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Income Tax Appellate Tribunal, MUMBAI BENCH “H” MUMBAI
Before: SHRI PRAMOD KUMAR & SHRI RAVISH SOOD
ORDER
PER RAVISH SOOD, JM :
The present appeal filed by the assessee is directed against the order passed by the CIT(A)-3, Thane, dated 04.08.2020, which in turn arises from the order passed by the A.O u/s 143(3) of the Income Tax Act, 1961 (for short „Act‟), dated 31.03.2014. The assessee has assailed the impugned order on the following grounds before us:
“1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal and that too without giving full and proper opportunity of being heard in the matter.
On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal and that too without appreciating fully and properly, the facts of the case.
On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal and that too without even considering fully and properly, the paper book consisting of written submissions as well as evidences submitted during the course of the hearing proceedings.
2 Kanayalal Tanumal Gambani Vs. DCIT, Circle-2
4. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal and thereby upholding the addition made of Rs.15,88,101/- as undisclosed business income of the assessee.
5. On the facts and in the circumstances of the case and in law, the learned A.O erred in interest of Rs.1,63,548/-u/s 234B of the Act. 6. The appellant craves leave to add, alter, amend or delete any or all of the grounds of appeal
at any time.”
2. Briefly stated, the assessee who is engaged in the business of construction & interior decoration had filed his return of income for A.Y. 2011-12 on 27.09.2011, declaring an income of Rs.88,74,731/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act. Assessment was thereafter framed by the A.O vide his order passed u/s 143(3) of the Act, dated 31.03.2014, wherein after making the following additions/disallowance the income of the assessee was determined at an amount of Rs.1,05,11,740/-:
Sr. No. Particular Amount 1. Disallowance u/s 40A(3) of the Act. Rs. 48,890/- 2. Addition of undisclosed business receipts Rs.15,88,101/- (as per form No. 26AS) 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee during the Covid Pandemic had on one occasion failed to put up an appearance before the first appellate authority, therefore, the latter proceeded with the appeal on an ex-parte basis and dismissed the appeal.
The assessee being aggrieved with the order passed by the CIT(A) has carried the matter in appeal before us. It was vehemently submitted by the ld. Authorized Representative (for short „A.R‟) for the assessee that though the counsel for the assessee had except for on one occasion had on all earlier occasions appeared in the course of the hearing of the appeal before the CIT(A), however, the latter had most arbitrarily dismissed the appeal for the standalone reason that there was a failure on the part of the assessee to appear before him after reopening of his office post lifting of the lockdown by the government. It was 3 Kanayalal Tanumal Gambani Vs. DCIT, Circle-2 submitted by the ld. A.R that the assessee had remained divested of a sufficient opportunity of being heard by the first appellate authority. It was submitted by the ld. A.R that the matter in all fairness be restored to the file of the CIT(A) with a direction to dispose off the same after affording a sufficient opportunity of being heard to the assessee.
Per contra, the ld. Departmental Representative (for short „D.R‟) relied on the orders of the lower authorities.
We have heard the ld. Authorized Representatives for both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, it is a matter of fact borne from the record that the assessee‟s counsel, viz. Shri. Rajesh Hiranand Modi, Advocate had in the course of hearing of the appeal except for on one occasion had on all earlier dates appeared before the CIT(A). Further, we find that as the assessee‟s counsel had in the course of the appellate proceedings placed on record his written submissions a/w supporting documents, therefore, the CIT(A) had forwarded the same to the A.O and had called for his remand report. However, as the A.O had failed to submit the remand report, therefore, the CIT(A) had assumed that he had nothing to say in the matter and had proceeded with the disposal of the appeal. However, in view of country wide lockdown that was imposed by the government due to Covid Pandemic, the hearing of the present appeal was suspended by the CIT(A). On reopening of the offices, though the CIT(A) had issued a notice dated 22.07.2020, however, the assessee failed to comply with the same. Backed by the aforesaid failure on the part of the assessee to comply with the aforesaid notice dated 22.07.2020, we find that the CIT(A) decided to dispose off the appeal on the basis of the material available on record and dismissed the appeal.
After giving a thoughtful consideration to the facts involved in the case before us, we are unable to persuade ourselves to subscribe to the manner in 4 Kanayalal Tanumal Gambani Vs. DCIT, Circle-2 which the appeal have been disposed off by the ld. CIT(A). As is discernible from the records the assessee had on all the earlier dates duly complied with the notices that were issued by the CIT(A) and had through his authorized representative, viz. Shri. Rajesh Hiranand Modi, Advocate participated in the appellate proceedings. Apart from that, the assessee had filed written submissions a/w supporting details in the course of the appellate proceedings which were forwarded by the CIT(A) to the A.O with a direction to file a remand report. In fact, we find that it was but for the failure on the part of the A.O who despite repeated reminders had failed to file his „remand report‟ that the CIT(A) assuming that the A.O had nothing to say had sought to proceed with the appeal on the basis of material available on record. At this stage, we may herein observe that upto the aforesaid period there was no non-compliance of any notice or direction of the CIT(A) by the assessee. However, we find that it was only for the reason that the assessee had failed to comply with a notice dated 22.07.2020 that that was issued by the CIT(A) after the offices had reopened after the lockdown was partially lifted by the government, that the CIT(A) had proceeded with the appeal on the basis of the material available on record and had dismissed the appeal. In the totality of the facts involved in the case before us, we are unable to persuade ourselves to subscribe to the proceeding with the appeal on an ex-parte basis by the CIT(A). As observed by us hereinabove, the solitary failure on the part of the assessee to comply with a notice issued by the CIT(A) on 22.07.2020, and that too at a time when the entire country was recovering from the trauma of Covid Pandemic can by no means justify disposing of the appeal on an ex-parte basis. Considering the conduct of the assessee on the earlier occasions, we are of a strong conviction that the CIT(A) ought not to have proceeded with and disposed off the appeal on an ex-parte basis. We, thus, in terms of our aforesaid observations restore the appeal to the file of the CIT(A), with a direction to dispose off the same after affording a reasonable opportunity of being heard to the assessee. As we have restored the appeal to the file of the 5 Kanayalal Tanumal Gambani Vs. DCIT, Circle-2 CIT(A), therefore, we refrain from adverting to and dealing with the merits of the case.
The appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.
Order pronounced in the open court on 21.09.2021.