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Facts
The assessee's appeal was dismissed ex-parte by the Ld. CIT(A) for non-prosecution. The assessee contended that notices were sent to an incorrect email ID, violating the principle of natural justice. The assessee also argued that the CIT(A) failed to decide the issues on merit.
Held
The Tribunal found that the notices were indeed sent to an incorrect email ID, leading to non-compliance by the assessee. The Tribunal also acknowledged the assessee's argument that issues should be decided on merit. Therefore, the Tribunal set aside the order of the Ld. CIT(A).
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without deciding the issues on merit, and whether the notices were properly served to the assessee.
Sections Cited
250, 251, 144, 68, 115BBE
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Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
This appeal by the assessee is directed against order dated 29.04.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
1. On the facts and circumstances of the case and in law, the On the facts and circumstances of the case and in law, the On the facts and circumstances of the case and in law, the National Faceless Appeal Centre/Commissioner of Income Tax National Faceless Appeal Centre/Commissioner of Income Tax National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) ['the learned Commissioner (Appeals)] erred in deciding (Appeals) ['the learned Commissioner (Appeals)] erred in deciding (Appeals) ['the learned Commissioner (Appeals)] erred in deciding the appeal ex the appeal ex-parte in violation of the principle of natural justice. the principle of natural justice. Thus, the order dated 29.04.2024 may be set aside and the Thus, the order dated 29.04.2024 may be set aside and the Thus, the order dated 29.04.2024 may be set aside and the matter may be restored back to the file of the learned matter may be restored back to the file of the learned matter may be restored back to the file of the learned Commissioner (Appeals) or the Respondent/the learned assessing Commissioner (Appeals) or the Respondent/the learned assessing Commissioner (Appeals) or the Respondent/the learned assessing officer for fresh adjudication. officer for fresh adjudication.
Without preju Without prejudice to the above, on the facts and circumstances of dice to the above, on the facts and circumstances of the case and in law, the order dated 29.04.2024 as passed by the case and in law, the order dated 29.04.2024 as passed by the case and in law, the order dated 29.04.2024 as passed by the learned Commissioner (Appeals) is bad in law since it the learned Commissioner (Appeals) is bad in law since it the learned Commissioner (Appeals) is bad in law since it dismisses the appeal on the reason of non dismisses the appeal on the reason of non-prosecution and does prosecution and does not adjudicate on the not adjudicate on the grounds/additional grounds of appeal
and grounds/additional grounds of appeal and the issues under consideration. The said order being in violation the issues under consideration. The said order being in violation the issues under consideration. The said order being in violation of the provisions of Section 250 and 251 of the Act and the of the provisions of Section 250 and 251 of the Act and the of the provisions of Section 250 and 251 of the Act and the decision of the Hon'ble jurisdictional Bombay High Court in "CIT decision of the Hon'ble jurisdictional Bombay High Court in "CIT decision of the Hon'ble jurisdictional Bombay High Court in "CIT vs. Premkumar Arjundas Premkumar Arjundas Luthra (HUF)- [2016] 69 taxmann.com [2016] 69 taxmann.com 407 (Bombay)" may be quashed. 407 (Bombay)" may be quashed.
3. On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner (Appeals) erred in taxing the rental income of Rs. 1,99,46,239/ (Appeals) erred in taxing the rental income of Rs. 1,99,46,239/ (Appeals) erred in taxing the rental income of Rs. 1,99,46,239/- as business income. Thus, the said rental income may be directed business income. Thus, the said rental income may be directed business income. Thus, the said rental income may be directed to be taxed under the head income from house property and the to be taxed under the head income from house property and the to be taxed under the head income from house property and the stand of the Appellant in this regard may be upheld. stand of the Appellant in this regard may be upheld. stand of the Appellant in this regard may be upheld.
4. On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, the learned asse the learned assessing officer and the learned Commissioner ssing officer and the learned Commissioner (Appeals) erred in disallowing the expenses of Rs. 58,91,594. (Appeals) erred in disallowing the expenses of Rs. 58,91,594. (Appeals) erred in disallowing the expenses of Rs. 58,91,594. Thus the said disallowance may be deleted. Thus the said disallowance may be deleted.
5. On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned the learned assessing officer and the learned Commissioner Commissioner (Appeals) erred in disallowing the rental expenses of Rs. (Appeals) erred in disallowing the rental expenses of Rs. (Appeals) erred in disallowing the rental expenses of Rs. 1,19,31,182/. Thus the said disallowance may be deleted 1,19,31,182/. Thus the said disallowance may be deleted 1,19,31,182/. Thus the said disallowance may be deleted
6. On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner (Appeals) erred in adding the loans of Rs. 3,30,00,000/ ls) erred in adding the loans of Rs. 3,30,00,000/- u/s 68 of ls) erred in adding the loans of Rs. 3,30,00,000/ the Act. Thus, the said addition may be deleted. the Act. Thus, the said addition may be deleted.
7. On the facts and in the circumstances of the case and as per law, On the facts and in the circumstances of the case and as per law, On the facts and in the circumstances of the case and as per law, the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner (Appeals) erred in ta (Appeals) erred in taxing the addition of Rs. 3,30,00,000/ xing the addition of Rs. 3,30,00,000/-at the rate of 60 percent u/s 115BBE of the Act. Thus, it may be rate of 60 percent u/s 115BBE of the Act. Thus, it may be rate of 60 percent u/s 115BBE of the Act. Thus, it may be reversed. reversed.
8. On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, the learned assessing officer erred in making disallowance of Rs. the learned assessing officer erred in making disallowance of Rs. the learned assessing officer erred in making disallowance of Rs. 1,33,84,632/ 1,33,84,632/- pertaining to purchase of stock in trade. Thus, the pertaining to purchase of stock in trade. Thus, the said disallowance may be deleted. said disallowance may be deleted.
9. On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner the learned assessing officer and the learned Commissioner (Appeals) erred in adding Rs. 47, 75,855/ (Appeals) erred in adding Rs. 47, 75,855/-. Thus . Thus, the said addition may be deleted addition may be deleted
2. At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that At the outset, the Ld. counsel for the assessee submitted that in the impugned order the appeal of the assessee has been in the impugned order the appeal of the assessee has been in the impugned order the appeal of the assessee has been dismissed for non-prosecution prosecution but without deciding the issue in without deciding the issue in dispute on merit. The Ld. counsel dispute on merit. The Ld. counsel for the assessee submitted that for the assessee submitted that the impugned order has been challenged on two grounds. Firstly, the impugned order has been challenged on two grounds. the impugned order has been challenged on two grounds. for violation of the principle of natural justice and secondly secondly, for not for violation of the principle of natural justice and deciding the issue on merit. Regarding the first objection, the Ld. deciding the issue on merit. Regarding the first objection deciding the issue on merit. Regarding the first objection counsel submitted that in the Form No. 35 i.e. the Form prescribed hat in the Form No. 35 i.e. the Form prescribed hat in the Form No. 35 i.e. the Form prescribed for filing appeal before the Ld. CIT(A) filing appeal before the Ld. CIT(A), e-mail ID for communication mail ID for communication provided was of raju.yadav@kdlogistics.co.in raju.yadav@kdlogistics.co.in, whereas the Ld. CIT(A) whereas the Ld. CIT(A) issued the notice on another ID upload@daoakandco.com upload@daoakandco.com. The Ld. counsel submitted that counsel submitted that said e-mail ID was not seen frequently and not seen frequently and therefore notice remained to be responded. He submitted that for therefore notice remained to be responded. He submitted that for therefore notice remained to be responded. He submitted that for the same reason assessment order the same reason assessment order was also passed ex passed ex-parte. Accordingly, the Ld. counsel submitted that the matter may be Accordingly, the Ld. counsel submitted that the matter may be Accordingly, the Ld. counsel submitted that the matter may be restored back to the file of the Ld. CIT(A) for deciding afresh. restored back to the file of the Ld. CIT(A) for deciding afresh. restored back to the file of the Ld. CIT(A) for deciding afresh. Regarding second objection, Regarding second objection, the Ld. counsel submitted that even in the Ld. counsel submitted that even in case of non-compliance on the part of th compliance on the part of the assessee, , the Ld. CIT (A) cannot dismiss the appeal for non cannot dismiss the appeal for non-prosecution and he prosecution and he was required to decide the issue on merit in view of decision of the Hon’ble to decide the issue on merit in view of decision of the Hon’ble to decide the issue on merit in view of decision of the Hon’ble Bombay High Court in the case of CIT v. Premkumar Arjundas Bombay High Court in the case of CIT v. Premkumar Arjundas Bombay High Court in the case of CIT v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bom Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay). bay).
3. On the contrary, the Ld. Departmental Representative (DR) did On the contrary, the Ld. Departmental Representative (DR) did On the contrary, the Ld. Departmental Representative (DR) did not object for restoring not object for restoring the matter back to the file of file of Ld. CIT(A) for deciding afresh.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the notices were not relevant material on record. It relevant material on record. It is evident that notices were not issued by the ld CIT(A) on issued by the ld CIT(A) on the e-mail ID, which was given by the was given by the , which was given assessee in Form No. 35 assessee in Form No. 35 but issued on e-mail ID, which in the return of income. in the return of income. In view of e-mail given in return of income mail given in return of income being not in operation in operation, the assessment was also completed u/s 144 ssessment was also completed u/s 144 a sufficient cause for non- of the Act. In our opinion t In our opinion there is a sufficient cause for non compliance of notices s issued by the Ld. CIT(A), accordingly, w ssued by the Ld. CIT(A), accordingly, we feel it appropriate to set aside the order of the Ld. CIT(A) and restore the it appropriate to set aside the order of the Ld. CIT(A) and restore the it appropriate to set aside the order of the Ld. CIT(A) and restore the matter back to the file of the Ld. CIT(A) the file of the Ld. CIT(A), both on the ground both on the grounds of non-receipt of the notices as well as for the reason that he was receipt of the notices as well as for the reason that he was receipt of the notices as well as for the reason that he was required to decide th required to decide the issue on merit, even in absence of the non ven in absence of the non- compliance on the part of the assessee. Accordingly, the grounds compliance on the part of the assessee. Accordingly, the grounds compliance on the part of the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. the assessee are allowed for statistical purposes. the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes. statistical purposes.