GRANDIENTE INFOTAINMENT LTD,HYDERABAD vs. INCOME TAX OFFICER, WARD 14(5), HYDERABAD

2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deciding the appeal without providing proper opportunity to the appellant.

3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance of expenditure incurred of Rs.1,53,07,613/- without considering the fact that such expenditure is on advertisement, finance cost and other expenses which are verifiable. 4 On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the disallowance of the deduction U/s. 35D of the ROC fee paid by the appellant. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of hearing of the appeal, so as to enable the Honourable Members to decide this appeal according to law.”

5. In the first round of proceedings, there was non- appearance on behalf of the assessee before the Learned Assessing Officer (“Ld. AO”), except on one occasion when the Managing Director of the assessee company, Shri V.R. Mathur, appeared before the Ld. AO and expressed his inability to produce the books of account and bank statements. However, Shri V.R. Mathur accepted the proposed additions as per the show cause notice issued by the Ld. AO. Accordingly, the Ld. AO, on the basis of the proposed additions mentioned in the show cause notice and accepted by the Managing Director, completed the assessment.

6. However, inspite of the acceptance given by Shri V.R. Mathur during assessment proceedings before the Ld. Ld. AO, the assessee filed an appeal against the order of Ld. AO before the Ld. CIT(A). The Ld. CIT (A) had posted the case on seven occasions i.e., on 11/08/2017, 01/12/2017, 08/12/2017, 26/12/2017, 18/01/2018 and finally on 01/02/2018. However, before the Ld. CIT(A), there was no response on behalf of the assessee except for seeking adjournment on two occasions. Accordingly, the Ld. CIT(A) dismissed the appeal of the assessee.

7. Against the order of the Ld. CIT (A), the assessee preferred an appeal before this Tribunal. In the first round before this Tribunal, the assessee prayed for one more opportunity and requested that the matter be remanded to the file of the Ld. CIT(A). Accordingly, this Tribunal, vide order dated 21.10.2019 in to 1055/Hyd/2018, restored the matter to the file of the Ld. CIT(A) for fresh adjudication after providing one more opportunity of being heard to the assessee. However, it was specifically directed by the Tribunal that the assessee shall promptly cooperate in the appellate proceedings, failing which the Ld. CIT(A) would be at liberty to pass appropriate orders in accordance with law based on material available on record.

8. In the second round also, during the remand proceedings the Ld. CIT(A) had posted the case for seventeen occasions. However, again there was non-appearance on behalf of the assessee, except for one submission wherein the assessee stated that it had filed a declaration under the Vivad se Vishwas Scheme, 2024 and was awaiting issuance of Form No. 2 from the competent authority. It was further submitted that upon receipt of the same, the assessee would file the relevant forms before the Ld. CIT(A) and therefore requested that the appeal proceedings be kept in abeyance. However, subsequently, the assessee neither filed Form No. 1, Form No. 2, Form No. 4, nor any other supporting evidence regarding the alleged declaration under the said scheme. Further, no response was filed to subsequent notices issued by the Ld. CIT(A). Accordingly, the Ld. CIT(A), on the basis of material available on record, proceeded to decide the appeals and dismissed the same.

9. Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before this Tribunal. The Ld. DR submitted that the assessee is a non-compliant assessee and had not even filed the return of income in response to notice issued under section 148 of the Income Tax Act, 1961 (“the Act”). It was further submitted that the assessee did not respond before the Ld. AO, except on one occasion when the Managing Director appeared and accepted the proposed additions. It was further submitted that even before the Ld. CIT(A), in both rounds of proceedings, the assessee failed to appear and did not cooperate in the proceedings. Even before this Tribunal, the assessee has failed to appear despite sufficient opportunities. The Ld. DR further submitted that the Ld. CIT(A) has elaborately dealt with the issues and passed a reasoned order. It was also submitted that the Managing Director of the assessee company had already accepted the additions before the Ld. AO. Therefore, it was prayed that the orders of the Ld. CIT(A) be upheld.

6. We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find merit in the submissions of the Ld. DR. The Ld. CIT (A) had posted the case on seven occasions ie., on 11/08/2017, 01/12/2017, 08/12/2017, 26/12/2017, 18/01/2018 and finally on 01/02/2018. However, none appeared on behalf of the assessee on the above-mentioned dates of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeals ex-parte on merits based on the materials on record. In this situation we do not find much strength in the arguments advanced by the ld. AR. However, considering the prayer of the Ld. AR, in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal afresh by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.

16. The assessee has raised the following grounds of appeal:

“1. On the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) is erroneous both on facts and in law.

3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have considered the fact that all the expenditure debited to the Profit and Loss account was already considered at the time of regular assessment and that there is no escapement of income.

17. The brief facts of the case are that the assessee is a non- filer and had not filed any return of income for the Assessment Year 2011–12. Consequent to a survey operation conducted in the case of the assessee on 07.04.2015, the case of the assessee was reopened and assessment under section 143(3) read with section 147 of the Act was completed by the Ld. AO on 29.12.2016, determining the total income of the assessee at Rs.13,76,66,370/-. Subsequently, on the basis of information received from the Investigation Wing, the case of the assessee was again reopened under section 147 of the Act and accordingly, notice under section 148 dated 28.03.2018 was issued to the assessee. During the course of reassessment proceedings, there was no compliance on behalf of the assessee, except on one occasion where the assessee, vide letter dated 17.12.2018, submitted that proceedings for Assessment Years 2009–10 to 2013–14 were pending before the appellate authorities and requested for withdrawal of the present reassessment proceedings. However, the Ld. AO did not accept the said submission of the assessee and proceeded to complete the reassessment under section 144 read with section 147 of the Act on 26.12.2018, making an addition of Rs.1,50,00,000/- on account of bogus expenditure and determining the total income of the assessee at Rs.15,26,66,370/-.

18. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). However, there was no appearance on behalf of the assessee before the Ld. CIT(A), except for submissions on two occasions stating that the assessee had filed a declaration under the Vivad se Vishwas Scheme, 2024 and was awaiting further processing. However, subsequently, the assessee neither filed Form No. 1, Form No. 2, Form No. 4, nor any supporting evidence regarding the declaration under the said scheme. Further, no response was filed by the assessee to subsequent notices issued by the Ld. CIT(A). Accordingly, the Ld. CIT(A), on the basis of material available on record, proceeded to adjudicate the appeal and dismissed the same.

19. Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before this Tribunal. The Ld. DR submitted that the assessee is a non-compliant assessee and had not even filed return of income in response to notice issued under section 148 of the Act. It was further submitted that the assessee failed to properly respond before the Ld. AO during reassessment proceedings. It was further submitted that even before the Ld. CIT(A), the assessee failed to appear and did not cooperate in the appellate proceedings. Even before this Tribunal, the assessee has failed to appear despite sufficient opportunities. The Ld. DR further submitted that the Ld. CIT(A) has elaborately dealt with the issue and passed a reasoned order. Therefore, it was prayed that the order of the Ld. CIT(A) be upheld.

Digitally signed TIRUPATI by TIRUPATI YAMINI YAMINI NAGA NAGA MALLESWARI Date: 2026.04.08 MALLESWARI 16:44:52 +05'30'