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Facts
The assessee company filed an appeal challenging an ex parte order by the CIT(A) that upheld the AO's additions. The appeal was filed with a delay, which was condoned by the Tribunal. The assessee's case involved additions under Section 68 and disallowance under Section 36(1)(va) for the Assessment Year 2017-18.
Held
The Tribunal condoned the delay in filing the appeal and held that the assessee should be given one more opportunity to present its case before the CIT(A) following principles of natural justice. The matter was remanded to the CIT(A) for de novo adjudication.
Key Issues
Whether the assessee should be granted another opportunity to present their case before the CIT(A) due to an ex parte order, and whether the additions/disallowances made by the AO and upheld by the CIT(A) were justified.
Sections Cited
250, 68, 36(1)(va), 143(2), 142(1), 143(3), 115JB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
(Assessment Year: 2017-18) Viiking Media and Entertainment Deputy Commissioner of Income Pvt. Ltd. Tax, Central Circle 2(2), Mumbai 604-605, 6th Floor, Gateway Plaza, 604-605, 6th Floor, Gateway Plaza, Vs. Central Circle 2(2), Mumbai – 400076. Central Circle 2(2), Mumbai – 400076. PAN/GIR No. AAACJ9884E (Assessee) : (Respondent) Assessee by : Shri. Aakash Kumar Respondent by : Shri. Ajay Singh, SR DR Date of Hearing : 06.02.2025 Date of Pronouncement : 07.02.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the ex parte order of the learned Commissioner of Income Tax (Appeals) 52, Mumbai (‘ld. CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18.
It is observed that the present appeal has been filed with a delay of 16 days for which the accountant of the ld.AR appearing for the assessee has filed application dated 06.02.2025 along with an affidavit for condoning the said delay. Upon perusal of the same, we deem it fit to hold that the assessee had “sufficient cause” for the said delay (A.Y. 2017-18) M/s. Viiking Media and Entertainment Pvt. Ltd. and therefore we are inclined to condone the delay caused by the assessee in filing the present appeal. Delay condoned.
The assessee has raised the following grounds of appeal:
“1. The Commissioner of Income-tax (Appeals)-52, Mumbai (hereinafter referred to as the CIT(A)) erred in framing an ex parte order. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have framed an ex parte order.
2. The CIT(A) erred in upholding the action of the Assistant Commissioner of Income-tax, Central Circle 4(4), Mumbai (hereinafter referred to as the Assessing Officer) in making an addition of Rs 2,45,28,021 under section 68 of the Act, being cash deposited by the appellants in their bank accounts during the demonetization period. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned addition inasmuch as he has not correctly appreciated the facts of the case in its entirety and hence, the impugned addition is bad in law and needs to be deleted. The appellants further, contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned addition inasmuch as the cash deposited by the appellants is out of their business activities and is out of books of account regularly maintained by the appellants and hence, the impugned addition is bad in law and needs to be deleted.
3. The CIT(A) erred in upholding the action of the Assessing Officer in making a disallowance of Rs 6,60,141 under section 36(1)(va) on account of delayed payment of employee's contribution to provident fund. The appellants contend that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned disallowance inasmuch as he has not correctly appreciated the facts of the case in its entirety and hence, the impugned disallowance is bad in law and needs to be deleted.”
(A.Y. 2017-18) M/s. Viiking Media and Entertainment Pvt. Ltd.
The brief facts are that the assessee company is engaged in the entertainment industry sector, service sector and trading and had filed its return of income dated 31.10.2017 declaring total income at Nil after setting of brought forward losses. The assessee’s case was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. The learned Assessing Officer (‘ld. AO’ for short) then passed the assessment order u/s. 143(3) of the Act dated 31.12.2019, determining total income at Rs. 4,24,50,400/-, under the normal provision and Rs. 3,13,51,790/- u/s. 115JB on the book profits after making addition/disallowance u/s. 68 and 36(1)(va) of the Act.
Aggrieved the assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide an ex parte order dated 06.09.2024, upheld the order of the ld. A.O. for the reason that inspite of several opportunities, the assessee has failed to substantiate its claim and has been non-compliant throughout the appellate proceedings.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present its case before the ld. CIT(A).
The learned Departmental Representative ('ld. DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunities by the ld. CIT(A) which was not availed by the assessee.
(A.Y. 2017-18) M/s. Viiking Media and Entertainment Pvt. Ltd.
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions/disallowances made by the ld. A.O. before the first appellate authority but has been non-compliant throughout the appellate proceeding.
On the above factual matrix of the case, we are of the considered view that the assessee may be given one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice. We, therefore, remand this issue back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply with the proceedings without any undue delay on its side and needless it is to say that sufficient opportunity of hearing is to be given to the assessee.