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Facts
The assessee filed a return for AY 2018-19 showing a total loss. The assessment was completed with several additions. The assessee appealed to the CIT(A), who passed an ex-parte order as the assessee did not comply with notices.
Held
The Tribunal held that the CIT(A) had decided the matter without giving the assessee a proper opportunity to be heard, violating principles of natural justice. Therefore, the appeal was allowed for statistical purposes, and the case was remanded.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without providing a reasonable opportunity of being heard to the assessee, thus breaching principles of natural justice.
Sections Cited
250, 23, 40A(3), 69A
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Before: SHRI AMIT SHUKLA & SMT. RENU JAUHRI
Assessee by : Shri K. Gopal Revenue by : Shri Mahesh Pamnani Date of Hearing 15.01.2025 Date of Pronouncement 20.01.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 28.06.2023 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2018-19.
The assessee has raised following grounds of appeal:
1. The National Faceless Appeal Centre, Delhi (NFAC) erred in passing the ex parte order dated 28.06.2023 under section 250 of the Act without providing the Appellant a reasonable opportunity of being heard. The order passed by A.Y. 2018-19 Prakash Jha NFAC is in breach of the principles of natural justice and the same may be set aside.
2. The NFAC erred in confirming the addition of Rs.4,61,484/- under section 23 of the Act as Income from house Property by treating the same as notional rent without appreciating the facts and circumstances of the case. The said addition made under section 23 of the Act is unjustified and the same may be deleted.
3. The NFAC erred in confirming the ad-hoc disallowance of Rs.39,38,890/- by treating the same as interest received on interest free loans given to sister concerns without appreciating the facts and circumstances of the same. The said ad-hoc disallowance made by the Ld.A.O. and confirmed by the NFAC is not justified and the same may be deleted.
4. The NFAC erred in confirming the disallowance of Rs.11,19,528/- made by the Ld.A.O. under section 40A(3) of the Act without appreciating the facts and circumstances of the case. The disallowance made under section 69A of the Act is not justified and the same may be deleted.
5. The NFAC is not justified in confirming the disallowance of Rs. 1,76,839/- under section 40A(3) of the Act without appreciating the facts and circumstance of the case. The disallowance made under section 40A(3) of the Act is not justified and the same may be deleted.”
Brief facts of the case are that the assessee filed return for AY 2018-19 on 30.10.2018 declaring total loss of Rs. 58,27,607/-. The assessee is engaged in the business of production of feature film as proprietor ‘M/s. Prakash Jha Production’ and has also shown income from house property. The case was selected for scrutiny and assessment was completed after making the following additions: i. Income from house property Rs.4,61,484/- ii. Disallowance on account of interest free loans Rs. 39,88,890/- iii. Disallowance u/s 40A(3) Rs. 11,80,528/- & 1,76,819/-
Aggrieved with the order of Ld. AO, the assessee preferred an appeal before Ld. CIT(A). As no compliance made to the notices issued by the Ld. CIT(A), he decided the appeal exparte vide order dated 28.06.2023.
A.Y. 2018-19 Prakash Jha Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before this Tribunal.
At the outset, Ld. AR pointed out that the assessee could not make compliance before Ld. CIT(A) as the notice was sent on email of an old employee and, therefore, was not received by the assessee. He has, therefore, requested for restoring the matter back to the file of Ld. CIT(A) for adjudication on the merits. Ld. DR has also not objected to the said proposition.
In the interest of justice, we are inclined to accept the request of the Ld. AR as the matter has been decided without giving proper opportunity to the assessee. The case is, therefore, remanded back to Ld. CIT(A) for a fresh adjudication on merits after giving due opportunity to the assessee. The assessee is also directed to make available his correct email address for proper service of the notice by the revenue.