ROYAL PALMS (INDIA) PRIVATE LIMITED ,MUMBAI vs. ITO WARD 13(3)(1), MUMBAI

Per Saktijit Dey, VP:

The captioned appeals by the assessee arise out of two separate orders of Ld.
ld. Addl./JCIT (Appeal), Indore pertaining to Assessment Years (AY) 2015-16 and 2016-17. 2. The basic grievance of the assessee is against dismissal of its appeal by learned First Appellate Authority without affording adequate opportunity of being heard.
3. We have heard parties and perused the materials on record.
4. Briefly the facts are, the assessee is a resident corporate entity. In course of enquiry conducted u/s. 133B of the Income Tax Act, 1961 (in short the ‘Act’) to Royal Palms India Pvt. Ltd.
Vs.
ITO Ward 13(3)(1), Mumbai verify Tax Deduction at Source (TDS) compliance, certain irregularities regarding deduction of tax at source was noticed. Accordingly, proceedings u/s.
201(1)/201(1A) of the Act were initiated against the assessee for the assessment years under dispute. In response to show cause notice issued by the Assessing
Officer (AO), the assessee furnished certain details. However, being unconvinced with the submissions of the assessee, the AO treated the assessee as an assessee in default in terms with Section 201(1) of the Act. Accordingly, the AO passed orders u/s. 201(1)/201(1A) of the Act raising demand of tax and interest on the assessee.
5. Being aggrieved with such orders passed by the AO, the assessee preferred appeals before ld. First Appellate Authority. However, by the impugned orders, learned First Appellate Authority has dismissed the appeals of the assessee. On a bare perusal of the orders passed by learned First Appellate Authority, it is observed that in sum and substance, learned First Appellate Authority has dismissed assessee’s appeals for non-prosecution. It is further observed from the orders of learned First Appellate Authority, the first notice of hearing was issued to the assessee on 03.03.2020. In response to which, the assessee sought an adjournment vide letter dated 05.03.2020. Thereafter, another notice of hearing was issued on 22.01.2021, to which, as alleged by the AO, no compliance was made. Thereafter, no action was taken by learned First Appellate Authority with regard to the appellate proceedings. Long after, on 05.02.2025, another notice of hearing was issued to the assessee stating that it will be treated as last and final opportunity. Since, assessee
Royal Palms India Pvt. Ltd.
Vs.
ITO Ward 13(3)(1), Mumbai did not respond, as alleged, learned First Appellate Authority proceeded to dispose of the appeals ex-parte by dismissing them. In the first place, it is not understood why the appellate proceedings were kept pending from the year 2020 till 2025
despite issuance of hearing notice. It is also surprising that after the second notice of hearing was issued on 22.02.2021 no further action was taken for completion of proceeding and after long lapse of almost three years, ld. First Appellate Authority again issued a notice of hearing on 05.02.2025. 6. Be that as it may, from the submissions made by the assessee before the AO, it is observed that the assessee has pleaded that it has itself disallowed the payments, subject to TDS, while computing its total income. The aforesaid submission of the assessee requires factual verification. Learned First Appellate Authority has failed to verify these facts as she has passed the impugned order, more or less, in limine virtually dismissing the appeals for non-prosecution. The impugned orders passed by learned First Appellate Authority do not fall in the category of speaking order.
7. In view of above aforesaid, we are inclined to set aside the impugned orders of learned First Appellate Authority and restore the issues arising in the appeals to the file of learned First Appellate Authority for de-novo adjudication. Needless to say, the assessee must be provided fair opportunity of being heard before deciding the issues. We further direct the assessee to respond to the notice of hearing to be issued by learned First Appellate Authority and cooperate in finalizing the proceedings.
Mumbai: Dated : 05.05.2025
Aks/-

Copy of the Order forwarded to :
1. The Applicant
2. The Respondent
3. The CIT(A)
4. CIT - concerned
5. DR, ITAT, Mumbai
6. Guard File
BY ORDER,

(Dy./Asstt.