BHUVANESH REALTORS PRIVATE LIMITED,HYDERABAD vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), HYDERABAD

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ITA 1372/HYD/2019Status: DisposedITAT Hyderabad25 February 2022AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) should have decided the case on merits instead of dismissing it ex-parte. The matter was remitted back to the CIT(A) to provide the assessee with another opportunity to be heard.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-compliance with notices. The assessee argued that the CIT(A) should have considered their submissions and that the expenditure was not related to investments.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal ex-parte without considering the merits of the case, and whether the expenditure disallowed was relatable to investments.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SHRI A.D. JAIN & SHRI A. MOHAN ALANKAMONY

Hearing: 22/02/2022Pronounced: 25/02/2022

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “A”, HYDERABAD BEFORE SHRI A.D. JAIN, VICE PRESIDENT AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER Assessment Year: 2016-17 Bhuvanesh Realtors Private Vs. ACIT, Limited, Circle-1(2), Hyderabad. Hyderabad. PAN: AACCB 6202 A (Appellant) (Respondent) Assessee by: Sri P. Vinod Revenue by: Sri T. Sunil Goutam, Sr. AR Date of hearing: 22/02/2022 Date of pronouncement: 25/02/2022 ORDER PER A. MOHAN ALANKAMONY, AM.:

This appeal is filed by the assessee against the order of the Ld. CIT (A)-1, Hyderabad in appeal No. 10357/2018-19/ACIT-1(2)/CIT(A)- 1/Hyd/2019-20, dated 28.06.2019 passed U/s. 143(3) r.w.s 250(6) of the Act for the AY 2016-17.

2.

The assessee has raised six grounds in its appeal and they are extracted herein below for reference:

“1. The order of the Ld. CIT (A) is erroneous both on facts and in law so far as it is prejudicial to the appellant. 2. The Ld. CIT (A) erred in dismissing the appeal for non-complying to the notice. 3. The Ld. CIT (A) should have considered the statement of facts submitted by the appellant wherein the appellant has made the submissions. By not considering the statement of facts, the Ld. CIT (A) erred in confirming the addition of expenditure amount of Rs. 93,533/- disallowed U/s. 14A of the IT Act, 1961.

4.

The Ld. CIT (A) ought to have considered the facts and circumstances of the appellant case that the investments into equity shares were made out of reserves and also considered the fact that, there is no relation between the expenditure of Rs. 93,533/- incurred and investments into equity shares.

5. The Ld.CIT(A) ought to have confirmed the expenditure disallowed for an amount of Rs. 93,533 U/s. 14A of the IT Act, 1961 since the expenditure is not relatable to investments.

6.

The appellant craves leave to add/alter/modify grounds which would be necessary to adjudication of the case.”

3.

At the outset, the ld. AR submitted that the Ld. CIT (A) has passed ex-parte order and therefore the matter may be remitted back to the file of the Ld. CIT (A) in order to provide one more opportunity to the assessee. Before us, the Ld. DR argued vehemently by stating that sufficient opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee nor her Representative appeared before the Ld. CIT (A). Therefore the Ld. CIT (A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.

4. We have carefully considered the facts and circumstances of the case and perused the materials on record. On examining the order of the Ld. CIT(A), it appears that none appeared on behalf of the assessee before the CIT(A) on the date of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal ex-parte. In this situation, we are of the view that the Ld. CIT(A) ought to have decided the case on merits instead of dismissing the appeal for non-appearance of the assessee. Considering these facts and circumstances of the case as well as the issues involved in the appeal, in the interest of justice, We hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, We also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.

5.

In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.

Pronounced in the open Court on 25th February, 2022.

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