CANE DEVELOPMENT COUNCIL ROHANA KALAN,MUZAFFARNAGAR vs. ITO, WARD- 1(2), MUZAFFARNAGAR

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ITA 2616/DEL/2018Status: DisposedITAT Delhi25 October 2021AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) passed an ex parte order and that all facts might not have been brought on record. In the interest of substantial justice, the issue was remanded back to the CIT(A).

What were the facts?

The assessee filed an appeal against an ex parte assessment order passed by the CIT(A) for AY 2014-15. The CIT(A) had upheld additions made by the AO on account of commission and interest received, stating the assessee did not have the benefit of Section 11 as it was not registered under Section 12AA.

What were the issues?

Whether the additions made by the AO were justified, and whether the CIT(A) erred in passing an ex parte order without considering all facts and providing adequate opportunity.

Which sections of the Income-tax Act were involved?

Section 11,Section 12AA,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI

Before: SHRI G.S. PANNU, HON’BLE & SHRI AMIT SHUKLA

For Appellant: Shri Ankit Gupta, Advocate
For Respondent: Shri Harpal Singh, Sr. DR
Hearing: 25.10.2021

The aforesaid appeal has been filed by the assessee against impugned order dated 31.1.2018, passed by the Ld. CIT(Appeals)- Muzaffrnagar for the quantum of assessment passed u/s 143(3) for the assessment year 2014-15. The assessee has raised following grounds:-

1. “That, the assessment order passed U/s 143(3) and the addition made are illegal, bad in law and without jurisdiction. The CIT(A) erred in upholding the same.

2. The addition/ disallowances made by the assessing officer are illegal, unjust, and highly excessive and are not based on any material on record by the assessing officer. The total income of the appellant has been wrongly and illegally computed by the assessing officer at Rs.62,02,054.00 as against NIL INCOME. The CIT (A) has erred in upholding the same. 3. That, in view of the facts and circumstances, the assessing officer has erred in law and on facts in making the addition of Rs.61,05,013.00 on account of Commission Received, which is highly arbitrary, unjust and against the facts and circumstances of the case. The Ld. CIT (A) has also confirmed the same. 4. That, in view of the facts and circumstances, the assessing officer has erred in law and on facts in making the addition of Rs.97,941.00 on account of Interest received from Bank, which is highly arbitrary, unjust and against the facts and circumstances of the case. The Ld. CIT (A) has also confirmed the same. 5. That, the assessing officer and CIT (A) has failed to appreciate before confirming the addition of Rs.62,02,054.00, that, the said amount is not come under the preview of definition of INCOME U/s 2(24) of the Income Tax Act, 1961 as the assessee appellant is the statutory body of the State Government, for performing the specific work for the development of Cane Agriculture, in the specified area. 6. Without prejudice to the above, in case if it is held, that; the commission and interest received is to be treated as income than the assessee is eligible for the indirect expenses against the development work done by the assessee council. 7. The additions confirmed and the observations made by CIT (A) are unjust, unlawful and based on mere surmises and conjunctures. The additions made cannot be justified by any material on record. 8. That the explanation given evidence produced, material placed and available on record has not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made.

9. That the impugned Assessment Order passed by the Assessing Officer and order passed by CIT(A) are against the principles of natural justice and the same has been passed without affording reasonable and adequate opportunity of being heard.

10.

That the interest U/s 234A & 234B has been wrongly and illegally charged as the appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of Advance tax. The interest charged under various sections is also wrongly worked out. 1 l. The appellant craves leave to add, amend, alter and or modify the grounds of appeal of the said appeal.”

2.

At the outset it is seen that Ld. CIT (A) has passed an ex parte order after noting that assessee has not made compliance on the dates fixed for hearing which has been tabulated at page 2 of the impugned order. Before us, Ld. Counsel for the assessee has stated that the similar issue was involved in the assessee’s own case for the assessment year 2006-07, wherein ITAT has decided the issue in favour of the assessee.

3.

On perusal of the impugned order, it is seen that Ld. CIT (A) has confirmed the action of the AO on the ground that assessee did not enjoy benefit of section 12AA and, therefore, section 11 is not available to it, hence assessee could not substantiate his case before the Ld. CIT (A). Since its an exparte order and all the facts has not been brought on record, therefore, in the interest of substantial justice, we are remanding the issue raised before us to the file of the Ld. CIT(A) to decide the grounds raised in this appeal on merits after giving a due opportunity to the assessee. The assessee should ensure that proper compliance is made and substantiate his case before the first appellate authority.

4.

Accordingly, all the grounds raised by the Ld. CIT (A) are remanded back to the file of the Ld. CIT (A) and the appeal of the assessee is allowed for statistical purposes.

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