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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” (SMC
Before: SHRI B. RAMAKOTAIAH
This is an appeal by assessee against the ex-parte order of the Commissioner of Income Tax (Appeals)-7, Hyderabad, dated 29-10-2016.
Briefly stated, assessee is a firm doing job work of manufacturing biscuits for Parle Products Ltd. It had filed its return of income admitting income at Rs. 2,51,520/-. Assessing Officer (AO) while completing the assessment, made the following disallowances:
i. Disallowance of PF & ESI - Rs. 4,41,446/- ii. Disallowance of expenses - Rs. 5,00,000/- iii. Commission debited to P&L A/c - Rs. 21,00,000/-
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Assessee preferred an appeal before the CIT(A) and in the statement of facts gave detailed reasons on all the issues. Ld.CIT(A) had issued notices posting the case on 11-03-2016, 21-03-2016 and further on 08-04-2016 and 29-09-2016. Since none appeared, Ld.CIT(A) dismissed the appeal in linine stating as under:
“5. During the course of appeal proceedings, the case was initially posted for hearing on 11.03.2016 to which the assessee did not appear. Further the case was fixed for hearing on 21.03.2016, to which none appeared. Further on 08.04.2016 & 29.09.2016, the assessee did not appear for hearing. As a final opportunity the case was fixed for hearing on 17.10.2016, to which there was no response. Since, the assessee did not appear for any hearing, after due service of notices, it is held that the assessee is not interested in pursuing the appeal. Accordingly, the appeal is dismissed in limine”.
It was the contention of Ld. Counsel that assessee has sought adjournments for the postings on 11-03-2016 and 21-03-2016, which were acknowledged by the Ld.CIT(A) and adjournments have been granted to 21-03-2016 and 08-04- 2016 respectively. However, subsequent notices could not be received, so there is no representation. It was submitted that Ld.CIT(A) could have decided the issue on merits as facts were stated in the statement of facts along with the appeal memo and since appeal was not decided on merits, assessee wants an opportunity before the CIT(A) for adjudication on merits.
After considering the rival contentions, I am of the opinion that Ld.CIT(A) could have decided the issue on merits. Ld. CIT(A) has no powers to reject the appeal in limine as the provisions of Section 251(1)(a) specifically states that in an appeal against the order of assessment, he may confirm,
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reduce, enhance or annul assessment. Since the powers of CIT(A) are limited by the above provision, dismissal of the appeal without considering the same on merits is not as per the provisions of the Act. Moreover, assessee intends to appear before the Ld.CIT(A). Therefore, keeping in mind the principles of natural justice, I am of the opinion that the appeal is to be decided by the Ld.CIT(A) on merits after giving due opportunity of hearing to the assessee. For this purpose, the impugned order of the Ld.CIT(A) is set aside and the appeal is restored to the file of CIT(A) to decide it on merits afresh.
In the result, appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 27th April, 2018
Sd/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER Hyderabad, Dated 27th April, 2018 TNMM
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Copy to : 1. Anand Food Products, C/o. Ch. Parthasarathy & Co., 1-1-298/2/B/3, 1st Floor, Sowbhagya Avenue, St.No. 1, Ashok Nagar, Hyderabad. 2. Income Tax Officer, Ward-9(1), Hyderabad.
CIT (Appeals)-7, Hyderabad. 4. Pr.CIT-7, Hyderabad.
D.R. ITAT, Hyderabad.
Guard File.