VEETEE FINE FOODS LTD,SONEPAT vs. JCIT, SPECIAL RANGE 9, NEW DELHI

1 The assessee has raised the following grounds of appeal: “1. That on the facts and circumstances of the case and in law, the ex-parte order dated 10.01.2023 passed by the Commission of Income Tax (Appeals) ['CIT(A)), under section 250 of the Income- tax Act, 1961 ('the Act'), is devoid of natural justice, illegal and bad in law. 2. That on the facts and circumstances of the case and in law, the CIT(A) erred in passing order dated 10.01.2023, without granting a reasonable opportunity of being heard, to the appellant. 3. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding in part the order of the assessing officer without adjudicating the case on merits. 4. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the disallowance made by the assessing officer, on account of depreciation aggregating to Rs.2,01,92,878 claimed by the appellant under section 32 of the Act, alleging that the assets were not put to use during the year. 4.1 That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the disallowance depreciation made by the assessing officer, without appreciating that the temporary suspension of business activities is not equivalent to closure of business. 4.2 That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the disallowance depreciation made by the assessing officer, ignoring the fact that the contention of the assessing officer is contradictory in as much it had allowed other business related expenses incurred by the appellant, such as rent, power and fuel, salary etc. 4.3 That on the facts and circumstances of the case and in law, the CIT(A) erred in failing to appreciate that the business of the appellant never ceased to exist. 5. That on the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition of Rs. 33,47,966, being the amount payable to Smt. Shubha Devi Verma as non- genuine, solely for the reason that the said liability could not be discharged within a period of 3 years.

1 That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the impugned addition, without appreciating the fact that the said amount was received by the appellant from a bank and not from Smt. Shubha Devi Verma. 5.2 That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the addition made by the assessing officer, without appreciating the fact that appellant was not in sound financial position to repay the said amount. 6. That on the facts and circumstances of the case and in law, the CIT(A) erred in disallowing the finance cost incurred by the appellant amounting to Rs 10,28,511, alleging that the loan funds have been diverted to non-business purposes. 6.1 That on the facts and circumstances of the case and in law, the CIT(A) erred in disallowing the finance cost incurred during the year since the appellant had not recovered interest on outstanding receivables from its debtor. The appellant craves leave to add, amend, alter, or vary the above grounds of appeal at o before the time of hearing.”

Facts of the case may be summarized as that the assessee / appellant e filed its revised return declaring loss of Rs. 2,17,83,486/- on 23.04.2016 and thereafter, the case was selected for scrutiny and in compliance thereof notice u/s 143(2), 142(1) issued from time to time and at the completion of the proceeding total income of assessee computed as 91,69,834/-. The Ld. CIT(A) has passed an ex-parte order and partly allowed the appeal. 3. Heard rival submissions and carefully scanned the material available before us.

We have carefully considered the order of the CIT(A), it is observed that the impugned order was passed ex-parte due to non- compliance by the assessee to multiple notices issued under section 250 of the Act. However, principles of natural justice require that a reasonable and effective opportunity be provided to the assessee before deciding the matter on merits. 5. Per contra, Learned Commissioner of Income Tax (Departmental Representative) [hereinafter referred to as ‘Ld. CIT(DR)’] relied on the order passed by both lower authorities and stated that sufficient opportunity provided to assessee before passing impugned order. 6. By hearing both side and perusing material placed before us, we are of the humble opinion that justice should not only done but it appears to be done and in order to achieve the noble goal of justice and before reaching any conclusion it is expedient to consider, all the material/ documents in existence and produced and whatever it is, if one more opportunity provided to assessee /appellant, object of justice will be served to some extent. Thus, for this purpose, we are inclined to remit back the matter to Ld. CIT(A) with the direction to decide afresh.

Consequently, matter is remitting back to the Ld. CIT(A) with the direction to decide the matter afresh after affording more effective, meaningful and sufficient opportunity of being heard to the assessee. At the same time, assessee / appellant shall co- operate in proceedings and will not seek unnecessary adjournments for ensuring expeditious disposal of the matter. Assessee / appellant is at liberty to file / submit any documents / evidence etc. in support of his claim. 8. In the result, this appeal is allowed as indicated above for statistical purpose.