DULRON PROCON PRIVATE LIMITED,MUMBAI vs. ITO 6(2)(3), MUMBAI

ITA 4544/MUM/2024Status: DisposedITAT Mumbai06 November 2024AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned order passed by the learned CIT(A) was in violation of the principles of natural justice. While the assessee did not comply with notices on four occasions, the impugned order lacked reasons, due application of mind, critical analysis, or objective consideration. The Tribunal noted that Section 250(6) of the Act requires the CIT(A) to state points for determination, decision thereon, and reasons for the decision. In the interest of justice and fair play, the Tribunal deemed it appropriate to set aside the impugned order and remit the matter back to the file of the learned CIT(A) for adjudication on merits. The Tribunal directed the assessee to be diligent and cooperative in attending hearings and making submissions for expeditious disposal, and also directed the CIT(A) to ensure observance of principles of natural justice. The Tribunal explicitly stated that no observations were made regarding the merits of the case. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Dulron Procon Private Limited, filed its return for Assessment Year 2011-12 declaring an income of Rs. 15,917/-. The assessment was reopened, and an order dated 24.12.2018 was passed under Section 143(3) of the Income-Tax Act, 1961, assessing the total income at Rs. 8,75,17,917/-. The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)], who dismissed the appeal ex-parte by an order dated 14.07.2023. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the CIT(A)'s order.

What were the issues?

1. Whether the learned CIT(A) erred in sustaining the addition by passing an ex-parte order without affording sufficient opportunity of hearing to the assessee, thereby violating the principles of natural justice, as per Section 250 of the Income-Tax Act, 1961? Assessee's Contention: The learned Authorized Representative (AR) submitted that the impugned order was passed in violation of the principles of natural justice and prayed for it to be set aside. The assessee relied on the principle that reason is the life of the law and that the absence of analysis evinces non-application of mind. Revenue's Contention: The learned Departmental Representative (DR) supported the impugned order.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH

Before: SHRI AMARJIT SINGH & SHRI SUNIL KUMAR SINGH

For Appellant: Ms. Payal Dedhia

(Assessment Year : 2011–12) Dulron Procon Vs. ITO 6(2)(3) Private Limited Income Tax Officer 6(2)(3), 396, Kamat Aayakar Bhawan, Industrial Estate MK Road, Veer Mumbai-400020. Savarkar Marg Prabhadevi, Mumbai-400025. PAN/GIR No. AACCD5830E (Appellant) .. (Respondent) Assessee by Ms. Payal Dedhia Revenue by Shri. R. R. Makwana, Sr. DR Date of Hearing 29/10/2024 Date of Pronouncement 06/11/2024 आदेश / O R D E R PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 14.07.2023 passed in Appeal no. CIT(A) 12, Mumbai/10307/2018-19 by the Ld. Commissioner of Income–tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income-Tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year [A.Y.] 2011-12, wherein learned CIT(A) has dismissed assessee's appeal ex-parte.

Dulron Procon Private Limited 2. The brief facts under appeal state that the assessee filed return for A.Y. 2011-12 on 17.09.2011, declaring income of Rs. 15,917/-. The assessment was reopened on the basis of certain specific information from the investigation wing of the department and assessment order dated 24.12.2018 was passed u/s. 143(3) of the Act, assessing total income of the assessee at Rs. 8,75,17,917/-. Aggrieved by the assessment order, assessee preferred an appeal before learned CIT(A), who dismissed assessee’s first appeal.

Assessee has filed this appeal on the ground that learned CIT(A) has erred in sustaining the addition by passing impugned order ex-parte without affording sufficient opportunity of hearing to the assessee.

In response to the notice issued by the tribunal, learned DR appeared and participated in the hearing.

We have perused the records and heard learned representatives for both the parties.

Learned AR has submitted that the impugned order has been passed in violation of the principles of natural justice. Prayed to set aside the impugned order.

Learned DR has supported the impugned order.

On perusal of impugned order, we notice that the assessee did not comply notices on four occasions. However, there are no reasons mentioned in the impugned order. There also does not seem to be due or proper application of mind or any critical analysis or objective consideration in the matter. It is well settled in law that the reason is the life of law. It is that filament that injects soul to the order.

Dulron Procon Private Limited Absence of analysis not only evinces non-application of mind but also mummifies the core spirit of the order. Learned CIT(A) was expected to state the points for determination, decision thereon and the reasons for the decision as provided u/s. 250(6) of the Act. In the circumstances and in the interest of justice and fair play, we deem it just and appropriate to remit the matter back to the file of learned CIT(A) for adjudication on merits and to pass speaking order. We direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the learned CIT(A) for the expeditious and effective disposal. Needless to say, that learned CIT(A) shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation in respect of the merits of the case. The appeal is liable to be allowed.

In the result, the appeal is allowed for statistical purposes. Impugned order dated 14.07.2023 is set aside. The case is restored back to the file of the learned CIT(A) for statistical purposes. Order pronounced on 06.11.2024.

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