Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
ORDER Per Vijay Pal Rao (JM):
This appeal by the assessee is directed against the order dated 15/05/2019 of Commissioner of Income-tax (Appeals) for the assessment year 2008-09.
2. The assessee has raised the following grounds in this appeal:-
“This appeal is against the order dated 16.05.2019 of the Commissioner of Income Tax (Appeals) - 30, Mumbai, (hereinafter referred to as the "CIT(A) in appeal against Order dated 21.03.2016 u/s 143(3) r.w.s. 147 of the Income-tax Act, 1963, passed by the "the A.O.") and relates to the Assessment Year 2008-09. The undermentioned grounds of appeal are without prejudice to one another: -
On the facts and in the circumstances of the case and in law, the re- assessment proceedings initiated by the Assessing officer were invalid and bad in law.
On the facts and in the circumstances of the case and in law, the re- assessment proceedings were initiated against a non-existing entity and the reassessment order was also passed against a non-existing entity and, therefore, the re-assessment proceedings and the reassessment order was invalid and bad in law.
On the facts and in the circumstances of the case and in law, the authorities have not considered the fact that the partnership firm was reconstituted during the relevant year and, therefore, erred in passing a sirigie order for the whole year which has rendered the reassessment proceedings and the reassessment order invalid and bad in law.
4. The CIT(A) erred in confirming the initiation of re-assessment proceedings by the A.O. after a period of 4 years, by holding that the original assessment was only completed u/s 143(3) of the Act, without appreciating that the original assessment proceedings were completed under section 143(3) of the Act.
The CIT(A) erred in upholding notice u/s 148 of the Income-tax Act, 1961 (hereinafter referred to as the "Act") as valid although the conditions precedent set out inter alia in s. 147 and 3 48 of the Act had not been complied with and the same ought to be held bad in law.
6. On the facts and the circumstances of the case and in law, the CIT(A) erred in not only confirming the disallowance made by the A.O. towards bogus purchases but also enhancing the income of the appellant to Rs. 29.77,17,6737-, against an addition of Rs. 1,48,85,8847-made by the A.O.
On the facts and in the circumstance of the case and in law, the CIT(A) erred in enhancing the income of the Appellant.”
3. At the time of hearing, the Ld.AR of the assessee has submitted that the appeal of the assessee was dismissed by the CIT(A) while passing the impugned exparte order. He has further submitted that the alleged notices issued by the CIT(A) were not served upon the assessee due to incorrect address and further, the director of the assessee company is a senior citizen of 70 years, was undergoing treatment during the said period and, therefore, he was not available at the work place. He has also filed an affidavit of the Director of the assessee company and submitted that he was hospitalized during the month of February, 2019 due to ill health and, therefore, the notices issued by the CIT(A) were not received by the assessee. He has pleaded that the assessee may be granted one more opportunity to present its case before the CIT(A). The Ld.AR has pointed out that the Assessing Officer estimated the income of the assessee and also disallowed various expenses while completing the re- assessment order whereas an identical disallowance was also made by the Assessing Officer in the original assessment order passed under section 143(3).
Therefore, there are serious objections against the reopening of the assessment which needs to be contested before the CIT(A) apart from the merits of the addition made by the Assessing Officer and confirmed by the CIT(A).
On the other hand, the learned departmental representative has opposed to the prayer of the assessee for granting one more opportunity to the assessee and submitted that the CIT(A) has given the details of the various notices issued to the assessee. However, when nobody attended the proceedings nor any request for adjournment was filed, the CIT(A) was left with no option but to pass the exparte order.
5. We have considered the rival submissions as well as relevant material on record. In the re-assessment order passed under section 143(3) r.w.s. 147, the Assessing Officer has made addition on account of disallowance of purchases treating the same as non genuine to the tune of 5% of the total purchases based on the statements of third parties. The assessee challenged the order of the Assessing Officer before the CIT(A) and raised the grounds of validity of reopening as well as the addition made by the Assessing Officer relying on third party statement without issuing notice under section 133(6) or under section 131 of the Income-tax Act to verify the genuineness of the payment made by the assessee for the alleged purchases. The CIT(A) has stated in the impugned order that three notices were issued to the assessee. However, nobody appeared on behalf of the assessee despite these notices and consequently, the grounds raised by the assessee was dismissed while passing the impugned exparte order. Since the assessee has explained the reasons for non attendance before the CIT(A) due to non receipt of the notice issued by the CIT(A) as the address was changed and secondly, the Director of the assessee company was undergoing the treatment and hospitalized. Having considered the plea of the assessee explaining the reasons for non appearance before the CIT(A), we are of the considered view that the assessee be given one more opportunity of hearing to explain its case with the support of relevant evidence. Accordingly, in the facts and circumstances of the case and in the interest of justice, we set aside the impugned order of the CIT(A) and remand the matter to the record of the CIT(A) for deciding the same afresh after giving one more opportunity of hearing to the assessee.
In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court at the time of hearing.