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Facts
A search and seizure operation led to the reopening of assessment for the assessee for AY 2013-14 and initiation of proceedings under Section 153C for AYs 2014-15 to 2016-17. The Assessing Officer made additions and completed assessments ex parte as the assessee did not comply with statutory notices. The first appellate authority also dismissed the appeals ex parte due to the assessee's lack of representation.
Held
The Tribunal noted that the ex parte disposal at both assessment and appellate stages was due to the Chartered Accountant's repeated adjournments and lack of proper representation, potentially leaving the assessee unaware. In the interest of fair play, the assessee should be given an opportunity to contest the additions.
Key Issues
Whether the ex parte orders passed by the Assessing Officer and confirmed by the First Appellate Authority, due to the assessee's lack of representation, violate the principles of natural justice and fair play.
Sections Cited
132, 147, 153C, 142(1), 143(2), 144
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, VP & SHRI AMARJIT SINGH, AM
O R D E R Per Saktijit Dey, VP:
These are bunch of four appeals by the same assessee, challenging four separate orders of the learned Commissioner of Income Tax (Appeals)-Pune (‘ld.CIT(A) for short), pertaining to assessment years (A.Y. for short) 2013-14, 2014-15, 2015-16 and 2016-17.
The common primary grievance of the assessee in all these appeals is against ex parte, orders being passed by the departmental authorities without providing reasonable opportunity of being heard to the assessee. on record reveal that the assessee is a resident corporate entity. A search and seizure operation u/s. 132 of the Income Tax Act, 1961 (‘the Act’ for short) was caried out at various office and residential premises of Indian Logistics Group on 17.09.2019, as also in case of Shri Ravi Jaysukh Chauhan and Shri Rudrapratap Tripathi and others. Based on the materials found and information received in consequence of search and seizure operation, the Assessing Officer (AO) noticed that the assessee was in receipt of certain income which were not offered to tax. Accordingly, he reopened the assessment u/s. 147 of the Act for A.Y. 2013-14. Whereas, in respect of A.Ys. 2014-15, 2015-16 and 2016-17, he initiated proceeding u/s. 153C of the Act. As alleged by the A.O., the assessee did not comply with any of the statutory notices issued u/s. 142(1)/143(2) of the Act. Therefore, he proceeded to complete the assessments ex parte, to the best of his judgement, by invoking the provisions of section 144 of the Act. While doing so, based on the information available on record, he made various additions at the hands of the assessee in all the assessment years in dispute.
Against the assessment orders so passed, the assessee preferred appeals before the first appellate authority. However, as could be seen, due to lack of representation by the assessee in course of appellate proceedings, learned first appellate authority disposed of the appeals ex parte and while doing so, he confirmed all the additions made by the A.O.
307/Mum/2024 (A.Ys.2013-14 to 2016-17) Shree Rajlaxmi Textile Park Pvt. Ltd. vs. Asst. CIT 5. Before us, the ld. Counsel appearing for the assessee submitted that the primary reason for ex parte disposal of the appeals before the learned first appellate authority was due to non-compliance by the Chartered Accountant engaged by the assessee. He submitted, the assessee was completely kept in dark with regard to the appellate proceedings and without the instructions of the assessee, the concerned Chartered Accountant engaged by the assessee took repeated adjournments and did not represent the case. He submitted, due to lack of proper representation by the concerned Chartered Accountant, documentary evidences contesting various additions could not be furnished, which ultimately resulted in confirmation of the additions. Thus, he submitted, the issues arising in the appeal may be restored back to departmental authorities for enabling the assessee to properly represent its case with supporting evidences.
Though, learned Departmental Representative ('ld. DR' for short) relied on the observations of the first appellate authority. However, she left it to the discretion of the Bench.
Having considered rival submissions and perused the materials available on record, we find that in course of assessment proceedings, various notices issued by the A.O. were not complied with compelling the A.O. to complete the assessments ex parte, to the best of his judgement, by invoking the provisions of section 144 of the Act. It is also observed that while completing the assessments, the A.O. has made various additions in different assessment years under dispute. Even, before learned first 307/Mum/2024 (A.Ys.2013-14 to 2016-17) Shree Rajlaxmi Textile Park Pvt. Ltd. vs. Asst. CIT appellate authority as well, there was no representation from assessee’s side. From the observations made in the appellate order, it is noticed that on each of the occasions the appeals were fixed for hearing, the Chartered Accountant engaged by the assessee took adjournment on some pretext or other. Hence, due to lack of proper representation, learned first appellate authority proceeded to dispose of the appeals ex parte sustaining the additions made by the A.O.
The aforesaid facts clearly reveal that the ex parte disposal of the appeals by learned first appellate authority was on account of repeated adjournment sought by the Chartered Accountant engaged by the assessee and the assessee, as submitted before us, might have been kept in dark. Thus, lack of proper representation or non compliance may not be at the instance of the assessee. Considering the fact that various additions were made in the assessment proceedings and were sustained by learned first appellate authority due to lack of proper representation and supporting evidences, we are of the considered view that the assessee must get a fair opportunity to contest the additions through effective representation by furnishing supporting evidences. Since, the assessee did not get such opportunity before the A.O. as well as learned first appellate authority, may be due to non-cooperation of the Chartered Accountant engaged by it, in the interest of fair play and justice, we are inclined to set aside the impugned orders of learned first appellate authority and restore all the issues arising in the appeals to the file of the A.O. for fresh adjudication, after providing due and reasonable opportunity of being heard to the assessee. We direct the assessee to comply with all the notices/queries to be made by the A.O. with supporting evidences and co-operate in 307/Mum/2024 (A.Ys.2013-14 to 2016-17) Shree Rajlaxmi Textile Park Pvt. Ltd. vs. Asst. CIT finalizing the proceedings. With the afore-said observations, the appeals are disposed of.
In the result, all the appeals are allowed for statistical purposes.