What did the Tribunal hold?

The Tribunal found that the assessee's contention regarding the CIT(A) misunderstanding the balance sheet facts was crucial. In the interest of justice, the issue was restored to the Assessing Officer for a fresh examination.

The assessee's appeal was against an ex-parte assessment order made under Section 144 due to limitation concerns. The addition of Rs. 12,06,280 was made on account of disallowance from purchases and freight/forwarding expenses on a prorata basis.

What were the issues?

Whether the ex-parte assessment order was made without proper opportunity and basis, and if the CIT(A) correctly appreciated the facts regarding the balance sheet and claimed expenses.

Usha Ispat Ltd, New Delhi vs ACIT | ITAT Delhi 2021

Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,

Before: SHRI N.K. BILLAIYA

Hearing: 13.09.2021Pronounced: 13.09.2021

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] – 27, New Delhi dated 25.11.2019 pertaining to assessment year 2001-02.

The solitary grievance of the assessee reads as under:

“The assessee has not been given proper opportunity to present the facts of the case. The addition of Rs. 12.06.280 is made without any basis or justification as no claim of expenditure has been made by the assessee. The C1T(A) has misunderstood the facts of the Balance Sheet as on 31.03.2002 which had detail of expenses as on 31.03.2001 and no expense on freight and forwarding has been claimed in that. The order is illegal and against facts of the case and bad at law. An assessment u/s 144 of the I T. Act. 1961 is illegal and basic facts on record have been completely ignored. T he addition of Rs. 12.06.280 is arbitrary and without any legal base and deserves to be deleted.”

As can be seen from the grounds of appeal, the Assessing Officer framed ex-parte order stating at para 4 of his order that since the assessment was getting barred by limitation, the Assessing Officer had no alternative but to finalise the assessment proceedings u/s 144 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] by making addition on account of disallowance out of purchase and freight and forward expenses on prorata basis.

The ld. CIT(A), without going into the merits, upheld the ex-parte assessment order.

In the grounds of appeal, the assessee has contended that the ld. CIT(A) has misunderstood the facts of the balance sheet as on 31.03.2002, as on 31.03.2001, no expenses of freight and forwarding has been claimed.

In my considered view, this contention of the assessee goes to the root of the matter. Therefore, in the interest of justice and fair play, I restore this issue to the file of the Assessing Officer with a direction to examine the issue afresh after giving reasonable opportunity of being heard to the assessee. The assessee is directed to furnish necessary documentary evidences in support of its claim.

In the result, the appeal filed by the assessee in is allowed for statistical purposes.

The order is pronounced in the open court on 13.09.2021.

USHA ISPAT LTD,NEW DELHI vs. ACIT, CENTRAL CIRCLE-18, NEW DELHI

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

Recent GST High Court judgments