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Facts
The assessee filed a NIL income return for AY 2017-18. The Assessing Officer made additions related to exempt dividend income under Section 14A and capital gains/losses under Section 68, finally assessing the income at NIL under Section 143(3) after adjusting losses. The Addl./JCIT(Appeals) subsequently dismissed the assessee's appeal ex-parte due to non-cooperation.
Held
The ITAT, to ensure the principle of natural justice, set aside the ex-parte order of the Addl./JCIT(Appeals) and remitted the matter back for fresh adjudication. The assessee was cautioned to promptly cooperate with the proceedings, failing which the lower authority could pass an appropriate order based on the available records.
Key Issues
The key issue was the ex-parte dismissal of the appeal by the Addl./JCIT(Appeals) and whether the matter should be remitted back for a fresh hearing after providing another opportunity to the assessee, considering their prior non-cooperation.
Sections Cited
14A, 68, 142(1), 143(2), 143(3)
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Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Sanjay Awasthi
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Addl./Joint Commissioner of Income Tax
Brief facts of the case are that the assessee-appellant filed its return of income for the assessment year 2017-18 on 06.11.2017 declaring NIL income after adjustment of brought forward loss of Rs.59,65,801/- and current year loss of Rs.4,32,973/-. The return was selected for complete scrutiny assessment through CASS. Notices under sections 143(2) and 142(1) were issued and duly served on the assessee-Company. In response to the notices, the assessee-company submitted copies of relevant documents through e-assessment portal. From the balance-sheet of the assessee that the assessee had non-current investments of Rs.47,14,32,607/- as on 31.03.2017 on which assessee earned exempt income in form the dividend amounting to Rs.4,44,015/-. The ld. Assessing Officer satisfied with the fact that the assessee has non-current investments, income from which does not form pat of total income and expenditure, which are attributable to earning of such exempt income and, therefore, the provision of section 14A are clearly applicable in the case of appellant- assessee. In response to notice, the assesese submitted that it earned LTCG/STCG of Rs.6,53,228/- and incurred LTCL/STCL of Rs.10,86,201/- and, therefore, net loss of Rs.4,32,973/- was disallowed in the computation of income. Therefore, the difference amount of Rs.6,53,228/- was further added back to the total income of the assessee as per provisions of section 68 of the Income Tax Act. The ld. Assessing Officer assessed income of (A.Y. 2017-2018) BPO Solutions Private Limited (successor to M/s. Arcee Finvest Limited) assessee at NIL under section 143(3) of the Act after adjustment of brought forward loss of Rs.1,15,39,750/-.
Being not satisfied, the assessee preferred appeal before the ld. CIT(Appeals).
The ld. Addl./JCIT(Appeals) has given several opportunities to the assessee to substantiate its claim, but the appellant neither filed the written submission nor represented the case before the ld. Addl./JCIT(Appeals). Thereafter the ld. Addl./JCIT(Appeals) dismissed the appeal ex-parte on 14th January, 2025 mentioning that the appellant-assessee is not interested in pursuing the appeal.
Against the order of ld. Addl./JCIT(Appeals), the assessee preferred appeal before the ITAT.
We have heard both the sides. At the time of hearing, ld. Counsel for the assessee prayed before the Bench that the impugned order be set aside and remitted back to the file of ld. Addl./JCIT(Appeals) for deciding it afresh.
At the outset, ld. D.R. brought to our notice that the appellant-assessee did not produce the relevant documents as asked by the revenue authorities during the assessment as well as appellate proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the income of assessee at NIL under section 143(3) of the Act after adjustment of brought forward loss of Rs.1,15,39,750/-. Thereafter the assessee preferred appeal (A.Y. 2017-2018) BPO Solutions Private Limited (successor to M/s. Arcee Finvest Limited) before the ld. CIT(Appeals). The ld. Addl./JCIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. Addl./JCIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim for the relevant assessment year. Therefore, he pleaded to uphold the order passed by the Addl./JCIT(Appeals).
We have perused the material available on record. Considering the facts and circumstances of the case, we are inclined to set aside the orders passed by the ld. Addl./JCIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. Addl./JCIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. Addl./JCIT(Appeals) failing which the Ld. Addl./JCIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised
by the assessee are allowed for statistical purposes.