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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI ABY T. VARKEY, JM & SHRI GAGAN GOYAL, AM
O R D E R PER ABY T. VARKEY, JM: These are appeals preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-10, Mumbai [hereinafter in short “Ld. CIT(A)”] dated 22.01.2019 for A.Y. 2009- 10, 2010-11 & 2013-14.
2. At the outset, the Ld. AR of the assessee pointed out that the impugned order of Ld. CIT(A) is an exparte order, even though in the cause-title of the impugned order, it is shown that Shri Shantilal Vora, Director have appeared for the assessee. In order to demonstrate that it was an exparte order, he drew our attention to para no. 7.2 of the impugned order wherein the Ld. CIT(A) has observed that the appeal was fixed for hearing time to time and that Shri Shantilal Vora, director of assessee appeared for hearing time to time and requested for adjournments which were granted but he could neither make any to 2616/Mum/2019 A.Ys.2009-10, 2010-11 & 2013-14 New Metal Refinery India Pvt. Ltd. submission on the issues raised before him nor could produce any record or documents to rebut the finding of the AO. Therefore, the Ld. CIT(A) says/admits that he decided the grounds of appeal
on the basis of the submission made before the AO. Thus, in the light of the aforesaid admission of Ld. CIT(A), according to Ld. AR it is clear that even though director appeared, he failed to make any submission or produce any documents so, he had to decide the appeal based on the submission before the AO, so in effect it was an ex-parte order. According to the Ld AR, the assessee company was into production of lead and due to continues strike of employees, the factory was under lock-down from the year 2014 onwards. According to the Ld. AR, when the assessment proceedings were going on before the AO as well as the First Appellate Proceeding was going on before the Ld. CIT(A) since the factory was under lock-down and employees handling the accounts as well as the legal department had left the company, the assessee was not able to get any relevant documents for substantiating its claim/stand before the AO/Ld. CIT(A), which resulted in both authorities taking adverse view against the assessee. In the light of the aforesaid facts, according to him, the assessee did not get proper opportunity during the assessment proceedings itself. Therefore, relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company Vs. CIT (249 ITR 216) (SC), the Ld. AR submitted that since the assessee did not get proper opportunity during assessment proceedings, de novo assessment may be ordered. A.Ys.2009-10, 2010-11 & 2013-14 New Metal Refinery India Pvt. Ltd. And that assesssee undertakes to produce relevant documents before AO provided it is given a chance.
3. Per contra, the Ld. DR, representing the department supported the action of the Ld. CIT(A) and submitted that despite several opportunities given, the assessee failed to file any documents to substantiate its claim before the Ld. CIT(A), therefore, the Ld. CIT(A) had no other alternative but to confirm the action of the AO. So the assessee should not be given second innings before the AO.
We have heard both the parties and perused the records. We note that the assessee company is into production of lead and due to the labour strike the factory was under lock-down from year 2014 onwards. Assessee’s assessment for the AYs 2009-10 & 2010-11 has been reopened by the AO u/s 147 of the Income Tax Act, 1961 (hereinafter “the Act”) and re-assessment was framed on 28.03.2016 for all the assessment years before us. According to the Ld. AR, the assessee was unable to produce the evidence/material to substantiate its claim/stand before the AO/Ld. CIT(A). According to assessee, since the office was closed and the employees who were handling the finance and legal branches had left the job, assessee could not get the relevant documents to submit before the AO. And in order to substantiate the aforesaid facts the assessee had filed an affidavit explaining the same. Upon perusal of the affidavit it transpires that due to the lock-down, and employees looking after the finance/legal branches had left their job and so, the assessee couldn’t get the A.Ys.2009-10, 2010-11 & 2013-14 New Metal Refinery India Pvt. Ltd. relevant documents for producing before the AO. In such circumstances, we are of the opinion that assessee did not get proper opportunity before the AO. Therefore for the interest of justice and we set aside the impugned order and the remand the same back to AO for denovo assessment and for that we rely on the decision of the Hon’ble Supreme Court in the case of Tin Box Company (supra) wherein the Hon’ble Supreme Court has held as under: - “ It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus :
We will straightway agree with the assessee's submission that the ITO had not given to the assessee proper opportunity of being heard.
That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of setting out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard.
Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus :
1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income-tax Officer had not given a proper A.Ys.2009-10, 2010-11 & 2013-14 New Metal Refinery India Pvt. Ltd. opportunity of hearing to the assessee ?
In our opinion, there can only be one answer to this question which is inherent in the question itself : in the negative and in favour of the assessee. 3. The appeals are allowed. The order under challenge is set aside. The assessment orders, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated. No order as to costs.”
Since we have found in the present case that no proper opportunity the assessee got before the AO, we relying on the aforesaid decision of the Hon’ble Supreme Court in the case of Tin Box Company (supra) set aside the impugned order of the Ld. CIT(A) and remand the same back to the file of the AO and direct the AO to frame the assessment de-novo after hearing the assessee in accordance to law. The assessee is at liberty to file documents/material/written submission before the AO to substantiate its return of income. And we direct the assessee to be diligent before the AO during the assessment proceedings as undertaken before us.