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Facts
The assessee, engaged in real estate, filed her return for AY 2017-18 declaring income of Rs. 93,74,910. The AO made an addition of Rs. 64,96,560 on account of disallowance of interest on unsecured loans. The CIT(A) dismissed the appeal ex-parte due to non-compliance by the assessee.
Held
The Tribunal noted that the CIT(A) order was passed ex-parte because the assessee failed to appear or submit evidence. However, considering the assessee's claim that notices were sent to an old email and the interest of natural justice, the matter was restored to the AO for fresh adjudication.
Key Issues
Whether the appeal dismissed ex-parte by the CIT(A) should be restored to the AO for fresh adjudication in the interest of natural justice, given the circumstances of non-service of notices.
Sections Cited
143(3), 57(iii), 270A
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 498/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2017-18 Shashi Gupta cuke Commissioner of Income Tax 702, Madho Singh Circle, Bani Vs. (Appeals), National Faceless Appeal Centre. Park, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ADFPG5645P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Vikash Rajvanshi, C.A. jktLo dh vksj ls@ Revenue by : Mrs. Swapnil Parihar, JCIT- DR a lquokbZ dh rkjh[k@ Date of Hearing : 19/02/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 02/04/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M.
This appeal is filed by the assessee against the order of the Ld. CIT, National Faceless Appeal Centre, Delhi dated 08.03.2024 [hereinafter referred as “CIT(A)/NFAC”] for the assessment year 2017- 18, which in turn arise from the order dated 14.11.2019 passed under section 143(3) of the Income Tax Act, [In short “Act” ] by the AO.
The assessee has raised following grounds:- “
1. The order of the learned AO as well as CIT Appeals is bad in law and against the facts of the case. The learned A.O. erred in making addition of Rs. 64,96,560/- to the total income on account of disallowance under section Shashi Gupta 57(iii) in respect of interest on unsecured loan, in most arbitrary manner and notice of CIT was sent to the old email id of the CA which was not served to the assessee. So this ex-parte order may be quashed by giving relief to the honest assessee.
2. The appellant prays your honor to add amend or alter all or any of the grounds of the appeal on or before the date of hearing.”
3. The brief facts of the case are that the assessee is director in various group companies which are engaged in the business of real estate. She earned directors' remuneration and interest on unsecured loans from these companies. Apart she has rental income and income from partnership firms. She filed her return of income tax for AY 2017-18 on 01.03.2018 declaring income of Rs.9374910.00. Order under section 143(3) of the Income Tax Act, 1961 was passed by Ld. ACIT, Circle-3, Jaipur on 14.11.2019 making addition of Rs.6496560.00on account of disallowance of interest on unsecured loans under section 57(iii), claimed by the assessee in her return of income tax. Ld. A.O. has also initiated penalty proceeding under section 270A of the Act for furnishing inaccurate particulars of Income despite facts that interest disallowed by A.O. is duly disclosed in return of income filed by the assessee.
4. Aggrieved from the order of AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:-
The appellant in its ground of appeal has assailed the addition of Rs.64,96,560/- by disallowing interest paid expenses u/s 57(iii) of the Act. The AO in the assessment order noted that the appellanthad taken unsecured loan of Rs.26.07 crores and also the appellant had advanced unsecured loan of Rs.20.24 crores on which she was earning interest. The AO had the view that the proportionate interest on money advanced is only allowed against the interest income earned by the appellant. Therefore, the AO added Rs.65,96,560/- to the income of the appellant.
5.1 It is pertinent that in order to decide this appeal in a timely manner a number of notices/ communications through ITBA portal were sent to the appellant, viz Communications dated 01.01.2021, 06.04.2022, 04.11.2022, 13.02.2024 and 28.02.2024. However, there evidently has been no response from the appellant till date. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on its part to purposefully and co-operatively pursue the same in a worthwhile manner, which the appellant has evidently failed to do. It clearly appears that the appellant's compliance or rather lack of it, the appellant has not even bothered to pursue this appal in any productive manner. Hence, in view of the aforesaid total non-compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed of, as under, ex-parte, primarily on the basis documentation available on record.
5.2 Firstly, it is stated at the outset, that in the situation as obtained in the instant case, as evidently seen from the above, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court and the various High Courts including the Hon'ble Apex Court which held in CIT v. B. N. Bhattacharjee and Another (10 CTR 354) that an appeal means an effective appeal and that to "prefer an appeal would mean effectively prosecuting an appeal. "Purposefully and constructively interpreted, preferring Shashi Gupta an appeal means more than formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray.
5.3 It is pertinent to add here that laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well- known maxim "Vigilantibus non dormientibus jura subveniunt". It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the onus is on person making the claim, and the primary responsibility/onus/burden for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the assessee/appellant. In the present case, the appellant has not been able to even discharge the primary onus/burden statutorily & judicially cast upon him to substantiate the claims made in the grounds of appeal in spite of adequate time and opportunities given as brought out in the foregoing paras
5.4 It is, thus, evident that the appellant has no evidence to substantiate the grounds taken and it has not even once argued with any supporting, relevant and cogent arguments/averments, constraining me to therefore, go through the extremely brief non-speaking submission appearing in the grounds of appeal and statement of facts filed along with the impugned appeal to decide on the merits while adjudicating the same. But the narrative submission/contention made vide the statement of facts/grounds of appeal is by and large on the very same made at the time of instant assessment which the AO after considering, has duly rejected or found without much merit leading him/her to add the same ie., the disallowance/additions made in the said assessment order and enumerated in the impugned grounds against which I am constrained to concur with the AO's findings of fact and decisions thereof, more particularly in the absence of any meaningful and worthwhile submissions/documentations even Shashi Gupta during the instant appellate proceedings in this case to counter effectively the position adopted by the AO on the concerned issues and reduced in writing in the assessment order. Therefore, I find no infirmity in the action of the AO in making addition of Rs.64,96,560/- on the appellant. In this view of the matter, the decision of the AO is upheld. Consequently, the Ground of appeal are dismissed.
5.5 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court (Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions/disallowances made by the AO is sustained in terms of the observations herein-above.
In the result, the appeal of the appellant is dismissed.”
Being aggrieved by the order of the Ld. CIT(A), the assessee has preferred the present appeal before us. During the course of hearing, the Ld. AR for the assessee submitted that the impugned order was passed ex parte without affording the assessee a proper opportunity of being heard. It was further submitted that the notice(s) issued by the Ld. CIT(A) were inadvertently sent to an old email ID of the erstwhile Chartered Accountant and, as a result, were not served upon the assessee. The Ld. AR prayed that in the interest of equity and natural justice, one final opportunity may be granted to the assessee to present her case before the Ld. CIT(A).
Shashi Gupta 6. Per contra, the Ld. DR opposed the plea of the assessee, submitting that the assessee failed to appear or comply during the course of appellate proceedings before the Ld. CIT(A), despite issuance of multiple notices, on the mail-id linked with PAN number.
We have considered the rival submissions and perused the materials available on record. On a perusal of the order passed by the Ld. CIT(A), We note that is an evident that the appeal was dismissed ex parte due to non-compliance by the assessee and no submissions or documentary evidence were furnished during the appellate proceedings. We also note that the assessee, in her grounds of appeal before us, has categorically raised the issue that the hearing notices were not served up on her, thereby depriving her of an opportunity to effectively represent her case. Considering the factual contention raised by the assessee, and in the interest of natural justice, we are of the considered view that the matter requires to be restored to the file of the Ld. AO for adjudication afresh.
8. Accordingly, we restore the matter to the file of the Ld.AO, who shall adjudicate the appeal de novo, after affording adequate opportunity of hearing to the assessee. The assessee is directed to appear before the Ld.AO and furnish all necessary documents and explanations in support Shashi Gupta of her case. It is also made clear that no adjournments shall be sought on frivolous grounds and the assessee shall extend full cooperation during the appellate proceedings.
9 Before parting, we clarify that this direction for restoration shall not be construed as any expression on the merits of the case. The Ld. AO shall decide the matter independently and in accordance with law, uninfluenced by any observations made hereinabove.
In the result, the appeal filed by the assessee is allowed for statistical purposes.