(3), 147, 148, 250(4), 250(6)
AI-generated summary — verify with the full judgment below
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR
Date of Hearing 30.07.2025 Date of Pronouncement 06.10.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal is filed by the assessee against the order passed by the Learned Commissioner of Income-tax, Appeal, ADDL/JCIT(A)-12, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 143(3) r.w.s 147 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 26.03.2014 for the Assessment Year [A.Y.] 2008-09. P a g e | 2 A.Y. 2008-09 Huhtamaki India Limited(Vista Film and Packaging Pvt Ltd. merged into positive packaging Industries Ltd. which in turn merged into Huhtamaki India Ltd.) 2. The grounds of appeal are as under:-
1. Ground No. 1-Assessment of a Non-Existent Entity 1.1. On the facts and circumstances of the case, as well as in law, the learned CIT(A) erred in confirming the action of the learned Assessing Officer ('AO'), inasmuch as the assessment order passed under section 143(3) read with section 147 of the Act on a non-existing amalgamating entity is bad in law, void ab initio, and liable to be quashed. The appellant prays that the assessment order passed under section 143(3) read with section 147 of the Act be quashed.
2. Ground No. 2-Violation of Principles of Natural Justice 2.1. Without prejudice to the above ground, the learned CIT(A) erred in law and facts in dismissing the appeal ex parte, without due consideration of the detailed submissions and annexures filed by the appellant on 21 March, 2025-well within the due date of submission of 24th March, 2025-as well as earlier submissions filed on 20th February, 2023 and 28th January 2021, thereby violating principles of natural justice. The appellant prays that the order passed by the learned CIT(A) be set aside.
3. Ground No. 3- Reopening of assessment 3.1.Without prejudice to the above grounds, on the facts and circumstances of the case. as well as in law, the learned CIT(A) erred in confirming the action of the learned AO, inasmuch as the reassessment proceedings initiated under section 147 of the Act and the consequential order dated 26th March 2014 passed under section 147 read with section 143(3) of the Act are bad in law and liable to be quashed.
4. Ground No. 4- Disallowance of Rs. 59,86,859 being DEPB claim written off 4.1. Without prejudice to the above, On the facts and circumstances of the case, as well as in law, the learned CIT(A) erred in confirming the action of the learned AO in making a disallowance of Rs. 59,86,559 on account of DEPB Credit written off in the profit and loss account during the year under consideration, without appreciating that the said amount has already been considered and offered to tax in AY 2005-06 and AY 2006- 07.
5. Ground No. 5-Disallowance of loss of Rs. 95,65,560 towards sale / write off of stores and spares 5.1. Without prejudice to the above, on the facts and circumstances of the case, as well as in law, the learned CIT(A) erred in confirming the action of the learned AO in disallowing loss of Rs. 95,65,560 arising from the P a g e | 3 A.Y. 2008-09 Huhtamaki India Limited(Vista Film and Packaging Pvt Ltd. merged into positive packaging Industries Ltd. which in turn merged into Huhtamaki India Ltd.) sale/write off of stores and spares and mischaracterizing the said loss as capital loss on sale of fixed assets. 5.2. Without prejudice to the above, if the learned AO's contention that the loss of Rs. 95,65,560 represents a capital loss is upheld and given the continued existence of the block of plant & machinery the depreciation may be allowable on the loss of Rs. 95,65,560 towards the sale/write-off of stores and spares.
3. In this case,assessment order was passed originally on 13.12.2010 which was subsequently reopened u/s 148 of the Act and the reassessment order was passed making certain additions and disallowances aggregating to Rs 28,92,724/-.Against the order of the AO the assessee filed appeal before the ld.CIT(A). However, before him there was no compliance to various notices of issued to it electronically on E- proceeding/ITBA facility. Thus, no submissions, documents or evidences were filed in support of the grounds of appeal though it was obligatory on its part to purposefully and co-operatively pursue the same in a worthwhile manner. The ld.CIT(A) observed that the appellant hadnot been able to even discharge the primary onus/burden statutorily and judicially cast upon him to substantiate the claims made in the grounds of appeal in spite of adequate time and opportunities given. Therefore, appeal was decided ex-parte dismissing the same.
4. When the case was called up for hearing, non attended on behalf of the assessee. We find that the appellate order has been passed P a g e | 4 A.Y. 2008-09 Huhtamaki India Limited(Vista Film and Packaging Pvt Ltd. merged into positive packaging Industries Ltd. which in turn merged into Huhtamaki India Ltd.) in ex parte manner mainly on account of lack of proper compliance by the assessee during appeal proceedings. Consequently, the ld.CIT(A) has not decided the appeal on merits which is contrary to the mandate of section 250(6) of the Act. A perusal of the provision makes it clear that the CIT(A) is bound to dispose of the appeal before him on merits. Once an appeal is preferred before him, then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the AOto make further inquiry and report the result of the same to him as per section 250(4) of the Act. However, it is equally true that the assessee himself did not make proper compliance during appellate proceedings.
5. In the light of above observations and in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the ld.CIT(A) for passing the appellate order de novo although the ld.DR strongly objected considering the non compliant attitude of the assessee. In case of any further failure on the part of the assessee, he would be at liberty to pass order after considering the materials on record. The assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld.CIT(A).
P a g e | 5 A.Y. 2008-09 Huhtamaki India Limited(Vista Film and Packaging Pvt Ltd. merged into positive packaging Industries Ltd. which in turn merged into Huhtamaki India Ltd.) 6. In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court on 06.10.2025. NARENDER KUMAR CHOUDHRY PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER)