M/S. HELIOS SOLUTIONS LTD.,,CHENNAI vs. ITO, CORPORATE WARD - 2 (3),, CHENNAI

The two appeals, & 181/Chny/2020 filed by the Assessee are directed against the consolidated order of the learned Commissioner of Income Tax (Appeals)-6, Chennai in I.T.A. No.7/CIT(A)-6/2017-18, dated 28.11.2019 relevant to the assessment year 2013 - 2014. & 181/Chny/2020 :- 2 -: There is a delay of nine days in filing of these appeals before the learned Commissioner of Income Tax (Appeals). The learned Commissioner of Income Tax (Appeals) simply dismissed the appeals of the Assessee on the ground of delay without adjudicating the appeal on merits. We find that the learned Commissioner of Income Tax (Appeals) has no power to dismiss simply on the delay without considering the merits of the case. In fact, in this case, the delay is only nine days and therefore we are of the opinion that the learned Commissioner of Income Tax (Appeals) ought to have condoned the delay. The case of the Assessee is that the delay is because that all the Directors were out of station and hence could not file the appeal before the learned Commissioner of Income Tax (Appeals) in time. When the Assessee had filed an affidavit, he has stated that he could not file the appeal due to the reason that all the Directors were out of station. The learned Commissioner of Income Tax (Appeals) ought not to have rejected the content of the affidavit without proper verification. & 181/Chny/2020 :- 3 -: We are of the opinion that it is a fit case to condone the delay. Accordingly, the delay is condoned.

We have heard both the sides through Video-Conferencing, perused the materials available on record and gone through the orders of the authorities below.

In this case, the Assessment was completed u/s.144 of the Income Tax Act, 1961 on 28th March, 2016. In the assessment order, the learned Assessing Officer has noted that the Assessee company has filed its original return for the Assessment Year 2013- 2014 belatedly on 13.01.2014 admitting a taxable income of Rs.32,35,690/- and arriving at a tax payable of Rs.11,80,869/-. The Assessee company filed its return of income without paying the resultant tax. The Form 3CA relevant to the Assessment Year 2013-2014 was also belatedly uploaded on 13.01.2014. Subsequently, on 06.09.2014, the Assessee company filed a revied return converting the income originally admitted to a returned loss of & 181/Chny/2020 :- 5 -: Rs.1,43,220/-. The Assessee company has remained unmoved with stoic silence for all the notices / communications issued all along. The levy of penalty u/s.271(1)(b) also did not elicit any compliance from it. The learned Assessing Officer further noted that the Assessee has not filed any details nor document evidences. The Assessee has not co-operated to finalize the scrutiny assessment proceedings. Accordingly, the learned Assessing Officer has disallowed the various expenditures that were incurred by the Assessee and accordingly the assessment was completed.

Before us, the Assessee has submitted that due to the heavy floods at Chennai during December 2015, the administrative office was affected wholly which lead to the passing of the ex-parte best judgement assessment u/s.144 of the Income Tax Act, 1961. It is submitted that due to the unexpected happening in the city of Chennai, the Assessee could not file relevant details before the learned Assessing Officer. As the Assessee is able to collect all the relevant details now, one more opportunity should be given to the Assessee to substantiate his case before the learned Assessing Officer. & 181/Chny/2020 :- 6 -:

The learned Departmental Representative has supported the order of the authorities below.

We have heard both the sides through Video-Conferencing, perused the materials available on record and gone through the orders of the authorities below.

We find that the learned Assessing Officer has passed the best judgement order u/s.144 of the Income Tax Act, 1961 on the ground that the Assessee has not filed any relevant bills and vouchers nor other documents in respect of the expenditure incurred by the Assessee and we also observed that the Assessee has not co-operated to complete the assessment. The case of the Assessee is that, at the relevant point of time due to the heavy floods, the Assessee could not file any relevant material before the learned Assessing Officer. Therefore, one more opportunity should be given to the Assessee to file all the relevant materials before the learned Assessing Officer to substantiate his case. To support his case, the Assessee has filed a paper-book, wherein in page-636, a Tahsildar, Mambalam Taluk, Chennai has issued a Certificate by stating that the office premises (Helios & 181/Chny/2020 :- 7 -: Solutions Limited Company) of Thiru Swamynathan S/o (Late) Govindarajan situated at No.1, 1st Link Street, Raghavan Colony, Jafferkhanpet, Chennai – 600 083 has been affected by the recent floods due to torrential North-East Monsoon rain in December 2015.

We therefore by taking into consideration all the submissions of the Assessee and the Certificate issued by the Tahsildar, Mambalam Taluk, we find that one more opportunity should be given to the Assessee to substantiate his case before the learned Assessing Officer. So far as the observations made by the learned Commissioner of Income Tax (Appeals) that the Managing Director of the Company has to sign, we direct the learned Assessing Officer to examine the issue in accordance with the rules. So far as the admission of additional evidences is concerned, we remit the entire paper-book filed by the Assessee consisting of 636 pages, we direct the learned Assessing Officer to peruse the relevant and necessary bills and vouchers and documents and by considering the same, it is open to the learned Assessing Officer to pass an assessment order de novo in accordance with law. We also direct that the Assessee has to appear and file all the relevant details as and when directed by the learned Assessing & 181/Chny/2020 :- 8 -: Officer. We further direct that the Assessee should fully co-operate with the learned Assessing Officer to complete the assessment.

In this appeal, the learned Commissioner of Income Tax (Appeals) has passed an ex-parte order. We are of the opinion that the order passed by the learned Commissioner of Income Tax (Appeals) has to be set aside on the ground of natural justice as well as following the principles of natural justice, one more opportunity should be given to the Assessee.

Accordingly, we set aside the order passed by the learned Commissioner of Income Tax (Appeals) and remit back the file to the Assessing Officer to pass an order afresh in accordance with law. The appeal of the Assessee in is allowed for statistical purpose.