M/S. MOONTREE CONSTRUCTION (P) LTD., ,KOLKATA vs. ITO, WARD - 13(3), KOLKATA , KOLKATA

The assessee in the present case is a Company, which filed its return of income for the year under consideration on 26.09.2014 declaring total income of Rs.3,53,130/-. In the Profit & Loss Account filed along with the said return, contractual and other income was shown by the assessee at Rs.35,75,00,000/- and expenses of Rs.35,71,46,865/- were debited including the contractual expenses of Rs.35,67,09,270/-. During the course of assessment proceedings, the assessee-company was required by the Assessing Officer to furnish the details of contractual and Assessment Year: 2014-2015 M/s. Moontree Construction (P) Limited other income as well as the contractual expenses. The assessee was also called upon by the Assessing Officer to explain as to why the income shown by it in the form of contractual and other income should not be treated as the accommodation entries provided to the parties keeping in view that its capital base was only Rs.5,00,000/- and there was hardly any cash or Bank balance to achieve the turnover of Rs.35.75 crores. The assessee-company, however, failed to furnish the details required by the Assessing Officer and also failed to offer any explanation as sought by the Assessing Officer. The Assessing Officer, therefore, was left with no option but to complete the assessment ex-parte to the best of his judgment on the basis of the material available on record. In the assessment so completed under section 144 vide an order dated 23.11.2016, the Assessing Officer estimated the business income of the assessee at Rs.2,14,50,000/- being commission @6% allegedly received by the assessee on the accommodation entries of Rs.35.75 crores given to the parties. Since the assessee had declared the business income of Rs.3,53,130/- in the return of income, addition of Rs.2,10,96,870/- was made by the Assessing Officer to the total income of the assessee.

Against the order passed by the Assessing Officer under section 144, an appeal was preferred by the assessee before the ld. CIT(Appeals) and since there was no satisfactory compliance on the part of the assessee to the notices issued by him fixing the said appeal for hearing from time to time, the ld. CIT(Appeals) dismissed the appeal of the assessee vide his appellate order dated 03.01.2018 passed ex-parte thereby confirming the addition by the Assessing Officer to the total income of the assessee. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

At the time of hearing fixed before the Tribunal on 17.10.2019, nobody appeared on behalf of the assessee. There was a similar non- compliance on the part of the assessee when this appeal was fixed for Assessment Year: 2014-2015 M/s. Moontree Construction (P) Limited hearing before the Tribunal earlier on 17.09.2019. This appeal of the assessee is, therefore, being disposed of ex-parte after hearing the arguments of the ld. D.R. and perusing the relevant material available on record. It is observed that the appeal of the assessee was fixed for hearing before the ld. CIT(Appeals) on five occasions, out of which the assessee had sought adjournments on four occasions. On fifth occasion, there was, however, no compliance on the part of the assessee to the notice issued by the ld. CIT(Appeals) and keeping in view the same, the appeal of the assessee was dismissed by the ld. CIT(Appeals) vide his impugned order passed ex-parte without giving any further opportunity of being heard to the assessee. In our opinion, the ld. CIT(Appeals), therefore, cannot be said to have given proper and sufficient opportunity of being heard to the assessee. Moreover, the ld. CIT(Appeals) as per the provisions of sub-section (6) of section 250 was required to dispose of the appeal of the assessee vide an order in writing stating the points for determination, the decision thereon and the reasons for the decision. It is observed that the impugned order passed by the ld. CIT(Appeals) does not comply with these requirements. We, therefore, consider it fair and proper and in the interest of justice to set aside the impugned order passed by the ld. CIT(Appeals) ex-parte and remit the matter back to him for disposing of the appeal of the assessee afresh on merit in accordance with law after giving one more opportunity of being heard to the assessee.

In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on November 15, 2019.