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PER PAWAN SINGH, JUDICIAL MEMBER; 1. This set of two appeals by assessee are directed against the orders of learned Commissioner of Income Tax (Appeals)-10, Mumbai, both dated 24th March 2017 for assessment year 2011-12 and 2012-13. In both the appeals the assessee has raised certain common grounds of appeal
. Thus, both the appeals were clubbed, heard together and are decided by common order. For appreciation of fact the appeal for Assessment Year 2011-12 is treated as lead case.
2. Brief facts of the case are that assessee-company is engaged in the business of manufacturing of Ropes, Twines, Fishnets & Geo Synthetic, ITA No. 4701 & 4702 Mum 2017-Garware Wall Ropes Ltd. filed its return of income for Assessment Year 2011-12 on 28th September 2011 declaring total income at Rs.18,77,94647/-. The return of income was selected for scrutiny. The assessment was completed under section 143(3) on 03.03.2014. The Assessing Officer while making assessment made various additions/ disallowance including addition of Rs. 24,79,282/- being difference in depreciation, disallowance under section 14A of Rs. 6,30,728/-, disallowance of commission of Rs. 1,42,45,314/-, addition on account of unexplained expenditure of Rs. 11,30,199/- and addition on account of short credit of TDS of Rs. 16,70,530/-.
3. On appeal before learned Commissioner (Appeals) all the addition/disallowance were confirmed by dismissing the appeal of assessee ex-parte. Thus, further aggrieved by the order of Commissioner (Appeals) the assessee has filed present appeal before us.
We have heard the submission of learned AR of the assessee and ld. DR for the revenue. The ld. AR of the assessee submits that the first appellate authority dismissed the appeal of assessee without giving fair and sufficient opportunity to the assessee. The ld. CIT(A) dismissed the appeal by following the decision of Delhi Tribunal in Multiplan India Pvt. Ltd. 38 ITD 320) and decision of Hon’ble Madhya Pradesh High Court in Estate of late Tukojirao Holkar (223 ITR 480 (MP). The ld. AR further submits that the decision of ld. CIT(A) is not in accordance with 2 & 4702 Mum 2017-Garware Wall Ropes Ltd. the mandate of section 250(6) of the Act. The ld. AR further submits that the assessee sought the adjournment for valid reasons. The application for adjournment of assessee was accepted by ld. CIT(A) on 23.03.2017 wherein the assessee sought adjournment for second week of April 2017, however, the appeal of revenue was dismissed by ex-parte order dated 24.03.2017. The ld. AR submits that the assessee has good case on merit and is likely to succeed in case, the grounds of appeal
are decided on merit.
5. On the other hand, the learned DR for the revenue supported the order of ld. CIT(A). The learned DR further submits that assessee is habitual defaulter in not making an appearance and was seeking adjournment instead of properly prosecuting and furnishing necessary detail and submission. The assessee was served a number of notices as summarized by ld. CIT(A) in para-4 of its order. The ld. DR prayed for dismissal of the appeal.
6. We have considered the submission of ld. AR of the assessee and ld. DR for revenue and perused the material available on record. First ground of appeal relates to dismissing the appeal without discussing grounds on merit and passing the impugned order without following the principle of natural justice. We have noted that the assessee filed appeal before the CIT(A) on 11th of April 2014. The ld. CIT(a) dismissed the appeal of assessee was dismissed on 24th March 2017. The ld. CIT(A) in para-4 of 3 & 4702 Mum 2017-Garware Wall Ropes Ltd. the impugned order has recorded that the assessee has not appeared on 18.01.2016, 17.05.2016, 14.06.2016, 28.07.2016, 09.08.2016 despite the service of notice of hearing of appeal by Speed Post. The assessee appeared on 14.09.2016 and on requested adjournment and case was adjourned for 18.10.2016. None appeared on behalf of assessee. The assessee was again served notice issued on 23.12.2016 for fixing the date of hearing on 11.01.2017, the notice was served on 31.12.2016.
However, none appeared on behalf of assessee. Again notice for hearing fixed on 23.03.2017 was sent vide notice dated 14.03.2017 through Speed Post, served on assessee on 15.03.2017. When none appeared on behalf of assessee, the ld. CIT(A) passed the order against the assessee.
We have seen that the assessee has filed application for adjournment vide application dated 23.03.2017 which is duly acknowledged vide acknowledgment/stamp of office of ld. CIT(A)-10. The impugned order was passed on 24.03.2017.
We have noted that learned Commissioner (Appeals) decided the appeal by placing reliance on the decision of Multiplan India Private Ltd (38 ITD 320) & decision of Hon’ble Madhya Pradesh High Court in Estate of late Tukojirao Holkar (supra). The ld. CIT(A) has not decided the appeal on merit. All the addition/disallowances were confirmed without discussing the material available on record. In our view, the order passed by ld. CIT(A) is not in accordance with the mandate of section 250(6) of 4 & 4702 Mum 2017-Garware Wall Ropes Ltd. the Act. Keeping in view the fact and peculiar circumstances of the case, we are of the view that the assessee was not granted sufficient and fair opportunity of hearing during the first appellate stage. Therefore, we deem it appropriate to restore the appeal to the file of learned Commissioner (Appeals), with the direction to decide all the issues raised by assessee on merit in accordance with law. Needless to say that learned Commissioner (Appeals) shall provide sufficient opportunity of hearing before deciding the appeal on merit. The assessee is also directed to appear as and when the appeal is fixed by learned Commissioner (Appeals) and to provide all necessary information, details and evidences on first date of hearing in restoration proceeding to substantiate his contention in support of various grounds of appeal
raised by him. The assessee is further directed not to seek any adjournment without any valid reasons.
8. In the result, ground no.1 of the appeal is allowed.
9. As we have allowed the ground No.1 raised by the assessee and restored all the grounds of appeal to the file of ld. CIT(A) to decide all the issues/grounds of appeal on merit and therefore the discussion on other grounds of appeal have become academic.
10. In the result, appeal of the assessee is allowed for statistical purpose.
ITA No. 4702/Mum/2017 appeal for AY 2012-13 & 4702 Mum 2017-Garware Wall Ropes Ltd.
We have noted that the facts for the year under consideration are similar as of earlier year; the assessee has raised certain common grounds of appeal
s. The assessee has raised ground No.1 that the learned Commissioner (Appeals) not granted sufficient opportunity of hearing while deciding the appeal, which is identical ground of appeal raised by assessee in appeal for AY 2011-12, which we have already restored to the file of ld. CIT(A), therefore following the principle of consistency, the appeal for the year under consideration is also restored to the file of ld. CIT(A) with similar direction.
12. In the result, this appeal of assessee is also allowed for statistical purpose. Order pronounced in open court on 30th January 2019.