MAKARA LEATHER MANUFACTURING COMPANY PRIVATE LIMITED (IN LIQUIDATION),CHENNAI vs. ITO CORPORATE WARD 4(1), CHENNAI

This appeal filed by the assessee (in liquidation) is directed against the order of the ld. Commissioner of Income Tax (Appeals) 8, Chennai, dated 18.01.2018 relevant to the assessment year 2012-13. The following grounds have been raised in the appeal:  The CIT(Appeals) has not applied his mind to the facts and circumstances of the case.  The CIT(Appeals) has not considered Sec 529A of the Companies Act 1956 (Section 326 of the New Companies Act, 2013) which has an over-riding provision over all the other laws for the time being in force.

The above appeal is filed with a delay of 101 days, for which, the Official Liquidator has filed a petition in support of an affidavit for condonation of the delay, to which; the ld. DR has not raised any serious objection. Consequently, since the Official Liquidator was prevented by sufficient cause, the delay of 101 days in filing of the appeal stands condoned and the appeal is admitted for adjudication.

The assessee (in liquidation) filed the return of income for the assessment year 2012-13 on 06.09.2012 admitting NIL income. The case was selected for scrutiny and notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was issued and duly served on the assessee company (in Liquidation). Subsequently, notice under section 142(1) of the Act was also issued called for various details. After considering the detailed submissions, the Assessing Officer completed the assessment under section 143(3) of the Act by assessing the income of the assessee at ₹.80,00,000/- after making addition towards long term capital gains. On appeal, after considering the materials available on record, the ld. CIT(A) allowed partial relief to the extent of ₹.8 lakhs and sustained the LTCG tax to the extent of ₹.72 lakhs.

On being aggrieved, the assessee (in liquidation) is in appeal before the Tribunal. The appeal was originally posted for hearing on 10.06.2021 and the hearing was adjourned to 26.07.2021 after informing both the parties. However, when the appeal was taken up for hearing, none appeared on behalf of the assessee. Hence, we proceeded to decide the appeal on merits after hearing the ld. DR.

We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee company is in liquidation proceedings. As per assessment order under section 143(3) of the Act, the Assessing Officer has made an addition of long term capital gains of ₹.80,00,000/-. On appeal, the ld. CIT(A) has stated that last opportunity of hearing to the assessee to file the information was given on 09.01.2018. But, no details of opportunities given to the Official Liquidator to represent the case are available in the appellate order. In the absence of any detailed representation from the Official Liquidator, the ld. CIT(A) concluded the appellate order with the available materials on record by allowing relief to the extent of ₹.8 lakhs and sustained the addition of ₹.72 lakhs towards long term capital gain. In view of the above facts and circumstances, we are of the considered opinion that the ld. CIT(A) should have given sufficient opportunities of being heard to the Official Liquidator to represent the case. Accordingly, we set aside the appellate order and direct the ld. CIT(A) to afford sufficient meaningful opportunities of being heard to the Official Liquidator to represent the case and thereafter conclude the appellate order in accordance with law.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 29th July, 2021 in Chennai.