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Before: Shri V. Durga Rao & Shri Manoj Kumar Aggarwal
आयकर अपीलीय अिधकरण, ‘बी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI �ी वी. दुगा� राव, �ाियक सद� एवं �ी मनोज कुमार अ�वाल, लेखा सद� के सम� । Before Shri V. Durga Rao, Judicial Member & Shri Manoj Kumar Aggarwal, Accountant Member आयकर अपील सं./I.T.A. No.3149/Chny/2019 िनधा�रण वष�/Assessment Year: 2016-17 M/s. Trac Media Pvt. Ltd., The Assistant Commissioner of No. 35, 3rd Main Road, Kalaimagal Income Tax, Nagar, Ekkattuthangal, Corporate Circle 20(1), Vs. Chennai 600 032. Chennai 600 034. [PAN:AADCT4184G] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri D. Anand, Advocate ��थ� की ओर से/Respondent by : Shri R. Clement Ramesh Kumar, CIT सुनवाई की तारीख/ Date of hearing : 01.02.2022 घोषणा की तारीख /Date of Pronouncement : 10.02.2022 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 9, New Delhi dated 09.08.2019 relevant to the assessment year 2016-17. The assessee has raised following grounds: “1. The order of the Commissioner of Income Tax (Appeals) is contrary to law, facts of the case and material on record. 2. The Commissioner of Income Tax (Appeals) and the Assessing Officer failed to afford sufficient opportunity of being heard to the appellant before passing exparte order.
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The Commissioner of Income Tax (Appeals) ought not to have passed exparte order especially when admittedly the AR of the appellant was present before the Commissioner of Income Tax (Appeals) as is evident from para 5.1 of the appellate order wherein the CIT(A) had observed that “during the course of appellate proceedings, the AR of the appellant too accepted that the jurisdiction was with the present AO at the time of initiation of assessment proceedings”. 4. The Commissioner of Income Tax (Appeals) is not justified in confirming the disallowances made by the Assessing Officer in the absence of sufficient material for making the disallowance of 50% of expenses and in treating the ‘Trade Payable’ in the sum of ₹.6,48,34,964/- as income under Sec. 68 of the Act. 5. For these grounds and such other grounds as may be adduced either before or during the appeal proceedings, the appellant prays that the Hon’ble Tribunal may be pleased to set aside the orders of the authorities below holding them to be untenable and direct the Assessing officer to make de novo assessment as per law after affording sufficient opportunity of being heard to the appellant and render justice”. 2. Brief facts of the case are that the assessee has filed its return of income for the assessment year 2016-17on 03.10.2016 admitting NIL income and loss for current year of ₹.13,52,97,483/-. The case was selected for scrutiny.
The case of the assessee is that the Assessing Officer has not served any notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] to the right address of the assessee. Therefore, the assessment order passed under section 144 of the Act has to be quashed and the order passed by the ld. CIT(A) should be set aside.
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Further, the assessee has relied on the decisions in the case of ACIT v. Hotel Blue Moon in Civil Appeal No. 1198 of 2010 (SC) and CIT v. Abacus Distribution Systems (India) Pvt. Ltd. in ITA No. 1382 of 2014 (Bom).
On the other hand, the ld. DR has submitted that the notice under section 143(2) of the Act has already been served on the assessee. The said notice was sent to the address given by the assessee by speed post as well as e-mail address given by the assessee. In the assessment order, it was recorded that the notice was served not only under section 143(2) of the Act, but notice under section 142(1) of the Act besides issued summons under section 131 of the Act to one of the Directors, who resides in Delhi. The ld. DR further submitted that for the assessment year under consideration, the assessee has not given any reply with respect to the notices served on the assessee knowing very well that its case was taken up for scrutiny neither the assessee has appeared before the Assessing Officer nor communicated.
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In the
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assessment order, in respect of the notices, the Assessing Officer has recorded as under: “2. Accordingly, a notice u/s 143(2) of the Act, 1961 dated 5.9.2017 was served to the assessee on 11.9.2017 through speed post ED 583646513IN for compliance 13.9.2017. This notice was served to the assessee on his then address i.e. No. 23, Sardar appartments, Mayur Vihar, Delhi - 110091 but no compliance was made by the assessee either through ITBA or by manual mode in office receipt. Thereafter, a notice u/s 142(1) of the Act, 1961 dated 18.7.2018 was served to the assessee company through e-assessment module under digital signature of the AO i.e. ACIT, Circle 25(2), Delhi for compliance on 2.8.2018 but assessee remained non- complied. Notice u/s 142(1) of the Act, 1961 dated 20.8.2018 along with questioners was served to the assessee again for compliance on 31.8.2018 but assessee did not complied this time too. Yet another notice u/s 142(1) of the Act, 1961 dated 4.9.2018 for necessary compliance and submission of basic details for compliance on 19.9.2018 was also not complied. Both the notices were served through ITBA module under digital signature of the AO. 3. Meanwhile the case was received on transfer to this special range in pursuant of the order u/s 127 of the Act, 1961 dated 22.10.2018 of the PCIT-9, Delhi and proceedings u/s 27I(1)(b) of the Act was initiated from this office to the assessee for compliance on 21.11.2018 as to why penalty for non compliance not be levied but assessee remained non-complied this time too. On receipt of the jurisdiction of the assessee company with this charge, proceedings u/s 271(1)(b) of the Act, 1961 was initiated against the assessee as to why penalty not be levied for non con-compliance of this office's statutory notices for the AY under consideration, which is limited by time bar on 31.12.2018, but no reply is received from the assessee on the stipulated date 19.11.2018. Thereafter penalty u/s 271(1)(b) of the Act, 1961 was levied in the case of the assessee on 20.11.2018 and same was intimated as well through the ITBA instantly. 4. In the e-filed return submitted by the assessee Company, it is seen that there are two directors in the company namely Sathyanarayanan Pachamuthu and Ravi Pachamuthu (PAN - AABPR7984F) and in the shareholder information, there is only shareholder mentioned is New Generation Media Corporation Limited
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with only address mentioned 'Mayur Vihar' with 96.15% percentage of share. No PAN is given in case of one direct and the share holder by the Assessee Company, for the reason best known to the Assessee Company. 4.2 Although address of director Sathyanarayanan Pachamuthu was given therefore this office issued summons u/s 131 of the Act, 1961 to both the directors through speed post vide ED902497154IN & ED902497171IN at their address. this summon was sent through ITBA to the e-mail address connected to PAN of Ravi Pachamuthu for compliance for 27.11.2018 but neither any compliance is made nor any information has been provided to this office for the said non- compliance. 4.2 This office also served notice u/s 221 (I) of the act, 1961 dated 26.11.2018 for collection of demand of Rs. 88,35,070/- for the AY 2014- 15 but assessee remained non-complied here too. Assessee has not filed even appeal against the demand raised as per the records available to this office for the said AY. This office also informed the proceedings to the AO which is ACIT, Central Circle 1(3), Chennai in the case of the director Ravi Pachamuthu vide this office letter dated 26.11.2018 served through speed post ED902497485IN. 5. The office of the AO i.e. ACIT, Circle 25(2), Delhi vide assessee's letter submitted on 19.12.2018 in response to the show cause dated 18.12.2017 for the AY 2015-16 had requested to transfer the PAN of the assessee company to the jurisdiction of income tax office at Chennai and this request was sent to the concerned office of income tax Chennai for necessary NOC, but the office of the Income Tax office of PCIT-10, Chennai vide letter dated 17.12.2018 informed that the case records may be transferred to the ACIT, Non-Corporate Circle- 20(1), Chennai after completion of time barring assessment. This was accordingly conveyed to the Assessee Company on the same, this letter received to this office through e-mail to the e-mail address of ACIT Circle 25(2), Delhi which was forwarded to this office from DCIT on 17.12.2018. This letter was on the subject 'Objection for transfer of jurisdiction u/s 127 in case of M/s Trac Media Pvt. Ltd. (PANAADCT4184G)reg.' 5.2 Therefore this office is passing this order exparte after given Show cause notice to the assessee as to why the case not been assessed u/s 144 of the act, 1961 on the basis of details available on record and also as the case is in eassessment module and this is
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faceless assessment and assessee need not have to visit the office of the Assessing officer for providing the necessary details called for. The details are asked through eassessment module every time and the statutory notice are received to the assessee on the already provided email address of the assessee by the Assessee Company while filing its return of income for the AY under consideration. The Assessee Company had received statutory notice u/s 143(2) on the correct address which was Delhi address at that time. Assessee has just tried to delay the proceedings by non cooperating into assessment proceedings and may take a plea of address change or jurisdiction change in ROC but the PAN is in the jurisdiction of the Special Range9, Delhi of the Income Tax and this office will correctly complete the assessment proceedings limited to time bar on 31.12.2018. 5.3 This Office has taken all possible effort to appraise you that the case is limited by time bar on 31.12.2018. The required NOC from Income Tax Office Chennai on your letter of request is not received and it is told by the Chennai office that the PAN be migrated after completion of scrutiny assessment in the case for AY 2016-17. The notice u/s 143(2) of the Act, 1961 was served to you at your correct address in September 2017. The Notice thereafter has been served to you through ITBA and being faceless scrutiny assessment, the detail is expected from you through online mode only and primarily. The reply to the summons issued to the Directors are also not complied. You are hereby being show caused as to why ex-parte assessment u/s 144 of the Act, 1961 not be passed in your case. Your reply should come on or before 22.12.2018 positively failing which order will be passed incorporating all details including this final show cause. No response is received of this show cause from you till date.” From the above, it is very clear that the Assessing Officer has made all efforts to serve the notice. The Assessing Officer has not only forwarded the notices through speed post, he has also forwarded
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through e-mail address of the company. Inspite of that, the assessee has not responded. That apart, the assessee knew very well that its case has been taken up for scrutiny, the assessee has not bothered to appear before the Assessing Officer. However, the assessee filed an appeal before the ld. CIT(A) and engaged a Chartered Accountant and submitted its case. Under the above facts and circumstances of the case, we are of the opinion that the non-services of notices under section 143(2) of the Act cannot be quashed. Moreover, the case law relied upon has no application.
On appeal before the ld. CIT(A), the ld. CIT(A) has adjudicated the only one issue of service of notice under section 143(2) of the Act and no order on merits has been passed. By considering the entire facts and circumstances of the case, we are of the opinion that one more opportunity should be given to the assessee to substantiate its case before the Assessing Officer. In view of the above, we set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the Assessing Officer with a direction to issue notice to the changed address of the assessee and pass the assessment order in accordance with law by affording an opportunity of being heard to the
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assessee. Further, we also direct the assessee to appear before the Assessing Officer without fail for completion of the assessment.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 10th February, 2022 at Chennai.
Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 10.02.2022 Vm/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु� (अपील)/CIT(A), 4. आयकर आयु�/CIT, 5. िवभागीय �ितिनिध/DR & 6. गाड� फाईल/GF.