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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
PER OM PRAKASH KANT, AM
This appeal has been preferred by the assessee against the order dated 26.06.2019 passed by the Ld. Commissioner of Income- tax (Appeals)-16, Mumbai [in short ‘the Ld. CIT(A)’], for assessment year 2013-14, raising following grounds:
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1. The Ld. Commissioner of Income Tax (Appeals) The Ld. Commissioner of Income Tax (Appeals) - - 16, Mumbai [hereinafter referred to as the "Ld. CIT(A)"] erred in passing the [hereinafter referred to as the "Ld. CIT(A)"] erred in passing the [hereinafter referred to as the "Ld. CIT(A)"] erred in passing the order dated 24.06.2019 up order dated 24.06.2019 upholding the action of the Ld. Income holding the action of the Ld. Income Tax Officer Tax Officer - 9(2)(2), Mumbai [hereinafter referred to as 'Ld. 9(2)(2), Mumbai [hereinafter referred to as 'Ld. A.O.'] in making various additions and disallowances without A.O.'] in making various additions and disallowances without A.O.'] in making various additions and disallowances without appreciating the facts and circumstances of the case. Thus, the appreciating the facts and circumstances of the case. Thus, the appreciating the facts and circumstances of the case. Thus, the order dated 24.06.2019 passed b order dated 24.06.2019 passed by Ld. CIT(A) is bad in law and y Ld. CIT(A) is bad in law and the same may be quashed. the same may be quashed.
2. Appellate Order passed without providing the Appellant an Appellate Order passed without providing the Appellant an Appellate Order passed without providing the Appellant an appropriate opportunity of being heard is bad in law appropriate opportunity of being heard is bad in law appropriate opportunity of being heard is bad in law i. The Ld. CIT(A) erred in passing the impugned order The Ld. CIT(A) erred in passing the impugned order dated 24.06.2019 under section 250 of the Act without the Act without providing the Appellant an appropriate opportunity of providing the Appellant an appropriate opportunity of being heard. Thus, the impugned appellate order is being heard. Thus, the impugned appellate order is passed in gross violation of principles of natural justice passed in gross violation of principles of natural justice and the same may be quashed and set aside. and the same may be quashed and set aside. ii. The Ld. CIT(A) failed to appreciate that during the ate that during the period when the notices were issued the Appellant's period when the notices were issued the Appellant's Director were not available in India. The notices were Director were not available in India. The notices were issued in physical form whereas the Applicant had issued in physical form whereas the Applicant had requested to issue the notices on email id provided in requested to issue the notices on email id provided in Form No. 35. Thus, the various notices issued by Ld. arious notices issued by Ld. CIT(A) were not received by the Directors of the CIT(A) were not received by the Directors of the Appellant. Hence, the same were remained to be Appellant. Hence, the same were remained to be compiled with. The Appellant, therefore, prays that the compiled with. The Appellant, therefore, prays that the impugned order dated 24.06.2019 may be set aside and impugned order dated 24.06.2019 may be set aside and an opportunity of being heard may be provided to the g heard may be provided to the Appellant to explain its case.
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3. Addition by treating the term deposit with the Shamrao Vithal Addition by treating the term deposit with the Shamrao Vithal Addition by treating the term deposit with the Shamrao Vithal Co-operative Bank as unexplained investment under section 69 operative Bank as unexplained investment under section 69 operative Bank as unexplained investment under section 69 of the Act unjustified of the Act unjustified - Rs.10,00,000/- i. The Ld. CIT(A) erred in upholding the action of Ld. A.O. ding the action of Ld. A.O. in treating the term deposit of Rs.10,00,000/- kept with in treating the term deposit of Rs.10,00,000/ the Shamrao Vithal Co-operative Bank Ltd as operative Bank Ltd as Unexplained Cash Credit under section 69 of the Act Unexplained Cash Credit under section 69 of the Act without appreciating the fact and circumstances of the without appreciating the fact and circumstances of the case in proper perspective. Hence, the addition of ective. Hence, the addition of Rs.10,00,000/- under section 69 of the Act is unjustified under section 69 of the Act is unjustified and the same may be deleted. ii. The Ld. CIT(A) failed to appreciate that the term deposit The Ld. CIT(A) failed to appreciate that the term deposit with the Shamrao Vithal Co-operative Bank Ltd operative Bank Ltd represents initial contribution made by the Directors of de by the Directors of the Appellant on the formation of the Appellant the Appellant on the formation of the Appellant company. Thus, the term deposit was made out of funds company. Thus, the term deposit was made out of funds available with the Directors of the Appellant company. available with the Directors of the Appellant company. The Appellant, therefore, prays that provisions of section The Appellant, therefore, prays that provisions of section 69 of the Act are not applicable in its case. Hence, not applicable in its case. Hence, addition of Rs.10,00,000/- under section 69 of the Act is under section 69 of the Act is against the provisions of law and the same may be against the provisions of law and the same may be deleted.
The appellant denies any liability to pay interest under section The appellant denies any liability to pay interest under section The appellant denies any liability to pay interest under section 234A, 234B and 234C of the Act. Hence, 234A, 234B and 234C of the Act. Hence, the same are leviable. the same are leviable.
At the outset, the Ld. counsel of the assessee submitted that the At the outset, the Ld. counsel of the assessee submitted that the At the outset, the Ld. counsel of the assessee submitted that the appeal has been filed on 30.11.2021, but al has been filed on 30.11.2021, but it is within limitation it is within limitation. In Centroid Capital Private Limited Centroid Capital Private Limited 4 ITA No. 2182/M/2021 view of fact that order of the Ld. CIT(A) though was passed on view of fact that order of the Ld. CIT(A) though was passed on view of fact that order of the Ld. CIT(A) though was passed on 24.06.2019 it was receive 24.06.2019 it was received by the assessee on 03.09.2021. The Ld. d by the assessee on 03.09.2021. The Ld. counsel of the assessee submitted that the Director of the assessee counsel of the assessee submitted that the Director of the assessee counsel of the assessee submitted that the Director of the assessee- company is a non-resident Indian and residing resident Indian and residing in New Jersey, USA New Jersey, USA since August 2001. The Ld. counsel has filed a copy of affidavit by since August 2001. The Ld. counsel has filed a copy of affidavit by since August 2001. The Ld. counsel has filed a copy of affidavit by the said Director Shri Subodh Ketkar. In the said affidavit, it is tor Shri Subodh Ketkar. In the said affidavit, it is tor Shri Subodh Ketkar. In the said affidavit, it is submitted that he being outside India submitted that he being outside India, the order of the Ld. CIT(A) the order of the Ld. CIT(A) could not be received and it came to the knowledge could not be received and it came to the knowledge could not be received and it came to the knowledge of the assessee in September 2021. The Ld. counsel submitted that on receipt of the in September 2021. The Ld. counsel submitted that on receipt of the in September 2021. The Ld. counsel submitted that on receipt of the said order of the Ld. CIT(A), the assessee has duly filed the appeal on id order of the Ld. CIT(A), the assessee has duly filed the appeal on id order of the Ld. CIT(A), the assessee has duly filed the appeal on 30.11.2021. The Ld. counsel submitted that it is a sufficient cause for 30.11.2021. The Ld. counsel submitted that it is a sufficient cause for 30.11.2021. The Ld. counsel submitted that it is a sufficient cause for filing the appeal with a delay. filing the appeal with a delay.
The Ld. DR could not controvert the facts stated by the Ld. The Ld. DR could not controvert the facts stated by the Ld. The Ld. DR could not controvert the facts stated by the Ld. counsel of the assessee. essee.
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4. In our opinion, In our opinion, there exists a sufficient cause for not filing sufficient cause for not filing appeal on time by the assessee appeal on time by the assessee, being the Director of the company being the Director of the company residing outside India and there was no active business carried out residing outside India and there was no active business carried out residing outside India and there was no active business carried out by the company. It is seen from the affidavit of It is seen from the affidavit of the Director of the the Director of the assessee-company that there was no proper communication to the company that there was no proper communication to the company that there was no proper communication to the assessee about outcome of the proceedin assessee about outcome of the proceedings u/s 264 before the Ld. gs u/s 264 before the Ld. CIT. There is delay in communication of the . There is delay in communication of the order of order of the Ld. CIT(A) by the person looking a looking after income-tax affairs of assessee in India. tax affairs of assessee in India. In view of the above facts, we condone f the above facts, we condone the delay in filing appeal and the delay in filing appeal and same is admitted for adjudication. same is admitted for adjudication.
On perusal of the order of the Ld. CIT(A), we find that order On perusal of the order of the Ld. CIT(A), we find that order On perusal of the order of the Ld. CIT(A), we find that order has been passed ex-parte parte qua the assessee due to non ee due to non-compliance of the notices issued by the Ld. CIT(A). In our opinion, the Ld. CIT(A) is the notices issued by the Ld. CIT(A). In our opinion, the Ld. CIT(A) is the notices issued by the Ld. CIT(A). In our opinion, the Ld. CIT(A) is required to decide the issue on merit even required to decide the issue on merit even when when there is no representation on behalf of the assessee. representation on behalf of the assessee.
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Before us, the assessee has justified the reason of non- Before us, the assessee has justified the reason of non Before us, the assessee has justified the reason of non compliance and the Ld. counsel of the assessee has given compliance and the Ld. counsel of the assessee has given compliance and the Ld. counsel of the assessee has given undertaking to comply before the Ld. CIT(A). In view of the above undertaking to comply before the Ld. CIT(A). In view of the above undertaking to comply before the Ld. CIT(A). In view of the above and in interest of substantial justice interest of substantial justice, we restore the matter back the matter back to the Ld. CIT(A) for deciding afresh in accordance with law for deciding afresh in accordance with law for deciding afresh in accordance with law after providing adequate opportunity of being heard providing adequate opportunity of being heard, both to the assessee both to the assessee as well as to the Assessing Officer as well as to the Assessing Officer. The grounds s raised by the assessee are accordingly allowed for statistical purposes. assessee are accordingly allowed for statistical purposes. assessee are accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical In the result, the appeal of the assessee is allowed for s In the result, the appeal of the assessee is allowed for s purposes.