What did the Tribunal hold?

The Tribunal found that the CIT(A) dismissed the appeal for non-appearance without providing adequate opportunity to the assessee. Therefore, the case was remitted back to the CIT(A) for a fresh decision after hearing the assessee.

The assessee, engaged in real estate development, declared a total loss after claiming significant expenses for advertisement and consultancy. The Assessing Officer disallowed these expenses, leading to a confirmation of the disallowance by the CIT(A).

What were the issues?

Whether the CIT(A) erred in dismissing the appeal for non-appearance without providing sufficient opportunity to the assessee, violating principles of natural justice.

Three C Properties Pvt. Ltd., New… vs DCIT | ITAT Delhi 2019

Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI

Before: SHRI R.K.PANDA & SHRI KULDIP SINGH

For Respondent: Shri S.S.Rana, CIT(DR)

Hearing: 03.12.2019

PER KULDIP SINGH, JUDICIAL MEMBER :

The appellant Three C Properties Pvt. Ltd., New Delhi (hereinafter referred to as 'the assessee’) by filing the aforesaid appeal sought to set aside the impugned order dated 20/01/2017 passed by Ld. Commissioner of Income Tax(Appeals)-9, New Delhi qua the Assessment Year 2012-13 on the grounds inter alia that :

1. “That on the facts and in the circumstances of the appellant’s case, the Ld. CIT(A) erred in disposing of appeal on non-merit by dismissing it for non-appearance/ non-compliance whereas appellant have been duly explained and argued in respect of all grounds raised

before the Ld. CIT(A) in written submission.

2. That on the facts and in the circumstances of the appellant’s case, the Ld. CIT(A), erred in law in not disposing of appeal as per the provisions of section 250(6) of the Income tax Act and dismissed the appeal merely due to non-appearance/ non- compliance of the appellant, which is unjustified, unlawful and unsustainable act in law and gross violation of principle of natural justice. Without prejudice to the Grounds of Appeal No. 1 to 2

3. That on the facts and in the circumstances of the appellant’s case, the Ld. CIT(A) erred both in facts and in law in confirming addition of Rs. 3,45,76,123/- on account of disallowance of expenditure debited in the Profit & Loss account without appreciating the submission along with supporting evidences furnished by the appellant in support of said expenses claimed. That the appellant craves leave to add, amend or alter any of the grounds of appeal.”

2. Briefly stated the facts necessary for adjudication of the controversy at hand are: the assessee is engaged in the business of Real Estate Development, Assessee filed return of income declaring total loss of Rs. 3,45,76,123/- during the year under assessment. AO noticed that the assessee has claimed other expenses to the tune of Rs. 3,46,01,452/- and major part of the claim is on account of advertisement expenses of Rs. 3.39 crore and consultancy fees of Rs. 5.41 crore. Declining the contention raised by the assessee that the expenses have been incurred for the purpose of business AO proceeded to disallow the claim of expenses and loss of current year to the tune of Rs. 3,45,76,123/-.

3. Assessee carried the matter before Ld. CIT(A) who has confirmed the assessment framed by AO by dismissing the appeal.

Feeling aggrieved the assessee has come up before the Tribunal by way of filing the present appeal.

We have heard the ld. DR, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

At the very outset it is brought to our notice by the Ld. AR for the assessee that the Ld. CIT(A) has passed the impugned order at the back of assessee by not providing adequate opportunity of being heard and requested for providing one opportunity to the assessee to put forth its case.

Perusal of the impugned order passed by Ld. CIT(A) particularly para 2 goes to prove that numerous opportunities were given to the assessee to prove its case but ultimately due to non- prosecution of appeal by the assessee the case was decided ex parte.

The Ld. AR for the assessee further contended that the assessee has engaged a tax practioner to argue the appeal but for the reason best known to him, he did not appear and as such assessee was not at fault. No doubt, the case was adjourned at the request of the Authorised Representative of the assessee thrice but ultimately none appeared on its behalf. In the interest of justice, we are of the considered view that when the entire case is based upon the factual evidence which has not come on record due to non- appearance of the assessee, the issue is required to be decided once for all by providing adequate opportunity of being heard to the assessee. Consequently, we remit the case back to the Ld. CIT(A) to decide afresh after providing opportunity of being heard to the assessee.

Consequently, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in open court on this 17th December, 2019.

THREE C PROPERTIES PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

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