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Facts
The assessee's appeal stems from an order by the CIT(A) for the assessment year 2018-19. The Assessing Officer made additions to the returned income, including additions under section 68 and disallowance of deduction under section 37. The assessee challenged these additions before the CIT(A).
Held
The Tribunal observed that the CIT(A) passed an ex-parte order without the assessee's appearance, despite granting opportunities. Adhering to the principles of natural justice, the Tribunal decided to set aside the CIT(A)'s order and remit the matter back for adjudication on merits after providing the assessee with a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without providing a reasonable opportunity of being heard to the assessee, and whether the grounds of appeal raised by the assessee are valid.
Sections Cited
68, 37, 250, 115BBE, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 29/01/2025 Date of Order – 10/02/2025
O R D E R PER V. DURGA RAO, J.M.
The aforesaid appeal by the assessee is emanating from the impugned order dated 13/05/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2018–19.
In this case, the Assessing Officer in its assessment order for the reasons stated vide Page-2 to 10, made following additions:-
Returned income as per return of income ` 3,34,720 Add: Addition u/s 68 ` 81,77,000 Add: Disallowance of deduction u/s 37 ` 1,48,95,921 Total Assessed Income ` 2,34,07,641
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The assessee challenged the aforesaid addition before the learned CIT(A). However, the fact remains, the assessee did not appear before the learned CIT(A) which resulted in passing ex-parte order by the learned CIT(A). Aggrieved, the assessee preferred appeal before the Tribunal raising inasmuch 19 grounds of appeal stating mainly that the assessee was not provided property opportunity of being heard to the assessee. The grounds raised by the assessee are as under:-
“1) The order passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre is without providing reasonable opportunity of being heard and is in violation of principles of natural justice. Dismissal of grounds is unjustified and unwarranted. 2) The order passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre u/s 250 of I.T. Act 1961 on 13/05/2024 is illegal, invalid and bad in law. 3) The Hon'ble CIT(A) has dismissed the appeal summarily without considering the merits of grounds on the basis of evidence on record. 4) Hon'ble CIT(A) in appellate order noted that adjournment application filed by assessee in respect to hearing dated 06/05/2024. Hon'ble CIT(A) proceeded to pass order on 13/05/2024 without disposing of adjournment application filed by assessee and thus order passed is in violation of principles of natural justice. 5) The order passed by A.O. is illegal, invalid and bad in law. 6) The income determined by A.O. at Rs.2,34,07,641/- is unjustified, unwarranted and excessive. 7) The addition made by A.O. at Rs.1,42,06,636/- out of purchases is unjustified, unwarranted and excessive. 8) The learned A.O. erred in making addition at Rs.1,42,06,636/-on account of cost of sand at the hands of assessee which was part of value of closing stock shown in trading account at Rs.1,82,71,000/-. 9) The learned A.O. erred in making addition at Rs. 1,42,06,636/-even though after considering the closing stock no such amount is claimed for determining income at the hands of assessee, resulting into unjustified addition.
3 Akshay Gajanan Suryawanshi Deshmukh ITA no.385/Nag./2024 10) Addition made by A.O. in respect to TCS amount at Rs.5,19,653/- is unjustified, unwarranted and excessive. 11) The learned A.O. erred in making addition at Rs.5,19,653/- on account of TCS even though no such claim as expenditure is made in the return or Profit & Loss Account submitted by assessee. 12) Addition made by A.O. on account of interest and bank charges at Rs.1,69,632/- is unjustified, unwarranted and excessive. 13) The learned A.O. erred in making addition at Rs.1,69,632/- by observing that assessee is not raised any objection for disallowance even though complete details were placed on record. 14) Addition made by A.O. at Rs.81,77,000/- u/s 68 of I.T. Act 1961 Arby not accepting part of the transaction of certain unsecured wloans is unjustified, unwarranted and excessive. 15) The learned A.O. erred in holding that there is difference at Rs.81,77,000/- in respect to credits from unsecured loans being not found in the bank statement of assessee warranting addition for the same u/s 68 of I.T. Act 1961 and levy of tax u/s 115BBE of I.T. Act 1961. 16) The learned A.O. ought to have accepted unsecured loans for which confirmation have been submitted as same are verifiable with reference to bank statement of assessee available on record and there is no difference as observed and computed in the assessment order. Difference computed by A.O. at Rs.81,77,000/- is unjustified, unwarranted. 17) A.O. erred in not granting credit for TDS at Rs.56,445/- while determining tax payable at the hands of assessee. 18) The assessee denies liability to pay interest u/s 234A, 234B and 234C of I.T. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 234C of I.T. Act 1961 is unjustified, unwarranted and excessive. 19) Any other ground shall be prayed at the time of hearing.”
Before us, during the course of hearing, the learned Counsel for the assessee submitted that the learned CIT(A) passed an ex-parte order and prayed that one opportunity may be granted by restoring the matter to the file of the learned CIT(A) to enable the assessee to substantiate its case before the learned CIT(A).
4 Akshay Gajanan Suryawanshi Deshmukh ITA no.385/Nag./2024 2. On the other hand, the learned D.R. submitted that despite the learned CIT(A) provided sufficient opportunities to the assesse, however, the assessee did not appear before the learned CIT(A) and not furnished relevant details. He strongly supported the orders passed by the learned CIT(A).
We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. We find that though the learned CIT(A) granted opportunities to the assessee to substantiate its case, ultimately, the order passed by him is an ex-parte order. Therefore, we are of the opinion that by following the principles of natural justice, one opportunity should be given to the assessee to substantiate the case before the learned CIT(A). In view of the above, the order passed by the learned CIT(A) is set aside and remit the matter back to the file of the learned CIT(A) and direct him to adjudicate the matter afresh on merit and in accordance with law after providing reasonable opportunity of being heard to the assessee. It is also directed that the assessee should not seek adjournment without there being a justified reason. Accordingly, all the grounds raised by the assessee in this appeal are allowed for statistical purposes.
In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 10/02/2025
Sd/- Sd/- K.M. ROY V. DURGA RAO ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 10/02/2025
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