What did the Tribunal hold?

The tribunal held that while the CIT(A) could dismiss an appeal for non-prosecution, the order must still be on merits and consider the material on record. The CIT(A)'s order was cryptic and lacked reference to any material.

The assessee claimed a deduction for write-off of inventories, which was disallowed by the Assessing Officer. The CIT(A) dismissed the assessee's appeal for non-prosecution without considering the merits.

What were the issues?

Whether the CIT(A) can dismiss an appeal for non-prosecution without adjudicating on the merits of the case after considering the available material.

Pentamedia Graphics Limited vs ACIT | ITAT Chennai 2019

Income Tax Appellate Tribunal, ‘C’ BENCH : CHENNAI

Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO

For Respondent: Ms. R. Anitha, IRS, JCIT

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER:

This is an appeal filed by the Assessee directed against the order of the Commissioner of Income Tax (Appeals)-7, Chennai (‘CIT(A)’ for short) dated 19.03.2019 for the Assessment Year (AY) 2014-2015.

The brief facts of the case are as under: 2.

The appellant namely ‘’M/s. Pentamedia Graphics Ltd’’ is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in development and export of multimedia software, special effect moves, computer based tutorials etc. The return of income for the AY 2014-15 was filed on 24.09.2014 disclosing total loss of Rs.7,57,57,801/-. Against the said return of income, the assessment was completed by the Assistant Commissioner of Income Tax, Non Corporate Circle-20(1), Chennai (hereinafter called “AO”) vide order dated 31.12.2016 passed u/s. 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) at total income of Rs.43,42,320/-. While doing so, the Assessing Officer disallowed the claim for deduction of write off of rights of inventories to the extent of �8,01,00,000/- on the ground that assessee had not furnished any reasons establishing as to why write off of inventories was necessitated.

Being aggrieved, an appeal was preferred before the ld. CIT(A), who vide impugned order dismissed the appeal for non prosecution.

Being aggrieved by the above decision of the CIT(A), the 4. appellant is in appeal before us in the present appeal. The ld. Authorised Representative submitted that ld. CIT(A) had not considered the material on record while passing the impugned order.

On the other hand, ld. Departmental Representative placed reliance on the orders of lower authorities.

We heard the rival submissions and perused the material on 6. record. Admittedly, the appeal was dismissed by the ld. CIT(A) for non prosecution. The ld. CIT(A) has granted sufficient number of opportunities to enable the assessee to represent before him. We are of the considered opinion that ld. CIT(A) cannot be faulted for dismissing the appeal ex-parte. However, the law mandates that ld. CIT(A) should pass even ex-parte order on merits after considering the materials on record. In the present case, though the ld. CIT(A) has dismissed the appeal on merits, it is apparent from the impugned order that without referring to any material on record, passed cryptic order. In the circumstances, we remand the issue back to the file of ld. CIT(A) for fresh adjudication on the merits of the appeal after affording due opportunity of hearing to the appellant in accordance with law. Hence, appeal filed by the assessee is partly allowed for statistical purposes.

In the result, the appeal filed by the assessee is partly 7. allowed for statistical purposes.

Order pronounced on 2nd day of December, 2019, at Chennai.

PENTAMEDIA GRAPHICS LIMITED,CHENNAI vs. ACIT, NCC - 20 (1), CHENNAI

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