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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI RAMIT KOCHAR
PER RAMIT KOCHAR, ACCOUNTANT MEMBER:
This appeal filed by assessee is directed against appellate Order dated 25.07.2019 passed by learned Commissioner of Income Tax (Appeals)-7, Chennai (hereinafter called “the CIT(A)”), in for assessment year (ay) 2010-11, the appellate proceedings before learned CIT(A) had arisen from assessment order dated 26.12.2018 passed by learned Assessing Officer (hereinafter called “the AO”) u/s.143(3) read with Section 147 of the Income-tax Act, 1961 (hereinafter called “the Act”) for ay: 2010-11.
Briefly stated the facts of the case are that the assessee did not file its return of income with Revenue for impugned ay: 2010-11 and as per details available with Revenue, the assessee had income of more than Rs. 1 lac for impugned ay:
2010-11 , and also the assessee was Director in M/s Merit Resorts Private Limited. This led to reopening of the concluded assessment by Revenue by invoking provisions of Section 147/148 of the 1961 Act. Several statutory notices were issued by AO to assessee to file her return of income with Revenue as is found mentioned in para 2-5 of assessment order and finally on 21.08.2018, the assessee filed its return of income for impugned ay : 2010-11 declaring income of Rs. 3,02,364/-. Finally, additions were made by the AO to the returned income of the assessee, with respect to unexplained cash deposited in bank accounts to the tune of Rs. 27,23,000/- and also additions were made in the hands of assessee for unexplained cash credits u/s 68 of the 1961 Act to the tune of Rs. 1,25,65,000/- in the hands of the assessee and finally income was assessed to the tune of Rs. 1,55,90,364/- by the AO in the hands of the assessee, vide assessment order dated 26.12.2018 passed by the AO u/s. 143(3) read with Section 147 of the 1961 Act. Aggrieved by an assessment framed by AO vide assessment order dated 26.12.2018 passed by AO u/s 143(3) read with Section 147 of the 1961 Act, the assessee filed first appeal before Ld.CIT(A) which was dismissed by Ld.CIT(A) vide appellate orders dated 25.07.2019 , inter-alia, for non-appearance on 25.07.2019 , but however, while passing appellate order the Ld.CIT(A) simply upheld assessment order passed by the AO without independently discussing issues on merits raised by assessee in its first appeal filed with learned CIT(A) , as is required under provisions of Sec.250(6) of the 1961 Act. It is matter of record as is emerging from appellate order passed by learned CIT(A) that in all four hearings were fixed by learned CIT(A) viz. on 14.05.2019, 30.05.2019, 11.06.2019 and 25.07.2019. It is further matter of record that the assessee sought adjournment on first three occasions viz. on 14.05.2019, 30.05.2019, and 11.06.2019 which was granted by learned CIT(A) on all these three occasions and it is only on 25.07.2019 , there was no appearance by the assessee before learned CIT(A) nor an application for adjournment was moved by assessee which led learned CIT(A) to dismiss appeal of the assessee.
Aggrieved by an appellate order dated 25.07.2019 passed by learned CIT(A) dismissing appeal of the assessee , the assessee has filed this appeal before tribunal and arguments are advanced by both the rival parties before the Bench.
The Ld.Counsel for the assessee submitted that Ld.CIT(A) ought to have adjudicated the issues in appeal filed by assessee on merits by independent application of mind , as is required under provisions of Section 250(6) of the 1961 Act but however learned CIT(A) simply upheld assessment order passed by learned AO. It was submitted that the assessee moved an adjournment on the first three dates of hearing on 14.05.2019, 30.05.2019 and 11.06.2019 respectively which adjournments sought were granted by learned CIT(A) but, however, it is only on 25.07.2019 when the appeal was called for hearing, the assessee did not move an adjournment nor appeared before learned CIT(A). It was prayed that matter may be restored to the file of Ld.CIT(A) for fresh adjudication and an fresh opportunity may be granted to the assessee to appear before Ld.CIT(A) and present its case/arguments/evidences in its defense in denovo appellate proceedings. It was stated by learned counsel for the assessee before the Bench that if given an opportunity, the assessee will fully co-operate with learned CIT(A) in denovo appellate proceedings. The Ld.DR submitted that assessee did not appear before learned CIT(A) in first round of litigation on 25.07.2019 and it is the assessee who is responsible for its woes but however, learned DR fairly submitted that the issues may be restored to the file of Ld.CIT(A) for fresh adjudication.
We have considered rival contentions and perused the material on record. We have observed that the assessee did not file its return of income with Revenue for impugned ay: 2010-11 and as per details available with Revenue, the assessee has income of more than Rs. 1 lac and also the assessee was Director in M/s Merit Resorts Private Limited. This led to reopening of the concluded assessment by AO by invoking provisions of Section 147/148 of the 1961 Act as in the view of AO income of the assessee has escaped assessment which requires intervention by AO by invocation of its powers u/s 147/148 of the 1961 Act. As is emerging from assessment order, several statutory notices were issued by the AO to assessee to file return of income as mentioned in para 2-5 of assessment order and finally on 21.08.2018, the assessee filed its return of income for impugned ay declaring income of Rs. 3,02,364/-. Finally, additions were made by AO with respect to unexplained cash deposited by assessee in her bank accounts to the tune of Rs. 27,23,000/- and also AO made additions towards unexplained cash credits u/s 68 of the 1961 Act to the tune of Rs. 1,25,65,000/- and finally income was assessed by AO to the tune of Rs. 1,55,90,364/- in the hands of the assessee, vide assessment order dated 26.12.2018 passed by the AO u/s. 143(3) read with Section 147 of the 1961 Act. The assessee filed first appeal with learned CIT agitating and challenging additions made by the AO. The learned CIT(A) fixed the appeal for hearing on four occasions, on first three occasions i.e. 14.05.2019, 30.05.2019 and 11.06.2019, the assessee did sought adjournment which was granted by learned CIT(A) but when the appeal was called for hearing on 25.07.2019,the assessee did not appear before learned CIT(A) nor moved an adjournment application before learned CIT(A) which led to dismissal of appeal ex-parte by learned CIT(A) , vide appellate order dated 25.07.2019. We have observed from appellate order dated 25.07.2019 passed by Ld.CIT(A) that learned CIT(A) passed an appellate order without discussing issues in the appeal filed by assessee independently on merits and has , inter-alia, dismissed appeal of the assessee for non-appearance and simply upheld assessment order passed by the AO without independently discussing all the issues in appeal filed by assessee on merits based on material on record , as is required u/s 250(6) of the 1961 Act. In our considered view, the matter needs to be restored to file of Ld.CIT(A) for fresh adjudication on merits in accordance with the law of all the issues/grounds raised by assessee in its first appeal filed with learned CIT(A).
We hereby direct assessee to appear before Ld.CIT(A) and submit all necessary evidences, explanations etc., in support of its contention , when the appeal comes for hearing before Ld.CIT(A) in denovo appellate proceedings in second round of litigation. It is made clear that in case if the assessee still did not come forward and co-operate in denovo appellate proceedings before learned CIT(A), then Ld.CIT(A) shall be at liberty to decide the issue’s on merits in accordance with law. The Ld.CIT(A) is directed to denovo adjudicate all the issues raised by assessee in its first appeal filed with learned CIT(A) on merits in accordance with law. Needless to say that learned CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law, in denovo appellate proceedings. Thus, the appeal of the assessee stands allowed for statistical purposes. We order accordingly.
5 In the result, the appeal filed by the assessee in 2010-11 is allowed for statistical purposes.
Order pronounced in Open Court on this 17th day of December , 2019 in Chennai.