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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the assessee against order dated 15/09/2017 passed by CIT(A)-38 for assessment year 2013-14.
The grounds of appeal are as under:-
1. That on the facts and circumstances of the case and in law, the ex-parte order dated 15.09.2017 passed by the CIT(A) without affording reasonable opportunity of being heard to the appellant is beyond jurisdiction, illegal and bad in law.
2. That on the facts and circumstances of the case and in law, the CIT(A) erred in passing the impugned ex-parte order dated 15.09.2017 in gross violation of principles of natural justice, on the alleged ground that the appellant was not inclined to prosecute its appeal.
2.1 That the CIT(A) erred in not appreciating that there was no default, whatsoever, on the part of the appellant in pursuing the appeal.
Without Prejudice
3. That the CIT(A) erred on facts and in law in not holding that the assessment order passed by the assessing officer under section 143(3) of the Income-tax Act, 1961 (“the Act”) is beyond jurisdiction, bad in law and void- ab-initio.
3.1 That the CIT(A) erred on facts and in law in sustaining the assessment made by the assessing officer under section 143(3) of the Income Tax Act, 1961 (‘the Act’) at a loss of Rs. 7,48,40,463 as against returned loss of Rs. 8,22,29,181.
3.2 That the CIT(A) erred on facts and in law in upholding the action of the assessing officer in making disallowance of Rs. 73,88,718 being 20% of the foreign exchange fluctuation loss of Rs. 3,69,43,591 incurred by the appellant on account of reinstatement of the accounts.
3.3 That the CIT(A) erred on facts and in law in sustaining the said disallowance by holding that the loss on account of foreign exchange fluctuation was incurred by the appellant by reinstating the trade payable of Rs. 55,99,58,923, payable to the holding company/ group company.
3.4 That while sustaining the said disallowance of Rs. 73,88,718, the CIT(A) erred in facts and in law in not appreciating that the foreign exchange loss incurred by the appellant on reinstatement of accounts was computed on the basis of accepted accounting principles and is a deductible expenditure under section 37 of the Act.
3.5 That the CIT(A) erred on facts and in law in sustaining the ad-hoc disallowance of 20% of the aggregate foreign exchange loss of Rs. 3,69,43,591, made on the basis of conjecture and surmises of the assessing officer.
During the year under consideration, the assessee company was engaged in the business of trading of telecom equipments and cables and also provided business auxiliary services. The assessee company has filed the return of income on 29,09,2013 declaring loss of Rs.8,22,29,181/-. The return of the assessee company was selected for scrutiny and statutory Notice u/s 143(2) dated 05.09.2014 was issued and served upon the assessee company. Thereafter notice u/s 142(1) along with questionnaire was issued and served on the assessee from time to time. In compliance to the statutory notices, CA and Authorized Representative (AR) of the assessee company attended the proceedings from time to time filed necessary details and submissions. The Assessing Officer made an addition of Rs. 73,88,718/- thereby disallowing the claim of the assessee on account of foreign exchange fluctuation loss.
Being aggrieved by the penalty order, the assessee filed appeal before the CIT(A). The CIT (A) dismissed the appeal of the assessee.
The Ld. AR submitted that the order passed by the CIT(A) is ex-parte order and the assessee was not given the adequate opportunity of hearing. Hence, the Ld. AR prayed that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the issues on merit after giving hearing to the assessee.
The Ld. DR submitted that relied upon the order of the CIT(A) and the assessment order.
We have heard both the parties and perused all the relevant materials available on record. From the perusal of the order of the CIT(A), it is noticed that the CIT(A) has dismissed the appeal of the assessee for reason that there is no representation on behalf of the assessee without commenting on merit of the issues contested by the assessee. Thus, in the interest of justice it will be appropriate to remand back the matter to the file of the CIT(A) for proper adjudication of all the issues raised by the assessee before the CIT(A). Therefore, we are remanding back the matter to the file of the CIT(A) thereby giving proper opportunity of hearing to the assessee by following principles of natural justice. The assessee should also co-operate the hearing before the CIT(A). The appeal of the assessee is partly allowed for statistical purpose.
In result, the appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the Open Court in presence of both the parties on this 13th Day of April, 2021