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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
The present appeal has been filed by the assessee challenging the impugned order dated 20/11/2019, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals)–24, Mumbai [“learned CIT(A)”], for the assessment year 2014– 15.
In this appeal, the assessee has raised following grounds:–
Kisha Telelinks Pvt. Ltd. ITA No. 478/Mum./2022
“The following grounds of appeal are independent of, and without prejudice to, one another:
1. The Commissioner of Income-tax (Appeals) - 24, 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 inasmuch as the date of hearing was the first date given by the CIT(A).
2. The CIT(A) erred in upholding the action of the Assistant Commissioner of Income-tax-15(2)(1), Mumbai (hereinafter referred to as the Assessing Officer) in disallowing Rs 6,82,373, being interest paid on loans received, on the ground that the appellants have advanced interest free loans. 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 impugned disallowance inasmuch as the CIT(A) has not correctly appreciated the facts of the case in its entirety.”
2. The assessee has also filed an application seeking condonation of delay of 785 days in filing the present appeal. In the said application, it has been submitted that the delay in filing the present appeal is for the reason that the learned CIT(A)‟s order was uploaded on the e–filing portal and physical copy of the order was not served on the assessee, as per the practice prevalent during that period. Therefore, the assessee was not aware of the passing of the impugned order by the learned CIT(A). It is further submitted that it is only upon receipt of call from the Income Tax Department for the payment of outstanding demand for the year under reference, the assessee enquired regarding the status of its appeal before the learned CIT(A) and only thereafter upon checking the e–filing portal, the assessee found the impugned order passed by the learned CIT(A). Thereafter, the present appeal was filed by the assessee. The submissions
Kisha Telelinks Pvt. Ltd. ITA No. 478/Mum./2022 made in the application seeking condonation of delay are also supported by an Affidavit sworn by Ms. Bharati Prakash Karamchandani, Director of Assessee company.
On the other hand, the learned Departmental Representative („learned D.R.‟) fairly agreed for condoning the delay in filing the present appeal.
We have heard the submissions and perused the application seeking condonation of delay alongwith supporting Affidavit. As per the assessee, the delay in filing the present appeal is due to non–receipt of physical copy of the order passed by the learned CIT(A), as the said order was uploaded on the e–filing portal as per the new practice which the Income Tax Department started following. Nothing has been brought on record to controvert the submissions of the assessee. We find that even before the learned CIT(A), there was no representation on behalf of the assessee. Thus, we are of the considered view that there was sufficient cause, which prevented the assessee from filing the present appeal within the prescribed limitation period. Therefore, the delay in filing the present appeal is condoned and we proceed to dispose off this appeal on merits.
The assessee is a company and is engaged in the business of reselling and export of mobile handset and smartphone. For the year under consideration, the assessee e–filed its return of income on 29/11/2014, declaring total income of Rs.98,40,870. During the course of Kisha Telelinks Pvt. Ltd. ITA No. 478/Mum./2022 assessment proceedings, it was observed that the assessee has borrowed loans of Rs.6,34,39,020. Further, it was observed that the assessee has also given interest free loans and advances of Rs.13,92,91,430. It was observed that the majority of these loans and advances are given to the sister concern by the assessee and no disallowance under section 36(1)(iii) of the Act has been made by the assessee. Accordingly, the assessee was asked to show cause as to why the interest claimed under section 36(1)(iii) of the Act be not disallowed. In the absence of any satifactory reply, the Assessing Officer, vide order dated 29/12/2016, passed under section 143(3) of the Act, disallowed the interest amounting to Rs.6,82,373, and added the same to the total income of the assessee.
During the assessment proceedings, it was also observed that the assessee has debited various expenditures to its Profit & Loss Account. The assessee was asked to furnish the details and evidences in support of claim of expenditure made by the assessee. In the absence of complete details, the Assessing Officer, vide order passed under section 143(3) of the Act, also made disallowance of Rs.5 lakhs, out of the expenditure claimed by the assessee.
In appeal, the learned CIT(A), vide ex–parte impugned order dated 20/11/2019, dismissed the appeal filed by the assessee by upholding the additions made by the Assessing Officer in the absence of any Kisha Telelinks Pvt. Ltd. ITA No. 478/Mum./2022 contradictory material made available on record. Being aggrieved, the assessee is in appeal before us.
As the impugned order has been passed by the learned CIT(A) ex- parte qua the assessee, the learned Representative appearing for the parties, during the course of hearing, fairly agreed to restore the matter to the file of the learned CIT(A) for de novo adjudication on all the issues raised in the present appeal.
We have considered the submissions and perused the material available on record. It is evident that the learned CIT(A) has passed the order ex–parte due to non–appearance of/on behalf of the assessee. Further, now in appeal before us, the assessee is duly represented by the learned A.R. and wishes to pursue the litigation against the additions made by the Assessing Officer. In view of the above, we are of the considered opinion that in the larger interest of justice, the assessee be hereby granted one more opportunity to represent its case on merits before the learned CIT(A). Accordingly, the matter is restored to the file of the learned CIT(A) for de novo adjudication after consideration of all the details / submissions as may be filed by the assessee. Further, the assessee is directed to appear before the learned CIT(A) on all the dates of hearing as may be fixed without any default. Thus, the grounds raised by the assessee are allowed for statistical purpose.
Kisha Telelinks Pvt. Ltd. ITA No. 478/Mum./2022
In the result, appeal by the assessee is allowed for statistical purpose. Order pronounced in the open court on 01/07/2022