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Facts
A search action led to the finding that the assessee obtained an accommodation entry for an unsecured loan of Rs. 54 lakhs from M/s Falak Trading Co. Pvt. Ltd. The Assessing Officer added this amount under section 68 of the Act as a bogus loan. The assessee appealed to the CIT(A), but due to non-compliance with notices and delay in filing, the appeal was dismissed ex-parte.
Held
The Tribunal noted that the assessee's email communication was inactive and that the CIT(A) had provided multiple opportunities for hearing, which were not complied with. However, the assessee explained the reasons for non-receipt of notices and filed an application for condonation of delay. The Tribunal found that reasonable opportunity was denied and restored the matter to the CIT(A) for denovo adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without providing adequate opportunity to the assessee, and if the delay in filing the appeal was sufficiently explained.
Sections Cited
250, 143(3), 68
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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI. B.R. BASKARAN & SHRI. ANIKESH BANERJEE
Instant appeal of the assessee is preferred against the order of theLearned National Faceless Appeal Centre (NFAC), Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income Tax Act, 1961 (for brevity the “Act”), order dated 29.11.2023. The impugned orderis emanated from the order of the Learned Income-tax Officer-19(2)(1), Mumbai, order passed under section 143(3) of the Act, date of order 28/03/2015.
“Being aggrieved by the order of the CIT (Appeals), appellant submits herewith the following grounds of appeal (which are taken up without prejudice to each other) for your sympathetic consideration:
1. The Learned Commissioner of Income-tax (Appeals) [hereinafter referred to as "Ld. CIT(A)"] has erred in upholding the order of Learned Assessing Officer by adding the loan taken to the extent of Rs. 54,00,000/- from M/S Falak Trading Co. Pvt. Ltd. as non-genuine unsecured loan.
2. The appellant craves to leave, add, alter or amend any grounds of appeal before or at the time of hearing.”
3. The brief facts of the case are that a search and seizure action was conducted on Shri Pravin Kumar Jain group on 03/10/2013 by DDIT(Inv), Mumbai. During the search proceedings, it is found that the group runs paper companies / firms / proprietary concerns with no real business activities operating solely with the purpose of facilitating the fraudulent financial transaction which includes, among others, providing of accommodation entries in form of unsecured loans to the interested parties. On getting information from the DIT(Inv), Mumbai, the ld. AO found that the assessee has also obtained accommodation entry for unsecured loan from said group amount to Rs.54 lakhs from party, M/s Falak Trading Co Pvt. Ltd. After a detailed investigation, the Ld.AO added back Rs.54 lakhs under section 68 of the Act on ground of bogus loan. Being aggrieved on the assessment order, the assessee filed an appeal before the ld. CIT(A) with delay. The Ld.CIT(A) allowed the assessee a reasonable opportunity on different dates, but none of the notice was complied with. Finally, the appeal order was passed exparte, and the appeal of the assessee was dismissed. Being aggrieved on the appeal order, the assessee filed an appeal before us.
Jagdish Kankraj Sanghvi 4. We heard the rival submission and considered the documents available in the record. The Ld.AR submitted a written submission which is kept in the record. In argument, the Ld.AR placed that the email id provided to the ld. CIT(A) was info@jpstainless.com which was not at all active. Now the assessee activated new email id jpstainlesssteel@yahoo.in which is in operation. The Ld.CIT(A) allowed number of opportunities for hearing, but all the notices are remained un- complied with. Further, we find that the Ld.CIT(A) indicated that the appeal of the assessee was filed with delay of 382 days and the assessee was not able demonstrate any ‘sufficient cause’ for delay in filing appeal before the authority. So, on the ground of limitation, the appeal of the assessee was dismissed ex parte. We find that the assessee has explained the reason for non-receiving of noticesin appeal proceeding. The assessee filed an application for condonation of delay before the Ld. CIT(A) and explained reason for delay in filing appeal before the Ld. CIT(A). We find that the reasonable opportunity was denied to the assessee. The Ld.DR agued and was not able to submit any other mode of communication of notice except email to the assessee during appeal proceeding. The Ld.AR prayed for restoring the matter back to the file of Ld. CIT(A) for denovo adjudication. Considering the submission of both the parties, we restore the matter to the file of the Ld.CIT(A) for denovo adjudication. We are not expressing our view on the merit of the case, which will impair the appeal proceedings. Both the revenue and the counsel of the assessee had not made any objection for remanding the appeal before the ld. CIT(A). Needless to say, that the Ld. CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside