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Income Tax Appellate Tribunal, MUMBAI BENCH “H” MUMBAI
ORDER PER RAVISH SOOD, J.M:
The present appeal filed by the assessee is directed against the order passed by the CIT(A)-24, Mumbai, dated 31.10.2019, which in turn arises from the order passed by the A.O u/s 143(3) r.w.s 147 of the Income Tax Act, 1961 (for short „Act‟), dated 17.03.2016. The assessee has assailed the impugned order on the following grounds before us: “1. On the facts and circumstances of the case the CIT (Appeals) – 24, Mumbai, erred in passing an ex-parte order on the ground of non appearance for the hearing, ignoring the fact that the appellant had sought adjournments for genuine reasons on 07.03.2019, 22.08.2019, 18.09.2019 and 30.10.2019 and the representative of the appellant had come with written submissions and paper compilation on 07.11.2019 as per the oral adjournment granted on 30.10.2019 but the said CIT (Appeal) adjourned the hearing as he had to attend & statutory 2 Hitech Corporation Ltd. Vs. ITO-1(2)(2) meeting and will inform the next date of hearing vide a fresh notice. Therefore, in the interest of justice, the appeal should be restored back to the file of CIT (Appeals). GROUNDS OFAPPEALON MERIT
2. Disallowance of claim U/s 80-IA(4)(iv) of Rs.14,13,123/- 2.1. On the facts and circumstances of the case, the said C.IT (Appeal) erred in confirming the disallowance of legitimate claim u/s 80-IA(4)(iv) of Rs.14,13,123/- ignoring the fact that the appellant rectified the technical mistake of claiming income from "windmill" as exempted U/sec 10 instead of claiming deduction u/s 80-IA(4)(iv) in the return filed u/s 148. 2.2. The said C.l.T. (Appeal) erred in ignoring the fact that the 'Windmill' was approved by the GEDA (a Gujarat State Government Body) for generation and safe of power and copy of approval certificate of GEDA before the AO.
3. Book Profit U/sec. 115JB: The said CIT(Appeal) erred in not allowing deduction U/sec 80IA(4)(iv) of Rs.14,13,123/- while computing book profit U/sec 115JB ignoring the fact that the net profit of the 80IA(4)(iv) unit of Rs.14,13,123/- has already been included in the book profit and therefore, any further addition will amount to double addition of the same income.
4. Interest u/s 234B and 234C The said C.IT.(Appeal) erred in confirming interest levied u/s 234B of Rs.37,96,590/- and u/s 234C of Rs.1,73,070/- when no such interest can be levied.
5. The appellant craves leave to add, amend, after, modify, delete and/or change all or any of the above grounds on or before the date of hearing.”
Briefly stated, the assessee company which is engaged in the business of manufacturing of plastic and PET containers, bottles, caps, jars and cans, trading in printing machines and accessories etc. had e-filed its return of income for A.Y. 2010-11 on 29.09.2010, declaring a total income of Rs.1,00,06,210/-. The return of income was initially processed as such u/s 143(1) of the Act. Original assessment was framed by the A.O vide his order passed u/s 143(3), dated 15.03.2013 at an income of Rs.2,17,06,540/-. Subsequently, the A.O observing that deduction u/s 80IA(iv) of Rs.16,17,483/- was wrongly allowed to the assessee firm, therefore, he reopened its case u/s 147 of the Act. Assessment 3 Hitech Corporation Ltd. Vs. ITO-1(2)(2) u/s 143(3) r.w.s 147 of the Act was completed by the A.O on 17.03.2016, determining the income of the assessee company at Rs.2,31,19,660/- under the normal provisions of the Act and „book profit‟ u/s 115JB at Rs.2,73,71,083/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(A). As is discernible from the order of the CIT(A), the assessee on various dates had sought adjournments i.e on 07.08.2019, 22.08.2019 and 18.09.2019. As observed by the CIT(A), the ld. authorized representative of the assessee viz. M/s Manubhai & Shah LLP, CA‟s on last occasion i.e on 18.09.2019 had requested for an adjournment; pursuant whereto the case was re-fixed for hearing on 30.10.2019, vide notice of hearing dated 25.10.2019. However, as observed by the CIT(A), the assessee representative, viz. M/s Manubhai & Shah LLP, CA on 18.09.2019 filed another letter stating that as their office would be closed due to Diwali and they would be preoccupied with the compilation of the tax audit reports and Income tax returns till 31.10.2019, therefore, the matter may be further adjourned by 15 days. However, the CIT(A) being of the view that the assessse was not serious in prosecuting the appeal, therefore, proceeded with and disposed of the same on the basis of an ex-parte order dated 31.10.2019. 4. Aggrieved, the assessee has assailed the order passed by the CIT(A), dated 31.10.2019 before us. The ld. Authorized Representative (for short „A.R‟) for the assessee at the very outset submitted that the assessee had sought adjournments on various occasions for genuine reasons i.e on 07.08.2019, 22.08.2019 and 18.09.2019. It was submitted by the ld. A.R that the asessee company had for a genuine reason requested the CIT(A) to adjourn the hearing of the appeal that was fixed for hearing on 30.10.2019 for a further period of 15 days. It was submitted by the ld. A.R that acceding to the aforesaid request the CIT(A) had on 30.10.2019 orally adjourned the matter and told the authorized representative that a fresh notice would be issued intimating the next date of hearing of the appeal. However, it is stated by the ld. A.R that when as per the 4 Hitech Corporation Ltd. Vs. ITO-1(2)(2) assurance given by the CIT(A) he had visited his office on 07.11.2019 with written submissions, he was informed that the appeal had already been disposed off vide order dated 31.10.2019. In the backdrop of the aforesaid facts, it was submitted by the ld. A.R that the assessee who as per the assurance of the CIT(A) remained under a bonafide belief that the hearing of the appeal was adjourned had however to his utter surprise suffered an ex-parte order for no fault on its part. It was, thus, submitted by the ld. A.R that in the totality of the aforesaid facts of the case the matter be restored to the file of the CIT(A) with a direction to redecide the appeal afresh after affording an 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. As is discernible from the order of the CIT(A), we find that the assessee had on various occasions sought adjournments qua the hearing of the appeal i.e on 07.08.2019, 22.08.2019 and 18.09.2019. Admittedly, on all the occasions there were justifiable reasons on the basis of which the adjournments were sought by the assessee and the same were in all fairness allowed by the CIT(A). Controversy involved in the present appeal hinges around the claim of the assessee that it had sought for a short adjournment qua the hearing of the appeal that was fixed for 30.10.2019, which as per him was orally allowed by the CIT(A). On the contrary, it is the claim of the CIT(A) that as per the request letter filed by the assessee on 18.09.2019 the case was adjourned to 30.10.2019, vide a notice of hearing dated 25.10.2019. However, on 18.09.2019 the ld. authorized representative for the assessee had filed another letter stating that as its office would be closed due to Diwali festival and they would be preoccupied with compilation of tax audit reports and the returns of income till 31.10.2019, 5 Hitech Corporation Ltd. Vs. ITO-1(2)(2) therefore, the hearing of the appeal may be further adjourned by 15 days. Backed by the aforesaid conduct of the assessee, the CIT(A) holding a conviction that the assessee was not serious in prosecuting its appeal, thus, proceeded with and disposed off the same on the basis of an ex-parte order.
We have given a thoughtful consideration to the aforesaid issue, and find, that it is the claim of the assessee that on 30.10.2019, on an oral request, the CIT(A) had adjourned the matter and had assured the assesee that the next date of hearing would be intimated vide a fresh notice. However, as stated by the ld. A.R, the CIT(A) had thereafter most arbitrarily disposed off the appeal vide an ex- parte order datd 31.10.2019. After deliberating at length on the aforesaid facts attending to the case of the present assessee before us, we may herein observe that though an assessee is entitled for seeking adjournment of a case under exceptional and compelling circumstances, however, the same by no means can be taken as a matter of right. As is discernible from the records, the CIT(A) had rightly observed that the conduct of the assessee in the course of the proceedings before him did not inspire much of confidence as regards its seriousness in prosecuting the appeal before him. At the same time, we also cannot remain oblivion of the fact that the assessee had remained divested of a fair opportunity in putting forth its case before the CIT(A) due to the misconception on the part of its authorized representative that on 30.10.2019 the matter was adjourned by the CIT(A) and the next date of hearing of the appeal was to be intimated vide a fresh notice. In the backdrop of the aforesaid facts, we are of the considered view that the matter in all fairness requires to be restored to the file of the CIT(A) for fresh adjudication. Needless to say, the CIT(A) in the course of the set-aside proceedings shall afford an opportunity of being heard to the assessee.
As we have restored the appeal to the file of the CIT(A) for fresh adjudication, therefore, we refrain from adverting to and therein adjudicating the 6 Hitech Corporation Ltd. Vs. ITO-1(2)(2) contentions raised by the assessee qua the validity of the additions made by the A.O, which are left open.
Resultantly, the appeal of the assessee is allowed for statistical purposes.