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Facts
The assessee, M/s. Mahalakshmi Saw Mills, filed its return for AY 2015-16. The AO made an addition regarding customs duty payment. The CIT(A) confirmed the addition in an ex-parte order.
Held
The Tribunal held that the CIT(A) erred in passing an ex-parte order without considering the assessee's adjournment petition. The matter was set aside and remitted to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in passing an ex-parte order without considering the assessee's request for adjournment and whether the addition related to customs duty was correctly confirmed.
Sections Cited
250, 143(3)
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Income Tax Appellate Tribunal, SMC-‘C’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 28/10/2024 in respect of the A.Y. 2015-16 on the following grounds of appeal:
Tax effect relating to each Grounds of Appeal
Ground of appeal
(see note below) The impugned Order u/s. 250 of the Act dated: 28-10-2024 passed by the 1. National Faceless Appeal Centre, Delhi Rs.14,96,490/- is opposed to law, facts and circumstances of the case. The Ld. CIT(A) has erred in confirming the addition of Rs.36,40,110/- on the ground the refund claimed from the 2. Customs Department was not Written Rs.14,96,490/- Off without appreciating the fact that the amount was Written Off in the Books of Account. The Ld. CIT(A) has erred in passing the appellate order ex-parte without appreciating the fact that the assessee
3. Rs.14,96,490/- has sought for adjournment of one week from 25-10-2024 as per e-filed ACK No.640619061241024 on 24-10-2024. The Ld. CIT(A) ought to have appreciated the fact that the assessee has paid Advance Custom Duty of Rs.40,74,779/- out of which a sum of Rs.36,40,110/- was not allowed and only a sum of Rs.4,34,668/- was allowed without 4. appreciating the fact that the entire Rs.14,96,490/- Custom Duty of Rs.40,74,779/- was claimed as an expenditure in the Trading Account for the F.Y. 31-03-2015 relevant to the A.Y. 2015-16 and the AO was not justified to make an addition of Rs.36,40,110/-.
The Ld. CIT(A) has erred in confirming the addition of Rs. 36,40,110/- which was claimed as refund from the Customs Department receivable without appreciating the fact that the Custom 5. Department has rejected the claim of the Rs.14,96,490/- Appellant as a result of which the entire claim of refund was adjusted as Custom Duty by the Custom Department and the claim of Refund is Written Off from the Books of Account. The Appellant craves leave to add, alter, 6. amend and delete any of the grounds at the time of hearing. Total Tax Effect Rs.14,96,490/-
The brief facts of the case are that the assessee is a firm and filed its return of income on 20/09/2015. Thereafter, the case was selected for scrutiny under CASS and notices were issued seeking the details in respect of the payments made to related persons and the custom duty paid since there are some mismatch in it. The assessee also explained the same with the AO, but the AO had not accepted the mismatch in the custom duty payment and made the assessment u/s. 143(3) of the Act. As against the assessment order, the assessee filed an appeal before the Ld.CIT(A) and contended that there is no mismatch in the payment of the customs duty. But unfortunately the assessee had not responded for the various notices issued by the Ld.CIT(A) and therefore the Ld.CIT(A) had confirmed the order passed by the AO.
As against the said ex-parte order, the assessee is in appeal before this Tribunal.
At the time of hearing, the Ld.AR submitted that Ld.CIT(A) had erred in not considering the adjournment petition filed by the assessee on 24/10/2024 vide acknowledgement no. 640619061241024. The Ld.AR also submitted that through the adjournment letter, assessee sought for one 25/10/2024. But unfortunately, the Ld.CIT(A) had passed an ex-parte order on 28/10/2024 without considering the adjournment petition on 24/10/2024. The Ld.DR relied on the order of the lower authorities and prayed to dismiss the appeal.
It is a fact that the assessee had appeared before the AO and filed its detailed objections to the addition made under huge customs duty payment but unfortunately the AO had not accepted their case. Thereafter, the assessee pursued the matter by filing an appeal before the Ld.CIT(A). But the Ld.CIT(A) without considering the adjournment petition had dismissed the appeal and observed that the assessee had not responded to the notices issued. We have also perused the acknowledgement filed by the assessee in support of the fact that they had filed their adjournment petition on 24/10/2024. We are convinced that the Ld.CIT(A) had not considered the request made by the assessee and passed the order as if the assessee had not responded to any of the notices. Under such circumstances, we are inclined to set aside the order of the Ld.CIT(A) and remit the matter to the file of the Ld.CIT(A) to decide the appeal afresh on merits after hearing the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 16th January, 2025.