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Facts
The assessee, M/s Kanak Projects Limited, filed its return for AY 2013-14, which was selected for scrutiny. The AO completed the assessment u/s 143(3), making additions for capital expenditure, rental income, excess depreciation, and dividend stripping income u/s 94(7). The assessee appealed to the CIT(A), who dismissed the appeal ex-parte and upheld the additions due to the assessee's non-prosecution, despite multiple opportunities and rejection of adjournment requests.
Held
The Tribunal observed that while the CIT(A) provided ample opportunities, dismissing the appeal ex-parte without considering the basic facts on record was incorrect, as an appellate authority should decide on merits even in cases of non-prosecution. Thus, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for reconsideration, directing to provide a sufficient opportunity of hearing to the assessee.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte and upholding additions without considering the basic facts on record, despite providing multiple opportunities and rejecting adjournment requests from the assessee.
Sections Cited
143(3), 94(7)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
O R D E R
Per Manjunatha G, AM:
This appeal filed by the assessee is directed against the order passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 07.04.2025 pertaining to assessment year 2013-2014.
Brief facts of the case are that the assessee e-filed its return of income for assessment year 2013-2014 on 26.09.2013 declaring total income at Rs.6,11,89,350/-. The case was selected for scrutiny and the assessment has been completed u/s.143(3) of the Act on 09.03.2016 and determined the total income at Rs.6,77,12,890/- by, inter alia, making additions towards disallowance of capital expenditure for Rs.52,58,956/-, rental income not offered to tax at Rs.8,77,945/-, disallowance of excess depreciation at Rs.3,75,000/- and addition towards dividend stripping income u/s.94(7) of the Act for Rs.1,636/-.
2 ITANo.1283/Kol/2025 3. Aggrieved by the assessment order, the assessee preferred an appeal before the ld.CIT(A). Before the ld.CIT(A), the assessee neither appeared nor explained its case, even though the case was posted for hearing on 24.01.2021, 11.04.2022, 23.12.2022, 21.11.2023, 23.10.2024 and 12.02.2025. Therefore, the ld. CIT(A) dismissed the appeal of the assessee ex-parte and upheld the additions made by the Assessing Officer towards returned income.
Aggrieved by the CIT(A)’s order, the assessee is now in further appeal before the Tribunal.
Ld. Counsel for the assessee submitted that although the assessee sought adjournment of hearing by filing letter but the ld. CIT(A) rejected the adjournment application of the assessee and dismissed the appeal of the assessee for non-prosecution without considering even basic facts available on record. Therefore, he submitted that one more opportunity may be given to the assessee to go to the ld. CIT(A) and explain its case.
Ld. Sr. DR for the revenue, on the other hand, fairly agreed that the matter may be remanded back to the file of ld.CIT(A) by giving one more opportunity to the assessee to substantiate its claim.
We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that the ld. CIT(A) had given ample opportunities of hearing to the assessee to submit relevant evidence in support of its case. It is also an admitted fact that when the assessee sought adjournment of hearing by filing an application but the ld. CIT(A) rejected