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Income Tax Appellate Tribunal, “SMC – A” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN
This appeal by the assessee is against the order dated 25.09.2018 of the CIT(Appeals), Hubballi, relating to assessment year 2014-15.
The assessee is a partnership firm engaged in the business of wholesale dealing in groundnut, groundnut seeds and husk. In the order dated 6.12.2016 passed u/s. 143(3) of the Income-Tax Act, 1961 [“the Act”], the AO made the following additions to the total income declared by the assessee :-
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Total income returned : Rs. 74,400 Add: 1) Addition on account of GP as Discussed in Para 6 : Rs. 18,547 2) Sales tax paid disallowed as Discussed in Para 7 : Rs.1,67,275 3) Disallowance as discussed in Para 8 : Rs. 30,670 4) Disallowance u/s. 40(a)(i) as Discussed in Para 9 : Rs.2,00,317 5) Interest paid to bank and others Disallowed as discussed in Para No.10 : Rs.9,82,201 Total Income: Rs.14,73,450/-”
Against the aforesaid additions made by the AO, the assessee preferred appeal before the CIT(Appeals). The appeal of the assessee was fixed for hearing before the CIT(A) on 2.5.18, 24.5.18, 11.6.18, 25.6.18 and 9.8.18. According to the CIT(A), the assessee appeared only on 11.6.18 through his AR and requested for time which was allowed till 25.6.18. Thereafter none appeared on behalf of the assessee. Finally, the CIT(Appeals) fixed the appeal for hearing on 30.8.18, but still there was no appearance on behalf of the assessee. In the circumstances, the CIT(A) dismissed the appeal of assessee, as he found no grounds to interfere with the order of AO.
Aggrieved by the order of ld. CIT(Appeals), the assessee has filed the appeal before the Tribunal. At the time of hearing, the ld. counsel for the assessee brought to our notice an affidavit filed by the assessee in which it has been averred that on 2.5.2018, one of the partners of the assessee Shri Jaidev T, Yelamalli appeared along with the AR and filed
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written submissions and other documents. Even on 24.5.2018, the assessee appeared before the CIT(Appeals). Thereafter, there was no appearance before the CIT(Appeals). It was also submitted that notices of hearing had been sent to the firm’s address and since the business of assessee had closed since 2017 due to huge losses, the notices were not received by the assessee. The ld. counsel for the assessee brought to our notice that ITAT Bangalore Bench in the case of another sister firm of the assessee, had also filed appeal against the order of assessment by the AO before the CIT(A) i.e., sister concern by name Sangameshwar Trading Company. Even in that case, an ex parte order was passed by the CIT(A) and the Tribunal set aside the order of CIT(A) and restored the issue for consideration afresh by the CIT(Appeals) on merits. A copy of the ITAT order in ITA No.3233/Bang/2018 for AY 2014-15 dated 31.5.2019 was filed before us.
The ld. DR relied on the order of CIT(Appeals). I have carefully considered the rival submissions. On identical facts and circumstances in the case of sister concern of assessee, this Tribunal has set aside the order of CIT(Appeals) observing as follows:-
“3. At the very outset, it was submitted by Id. AR of assessee that the order of CIT(A) is ex-parte qua the assessee. It is also submitted that as noted by CIT (A) in Para 3 of his order, six dates of hearing were fixed by CIT (A) and the assessee could not make compliance. In this regard, he submitted that on pages 52 & 53 of paper book is the affidavit of Shri Jayadev Totappa Yelamali, one of the partners of the assessee firm in which he explained that he has appeared before CIT (A) along with his auditor and presented the case of the assessee and written submissions were also filed. It is also stated in the affidavit that ld. CIT (A) said that no new evidences will be entertained at the appellate stage and in spite of this, it was submitted by assessee before CIT (A) that assessee has already filed all the details before the AO and what they are filing is only extracts from the
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books of accounts of the firm which were produced before the AO for verification. He also pointed out that it is also stated in the affidavit that it was explained before CIT(A) orally that the business has been closed and any further communication be sent to the auditor of the assessee firm and after that, no notice was received by the assessee. He submitted that in the interest of justice, the matter may be restored back to the file of CIT(A) for fresh decision. The Id. DR of revenue supported the orders of authorities below. 4. I have considered the rival submissions. I find that this is noted by CIT (A) in Para 3 of his order that six dates of hearing were fixed by him for hearing but it is stated by CIT (A) in this Para that assessee failed to appear or make any submission. As against this, as per the affidavit of the partner of the assessee firm, it is stated that he had appeared before CIT(A) along with the auditor and filed written submission also and explained the case. Copy of written submissions said to have been filed before CIT (A) is available on pages 7 and 8 of the paper book. Considering all these facts, I feel it proper that in the interest of justice, the assessee should be provided one more opportunity for proper compliance and hence, I set aside the order of CIT (A) and restore the matter back to the file of CIT (A) for fresh decision after providing adequate opportunity of being heard to both sides. In view of this, no adjudication on merit is called for at the present stage. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes.”
I am of the view that the facts and circumstances are identical to the case decided by the Tribunal supra. Following the said order, I am of the view that in the interest of justice, the assessee should be provided opportunity of being heard before the CIT(Appeals). I therefore set aside the order of CIT(Appeals) and restore the issue before the CIT(Appeals) for fresh consideration by the CIT(Appeals) on merits, after affording the assessee opportunity of being heard.
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In the result, the appeal of assessee is treated as allowed for statistical purposes.
Pronounced in the open court on this 6th day of September, 2019.
Sd/-
( N.V. VASUDEVAN ) VICE PRESIDENT
Bangalore, Dated, the 6th September, 2019.
/ Desai Smurthy /
Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file
By order
Assistant Registrar, ITAT, Bangalore.