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Facts
For Assessment Year 2012-13, the Assessing Officer made an addition of Rs. 52,01,042/- to PP Jewellers Private Ltd., treating an amount taken from its subsidiary as deemed dividend under Section 2(22)(c) of the Income Tax Act. The CIT (Appeals) upheld this addition, noting that the assessee had not made any submissions during the appellate proceedings before him.
Held
The Income Tax Appellate Tribunal (ITAT) remitted the matter back to the CIT (Appeals) for a fresh hearing. This decision was based on the assessee's plea that their previous counsel could not present the case properly due to old age and illness, a proposition that the Departmental Representative did not object to. The ITAT concluded that granting an opportunity of being heard to the assessee would serve the interest of justice.
Key Issues
Whether the addition of Rs. 52,01,042/- as deemed dividend under Section 2(22)(c) was justified, and whether the CIT(A) erred in dismissing the appeal without considering the reason for the lack of submissions from the assessee.
Sections Cited
2(22)(c)
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Income Tax Appellate Tribunal, DELHI BENCH ‘F’ : NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI VIMAL KUMAR
Order
: 29.07.2024 ORDER
PER SHAMIM YAHYA, ACCOUNTANT MEMBER
This appeal by the assessee is directed against the order of the ld. CIT (Appeals)- 29, New Delhi dated 19.03.2024 for the assessment year 2012-13.
Grounds of appeal
taken by the assessee read as under :- “1. That on the facts and in the circumstances of the case, the disallowance, imposition of tax and interest with reference thereto, the quantification of taxable income and the tax liability, has been grossly unjustified, erroneous and unsustainable and necessary direction be given to the AO to give appropriate relief in accordance with law.
2. That on the facts and in the circumstances of the case, the Ld. CIT- (A) was not justified and grossly erred in dismissing the appeal on account of non-filing of written submission due to the reason that appellant's previous counsel is senior citizen suffering from ill health at that time.
3. That on the facts and in the circumstances of the case, Ld. CIT-(A) erred in upholding the order of the Ld. AO added amount taken by appellant from its subsidiary in ordinary course of business as deemed dividend u/s 2(22)(c) of the Act while computing tax liability under the normal provisions of the Act.” 3. Assessing Officer made addition for deemed dividend amounting to Rs.52,01,042/-.
4. Ld. CIT (A) upheld the order of the AO by inter alia noting that assessee has not made any submission. 5. Against the above order, assessee is in appeal before us. We have heard both the parties and perused the records. 6. Ld. Counsel for the assessee prayed that it was the old age and illness (Covid) of the previous counsel that assessee could not canvass the case before the ld. CIT (A) properly. He prayed that the matter may be remitted back to the file of ld. CIT (A). 7. Ld. DR for the Revenue did not object to this proposition. 8. Upon carefully considering the issue and hearing both the parties, we are of the considered opinion that interest of justice would be served if the matter is remitted to the file of ld. CIT (A). Ld. CIT (A) is directed to grant an opportunity of being heard to the assessee and thereafter decide the matter as per law. Order pronounced in the open court on this 29TH day of July, 2024.