What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and remitted the issues back to the CIT(A) for fresh adjudication. This was done to provide the assessee with another opportunity to present their case and evidence, adhering to the principles of natural justice.

The assessee, engaged in advertising, appealed against the CIT(A)'s order upholding the AO's disallowances of TDS credit, development expenses, and land expenses. The CIT(A) had dismissed the appeal due to the assessee's non-compliance and non-appearance.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal ex-parte without providing sufficient opportunity for the assessee to present their case and evidence.

M/S. Sunshine Communication P… vs DCIT | ITAT Mumbai 2022

Income Tax Appellate Tribunal, “B” BENCH

Before: SHRI BASKARAN BR& SHRI PAVAN KUMAR GADALE

Hearing: 22.09.2022

ORDER

PER PAVAN KUMAR GADALE, JM:

The assessee has filed an appeal against the order of Commissioner of Income Tax Appeals 53 Mumbai, passed under Section 250 of the Income Tax Act, 1961 (hereinafter in short “the Act”).

2 Sunshine Communication P Ltd.

The assessee has raised following grounds of appeal. 1) The Learned CIT (A) has erred in law & on facts in upholding the Learned AO's action of disallowing TDS credit of Rs.2,09,533/- in case of Appellant Company for the . A.Y.2016-17. 2) The Learned CIT (A) has erred in law & on facts in upholding the Learned AO's action of disallowing development expenses of Rs.2,13,41,035/- (being'25% of development; expenses of Rs.8.53 crores) and reducing the same from Work-in-Progress as on 31-03- 2016. 3) The Learned CrT(A) has erred in law & on facts in upholding the Learned AO's action^ of disallowing expenses of Rs.83,32,537/- (being 25% of land expenses of Rs.3.33 crores): and reducing the same from Work-in-Progress as on 31-03-2016. 4) The Learned CIT (A) has erred in law & on facts in upholding the Learned AO's action of demanding/recovering back refund already issued to the tune of Rs.2,13,900/- on; assesseed loss of Rs.21,29,221/-. 5) The Appellant craves leave to add to and/ or amend and/ or delete and/ or modify, and/ or alter the aforesaid grounds of appeal as and when the occasion demands. ' 6) All the aforesaid grounds of appeal are independent in the alternative, and without; prejudice to one another.

2. The brief facts of the case that the assessee company is engaged in the business of Advertising Agency. The assessee has filed the return of income for the assessment year 2016-17 on 13.10.2020 disclosing a total loss of Rs.21,29,2021/-. Subsequently, the case was selected for scrutiny and the notice under Section 143(2) and 142(1) along with the questionnaire was issued. In- 3 Sunshine Communication P Ltd. compliance to notice the Ld. AR of the assessee has submitted the details and explanations were filed from time to time. The Assessing Officer on perusal of the financial statements found certain discrepancies in respect of contract amounts and also variation in the TDS and the same could not be reconciled and withdrawn the TDS credit of Rs.2,09,532. Similarly, the AO has made disallowance of 25% of development expenses of Rs.8.53 crores which work out to Rs.2,13,41,035/- in the absence of supporting documents and also the value of working progress has been reduced to that extent. The third disputed issue is with respect to disallowance of 25% of land expenses of Rs.3.33 crores which worked out to Rs.83,32,537/- as the assessee has not produced the details of land and also reduced the disallowance from working progress and assessed the total loss of Rs.2,96,73,572/-and passed the order under Section 143(3) of the Act dated 29.12.2018.

Aggrieved by the order, the assesssee has filed an appeal with the CIT(A). Whereas, CIT(A) considered the grounds of appeal, finding of the scrutiny assessment and since there was no compliance in respect of the notices, the CIT(A) has confirmed the action of the Assessing Officer in making disallowance and dismissed the assessee’s appeal. Aggrieved by the order CIT(A), the assessee has filed an appeal with the Honorable Tribunal.

4 Sunshine Communication P Ltd.

At the time of hearing, none appeared on behalf of the assessee and Learned DR submitted that the assessee has not filed the information before lower authorities and supported the order of the CIT(A).

We heard the DR submissions and perused the material on record. Prima-facie the CIT (A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT (A) was of the opinion that the assesseee is not interested in prosecuting the appeal and dismissed the appeal ex- parte confirming the action of the assessing officer. We find the Ld. CIT(A) has issued the notices of hearing referred at page 2 para 3 of the order, but there was no response and thus the Ld. CIT(A) came to a conclusion that the assesseee is not interested and decided the appeal based on the information available on record. We find that the assesseee has raised grounds of appeal challenging the validity of Assesseement and addition of the assessing officer and there could be various reasons for non appearance which cannot be overruled.

M/S. SUNSHINE COMMUNICATION P. LTD.,MUMBAI vs. DY CIT, CC-5(4), MUMBAI

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