KRISHNA VALLEY AGRO(INDIA) LTD,PUNE vs. ITO, WARD-14(1), PUNE, PUNE

There is a delay of 140 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, condone the said delay and proceed to decide the appeal.

Briefly stated, the facts of the case are that the assessee is a company engaged in the manufacturing and trading of cattle feeds, poultry

Before the Ld. CIT(A)/NFAC the appeal was filed with a delay which was condoned by the Ld. CIT(A)/NFAC. However, there was non- compliance of notices of hearing and the Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and confirmed the penalty of Rs.1,04,74,541/- levied on the assessee by endorsing the findings of the Ld. AO/TPO.

Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “1. The Ld. TPO erred in levying (Ld. CIT-A erred in confirming) the penalty u/s 271G of the IT Act of Rs. 1,04,74,541/-. 2. The Ld. TPO ought to have appreciated the fact that ALP of the Specified domestic transaction entered into was accepted by the Ld. TPO and therefore penalty ought not to have been levied. 3. The reference was made to the TPO on 18-10-2017. In view of amendment to Section 92BA clause (i), vide finance act 2017 w.e.f. 01-04-2017, the reference to TPO itself is invalid and therefore the consequential penalty order passed by the TPO pursuant to such invalid reference be quashed. 4. The appellant craves its right to add to or alter the Grounds of Appeal at any time before or during the course of hearing of the case.”

The Ld. AR submitted that the non-compliance to the notices issued by the Ld. CIT(A)/NFAC was not intentional. He submitted that upon receipt, the assessee duly forwarded the notices to its erstwhile tax consultant who was handling all the Income Tax cases of the company since beginning. The tax consultant filed adjournment request on certain occasions, however, he failed to file any reply to the notices. He submitted that the tax consultant of the assessee passed away on 15.03.2025 and thereafter a new tax consultant was appointed who then informed the assessee about the ex-parte order passed by the Ld. CIT(A)/NFAC. The Ld. AR submitted that the assessee has a strong case on merits and is in a position to substantiate its case by filing the requisite details/documentary evidences in support thereof. He therefore prayed that, in the interest of justice, an opportunity may be granted to the assessee to present and substantiate its case by filing the requisite details.

The Ld. DR supported the order of the Ld. CIT(A)./NFAC.

We have heard the Ld. Representatives of the parties and perused the material available on record. We find that both the Ld. AO/TPO as well the Ld. CIT(A)/NFAC have completed their respective proceedings ex-parte qua the assessee due to non-compliance of the notices of hearing issued by them. It is the submission of the Ld. Counsel for the assessee that such non-compliance was not intentional but resulted owing to the reasons cited above. Perusal of the appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of the Hon’ble Supreme Court in CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and several other decisions and dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. Nonetheless, he has to adhere to the legislative mandate enshrined in sub- section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision. We observe that the Ld. CIT(A)/NFAC has passed the impugned order in concurrence of the order of Ld. AO/TPO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.

On the above facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file for adjudication afresh and pass speaking order on merits as per fact and law after allowing a reasonable opportunity of being heard to the assessee. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order in accordance with law. We direct and order accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 10. In the result, the appeal of assessee is treated as allowed for statistical purpose.