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Facts
The assessee's appeal was directed against the order of the National Faceless Appeal Centre (NFAC/Ld.CIT(A)) for AY 2017-18. The assessee contended that neither the Assessing Officer nor the Ld. CIT(A) provided adequate opportunities for a fair hearing, leading to a miscarriage of justice. The additions were made on grounds of sundry creditors, ad hoc disallowance of expenses, Employees' Provident Fund payment, closing stock difference, and non-deduction of TDS interest.
Held
The Tribunal noted that the Assessing Officer issued a show-cause notice on 26.12.2019 and passed the assessment order on 28.12.2019, leaving little time for the assessee to respond. The Ld. CIT(A) dismissed the appeal in a non-speaking order, without properly considering the assessee's submissions or allowing further opportunities. The Tribunal found that the Ld. CIT(A)'s order was not in consonance with Section 250(6) of the Act.
Key Issues
Whether the assessee was provided with reasonable and fair opportunities by the lower authorities, and whether the Ld. CIT(A) passed a speaking order considering the merits of the case.
Sections Cited
143(3), 250(6)
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िनधा�रती की ओर से /Assessee by Shri Bipin Jariwala, AR राज� की ओर से /Revenue by Shri Mukesh Jain– Sr-DR सुनवाई की तारीख/Date of hearing 09.01.2025 उद्घोषणा की तारीख/Date of 13.01.2025 pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER:
1. 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld.CIT(A)] dated 24.12.2024 for assessment year (AY) 2017-18, which in turn arises out of assessment order passed by Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.12.2019.
2. Rival submission of both the parties heard and record perused. The Ld. Authorized Representative (Ld.AR) of the assessee submits. The Ld. AR of the assessee submits that neither Assessing Officer nor Ld. CIT(A) allowed reasonable and fair opportunities to the assessee which resulted in miscarriage of justice to assessee. The Ld. AR of the assessee submits that Assessing Officer issued show cause notice on 26.12.2019 for proposing various additions in the assessment and sought various details, before assesse could furnish any details, the Assessing Officer passed assessment order on 28.12.2019. The AO made various additions on account of sundry creditors, ad hoc disallowance of various expenses, addition on account of payment of Employees’ Provident Fund, addition on account of different in closing stock and addition on account of non-deduction of TDS interest paid to NBFC. The assessee filed appeal before Ld.CIT(A) in the year 2020. The Ld.CIT(A) dismissed the appeal of assessee in a non-speaking order. In para-4 of impugned order, Ld. CIT(A) recorded that assessee requested for adjournment in January, 2021 and that no other notices were complied. The Ld. AR of the assessee submits that finding of Ld.CIT(A) is contrary to the record. The assessee in response to notice dated 13.09.2024 furnished details submission along with supporting documents and further request for more time. The request of assessee for adjournment is neither allowed nor rejected. The Ld. CIT(A) confirmed the additions made by Assessing Officer in a cryptic manner without discussing merit of the case and materials available on record. The order passed by Ld. CIT(A) is not in consonance with the mandate of Section 250(6) of the Act. The Ld. AR of the assessee submits that both the lower authorities have passed the order for want of evidence. Therefore, in the interest of justice the matter may be restored back to the file of Assessing Officer instead of CIT(A), to avoid long drawn process of remand report before Ld.CIT(A). The Ld. AR of the assessee undertakes on behalf of assessee to be more vigilant and making timely compliance before lower authorities as and when called for.
On the other hand, Ld. Sr-DR for the Revenue supported the order of lower authorities. Ld. Sr-DR for the Revenue submits that Assessing Officer has given several notices which were not complied by the assessee. The AO in para-2 of his order has recorded that notice dated 24.07.2019 was also served on the assessee and that certain details were required from the assessee. So, the cause notice dated 26.12.2019, was not the only notice served on the assessee. The assessee furnished part reply in response to such notice. The Ld. Sr-DR for the Revenue submits that in case Bench is of the view that assessee deserves any further opportunity, the mater may be restored back to the file of Ld.CIT(A) with the direction to assessee to make timely compliance as and when called for.
We have considered the rival submissions of both the parties and have gone through order of lower authorities carefully. On perusal of record, we find that assessee was given show cause notice on 26.12.2019 for seeking numerous details, though the assessee furnished certain details vide reply dated 27.12.2019. We further find that Assessing Officer passed assessment order on 28.12.2019. No doubt, in the show cause notice dated 24.07.2019 was served on the assessee, however, the details required in such notice was furnished by the assessee, as evident from para-2 of assessment order. The Ld. CIT(A) confirmed the action of Assessing Officer in ex parte order without discussing the merit of the case. We find that it is not a case of non-compliance before Ld.CIT(A) rather the assessee sought adjournment in response to notice dated 13.09.2024 by furnishing certain details, the Ld. CIT(A) neither considered such details available on record nor allowed further opportunity to assessee. Considering overall facts and circumstances of the case that majority of additions made in the assessment order for want of proper explanation by assessee. Therefore, we set aside the order of Ld.CIT(A) and deem it proper to restore the matter back to the file of Assessing Officer to adjudicate the issues afresh in accordance with law. Needless to direct Assessing Officer before passing the order afresh, the Assessing Officer shall give reasonable opportunity of being heard to assessee and to file requisite as required and explanation and evidence as and when called for. In the result, the grounds of appeal
raised by the assessee is allowed for statistical purposes.
5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 13/01/2025.
Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद�/Accountant Member �ाियक सद�/Judicial Member सूरत / Surat Dated: 13/01/2025 Dkp Outsourcing Sr.P.S* आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant ��थ�/ The Respondent आयकर आयु�/ CIT िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT गाड� फाईल/ Guard File // True Copy // By order/आदेश से,
सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत