MUKTESH PRIVATE LIMITED (FORMERLY KNOWN AS MUKTESH CHEMICALS PRIVATE LIMITED),PUNE vs. ITO, WARD-11(1), PUNE

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ITA 2032/PUN/2019Status: DisposedITAT Pune06 July 2022AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) should not have dismissed the appeal on delay alone without deciding the penalty issue on merits. The assessee should be given an opportunity for a hearing on the merits of the case.

What were the facts?

The assessee company, engaged in manufacturing DNA chemicals, discontinued its business and rented out sheds. It claimed business and depreciation loss against rental income, which the AO treated as income from house property and levied penalty. The CIT(A) dismissed the appeal solely on grounds of delay.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal on grounds of delay without adjudicating the penalty issue on merits.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 271(1)(c)

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Income Tax Appellate Tribunal, “A”

Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE

For Appellant: Shri Saurabh Bora – AR
For Respondent: Shri S.P. Walimbe - DR
Hearing: 09/06/2022Pronounced: 06/07/2022

ORDER

PER DR. DIPAK P. RIPOTE, AM:

1.

This appeal filed by the Assessee is directed against the order of ld. Commissioner of Income Tax(Appeals)-9, Pune for the A.Y. 2008-09 dated 15.10.2019.

2.

Briefly stated, the facts of the case are that the assessee is a company and engaged in the manufacturing of DNA chemicals. However, it discontinued the business and the sheds were given on rent. The assessee filed its return of income on 29.09.2008 declaring Rs.Nil income and claimed business loss and depreciation loss of Rs.4,77,246/-. The case was selected for scrutiny. The assessee shown rental income of Rs.4,77,246/- and claimed set off against the A.Y. 2008-09 Muktesh Pvt. Ltd. Vs. ITO, Ward-11(1), Pune)

business loss and depreciation loss. Eventually, the AO, in the assessment completed u/s.143(3) treated the same as income from house property and levied penalty u/s.271(1)(c) of the Act for filing inaccurate particulars of income.

3.

Aggrieved by the order of AO, the assessee preferred an appeal before the ld.CIT(A). There was a delay of 173 days in presenting the appeal before him. However, the ld.CIT(A) relying on various judicial precedents has dismissed the appeal of the assessee on the ground of delay alone. Relevant discussion has been made in para nos. 2.3 to 2.3.5 of the ld.CIT(A)’s order.

4.

Aggrieved by the order of ld.CIT(A), the assessee has approached the Tribunal espousing the delay issue in the grounds of appeal and the issue of levy of penalty u/s.271(1)(c) of the Act as well.

5.

We have heard both the sides and perused the relevant material on record. On perusal of the order of the ld.CIT(A), it is an admitted position that the ld.CIT(A) has not decided the penalty issue on merits instead he dismissed the appeal on the ground of delay alone. Therefore, the assessee, in our view, should not be precluded an opportunity of hearing on merits, simply on account of delay alone. Our view is further strengthened by the decision of Amritsar Bench

A.Y. 2008-09 Muktesh Pvt. Ltd. Vs. ITO, Ward-11(1), Pune) of the Tribunal in Kashmir Road Lines Vs. DCIT (2021) 123 taxmann.com 5 where in it was held that even when the assessee is not interest in pursuing the appeal, even then, the ld.CIT(A) should dispose of the appeal of merits. In view of the aforementioned reasons, we set-aside the impugned order and remit the matter to the file of the ld.CIT(A) with a direction to dispose of the appeal afresh on merits as per law after allowing a reasonable opportunity of hearing to the assessee.

6.

In the result, the appeal is allowed for statistical purposes.

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