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Facts
The assessee is aggrieved by an order of the CIT(A) which dismissed their appeal. The CIT(A) had confirmed the disallowance of property tax expenses of Rs. 32,69,804/-, holding that these expenses pertained to earlier years. The assessee argued that these expenses crystallized in the current year and were allowable under Section 43B of the Act.
Held
The Tribunal found that the CIT(A) had passed the order ex-parte without giving the assessee adequate opportunity, despite the assessee's counsel being overburdened during a busy period. Therefore, the Tribunal set aside the impugned order and remanded the matter back to the CIT(A) for fresh adjudication on merits.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte and confirming the disallowance of property tax expenses without granting adequate opportunity to the assessee.
Sections Cited
253, 143(1), 143(3), 144B, 246A, 43B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI BHAGIRATH MAL BIYANI & SHRI PARESH M JOSHI
आदेश/ O R D E R
Per Paresh M Joshi, J.M.:
This is an appeal filed by the Assessee Under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as the Act for sake of brevity) before this Tribunal as and by way second appeal.
The assessee is aggrieved by order bearing Number ITBA/NFAC/S/ 250/2024-25/1067233200(1) dated 01.08.2024 passed by Ld. CIT(A), passed U/s 250 of the Act which is hereinafter referred to as the “impugned order”. The relevant Page 1 of 6 period is from 01.04.2017 to 31.03.2018.
FACTUAL MATRIX 2.1 That the assessee company is engaged in the manufacturing of flour and rice, Power, energy and providing other service.
2.2 That by an assessment order bearing number ITBA/AST/S/143(3)/2021-22/1032744583(I) which is dated 30.04.2021 the total income of the assessee was computed as Rs.23,03,53,380/- against total income determined u/s 143(1) of Rs.10,74,61,370/-. Sum of Rs.32,69,804/- was disallowed on account of property tax of earlier period. The said assessment order is hereinafter referred to as the “Impugned Assessment Order” which was passed u/s 143(3) r.w.s 144B of the Act.
2.3 That the assessee being Aggrieved by the Impugned Assessment order (supra) preferred first appeal u/s 246A of the Act before Ld. CIT(A) who by the “Impugned Order” has dismissed the appeal of the assessee.
Page 2 of 6 has filed this present appeal before this Tribunal as and by way of Second Appeal under the Act and has raised following grounds of appeal against the Impugned Order in form No.36 which are as under:
“1.That on the facts and in the circumstances of the case and in law, the Ld. CIT(A)-NFAC erred in deciding the appeal ex-parte even when the assessee had filed an adjournment before him asking for next date in the appeal filed before him. The order so passed by the Ld. CIT(A)-NFAC is therefore wrong and uncalled for.
2. That on the facts and in the circumstances of the case and in law the Ld. CIT-NFAC erred in confirming the disallowance as made by the Ld. AO of Rs. 32,69,804/- towards out of the property tax expenses by holding that the same pertains to earlier years even when the said expenses have been crystalized during the year under consideration only hence the same are allowable in nature. The addition so made by the AO and confirmed by the CIT(A) is therefore neither legal nor proper and the same requires to be deleted.
That on the facts and in the circumstances of the case and in law the Ld. CIT-NFAC erred in confirming the disallowance as made by the Ld.AO of Rs. 32,69,804/- towards the property tax expenses incurred by it even when it was submitted that the said expenses pertain to the earlier years however the same is otherwise allowable as per the provisions of Sec. 43B of the Act. Thus the addition so made by the AO and confirmed by the CIT(A) is therefore neither legal nor proper and the same requires to be deleted.”
Page 3 of 6 3.1 The hearing in the appeal took place before this Tribunal on 18.03.2025 when Ld. AR for and on behalf of the assessee appeared before us and interalia contended that “Impugned Order” is passed in violation of the Principles of natural justice and that therefore, the Impugned order is illegal and bad in law.
The “Impugned order” should be set aside and the matter should be remanded back to the Ld. CIT(A) for fresh adjudication on denovo basis. The Ld. AR fairly stated that while it is true that office of Ld. CIT(A) had sent number of notices as and by way of opportunity to the assessee but since these notices come into month of May, June and July 2024. The assessee’s counsel who was a practising CA could not appear as he was overburdened with work relating to filing of returns of various assessee including Tax Audits and for want of time he could not represent his clients. the assessee herein. Under these circumstances Ld. AR prayed for lenient view to be taken and if an opportunity is not offered by Ld. CIT(A) he would participate in first appellate proceedings.
Page 4 of 6 contentions canvassed by the Ld. AR. The Ld. DR however has left it to this Tribunal to take final call according to law.
Observations & findings & conclusions 4.1 We have perused the record of the case and have examined the rival contentions. We are of the considered view that at times particularly in the month of June & July in a year Professional like CA are busy lot hence some minor leeway should be given.
Under these facts we deem fit and proper to set aside the “Impugned order” as Ld. AR (CA) has undertaken to participate in first appeal before Ld. CIT(A).
Order 5.1 In the premises “Impugned order” is set aside as and by way of remand back to the file of CIT(A) on denovo basis with a direction to dispose off first appeal on merits as is mandated by law. The assessee is directed to effectively participate in first appeal and not to seek any unnecessary adjournments as undertaken.
Order pronounced in open court on 19.03.2025.