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Income Tax Appellate Tribunal, DELHI BENCH ‘C’ : NEW DELHI
Before: SHRI H.S. SIDHU & SHRI L.P. SAHU
The Assessee has filed this Appeal against the Order dated 03.5.2018 of the Ld. CIT(A)-22, New Delhi pertaining to assessment year 2014-15 on the following grounds:-
1 That the learned Commissioner of Income Tax (Appeals) has grossly erred in law and on facts in passing the impugned order in utter disregard of the statutory provisions contained under section 250(6) of the Act by dismissing the appeal of the appellant ex parte, thereby, violating the principles of natural justice.
2 That the learned Commissioner of Income Tax (Appeals) has overlooked the provisions of Section 250(6) of the Act, as the order passed by him has not been decided on merits and is thus, wholly non speaking and deserves to be set aside on this ground alone.
3 That the learned Commissioner of Income Tax (Appeals) ought not to have decided the appeal of the appellant ex parte, as due appearance was caused by the counsel of assessee - appellant on the last date of hearing i.e. on 16.04.2018 and the matter was adjourned at the behest of learned CIT (A) and no order sheet entry was made signed by him, in view of CBDT instruction F.
No. 380/1/2018-IT(B), as he stated that only matters involving tax effect of less than Rs. 10 lacs would be disposed off till 30.06.2018 3.1 The learned CIT (A) while disposing off the appeal ex parte, was not justified in not accepting the submissions made in writing, on the pretext that the same may be taken up on the date of hearing, as and when, the same will be communicated through notice.
4. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding the order of assessment at a loss of Rs.60,77,49,876/-, as against the returned loss of Rs. 63, 95, 61. 964/- in an order of assessment dated 30.12.2016 under section 143(3) of the Act.
4.1 That further, the learned Commissioner of Income Tax (Appeals) has also failed to appreciate the fact that addition so made by learned assessing officer is based on preconceived notions and by arbitrarily brushing aside the detailed submissions/evidences/material placed on record, which were furnished in order to support the fact that no addition was called for in the instant case.
5. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaining the addition of Rs. 2, 50, 00, 000/- made under section 68 of the Act, being unsecured loan received by the appellant from M/s Skybase Infra Pvt. Ltd. 5.1 That in doing so, the learned CIT (A) has grossly erred in failing to appreciate that the appellant had filed complete documentary evidences which established the genuineness of the transaction and further, the same was duly confirmed by the said party by filing a reply directly to the learned ACIT, as such, burden which lay upon the appellant stood discharged and further, the learned ACIT based his decision purely on suspicion, surmises and conjectures, without carrying out any investigation/ verification and as such, the addition so made should be deleted.
That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining an adhoc disallowance of Rs.7,24,690/- on account of business promotion expenses.
That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts in sustaining a disallowance of Rs. 1,284/- on account of interest on TDS claimed and wrongly disallowed under section 37 of the Act.
That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts in sustaining a disallowance of Rs. 7,75,839/- on account of stale cheques and the said addition in unjustified and contrary to facts of the instant case.
That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts in sustaining a disallowance of Rs. 36, 00, 000/- on account of expenses claimed in the nature of penalty, whereas, the said expense were paid during the regular running of the business and were not in nature of penalty and thus, were allowable under the Act.
That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining a disallowance of Rs.17,16,275/- on account of non- deduction of TDS on provision of legal and professional expenses.
At the time of hearing, Ld. counsel for the assessee has drawn our attention towards Section 250(6) of the Income Tax Act, 1961 and stated that as per Section 250(6) of the Act, Ld. CIT(A) should have decided the case of the assessee on merits, after adjudicating all the grounds raised
by the assessee in the grounds of appeal in Form No.
35. But the Ld. CIT(A) has not followed the prescribed procedure under the law. Therefore, the impugned order is liable to be cancelled. He further stated that assessee appeared before the Ld. CIT(A) many times and also filed adjournment applications and joined the proceedings, but the Ld. CIT(A) has not given sufficient opportunity of hearing and dismissed the appeal of the assessee in limini, without deciding the issue in dispute on merits, which is contrary to the provisions of law and, therefore, he requested that the issues in dispute may be remitted back to the Ld. CIT(A) to decide the same afresh, as per law after giving adequate opportunity of being heard to the assessee.
3. On the other hand, Ld. DR relied upon the order of the Ld. CIT(A) and stated that Ld. CIT(A) has given various opportunities to the assessee, but the assessee remained non-cooperative and as a result thereof, the Ld. CIT(A) has no option but to dismiss the appeal of the assessee in limini. But he agreed for setting aside the issues in dispute to the file of the Ld. CIT(A) for deciding the same afresh, subject to the condition that if this Bench directed the assessee through his counsel to appear before the Ld. CIT(A) to substantiate its claim on the fixed date and Ld. CIT(A) will not issue any notice to the assessee.
We have heard both the parties and perused the records as well as the relevant provisions of law, we are of the view that there is no doubt assessee remained non-cooperative before the Ld. CIT(A) and the Ld. CIT(A) has passed the exparte order, without discussing in detail the facts and circumstance of the case and also did not deal the issue on merit and passed a non-speaking order, which in our opinion, is not in accordance with the principles of natural justice and it is an erroneous approach. After reading Section 250(6) of the Act, we are also of the considered view that Assessee’s case should be decided on merits, which the Ld. CIT(A) has not done.
However, it is a settled law that even an administrative order has to be speaking one. In this regard we draw support from Hon’ble Apex Court in the case M/s Sahara India (Farms) Vs. CIT & Anr. in [2008] 300 ITR 403 wherein it has been held that even “an administrative order has to be consistent with the rules of natural justice”.
4.1 In the background of the aforesaid discussions and in the interest of justice as well as agreed by both the parties, we remit back the issues in dispute to the files of the Ld. Commissioner of Income Tax (Appeals) for hearing on 22.05.2019 at 10.00 AM with the directions to consider each and every aspects of the issues involved in the Appeal and decide the same afresh, after considering all the evidences/documents and pass a speaking order. It is made clear that no notice for hearing will be issued by the Ld. CIT(A).
Assessee is also directed through his Counsel to appear before the Ld. CIT(A) on 22.5.2019 at 10.00 AM for hearing to substantiate its case and file all the necessary documents before him and did not take any unnecessary adjournment in the case.
In the result, Assessee’s appeal is allowed for statistical purposes. Order pronounced on 13-03-2019.