M.L. LAKHAMSI & CO,MUMBAI vs. JT CIT RG 17(2), MUMBAI

The present Appeal filed by the assesseeis against the order of Ld. CIT (Appeal) – 28, Mumbai dated 17.10.16 for AY 2012-13.

The brief facts of the case are thatthe assessee is engaged in the business of export, import and general trading of all products, chemicals, machinery. The return of income for the year under considerationwas filed on 19.09.2012declaring total income at Rs. 22,99,420.Later on, the case was selected for scrutiny and after serving statutory notices and seeking reply of the assessee, assessment order u/s. 143(3) of the I.T. Act, 1961 was passed by the AO thereby making additions on account of valuation of closing stock and foreign exchange loss.

At the very outset, Ld. AR submitted that Ld. CIT(A) before confirming the additions made by the AO had not provided opportunity to the assessee to explain its case in the correct perspective and hence challenged the upholding the additions. Ld. AR also relied upon certain documents which are M. L. Lakhamsi& Co. annexed in paper book and submitted that documents at serial no. 16 to 18 were not filed before Ld. CIT(A). In addition to that, Ld. AR also submitted that nobody could appear before Ld. CIT(A) at the time of hearing and therefore in absence of the assessee, Ld. CIT(A) has passed an ex-party order.

On the other hand, Ld. DR relied upon the orders passed by revenue authorities and submitted that the assessee had intentionally not appeared before Ld. CIT(A) and the orders passed by Ld. CIT(A) needs no interference.

We have heard the counsels for both the parties and we have also perused the material placed on record as well as orders passed by the revenue authorities. From the records we found that the assessee could not placed on record certain documents as he was proceeded ex-parte before the ld. CIT(A) and now the assessee is relying upon those documents which are annexed in paper book. Although it was boundary duty of the assessee or his representative to appear before the authorities on each and every date of hearing and to assist and cooperate the authorities for the earlier disposal of the appeal, since the assessee was ex-parte M. L. Lakhamsi& Co. before the ld. CIT(A) therefore he could not file and relied upon the documents and contest the appeal on merits. Be that as it may, considering the facts and circumstances of the present case and keeping in view the substantial cause of justice, we are of the considered view that the ends of justice would be met only, when we provide one more opportunity of hearing to the assessee for contesting the appeal on merits. In our view, if the assessee is allowed to represent his case before Ld. CIT(A) then in that eventuality, no prejudice would be caused to the interest of revenue as legitimate taxes due on the assessee’s correct income will be adjudicated. Whereas, if the contrary view is taken then in that eventuality the assessee may be put to great hardship and difficulty. Therefore, keeping in view the above discussion, we set aside the ex-parte order passed by Ld. CIT(A) and remit the matter back to Ld. CIT(A) with a direction to provide one more opportunity to the assessee to represent his case and thereafter pass afresh order on all the grounds raised by the assessee. Assessee is also directed to appear before Ld. CIT(A) within 60 days from today and cooperate in early disposal of the appeal Before parting, we may make it clear that our decision to restore the matter back to the file of Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.

In the net result, appeal filed by the assessee is partly allowed.