M/S KOSHA CHEMTECH PRIVATE LIMITED,MUMBAI vs. ACIT 12 (3)(1), MUMBAI

This is an appeal by the assessee against order dated 25.03.2019 of learned Commissioner of Income Tax (Appeals)-20, Mumbai for the assessment year 2014-15.

The basic grievance of the assessee is against ex-parte disposal of the appeal filed before learned Commissioner (Appeals), that too, in limine. 3. Briefly the facts are, the assessee is a resident company engaged in manufacturing of organic chemical products. For the assessment year under dispute, assessee filed its return of income on 21.11.2014 declaring total income of Rs. 1,18,35,410/-. Subsequently, based on information received 2 Assessment Year: 2014-15 from the Investigation (Wing) at Kolkata that deduction claimed because of donation given to a particular entity is ingenuine, the Assessing Officer (AO) reopened the assessment under section 147 of the Income Tax Act, 1961. Ultimately, the AO completed the assessment under section 147 of the Act adding back the donation of Rs. 42,50,000/-. Against the assessment order so passed, assessee preferred an appeal before learned Commissioner (Appeals). Being of the view that the appeal filed by the assessee is defective, since, the Memorandum of Appeal in Form No. 35 has not been signed by the Managing Director or any other Director, learned Commissioner (Appeals) treated the appeal as invalid and accordingly dismissed it without going into the merits. 4. Before us, learned Counsel for the assessee submitted that the Memorandum of Appeal was signed by one of the Directors of the assessee company. She submitted, without providing even a single opportunity to the assessee to explain the so called defect, learned Commissioner (Appeals) has dismissed the appeal purely on technical ground without going into the merits. Thus, she submitted, the order passed being in violation of rules of natural justice, should be set aside. 5. Learned Departmental Representative fairly submitted, the assessee can be given one more opportunity to represent the case before learned Commissioner (Appeals) after rectifying the defect. 6. We have considered rival submissions and perused the materials on record. Undisputedly, learned Commissioner (Appeals) has dismissed assessee’s appeal in limine purely on a technical ground that the Memorandum of Appeal in Form No. 35 was not signed by the Managing Director or any other 3 Assessment Year: 2014-15 Director. However, on perusal of material on record, prima facie, we are satisfied that one of the Directors of the assessee company has verified and singed the Memorandum of Appeal. Even, assuming that there was some defect in the appeal filed by the assessee, learned Commissioner (Appeals) should have adhered to the principles of natural justice and granted a fair opportunity to the assessee to rectify the defect, if any. However, on a careful scrutiny of the impugned order of learned Commissioner (Appeals) as well as other materials on record, we do not find any such opportunity being granted to the assessee by learned Commissioner (Appeals). In fact, a cursory glance at the impugned order of learned Commissioner (Appeals) would make it clear that without providing any opportunity to the assessee, learned Commissioner (Appeals) has dismissed the appeal in limine without going into the merits of the case. In our view, this is in gross violation of rules of natural justice.

In view of the aforesaid, we are inclined to set aside the impugned order of learned Commissioner (Appeals) and restore the matter back to him for de novo adjudication. In case, there is any defect in the appeal filed by the assessee, learned Commissioner (Appeals) must provide reasonable opportunity to the assessee to remove the defect and thereafter decide the appeal on merits after due opportunity of being heard to the assessee.

In the result, appeal is allowed for statistical purposes.