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Facts
The assessee company, engaged in fruit product processing, filed a return of income showing a loss. The case was selected for scrutiny, and the Assessing Officer made additions totaling Rs. 99,10,27,894/- after the assessee failed to comply with notices. The CIT(A) dismissed the assessee's appeal for non-prosecution.
Held
The Tribunal held that due to the company initiating insolvency proceedings, an adjournment was sought but disregarded by the CIT(A), leading to an ex-parte order. The Tribunal restored the appeal to the CIT(A) to provide one final opportunity to the assessee.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without considering the insolvency proceedings and the adjournment request. Whether the assessee should be granted a final opportunity to present its case.
Sections Cited
143(2), 142(1), 144, 68, 40(a)(ia), 10
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 30.04.2025 of the Ld. Addl. / JCIT(A)-3, Chennai relating to assessment year 2014-15.
Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. Addl. / JCIT(A) in dismissing the appeal of the assessee for non-prosecution and thereby upholding the addition of Rs.31,93,82,087/- made by the Assessing Officer.
Facts of the case, in brief, are that the assessee is a company engaged in business of processing of fruit products, production of pulp, concentrates & clarified concentrates. It filed its return of income on 24.09.2014 declaring loss of Rs.41,04,09,981/-. The case was selected for scrutiny under CASS and accordingly statutory notice u/s 143(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued and served on the assessee. Subsequently notice u/s 142(1) of the Act was also issued and served on the assessee. However, there was no compliance from the side of the assessee for which the Assessing Officer issued a final show cause notice u/s 142(1) of the Act on 19.12.2016 asking for various details. Since there was non compliance from the side of the assessee despite number of opportunities granted by the Assessing Officer, the Assessing Officer completed the assessment u/s 144 of the Act determining the total loss of the assessee at Rs.99,10,27,894/- by making the following additions / disallowances: a) Unexplained cash credit u/s 68 Rs.8,04,78,448/- b) Disallowance of proportionate interest Rs.38,78,763/- c) Unsecured loan written off Rs.23,36,19,041/- d) Non deduction of tax on certain payments – disallowance u/s 40(a)(ia) Rs.8,45,301/- e) Inadmissible depreciation for assets Rs.1,66,735/- f) Unverifiable expenses Rs.2,35,799/- g) Disallowance of rent paid Rs.1,58,000/-
Since, despite number of opportunities granted by the Ld. Addl. / JCIT(A) the assessee did not make any submission, the Ld. Addl. / JCIT(A) dismissed the appeal filed by the assessee and thereby sustained the various additions made by the Assessing Officer.
Aggrieved with such order of the Ld. Addl. / JCIT(A), the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the outset submitted that the assessee company voluntarily initiated insolvency proceedings by filing a petition u/s 10 of the Insolvency and Bankruptcy Code, 2016 before the NCLT, Mumbai Bench. Pursuant to the said petition, the NCLT vide its order dated 13.08.2024 admitted the application and appointed one Mr. Prakash D. Naringrekar as the Interim Resolution Professional (IRP). The IRP thereafter took charge of the management and operations of the assessee company in accordance with the provisions of the IBC, 2016. He submitted that even before the Ld. Addl. / JCIT(A) the resolution professional submitted a request seeking an extension of one month to furnish the requisite information. However, the Ld. Addl. / JCIT(A) disregarded the adjournment application and proceeded to dismiss the appeal on the ground that the assessee was not interest to pursue the matter. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details. He accordingly submitted that the matter may be restored to the file of the Ld. Addl. / JCIT(A).
The Ld. DR on the other hand strongly supported the order of the Ld. Addl. / JCIT(A) and submitted that despite opportunities granted by the Assessing Officer as well as the Ld. Addl. / JCIT(A), there was no response from the side of the assessee for which ex-parte orders were passed. He accordingly submitted that the order of the Ld. Addl. / JCIT(A) should be upheld and the grounds raised by the assessee be dismissed.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. Addl. / JCIT(A) and the paper book filed on behalf of the assessee. We find due to non-compliance to the statutory notices issued by the Assessing Officer, he passed the ex-parte order wherein he made various additions the details of which are given at para 3 of this order. We find before the Ld. Addl. / JCIT(A) there was no compliance from the side of the assessee for which he dismissed the appeal filed by the assessee for non- prosecution and thereby upholding the various additions made by the Assessing Officer. It is the submission of the Ld. Counsel for the assessee that the company voluntarily initiated insolvency proceedings by filing a petition u/s 10 of the Insolvency and Bankruptcy Code, 2016 before the NCLT, Mumbai Bench which admitted the application and appointed the Interim Resolution Professional. It is his submission that the adjournment application filed by the IRP was not considered and the Ld. Addl. / JCIT(A) has passed the ex-parte order. It is also his submission that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. Addl. / JCIT(A). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. Addl. / JCIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Ld. Addl. / JCIT(A) on the appointed date and make its submissions, if any, without seeking any adjournment under any pretext failing which the Ld. Addl. / JCIT(A) shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 11th August, 2025.
Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 11th August, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: अपीलार्थी / The Appellant; 1. 2. प्रत्यर्थी / The Respondent 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune
S.No. Details Date Initials Designation 1 Draft dictated on 05.08.2025 Sr. PS/PS 2 Draft placed before author 11.08.2025 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to the Head 9 Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order