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Facts
The assessee filed an appeal against an order by the NFAC sustaining additions made by the AO. The assessment involved additions under Section 68 and disallowance of expenses. The assessee contended that they were not given sufficient opportunity to respond due to issues with the e-submission portal.
Held
The Tribunal held that the assessee was not granted adequate opportunity to respond to the additions proposed by the AO. The limited time given and the closure of the e-submission portal prevented the assessee from filing submissions. Therefore, the matter was set aside to the AO for a fresh examination.
Key Issues
Whether the assessee was provided with sufficient opportunity to present their case before the AO and CIT(A), and if not, whether the matter should be remanded for fresh consideration.
Sections Cited
68, 143(3), 144B
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Income Tax Appellate Tribunal, MUMBAI “D” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI ANIKESH BANERJEE
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 27-08-2024, pertaining to Assessment Year (AY) 2020-21, wherein the assessee has taken the following grounds of appeal:
“Ground 1: On the facts and in the circumstances of the case as well as law, the order of AO was passed without affording sufficient opportunity of being heard which is contrary to the natural justice without acquiring proper justification and liable to be set aside. Ground 2: On the facts and in the circumstances of the case as well as law the AO erred in making addition of Rs. 2600000/- u/s 68 of 1.T. Act, 1961 without affording reasonable time to assessee which is unjustified and liable to be quashed. Ground 3: On the facts and in the circumstances of the case as well as law the AO erred in making disallowance of Rs. 3720647/- on assumption and presumption, without any evidence which is grossly justify and liable to be deleted.”
At the outset, it is noted that there is a delay of ten days in filing the appeal as pointed out by the Registry. After hearing both the parties and perusing the facts placed on record, we find that there was reasonable cause for the delay in filing the present appeal and hence, the delay is hereby condoned and appeal is admitted for adjudication.
Briefly, the facts of the case are that in this case, the assessment was completed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 („the Act‟) wherein the AO determined the assessed income at Rs. 78,38,600/- by making addition to the returned income of Rs. 26 lakhs u/s. 68 of the Act, disallowance of expenses amounting to Rs. 37,20,647/- and income tax expenses amounting to Rs. 4,92,833/-. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), challenging the addition of Rs. 26 lakhs u/s. 68 of the Act as well as the addition of Rs. 37,20,647/- on account of various expenses. However, in absence of any submissions filed by the assessee, the Ld.CIT(A) passed an ex-parte order sustaining the findings of the AO.
During the course of hearing, the Ld.AR submitted that the AO has not given sufficient opportunity to the assessee and has made the subject addition. In this regard, it was submitted that a show cause notice was issued to the assessee on evening of 29th March, 2022 calling for the response by the next date i.e., 30th March, 2022. It was further submitted that even the e-submission portal was closed before the scheduled time on 30-03-2022 and thereafter the assessee made on-line request through „Grievance Portal‟ to open the same. However, the e-submission portal was not opened and the assessee was thus prevented from filing necessary submissions. It was further submitted that even before the Ld.CIT(A), the assessee could not file necessary submissions and the order has been passed ex-parte. It was accordingly submitted that the assessee be granted one more opportunity and the matter may be remanded back to the file of the AO to allow the assessee to file the necessary submissions and basis the same, the AO can decide on the merits of the case.
Per contra, the Ld. DR is heard, who has relied on the order passed by the lower authorities.
After hearing both the parties and perusing the material available on record, we find that the assessee has not been granted appropriate opportunity to respond to the proposed additions sought to be made by the AO. The assessee has been granted only a day‟s time to respond to the show cause notice and by the time, the assessee could respond, e-filing portal was closed which prevented the assessee from filing the submissions. Further, it doesn‟t seems to a case where the matter was getting time-barred as the AO finally passed the assessment order on 06- 09-2022 and, therefore, the assessee‟s prayer for opening the e-submission portal could have been addressed. In light of the same, we believe that the assessee deserves one more opportunity and the matter is accordingly set aside to the file of the AO to examine the matter afresh, after taking into consideration the submissions sought to be filed by the assessee and after providing reasonable opportunity to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 13-06-2025 Sd/- Sd/- [ANIKESH BANERJEE] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 13-06-2025 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