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Facts
The assessee, engaged in trading and renting property, filed a return of loss for AY 2013-14. The AO made significant additions. The CIT(A) passed an ex-parte order confirming these additions due to non-compliance by the assessee. Similar additions were made for AYs 2014-15 and 2017-18.
Held
The Tribunal noted that the assessee's non-compliance before the CIT(A) was due to a change in counsel. Exercising natural justice, the Tribunal decided to give the assessee another opportunity.
Key Issues
Whether the CIT(A) order passed ex-parte due to non-compliance, without affording natural justice, warrants a remand for fresh consideration.
Sections Cited
143(3), 23(1)(a), 36(1)(3), 14(A), 8D, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY, JM &
Appellant /Assessee by : Shri Priyavrat Gupta, AR Revenue / Respondent by : Shri Surendra Meena, Sr. DR Date of Hearing : 28.01.2025 Date of Pronouncement : 29.01.2025 O R D E R Per Bench: These appeals by the assessee are against the separate orders of the National Faceless Appeal Centre (NFAC) dated 22.08.2024 for the AY 2013-14, 2014-15 & dated 29.08.2024 for AY 2017-18. Since the issues contend in all this appeal are
For the purpose of adjudication the appeal of AY 2013-14 is considered as a lead case. The assessee is a company engaged in the business of trading in knitted/hosiery fabric and renting of immovable property. The assessee filed a return of income for AY 2013-14 on 26.09.2013 declaring loss of Rs. 38,24,573/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing Officer (AO) called on the assessee to furnish various details from time to time during the assessment proceeding. The AO completed the assessment under section 143(3) assessing the income of the assessee at Rs. 3,19,21,095/- by making the following additions: i. Addition under section 23(1)(a) under the head "Income from House Property" – Rs. 1,26,40,656/- ii. Disallowance under section 36(1)(3) towards proportionate interest – Rs. 59,18,321/- iii. Disallowance under section 14(A) r.w.r. 8D towards expenditure incurred related to exempt income – Rs. 35,36,691/-. iv. Disallowance of loss – Rs. 1,36,50,000/-.
Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) issued various notices to the assessee calling for details pertaining to the additions made by the AO. However, since the assessee did not file any response and did not appear before the CIT(A) he proceeded to decide the appeal based on materials available on record. Accordingly, the CIT(A) passed an ex-parte order confirming the various additions / disallowances made by the AO. The observations made by the CIT(A) with regard to non-compliance by the assessee are extracted as under: “5. Notice u/s 250 dated 13.01.2021 of the I.T. Act, 1961 was issued to the appellant fixing the case for uploading submission along with necessary documents in support of grounds of appeal on 28.01.2021. However, the appellant did not comply to the said notice. On 16.02.2021, the appellant has 5466 & 5490/Mum/2024 Jade Traders Private Ltd. filed a petition seeking adjournment of the case and considering the same the case was refixed for uploading submission by 07.07.2021 vide letter dated 23.06.2021. However, the appellant did not reply to the same. The case was again refixed on 20.10.2023 vide notice/letter dated 13.10.2023 mentioning that in the event of failure to submit the details within the stipulated time as mentioned in the notice, the appeal may be decided on the materials as available on record without providing any further opportunity of being heard. Again, the appellant failed to comply with the same. A show cause letter issued to the appellant on 09.08.2024 requesting for an explanation by 12.08.2024 as to why appeal of the appellant should not be dismissed due to repeated non- compliances. However, the appellant neither filed any reply on the said date nor till the date of passing of this order. As the appellant is noncompliant and thus no material/details in support of the grounds of appeal
taken were submitted, the decision of the case is being given accordingly.”
4. We heard the parties and perused the material on record. Before us the assessee filed an affidavit stating that the counsel of the assessee whose email ID was mentioned for communication in Form-35 filed before the CIT(A) stopped being associated with the assessee and therefore the assessee did not come to know of the date of hearing / notices issued by the CIT(A) which was sent to the email ID of the counsel. The assessee also stated that no physical copies of the notices of hearing was received by the assessee and hence the assessee could not represent the case properly before the CIT(A). In view of the facts and circumstances peculiar to assessee's case and in the interest of natural justice and fair play we are inclined to give one more opportunity to the assessee to represent the case properly before the CIT(A). Accordingly, we remit the appeal back to the CIT(A) with a direction to call for the relevant details and decide the case on merits in accordance with law. The assessee is directed to submit the relevant details as may be called for by the CIT(A) without seeking unnecessary adjournments and co-operate with the appellate proceedings. It is ordered accordingly.
5. The AO while completing the assessment for AY 2014-15 and 2017-18 has made similar additions and that the CIT(A) has confirmed the additions by passing 5466 & 5490/Mum/2024 Jade Traders Private Ltd. an ex-parte order. The assessee in the above referred affidavit has stated the same reason for non-compliance before the CIT(A) for AY 2014-15 and 2017-18 also. Since the facts are identical, we are remitting the appeal of AY 2014-15 & 2017- 18 also back to the CIT(A) with similar directions.
In result, the appeals of assessee are allowed for statistical purposes.