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Facts
Alok Buildtech Private Limited appealed an addition of Rs. 75,33,583/- made by the Assessing Officer for AY 2019-20, which represented the difference between income surrendered during a survey and that declared. The Commissioner of Income Tax (Appeals) dismissed the assessee's first appeal ex-parte due to non-compliance with notices for hearing.
Held
The Income Tax Appellate Tribunal found that the assessee had opted for physical delivery of notices and against email communication in Form 35, and the revenue failed to prove service through any other mode. The Tribunal concluded that the assessee's non-representation was bona fide and not intentional avoidance, thus violating principles of natural justice. The matter was remanded to the CIT(A) for a fresh decision after providing a reasonable opportunity to the assessee.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without ensuring proper service of notices, especially when the assessee had opted for physical communication, thereby violating principles of natural justice.
Sections Cited
Section 250, Section 143(3), Section 143(2), Section 142(1)
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI ARUN KHODPIA, AM
v Alok Buildtech Private Limited, Asst. Commissioner of Income Tax, s Qtr No. 10, Kadambari Nagar, Central Circle-1, CBD Building, Durg-491001 (C.G.) Sector-21, Naya Raipur-492001 (C.G.) PAN: AAOCA5812F (अपीलाथ"/Appellant) . (""थ" / Respondent) . िनधा"रती की ओर से / Assessee by : Shri Nilesh Jain, CA & Shri Jay Juneja, CA राज" की ओर से / Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 25.06.2025 : 27.06.2025 घोषणा की तारीख / Date of Pronouncement आदेश / O R D E R Per Arun Khodpia, AM:
The captioned appeal instituted by the assessee is directed against the order of the Commissioner of Income Tax (Appeal), Raipur-3, [in short “Ld. CIT(A)”], passed on 18.02.2025, u/s 250 of the Income Tax Act, 1961 (in short “the Act”), for the Assessment Year 2019-20, which in turn arises from the order of Assistant Commissioner of Income Tax, Central Circle-1, Raipur (in short “Ld. AR”), u/s 143(3) of the Act, dated 30.09.2021. 2 Alok Buildtech Private Limited vs. ACIT, Central Circle-1, Raipur 2. The grounds of appeal raised by the assessee are as under: 1) In the facts and circumstances of the case and in law the ld. Commissioner of Income-tax (Appeals) (NFAC) has erred in deciding the appeal ex-parte without proper service of the notice as per provisions of the Act despite Appellant opting out for service of notice u/ s.250 of the Income-tax Act, 1961 through email by stating "No" in relevant column of Form 35 and without following the principles of natural justice. 2) In the facts and circumstances of the case and in law, learned Commissioner of Income Tax (Appeals), NFAC has erred in upholding order of learned Assessing Officer making addition of Rs.75,33,583/- as unrecorded investment without considering assessment records, without observing the principles of natural justice and without allowing reasonable opportunity to the appellant to explain his case. 3) The impugned order is bad in law and on facts. 4) The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice.
3. Concisely stated, the assessee is a private limited company, derives income from civil construction work and engaged in construction of buildings, road projects and bridges, have filed Return of Income for AY 2019-20 on 31.10.2019, declaring total income of Rs. 5,49,25,240/-. The case of assessee was selected for scrutiny on the basis of survey conducted on 20.02.2019. Statutory notices, u/s 143(2) dated 22.09.2019 was issued. Subsequently, notice u/s 142(1) of the Act along with questionnaire was issued and served upon the assessee. In response to the said notices, the assessee furnished requisite submission and supporting documents through ITBA portal. After deliberations upon the submission of the assessee, Ld. AO observed that the total additional income agreed to be surrendered by 3 Alok Buildtech Private Limited vs. ACIT, Central Circle-1, Raipur the assessee during the survey was Rs.2,23,46,148/-. However, the assessee had included only Rs.1,48,12,565/- under the head ‘other income’ while declaring the same, therefore, there was a difference of Rs.75,33,583/- which is added back to the income of the assessee.
4. Aggrieved with the aforesaid addition, the assessee preferred an appeal before the First Appellate Authority, however, the appeal of the assessee has been dismissed by the Ld. CIT(A) on ex-parte basis. The observations of Ld. CIT(A) highlighting non-compliance by the assessee during the appellate proceedings, are extracted as under:
Being aggrieved with the assessment order, the appellant has preferred appeal which is under consideration. During the course of appeal proceedings, several notices u/s 250 were issued but the assessee firm never filed any evidence in support of issues raised in appeal. Last notice u/s 250 was issued on 09.07.2024 and hearing was fixed on 15.07.2024 but the assessee company did not submit any further reply in support of appeal. Therefore, it is held that the assessee company has no interest in this appeal. Three notices are issued but the assessee company did not file any submission in support of the grounds raised in the appeal. The details of 03 notices issued to the assessee company as reproduced here in below:
4 Alok Buildtech Private Limited vs. ACIT, Central Circle-1, Raipur Sr. Notice issued under Section Date of notice Hearing Date Remarks No. 1. 250 of I. T. Act, 1961 11.11.2022 21.11.2022 No reply 2. 250 of I. T. Act, 1961 22.09.2023 12.10.2023 No reply 3. 250 of I. T. Act, 1961 09.07.2024 15.07.2024 No reply The assessee company has failed to submit any evidence in support of its appeal despite given several opportunities being heard. Under these circumstances, in my opinion the appellant is not interest in the appeal.
Being the appeal of assessee has been dismissed by the First Appellate Authority, the assessee preferred an appeal before this tribunal, which is under consideration for the present matter.
At the outset, Ld. AR of the assessee submitted that the reason for non-compliance before the Ld. CIT(A) was that the assessee had preferred delivery and notices and communication other than by way of email, therefore, the Form 35 furnished before the First Appellate Authority, assessee opted ‘No’ towards the column ‘whether notices / communication may be sent on email?’. Accordingly, the assessee was unaware about the notices issued, therefore, no compliance could be made before the First Appellate Authority. It was the submission that assessee’s non-representation before the First Appellate Authority was on account of Bonafide reasons beyond the control of assessee and, there was no intentional avoidance at the end of assessee, thus, the dismissal of assessee’s appeal was representing the contravention of principle of natural justice. It was therefore the prayer by Ld. AR that the matter may 5 Alok Buildtech Private Limited vs. ACIT, Central Circle-1, Raipur kindly be restored back to the file of Ld. CIT(A), with a last and final opportunity to the assessee to represent its case and make necessary submissions.
Per contra, Ld. Sr. DR, vehemently supported the order of revenue authorities, however, had not objected to the request of assessee to restore the matter back to the file of Ld. CIT(A).
Considering the aforesaid facts and circumstances, after hearing both the parties, we find that the assesse before the First Appellate Authority was under impression to receive the notices through physical mode, as it had opted ‘No’ towards the communications through email, further, the revenue before us is unable to produce any proof that the notices or communication are served to the assessee by way of any other mode other than by way of email. Considering such factual aspect, we find substance in the submission by the Ld. AR, accordingly, as concede by both the parties, it would be fair in the interest of justice to restore this matter back to the file of Ld. CIT(A) for allowing one more opportunity to the assessee to represent its matter and to decide the appeal afresh.
Needless to say, the assessee shall be afforded with reasonable opportunity of being heard in the set aside appellate proceedings. The assessee as agreed is directed to cooperate and to assist proactively in the 6 Alok Buildtech Private Limited vs. ACIT, Central Circle-1, Raipur set aside proceedings, failing which the Ld. CIT (A) would be at liberty to decide the case in accordance with the mandate of law.
In result, appeal of the assessee is allowed for statistical purposes, in terms of over aforesaid observations.