SCHEMA ENTERPRISES PVT LTD.,MUMBAI vs. DCIT CC 2 (1), MUMBAI

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ITA 7819/MUM/2019Status: DisposedITAT Mumbai04 January 2022AY 2013-145 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT found that the CIT(A) had passed an ex-parte order due to the assessee's non-appearance. Considering principles of natural justice, the ITAT set aside the CIT(A)'s order and remitted the issues back for fresh adjudication.

What were the facts?

The assessee's appeal against an ex-parte order of the CIT(A) was heard by the ITAT. The CIT(A) had confirmed additions made by the AO regarding bogus purchases and on-money receipts. The assessee claimed the CIT(A) passed the order without giving an opportunity to submit grounds.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without providing an opportunity to the assessee to present their case. Whether the additions made by the AO for bogus purchases and on-money receipts were justified.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Hearing: 06.01.2022Pronounced: 07.01.2022

O R D E R

PER PAVAN KUMAR GADALE JM:

1.

The assessee has filed the appeal against the order of the CIT(A)-48, Mumbai passed u/s 143(3) r.w.s 153C of the Act. The assessee has raised the following grounds of appeal:

1. On the facts and circumstances of the case and law on the subject the Ld. CIT(A) erred in passing the order u/s 143(3) r.w.s 153C without giving any opportunity to the assessee for submitting his grounds.

Schema Enterprises Pvt Ltd, Mumbai. - 2 -

2. On the facts and circumstances of the case law on the subject the Ld. CIT(A) erred in upholding the disallowance of bogus purchase of Rs. 56,34,244/- to the returned income by the AO. The addition be deleted.

3. On the facts and circumstances of the case and law on the subject the Ld. CIT(A) erred in upholding the addition by AO of Rs. 7,41,12,000/- u/s 68 on account of money to the returned income. The addition made be deleted. 4. The appellant craves leave to add modify, delete the grounds of appeal on or before date of hearing.

2.

The Brief facts of the case are that, the assessee is engaged in the business as builder and developer. The assessee has filed the return of income fortheA.Y 2013-14 on 29.09.2013 disclosing a loss of Rs.35,247/-.A search and seizure operations u/s 132 of the Act was carried out in the assessee group companies and the survey u/sec133A of the Act on the assessee premises. Some projects are under taken by the assessee and information was found in the course of the search and the A.O has issued notice u/s 153C of the Act on the assessee. In compliance, the assessee has filed the return of income

Schema Enterprises Pvt Ltd, Mumbai. - 3 - on 26.10.2017 declaring a loss of Rs.35,247/.- Subsequently, the A.O. has issued notice u/s 143(2) and 142(1) of the Act along with questionnaire, in compliance the Ld AR of the assessee appeared from time to time and furnished the details as called for. The A.O found that the assessee has entered into bogus transactions and could not substantiate with the proper evidence and explanations on the genuineness and made addition of bogus purchase of Rs.56,34,244/-.Further the A.O. has observed that the assessee has received on money and made an addition of Rs.7,14,12,000/-. Finally the A.O. has assessed the total income of Rs.7,97,46,244/- and passed the order u/s 143(3) r.w.s 153C of the Act on 30.12.2017. Aggrieved by the order, the assessee has filed an appeal with the CIT(A) and the CIT(A) has confirmed the additions and passed a ex parte order. Aggrieved by the CIT(A) order, the assesee has filed an appeal with the Honble Tribunal.

3.

At the time of hearing, the learned Counsel for the assessee submitted that the Ld.CIT(A) has passed an ex parte for non prosecution of appeal and prayed for an opportunity of hearing to substantiate the case on merits with the evidences before the appellate authority. Contra, the Ld. DR supported the order of the CIT(A).

Schema Enterprises Pvt Ltd, Mumbai. - 4 -

4.

We heard the rival submissions and perused the material on record. Prima-facie the CIT(A) has passed the ex-parte order considering the fact that there is no appearance nor any submissions are filed by the assessee in spite of providing adequate opportunity of hearing. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. We on perusal of the CIT(A) found that the Ld.CIT(A) has issued the notices of hearing, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not inclined to prosecute the appeal.

5.

We find that the assessee has raised grounds of appeal challenging the additions by the A.O. and there could be various reasons for non appearance which cannot be overruled. We considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case along with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the Schema Enterprises Pvt Ltd, Mumbai. - 5 - information for early disposal of appeal and allow the grounds of appeal of the assessee for statistical purposes.

6.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 07.01.2022.

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