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Income Tax Appellate Tribunal, “C”, BENCH
Before: SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI, JM
O R D E R PER: R.C. SHARMA, A.M. This is the appeal filed by the assessee against the exparty order of the ld. CIT(A)-21, Mumbai dated 12/08/2016 for the A.Y. 2007-08 in the matter of order passed U/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short, the Act). In this appeal, the assessee has raised following grounds of appeal:
1. Ground no. 1 :- On facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in holding that the reassessment proceedings of the Appellant were valid even though the same were initiated by the learned Assessing Officer without satisfying the mandatory jurisdictional conditions set out in section 147 of the Income Tax Act, 1961.
Primal Senses Hospitality & Entertainment P Ltd. Vs ITO 2. Ground no. 2 :- On facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in sustaining the addition of Rs. 4,02,01,500/- made by the learned Assessing Officer u/s 68 of the Income Tax Act, 1961 in respect of alleged unexplained loans.
The learned Commissioner (Appeals) here also failed to appreciate that the above amount of Rs, 4,02,01,500 included – (a) Rs. 42,500 being share application money, which is doubly taxed because a separate addition was made by the learned Assessing Officer towards alleged unproved share application money and (b) Rs. 2,000 being share allotment money in respect of share capital which was been accepted by the learned Assessing Officer as genuine in the assessment.
3. Ground no. 3 :- On facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in sustaining the addition of Rs. 3,47,000/- made by the learned Assessing Officer u/s 68 of the Income Tax Act, 1961 in respect of alleged unproved share application money.
Here, the learned Commissioner (Appeals) also failed to appreciate that as per the provisions of section 68 applicable for the year under appeal and judicial pronouncements, an addition towards share application money cannot be made in the hands of the Appellant Company.
Ground no. 4 :- On facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in sustaining the addition of Rs. 14,13,145/- made by the learned Assessing Officer u/s 68 of the Income Tax Act, 1961 in respect of alleged unexplained sundry creditors.
Here, the learned Commissioner (Appeals) also erred in disregarding the Appellant's contention in appeal that the sundry creditors included government dues of Rs. 3,50,533/- and in holding that the addition was, in any Primal Senses Hospitality & Entertainment P Ltd. Vs ITO case, otherwise maintainable u/s 43B of the Income Tax Act, 1961.
Ground no. 5 :- On facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in directing the learned Assessing Officer to verify whether cash deposits to the extent of Rs. 10,71,012 in the Appellant's bank accounts were explainable from sales receipts of the Appellant and thereby losing sight that the Appellant may also have other explainable sources for the cash deposits.
Ground no. 6 :- Both the learned Commissioner (Appeals) and the learned Assessing Officer erred in passing their respective orders without granting the Appellant adequate opportunity of being heard. The orders passed by them are in contravention of the principles of natural justice and hence, bad in law.
Ground no 7:- The Appellant reserves right to add, alter, amend or delete any grounds of appeal
s with permission of the Hon'ble Tribunal.”
2. Rival contentions have been heard and record perused. In this appeal assessee is basically aggrieved for the exparty order passed by the CIT(A) without giving opportunity of being heard. It was contended by the ld. AR that because of the heavy losses, the business of the assessee was closed down and the Registered office was also changed from Patel Nagar, Kandivili(W), Mumbai to Pune. An affidavit in support of the same was also filed according to which because of heavy losses, business was closed and re-located to Pune in 2014. No notice issued by the CIT(A) was served on the assessee, therefore, assessee could not appear before the CIT(A). After going through the affidavit placed at pages 6-13 of the paper book duly excluded on the non judicial stamp
Primal Senses Hospitality & Entertainment P Ltd. Vs ITO paper, we are satisfied that there was sufficient cause for non- appearance before the CIT(A) on the dates fixed for hearing before CIT(A). As none of the notices could be served on the assessee, assessee could not appear before the CIT(A). In the substantial interest of justice, we set aside the exparty order of the CIT(A) and restore the matter back of his file for deciding afresh and after giving due opportunity to the assessee. Assessee is also directed to appear before CIT(A) within a period of 60 days from the date of receipt of this order. We direct accordingly.
In the result, appeal of the assessee is allowed in part for statistical purposes.
Order pronounced in the open court on 20th December, 2019.