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Facts
The assessee, a foreign bank, filed an appeal against an ex-parte assessment order passed by the CIT(A). The CIT(A) dismissed the appeal for non-compliance, despite the assessee claiming to have responded to notices and citing confusion regarding appeal details and jurisdiction.
Held
The Tribunal found that the CIT(A) failed to take cognizance of the assessee's response to a show cause notice and dismissed the appeal without discussing the merits. The Tribunal restored the issue to the CIT(A) for fresh adjudication, allowing a reasonable opportunity to the assessee.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without adjudicating the grounds of appeal and failing to consider the assessee's response to notices.
Sections Cited
254(1), 250, 201, 201(1A), 195
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
1. This appeal by assessee is directed against the assessment order of ld. CIT(A) dated 17.12.2024 for A.Y. 2015-16. The assessee has raised the following grounds of appeal:
The Commissioner of Income-tax Appeals, Addl./JCIT(A)-11, Delhi (hereinafter referred to as "the AddI./JCIT(A)") erred in passing the order under appeal, ex-parte and not adjudicating any ground of appeal
on the basis that there was no compliance by the Appellant to the notices of hearing, that the Appellant has not pursued the appeal despite being granted several opportunities, notwithstanding that the Appellant had furnished response to the notice dated
11. December 2024 within the due date.
2. The Addl./JCIT(A) erred in passing the order under section 250 for assessment year 2015-16 which is invalid and without any jurisdiction as the Appellant is a non-resident and the alleged appeal belongs to International charge and therefore, ought to be disposed by the jurisdictional Commissioner of Income-tax (Appeals) and not, under the e-Appeals Scheme, 2023 in terms of CBDT order no. F. No. 370149/97/2023-TPL dated 16 June 2023
3. The Addl./JCIT(A) erred in passing order under section 250 for assessment year 2015-16 by issuing notice of hearing for alleged appeal no, NFAC/2014- 15/10219735 filed against order dated 31 January 2023 under section 201 for assessment year 2015-16, without appreciating the fact that the said notice does not belong to appeal filed by the Appellant against order under section 201 for assessment year 2015-16.
4. The Appellant submit that they have filed appeal no. CIT (A) 56, Mumbai/10276/2014-15 against order dated 25 March 2022 passed under section 201 for assessment year 2015-16 with the office of the CIT(A)-56, Mumbai.
5. The Addl./JCIT(A) erred in passing order under section 250 for assessment year 2015-16 by incorrectly disposing appeal against order dated 31 January 2023 passed under section 201 for assessment year 2016-17 and not assessment year 2015-16 for which the notice of hearing was issued.
6. The Addl./JCIT(A) erred in not appreciating the Appellant's letter dated 16 December 2024 (sent via emall dated 16 December 2024) wherein the Appellant had mentioned that it was unable to locate the appeal as stated in the notice of hearing.
7. Addl./JCIT(A) erred in not providing a copy of communication for transfer of Appellant's appeal from Mumbal to Delhi jurisdiction, inspite of a specific request by the Appellant.
8. The Addl./JCIT(A) erred in confirming that the Appellant be treated as an "assessee in default" under section 201 of the Act for alleged non-deduction of tax at source under section 195 on service fees of Rs.1,07,60,595 paid to Visa Worldwide Pte Ltd., Singapore (VISA) for assessment year 2015-16.
The appellant reserves the right to amend, alter or add to the grounds of appeal.”
2. Rival submissions of both the parties have been heard and record perused. The ld. Authorised Representative (AR) of the assessee submits that ld. CIT(A) dismissed the appeal of the assessee for the want of submission by taking view that despite allowing opportunity vide notice dated 03.12.2012 and 11.12.2024, the assessee has not furnished any submission. The ld. AR of the assessee submits that in response to notice under section 250 dated 11.12.2024, the assessee filed its reply/ response on 16.12.2024, which has not been considered by ld CIT(A). In the reply / submission, the assessee pointed out that they are unable to find out (locate) impugned order and corresponding appeal mentioned in the show cause notice. The assessee also submitted that jurisdiction in case of assessee is in Mumbai before CIT(A) – 56, Mumbai. The ld. AR by referring the notice under section 250 dated 11/12/2024 issued by NFAC/CIT(A) shown us that such notice contained the reference to assessment year (A.Y.) 2015-16. Though, the said appeal relates to order passed under section 201 of Income Tax Act on account of TDS under section 195 against payment to Visa Worldwide Pte Ltd (VISA), which is to be considered in accordance with financial year, therefore, due to such confusion, the assessee could not make timely compliance. Even otherwise, appeal against addition in A.Y. 2015-16 was pending before CIT(A)-56, Mumbai. The ld. AR of assessee submits that assessee is a foreign bank in India, being non- resident assessee and under jurisdiction of Deputy Commissioner of Income Tax (DCIT) (International-taxation)-2(1)(2) Mumbai and any appeal arising out of any addition in the assessment order or otherwise is to be heard in physical manner and not under e-appeal Scheme-2023 as per CBDT Circular No. 370149/97/2023-TPL dated 16.06.2023. The ld. AR of the assessee submits that since there is no adjudication of appeal on merit, the reply in response to notice under section 250 dated 11.12.2024, the same has not been considered therefore, matter may be restored back to the file of ld CIT(A)-56 Mumbai, for adjudicating all the issues afresh. He undertakes on behalf of the assessee to be vigilant in future in making timely compliance.
On the other hand, ld. Sr. DR for the Revenue submits that he has no objection if the matter is restored back to the file of CIT(A) for adjudicating the grounds of appeal fresh and in accordance with law.
4. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that order under section 201(1) and 201(1A) r.w.s. 195 was passed against the assessee on 31.01.2023 by raising a demand of Rs. 20,28,358/-. Aggrieved by the demand, the assessee filed appeal before CIT(A). In Form 35, the assessee mentioned relevant F.Y. 2015-16 by clearly specifying the details of order under section 201 dated 31.01.2023. The appeal of the assessee was migrated to Faceless Appeal Centre New Delhi. We find that ld. CIT(A) issued two show cause notices in quick succession that is first notice dated 03.12.2024 for making compliance by 09.12.2024 and second notice dated 11.12.2024 for making compliance by 16.12.2024. The assessee in response to notice dated 11.12.2024 responded and sought certain clarifications and also pointed out their jurisdiction is with ld. CIT(A)-56, Mumbai. We find that no cognizance of such reply / letter was taken by ld. CIT(A). The ld. CIT(A) is straightway held that no response was received by assessee. The appeal of assessee was dismissed for the want of submission without discussing the merits of the case.
We find that assessee is a foreign bank in India and their jurisdiction is with DCIT 1(1)(2) Mumbai. Thus, any appeal arising out of addition or against other orders is to be heard in physical manner, as per CBDT Circular (supra). We also find that due to technicalities all reference vis a vis financial year and / versus assessment year, no effective compliance could be made by assessee, though assessee responded to the show cause notice dated 11.12.2024. The ld CIT(A) failed to take cognizance of such reply. Therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(A) to adjudicate the issue afresh on merit and as per CBDT Circular dated 16.06.2023. Needless to direct that before passing the order afresh, the ld. CIT(A) shall allow reasonable opportunity to the assessee. The assessee is also directed to be more vigilant in future in timely. In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, the appeal of assessee is allowed for statistical purpose.
Order pronounced in the open Court on 08/04/2025.