M/S SUN DIRECT TV PRIVATE LIMITED ,CHENNAI vs. ITO , NFAC , CHENNAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), New Delhi, dated 26.08.2022 relevant to the assessment year 2015-16.

Brief facts of the case are that the assessee filed its original return of income for the assessment year 2015-16 on 24.11.2015 admitting total loss at ₹.123,55,22,939/-. Subsequently, the return was revised on 28.03.2017 admitting loss at ₹.119,68,88,305/-. The case was selected for limited scrutiny through CASS. After following due procedure, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 144A r.w.s. 92CA of the Income Tax Act, 1961 [“Act” in short] assessing total loss at ₹.119,65,13,457/- after making addition towards interest income short offered at ₹.2,49,848/- and disallowance of legal expense of ₹.1,25,000/-. On appeal, the ld. CIT(A) confirmed the order of the Assessing Officer.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has challenged the ex-parte order passed by the ld. CIT(A) on the presumption that the assessee is not interested in prosecuting its appeal. The ld. Counsel for the assessee has submitted that the assessee has sought for and obtained adjournments on three occasions. Since the AR of the assessee has pre-occupied and could not put his appearance before the ld. CIT(A), the ld. Counsel for the assessee has prayed that opportunity of being heard to the assessee may kindly be accorded so that the assessee can substantiate its claim before the ld. CIT(A).

On the other hand, the ld. DR supported the orders passed by the authorities below.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, against the assessment order of addition towards interest income and legal expenses, the assessee filed an appeal before the ld. CIT(A). Despite various opportunities given to the assessee and due to non- compliance either by putting appearance or filing written submissions before the ld. CIT(A), the ld. CIT(A) presumed that the assessee is not interest in proceeding with the appeal filed accordingly, confirmed the assessment order passed by the Assessing Officer. On perusal of the appellate order, we find that the ld. CIT(A) has not adjudicated the issues on merits, but, simply confirmed the addition made by the Assessing Officer is not correct. Considering the plea raised before us, and to meet the ends of natural justice, we are of the considered opinion that the assessee shall be given an opportunity of being heard to the assessee to substantiate its claim before the ld. CIT(A). In view of the above, we set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to decide the issue afresh in accordance with law by affording an opportunity of being heard to the assessee. The assessee is also directed to furnish complete details before the ld. CIT(A) for consideration and adjudication.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 30th November, 2022 in Chennai.