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Facts
The assessee, engaged in solar power generation, claimed a deduction under Section 80-IA for AY 2020-21. The case was selected for scrutiny. The assessee's appeal before the CIT(A) was dismissed for non-prosecution before the scheduled hearing date.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal prior to the due date for compliance, thereby violating principles of natural justice. The Tribunal set aside the CIT(A)'s order and directed the CIT(A) to provide an adequate opportunity for a fresh hearing on merits.
Key Issues
Whether the CIT(A) erred in dismissing the appeal before the scheduled hearing date without providing adequate opportunity to the assessee, thus violating principles of natural justice.
Sections Cited
80-IA, 250, 154, 143(3), 144B
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Before: MS. KAVITHA RAJAGOPAL & SMT. RENU JAUHRI
सुिवधई की िधरीख / Date of Hearing 16.04.2025 घोर्णध की िधरीख/Date of Pronouncement 25.04.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 16.01.2025 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2020-21.
The assessee has raised the following grounds of appeal:
A.Y. 2020-21 Astonfield Solar (Rajasthan) Pvt. Ltd.
That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in dismissing the appeal against the assessment order dated September 17, 2022, without considering the written submissions of the assessee or providing an opportunity to the assessee to present the case. The appellant fulfilled all the criteria for claiming the deduction under Section 80- IA of the Act. The disregard to submissions and opportunity to present the case violates the principles of natural justice and undermines the assessment process.
2. That the learned CIT(A) erred in law and on facts in dismissing the appeal on January 16, 2025, prior to the hearing date specified in the notice, which was January 20, 2025. The appellant was fully prepared to comply with the notice dated January 15, 2025 but was surprised to receive the judgement even before the date of hearing. The appellant had neither defaulted in compliance nor been given an opportunity to present its case. Further, the Statement of Facts and Grounds of Appeal
were already filed, but the learned CIT(A) did not even consider them before dismissing the appeal.
3. That the learned CIT(A) erred in law and on facts and violated the principles of natural justice by dismissing the appeal without granting the appellant an opportunity of being heard, thereby depriving the appellant of its right to a fair hearing.
4. That the demand notice for recovery proceedings, issued on January 28, 2025, was served upon the appellant without considering that the appellant had already filed a rectification application under Section 154 of the Act on January 23, 2025. The rectification application sought relief from the incorrect dismissal order and requested that the appeal be restored, and a fresh date be granted for presenting the appellant's case before the authorities.
5. The CIT(A) erred in law and facts by disallowing the deduction available to the assessee under section 80-IA of the Act without considering the facts of the case Le. the assessee is in the business of generation of power from solar energy in Rajasthan.
6. Stay on demand and recovery proceedings.”
3. Brief facts of the case are that the assessee filed its return declaring income of Rs. 60,67,840/- on 30.02.2021. The assessee is engaged in the production and the distribution of solar power and has claimed deduction u/s 80IA of Rs. 74,52,708/- for the first time in AY 2020-21. The case was selected for scrutiny and assessment was completed u/s 143(3) r.w.s. 144B at the returned income vide order dated 09.11.2021. However, Ld. AO did not consider A.Y. 2020-21 Astonfield Solar (Rajasthan) Pvt. Ltd. the assessee’s claim for deduction u/s 80IA even though the facts were mentioned in the body of the order.
4. Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). Vide order dated 16.01.2025, the appeal was dismissed on the ground of non-prosecution as no compliance was made to various notices issued during the appellate proceedings. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before the Tribunal with raising several grounds.
5. The first ground relates to erroneous dismissal of the appeal by Ld. CIT(A) on 16.01.2025, prior to the date of hearing specified in the notice dated 15.01.2025, as per which the assessee was required to make compliance on 20.01.2025.
6. At the outset, Ld. AR pointed out that the earlier notices dated 19.12.2024 and 31.12.2024 were not received as these were delivered to an email account where they landed in the spam folder and therefore remained unnoticed by the assessee. Subsequently, a notice dated 15.01.2025 was duly received, and the assessee was preparing to submit its response on the given date on 20.01.2025. However, before the scheduled date, the appeal was dismissed by Ld. CIT(A) vide order dated 16.01.2025. Accordingly, he has requested that the matter may be remanded back to Ld. CIT(A) for a fresh consideration of the appeal on merits relating to the issue of grant of deduction u/s 80IA.
A.Y. 2020-21 Astonfield Solar (Rajasthan) Pvt. Ltd. Ld. DR has not controverted the above proposition.
In view of the above-stated facts, we are of the view that Ld. CIT(A) erred in dismissing the appeal 4 days before the due date for making compliance. Accordingly, the order of Ld. CIT(A) deserves to be set aside. We direct the Ld. CIT(A) to provide adequate opportunity to the assessee to furnish the requisite details and pass the order afresh on merits.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 25.04.2025.