ASKLEPIOS REMEDIES PVT. LTD,PATNA vs. NFAC, DELHI

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ITA 202/PAT/2025Status: DisposedITAT Patna11 September 2025AY 2018-195 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that proper representation was not made by the assessee at both the assessment stage before the AO and the appellate stage before the CIT(A). The assessee's representative requested that the matter be remitted to the CIT(A) for a fresh decision, citing lack of communication and insufficient opportunity. The Tribunal, considering the interest of justice and fair play, deemed it appropriate to provide another opportunity to the assessee to represent its case properly before the CIT(A). Accordingly, the order of the Ld. CIT(A) was set aside, and the appeal was restored to the CIT(A) for a fresh decision. The CIT(A) was directed to allow an opportunity of being heard to the assessee and, if required, to the AO as per Rule 46A of the Income Tax Rules, 1962, before passing an order in accordance with law. The appeal was partly allowed for statistical purposes.

What were the facts?

The assessee, Asklepios Remedies Pvt. Ltd., filed its return of income for Assessment Year 2018-19 declaring a total income of Rs. 13,11,910/-. The case was selected for limited scrutiny concerning business expenses. The Assessing Officer (AO) passed an assessment order on March 1, 2021, determining the total income at Rs. 63,52,006/-, including an addition of Rs. 50,21,813/- for disallowance of sales promotion expenses. The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi. The NFAC dismissed the appeal ex-parte, upholding the addition of Rs. 50,21,813/-. The assessee is now in appeal before the Income Tax Appellate Tribunal (ITAT) against the NFAC's order dated April 11, 2025.

What were the issues?

1. Whether the Ld. CIT(A) erred in affirming the AO's order in an ex-parte proceeding, thereby affirming the income assessed at Rs. 63,52,006/-? 2. Whether the Ld. CIT(A) erred in deciding the appeal ex-parte without proper notification of notices to the appellant? 3. Whether the appellant was prevented by sufficient cause from complying with notices due to non-receipt of information on its registered email/mobile number? 4. Whether the Ld. CIT(A) erred in holding that the appellant failed to avail opportunities offered through notices? 5. Whether the Ld. CIT(A) erred in holding that the appellant was not pursuing the appeal? 6. Whether the Ld. CIT(A) erred in not granting the requested fortnight's time and seeking compliance by a short deadline without proper communication? 7. Whether the Ld. CIT(A) erred in affirming the disallowance of Rs. 50,21,813/- on account of sales promotion expenses without considering uploaded material/evidences? 8. Whether the Ld. CIT(A) erred in holding that sales promotion expenses were hit by UCPMP, Explanation 1 to Section 37, and CBDT Circular, when major expenses were not freebies to doctors? Assessee's contentions: The Ld. AR argued that the matter should be remanded to the Ld. CIT(A) as adequate opportunity was not provided. The assessee sought an adjournment of 15 days, but the appeal was decided ex-parte due to improper representation. The assessee claims to have sufficient evidence and that lack of communication prevented proper representation before the AO and CIT(A). The assessee requested the appeal be restored to the Ld. CIT(A). The assessee also sought personal hearing and the right to furnish detailed submissions. Revenue's contentions: The Ld. DR supported the order of the Ld. CIT(A).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 37

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA

Before: SHRI GEORGE MATHAN

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [“the Ld. CIT(A)”] dated 11.04.2025 which has been passed against the assessment order passed u/s 143(3) of the Income

Tax Act, 1961 (‘the Act’) dated 01.03.2021. I.T.A. Nos.: 202/PAT/2025

Assessment Year: 2018-19

1.

Asklepios Remedies Pvt. Ltd.

2.

The assessee is in appeal before the Tribunal raising the following

grounds of appeal:

“1. For that the Ld. CIT(A) has erred in affirming the order of the A.O. in an ex-parte order and thereby the income assessed by the A.O. at Rs.63,52,006/ stands affirmed.

2.

For that the Ld. CIT(A) has decided the appeal ex-parte without there being any information of uploading of the notices dated 11.06.2024, 15.03.2025, 27.03.2025 and 02.04.2025 on registered e-mail/mobile number of the appellant.

3.

For that the Ld. CIT(A) has failed to appreciate that the appellant was prevented by sufficient and reasonable cause for not making compliance to the notices as no information of its uploading were received on registered e- mail / mobile number of the appellant.

4.

For that the Ld. CIT(A) has erred in holding that the appellant has failed to avail the opportunity offered through various notices.

5.

For that the Ld. CIT(A) has erred in holding that the appellant is not in pursuing the appeal.

6.

For that the Ld. CIT(A) has erred in not granting fortnights time as sought by the appellant in time petition uploaded on 25.03.2025 and has erred in seeking compliance by 07.04.2025 by notice dated 02.04.2025 for which no message/email was received.

7.

For that the Ld. CIT(A) has erred in affirming the disallowance of Rs.50,21,813/-on account of sale promotion expense by affirming the findings of the A.O. and without considering the material/evidences uploaded in course of assessment proceedings.

8.

For that the Ld. CIT(A) has erred in holding that the expenditure incurred on sale promotion expense are hit by UCPMP, Explanation 1 to section 37 and the Circular of the CBDT whereas the fact remains that major part of expense are not freebies to Doctors.

9.

For that the sustenance of disallowance by CIT(A) is wrong, illegal and unjustified on the facts and circumstances of the appellant's case.

10.

For that the appellant reserves its right to furnish detailed written submission along with documents and evidences on or before date of hearing.

11.

For that the appellant may be given opportunity of personal hearing physically/ virtually at the time of hearing of the appeal.

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I.T.A. Nos.: 202/PAT/2025

Assessment Year: 2018-19

1.

Asklepios Remedies Pvt. Ltd.

12.

For that the whole order is bad in fact and law of the case and is fit to be annulled/restored back to the file of CIT(A) for decision afresh.

13.

For that the other grounds, if any, shall be urged at the time of hearing of the appeal.”

3.

Brief facts of the case are that the assessee had filed the return of income for AY 2018-19 on 01.04.2018 declaring total income of %13,11,910/-. The case was selected for limited scrutiny on the issue of ‘Business expenses’. Subsequently, assessment order was passed on 01.03.2021 assessing the total income at %63,52,006/- after making an addition of 350,21,813/- on account of disallowance of sales promotion

expenses and other amount already added in the intimation issued.

Being aggrieved with the assessment order passed on 01.03.2021, the assessee filed an appeal before the Ld. CIT(A) , who vide the impugned order, dismissed the appeal of the assessee as despite having been granted sufficient time and opportunities of being heard, the assessee did not make any submission and it was inferred that the assessee had no specific submission and documentary evidences to file in respect of he claims made in the Grounds of appeal and the addition of 2 50,21,813/- was upheld and the appeal was dismissed. Aggrieved with he order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

4.

Rival contentions were heard and the submissions made have been examined. Before us, the Ld. AR submitted that the matter may be remanded to the Ld. CIT(A) as adequate opportunity was not provided. The assessee had sought adjournment of 15 days but the appeal order was decided ex parte, since proper representation was not made before the Ld. CIT(A). As the assessee has sufficient evidence for the relief claimed and proper representation could not be made either

I.T.A. Nos.: 202/PAT/2025

Assessment Year: 2018-19

1.

Asklepios Remedies Pvt. Ltd.

before the Ld. AO or even before the Ld. CIT(A) on account of lack of communication, it was requested that the appeal may be restored before

the Ld. CIT(A).

5.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). We find that at both the stages of assessment order before the Ld. AO as well as before the Ld. CIT(A) in the appeal, proper representation was not made on behalf of the assessee. The Ld. AR requested that the matter may be remitted to the Ld. CIT(A) while the Ld. DR supported the order of the Ld. CIT(A). Therefore, we deem it appropriate in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent his case properly before the Ld. CIT(A). We, therefore, set aside the order of the Ld. CIT(A) and restore

the appeal to him to be decided afresh, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and to be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereafter pass an order in accordance with law. For statistical purposes, the appeal of the assessee is partly allowed.

6.

In the result, the appeal filed by the assessee is partly allowed for statistical purpose.

Order pronounced in the open Court on 11th September, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member

Dated: 11.09.2025

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I.T.A. Nos.: 202/PAT/2025

Assessment Year: 2018-19

1.

Asklepios Remedies Pvt. Ltd.

Copy of the order forwarded to:

1.

AnNAWN

Asklepios Remedies Pvt. Ltd., Rukanpura, Bailey Road, PO- Bihar Veterinary College, Patna, Bihar, 800014

The Assessing Officer, NFAC, Delhi.

CIT(A)-

CIT-

CIT(DR), Patna Bench, Patna.

Guard File.

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By order

Assistant Registrar ITAT, Kolkata Benches Kolkata

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