M/S SPECTRUM CHEMICALS PVT LTD., INDORE vs. ITO 2(3)(2), MUMBAI

Captioned appeals by the same assessee arise out of three separate orders of learned Commissioner of Income Tax (Appeals)-6, Mumbai. While appeals relating to assessment years 2006-07 and 2007-08 are against imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961, appeal for the assessment year 2012-13 arises out of quantum proceedings.

Briefly the facts are, the assessee is a resident company. For the assessment years under consideration, assessee had filed its return of income under section 139(1) of the Act. Based on information received that the assessee has made cash deposits in its bank account, assessments were reopened under section 147 of the Act. Ultimately, the assessing officer (AO) completed the assessments under section 143(3) r.w.s. 147 of the Act adding back the cash deposits made in the bank account. Based on the additions made, the AO initiated proceedings for imposition of penalty under section 271(1)(c) of the Act and ultimately passed orders imposing penalty of Rs. 5,24,719/- and Rs. 61,200/- in assessment years 2006-07 and 2007-08 respectively. Against the penalty orders so passed, assessee preferred appeals before learned Commissioner (Appeals). However, learned Commissioner (Appeals) disposed of the appeals ex-parte. While doing so, he dismissed the appeals on the ground that the appeals were not filed within the period of limitation and the assessee did not file any application seeking condonation of delay.

When the appeals were called for hearing, none appeared on behalf of the assessee, hence, we proceed to dispose of the appeals ex-parte qua the assessee after hearing the learned Departmental Representative and based on materials on record.

Heard learned Departmental Representative and perused the materials on record. It is evident, alleging that the assessee did not respond to notice of proceeded to dispose of the appeals ex-parte. While doing so, learned Commissioner (Appeals) has observed that though in Form No. 35, the assessee has mentioned the date of receipt of the penalty order as 20.01.2017, however, as per the report of the AO, the orders were served on the assessee on 30.03.2015. Whereas, the appeals were filed on 24.01.2017. Thus, he held that the inordinate delay in filing the appeals having not been satisfactorily explained by the assessee, appeals are not maintainable in terms of section 249(2) of the Act. Accordingly, he dismissed the appeals without deciding them on merit. Though, learned Commissioner (Appeals) has mentioned that sufficient opportunity was granted to the assessee to represent its case, however, it is quite possible that the hearing notices may not have been received by the assessee. Further, as per assessee’s claim, the penalty orders were served on him on 20.01.2017. Whereas, learned Commissioner (Appeals) has alleged that as per the report of the AO, the penalty orders were served on the assesse on 30.03.2015, hence, the appeals are barred by limitation. In our view, unless the assessee is given an opportunity to explain the cause of delay, if any, for which the appeals were dismissed without going into the merits, it may cause serious prejudice to the assessee, since, other consequences under the provisions of the Act, such as, prosecution can be launched against the assessee. Keeping in perspective all these facts, we are of the view that in the interest of fairplay and justice, the assessee deserves an opportunity to explain the alleged delay in filing the appeals before learned Commissioner (Appeals), which, it was unable to do due to ex-parte disposal of the appeals. Accordingly, matters are restored back to his file for de novo adjudication after providing reasonable opportunity to the assessee to explain the delay, if any, in filing the appeals.

In the result, appeals are allowed for statistical purposes.

This appeal arises out of the assessment proceedings completed under section 143(3) of the Act.

We have heard learned Departmental Representative and perused the materials on record. It is evident, assessee’s appeal against the assessment order was dismissed by an ex-parte order passed by the learned Commissioner (Appeals). Though, learned Commissioner (Appeal) has stated that in spite of a number of opportunities given to the assessee, no representation was made, However, we are of the view that cause of justice should be better served if one more opportunity is granted to the assessee to represent its case before learned Commissioner (Appeals). In view of the aforesaid, we are inclined to set aside the impugned order of learned Commissioner (Appeals) and restore the issues back to the file of learned Commissioner (Appeals) for de novo adjudication after due opportunity of being heard to the assessee. We also direct the assessee to make proper representation before learned Commissioner (Appeals) and cooperate in finalization of the appeal proceedings.

In the result, appeal is allowed for statistical purposes.

To sum up, all the appeals are allowed for statistical purposes.