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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI S. RIFAUR RAHMAN
O R D E R
Per : Kuldip Singh, Judicial Member:
The appellant, M/s. Transworld Terminals Dadri Pvt. Ltd. (Formerly Albatross Inland Ports Pvt. Ltd.) (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 23.08.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2018-19 on the grounds inter-alia that :- 2 M/s. Transworld Terminals Dadri Pvt. Ltd. (Formerly Albatross Inland Ports Pvt. Ltd.) “1. The Honorable Commissioner of Income Tax (Appeals) under the National Faceless Appeal Centre, Delhi erred in dismissing the appeal and that too in violation of rules of Natural Justice.
The Honorable Commissioner of Income Tax (Appeals) under the National Faceless Appeal Centre, Delhi upheld the disallowance of sums amounting in all to Rs.8,81,42,837/-, as not being eligible for deductions under section 80-1A of the Income Tax Act, 1961.
The Honorable Commissioner of Income Tax (Appeals) under the National Faceless Appeal Centre Delhi upheld the disallowance of sums amounting in all to Rs.16,46,48,995/-, as Unexplained Expenditure under Section 69C of the Income Tax Act, 1961.
4. Your Appellant crave leave to add, alter or amend or withdraw any or all grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before hearing of the appeal.”
2. Briefly stated facts necessary for adjudication of the issues at hand are: assessee company has filed return of income for the year under consideration declaring income from business and profession at Rs.8,81,42,837/- claiming deductions under section 80IA of the Income Tax Act, 1961 (for short ‘the Act’) to the tune of Rs.8,81,37,187/- and under section 80G to the tune of Rs.5,650/-. During the scrutiny proceedings the Assessing Officer (AO) noticed that the assessee has carried out high value transaction with related parties and claimed deduction under section 80IA/80IAB/80IAC/80IB/80IC/80IBA/80ID/80IE/10A/10AA of the Act and the deduction claimed by the assessee is more than the claim during the preceding years. During the assessment proceedings the assessee has uploaded only the financial statements and note on business activities of the company but the AO stated that he has not submitted complete reply to the questionnaire issued along with notice under section 142(1) of the Act despite issuing five reminders. On failure of the assessee to file complete detail to substantiate its claim qua deductions the AO proceeded to disallow the deductions claimed and also made addition of unexplained 3 M/s. Transworld Terminals Dadri Pvt. Ltd. (Formerly Albatross Inland Ports Pvt. Ltd.) expenditure and thereby assessed the income at Rs.25,27,91,832/- under section 143(3) of the Act.
3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has confirmed the disallowance/addition by dismissing the appeal. Feeling aggrieved the assessee has come up before the Tribunal by way of filing present appeal.
We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto.
At the very outset, it is contended by the Ld. A.R. for the assessee that the assessee has not been provided with adequate opportunity to substantiate its claim qua deductions and expenditures by the AO nor by the Ld. CIT(A). Notices alleged to have been issued by the AO have never been received.
Bare perusal of the assessment order passed by the AO shows that no doubt, in para 6.II & III it is specifically recorded that 5 notices/reminders were issued to the assessee through ITBA system, addressed to the assessee company’s designated e-mail ID but it is strange that when first notice issued under section 142(1) annexed with questionnaire was received by the assessee how the remaining notices were not received by the assessee. However, in the interest of justice benefit of doubt is required to be given to the assessee who has now prepared to file the complete detail to substantiate its claim.
Even perusal of the impugned order passed by the Ld. CIT(A) shows that no opportunity of being heard has been 4 M/s. Transworld Terminals Dadri Pvt. Ltd. (Formerly Albatross Inland Ports Pvt. Ltd.) given to the assessee rather statement of facts furnished by the appellant in form No.35 extracted in para 2 of the impugned order has been treated as submissions of the assessee and decided the case in a mechanical manner as is evident from the findings recorded in para 3 of the impugned order.
At the same time the Ld. CIT(A) has specifically recorded in para 3 that “in response to hearing notice given to the assessee, the assessee has neither filed any submissions on merits of the case nor produced any additional evidence in terms of rule 46A of the IT Rules, 1962 in respect of the additions/disallowance made by the AO.”
All these facts go to prove that the assessee has not been provided with an adequate opportunity of being heard during the assessment proceedings as well as first appellate proceedings and as such impugned order passed by the Ld. CIT(A) is not sustainable in the eyes of law, for want of violation of principle of natural justice. To impart the justice and to decide the issue once for all, we are of the considered view that the case is required to be remanded back to the AO to decide afresh after providing opportunity of being heard to the assessee.
Consequently, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 22.12.2022.