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Facts
The assessee, Welsome Finance Pvt. Limited, filed an ITR declaring Rs. 31,570/- for AY 2015-16, but its case was selected for scrutiny due to a large difference in opening and closing stock. Despite notices under Section 143(2) and Section 142(1), the assessee failed to comply, leading the AO to assess its income at Rs. 12,50,76,570/- and initiate penalty proceedings. The ld. CIT(Appeals) dismissed the assessee's appeal due to lack of material evidence despite providing several opportunities.
Held
The ITAT set aside the order of the ld. CIT(Appeals) and remitted the matter back to the ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. The ITAT also cautioned the assessee to cooperate promptly with the proceedings, failing which the ld. CIT(Appeals) may pass an appropriate order based on available records.
Key Issues
Whether the ld. CIT(Appeals) was justified in dismissing the appeal without ensuring sufficient opportunity for the assessee to present its case, thereby violating the principles of natural justice.
Sections Cited
143(2), 142(1), 271(1)(c)
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Income Tax Appellate Tribunal, ‘D’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Rakesh Mishra
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals)-2, Kolkata dated 2nd April, 2019 passed for Assessment Year 2015- 16.
(A.Y. 2015-2016) Welsome Finance Pvt. Limited
Brief facts of the case are that the assessee is a Private Limited Company, which filed its original income tax return for the assessment year 2015-16 declaring total income of Rs.31,570/-. The case was selected for scrutiny under CASS stating reason “large difference in the opening stock of current year and closing stock of previous year shown in P&L A/c as per return of income”. Notice under section 143(2) of the Act was issued on 11.04.2016. Thereafter notice under section 142(1) was issued to the assessee along with questionnaire on 07.02.2017, which was served to the e-mail of the assessee-company asking to produce and submit certain details and documents to substantiate its return of income, but the assessee failed to make any compliance. As the assessee failed to comply with the notices/letters issued, the ld. Assessing Officer assessed the total income of the assessee at Rs.12,50,76,570/- including opening stock for the assessment year 2015-16 amounting to Rs.12,50,44,996/- and penalty proceeding under section 271(1)(c) was initiated.
Being not satisfied, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) has given several opportunities to the assessee to substantiate its claim, but the appellant neither filed the cogent material evidence nor represented the case with evidences against the findings of ld. Assessing Officer before the ld. CIT(Appeals). Therefore, the ld. CIT(Appeals) dismissed the (A.Y. 2015-2016) Welsome Finance Pvt. Limited appeal of assessee on 2nd April, 2019 in absence of cogent material evidence.
On being aggrieved, the assessee preferred an 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. CIT(Appeals) for deciding it afresh.
At the outset, ld. D.R. brought to our notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.12,50,76,570/- . Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission in support of its claim nor any cogent material evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the order passed by the 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 order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter (A.Y. 2015-2016) Welsome Finance Pvt. Limited back to the file of ld. CIT(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. CIT(Appeals) failing which the Ld. CIT(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.