M/S SWADIST SWEETS PVT. LTD.,HOWRAH vs. I.T.O, WD-12(2), KOLKATA

The assessee in the present case is a non-banking finance company. The return of income for the year under consideration originally filed by it was processed by the AO u/s 143(1) of the Act on 25.05.2011 on a total income of Rs. 44,490/-. Thereafter the assessment was reopened by him and a notice u/s 148 was issued in response to which the return of income was filed by the assessee on 03.06.2017 declaring total income at Rs. 44,490/-. During the course of assessment proceedings, a notice u/s 143(2) was issued by the AO. There was however no compliance on the part of the assessee with the said notice as well as with the subsequent notices issued by the AO u/s 142(1) of the Act. The AO, therefore, was left no option but to complete the assessment to the best of his judgement on the basis of Assessment Year: 2010-11 M/s. Swadist Sweets Pvt. Ltd. the material available on record. In the assessment so complete u/s 144/147 of the Act vide an order dated 22.12.2017, the loss of Rs. 12,34,460/- claimed by the assessee as arising from the sale of shares through a broker M/s. Sethi Finmart Pvt. Ltd. was disallowed by the AO and addition to that extent was made by him to the total income of the assessee.

Against the order passed by the AO u/s 144/147 of the Act, an appeal was preferred by the assessee before the Ld. CIT(A) and since there was no 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(A) dismissed the appeal of the assessee for non-prosecution vide his appellate order dated 31.12.2017 passed ex-parte. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.

I have heard the arguments of both the sides and also perused the relevant material available on record. Although the learned counsel for the assessee has tried to explain the non-compliance on the part of the assessee during the course to assessment proceedings before the AO as well as during the course of appellate proceedings before the Ld. CIT(A) by submitting that the notices stated to be issued by the AO as well as by the Ld. CIT(A) were never received by the assessee, I am not fully satisfied with the explanation offered by him. In my opinion, the assessee having received the notice issued by the AO u/s 148 and having filed the return of income in response to the said notice was expected to pursue the matter. Similarly when the appeal against the ex-parte assessment made by the AO u/s 144/147 was filed by the assessee

Assessment Year: 2010-11 M/s. Swadist Sweets Pvt. Ltd. before the Ld. CIT(A), he ought to have pursued the matter to find out the fate of the said appeal. Having considered all these facts of the case and keeping in mind the substantial interest of justice, I consider it fair and proper to give one more opportunity to the assessee of being heard by sending the matter back to the AO subject to a cost of Rs. 5,000/- to be paid by the assessee. Subject to the payment of the said cost by the assessee to the department, the impugned order passed by the Ld. CIT(A) is set aside and the matter is restored to the file of the AO for making the assessment afresh after giving proper and sufficient opportunity to the assessee of being heard. As undertaken by the learned counsel for the assessee, the assessee shall make due compliance before the AO and shall extend all the possible cooperation in order to enable the AO to complete the assessment afresh expeditiously.

In the result, the appeal of the assessee is treated as allowed for statistical purpose. Order Pronounced in the Open Court on 24th October, 2019.