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Facts
The assessee filed its return of income declaring a loss. The assessment was completed by disallowing call option premium charges as capital in nature, leading to an assessed income. The assessee's appeal before the NFAC (Appeals) was dismissed ex-parte.
Held
The Tribunal held that the NFAC (Appeals) ought to have given reasonable and adequate opportunity of being heard to the assessee. Therefore, the appeal is restored to the file of the NFAC (Appeals) for a fresh decision.
Key Issues
Whether the NFAC (Appeals) erred in passing an ex-parte order without providing adequate opportunity of being heard to the assessee and confirming the disallowance of call option premium charges.
Sections Cited
80IA, 115JB, 270A, 234D
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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI SANDEEP SINGH KARHAIL, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order dated 20/06/2024 passed by NFAC, Delhi pertaining to AY 2017-18.
The grievance of the assessee reads as under:- “1. On facts and circumstances of the case and in law, the NFAC (Appeals) has erred in passing an exparte order in the matter, thereby, rejecting the appeal by applying the principles of law "Vigilantibus Non Dormientibus Jura Subventunt". It is humbly prayed that since the appellant could not respond to notices for reasons beyond its control, the exparte order passed may please be recalled. 2. On facts and circumstances of the case and in law, the NFAC (Appeals) has erred in confirming the disallowance of Rs.7,26,79,652/- being call option premium charges paid by the appellant as capital in nature. 3. Without prejudice to the above ground, the amount of Rs.7,26,79,652/- paid in respect of option premium charges disallowed as capital expenditure in nature by the AO, depreciation ought to have been allowed on the same. 4. On facts and circumstances of the case and in law, the NFAC (Appeals) failed in appreciating the fact that the appellant is in the business of solar power generation and audit report in Form 10CCB being filed with the AO, the appellant was entitled 2 to claim deduction u/s.80IA in respect of the income assessed of Rs.2,72,96,710/-, after considering a disallowance of Rs. 7,26,79,652/-.
5. On facts and circumstances of the case and in law, the NFAC (Appeals) has erred in confirming the initiation of penalty proceeding u/s.270A of the Income Tax.
On facts and circumstances of the case and in law, the NFAC (Appeals) has erred in confirming the chargeability of interest u/s.234D of the Income Tax Act. The Appellant reserve its right to add to alter, amend, modify and delete any of the grounds taken in this appeal. The grounds taken in this appeal are without prejudice to each other. Since there is no designation of a Managing Director, the appeal is being signed by the Director.”
Briefly stated the facts of the case are that the assessee electronically filed its return of income on 31/10/2017 declaring total loss of Rs. 4,61,10,257/- and MAT income u/s 115JB of the Act at Rs.76,12,718/-. The return was selected for scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee. The returned loss was assessed at Rs.2,72,96,710/- by disallowing the option premium at Rs. 7,26,79,652/-.
The assessment was agitated before the ld. CIT(A) and the ld. CIT(A) issued notices to the assessee at the given e-mail address. On receiving no response, the final showcause notice was served on 12/01/2024 to which the assessee sought adjournment vide letter dated 30/01/2024. The ld. CIT(A) presumed that the assessee does not wish to rebut the contentions of the AO and the conclusion drawn and proceeded ex-parte and dismissed the appeal of the assessee.
We have given a thoughtful consideration to the orders of the authorities below. We find that all the notices have been issued on the e-portal. The adjournment requests of the assessee were denied and the order has been framed ex-parte.