Loading judgment…
Facts
The assessee's appeal was filed against an ex-parte order passed by the Ld. CIT(A), which confirmed the disallowances made by the AO under various sections. The assessee did not appear before the CIT(A) and sought an adjournment, which was rejected. The AO had made disallowances for legal and professional expenses, other miscellaneous expenses, and under section 14A.
Held
The Tribunal noted that the assessee was denied a reasonable opportunity of being heard by the CIT(A) due to an ex-parte order. Considering that the assessee had a precedent from a co-ordinate bench on similar issues, the matter was remitted back to the CIT(A).
Key Issues
Whether the Ld. CIT(A) erred in passing an ex-parte order without providing a reasonable opportunity to the assessee, and whether the disallowances made by the AO were justified.
Sections Cited
250, 143(3), 263, 14A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRIGIRISH AGRAWAL
Instant appeal of the assessee was filed 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 (in short, ‘the Act’), for Assessment Year 2012-13, date of order 28.11.2023. The impugned order emanated from the order of the Learned Deputy Commissioner of Income-tax-2(3)(2), Mumbai, order
2. The assessee has taken the following grounds:-
“1. On the facts and in the circumstances of the appellant's case and in law, the Learned Commissioner of Income Tax (Appeal) erred in passing ex-parte order.
2. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding AO's action of disallowing the expenditure incurred towards legal and professional fees of Rs 10,53,80,623/- without appreciating the facts of the Case.
On the facts and in the circumstances of the caseand in law, the Ld. Commissioner of Income Tax(Appeal) erred in confirming AO's action ofdisallowing the expenditure incurred towards othermiscellaneous expenses of Rs 3,15,07,838/-without appreciating the facts of the case .
On thefacts and in the circumstances of the case and inlaw, the Ld. Commissioner of Income Tax(Appeal) erred in confirming the disallowancemade by the AO u/s 14A despite the fact that theissue has been resolved to the file of the AO dated19.09.2018 in ITA No. 2717/Mum/2017.
The appellant craves leave to add to, alter,amend, modify and /or delete all or any of theforegoing grounds of appeal. The appellant praysbefore the Hon'ble Tribunal to delete the addition/smade by the AO and confirmed by the Ld. CIT(A).”
When the appeal is called for hearing, none was present on behalf of the assessee. The adjournment petition was filed but the reasonfor adjournment is not convincing. We reject the adjournment petition of assessee and proceed to dispose of the appeal exparte qua for assessee after hearing the Ld.DR.
Majestic Infracon Private Limited 3. We heard the submission of the Ld.DR, considered the documents available in the record and perused the orders of the revenue authorities. The assessment was completed under section 143(3) / 263 of the Act with a disallowance of legal and professional expenses and other expenses amount to Rs.10,53,80,623/-, disallowance was for non deduction of TDS amount to Rs.3,51,07,838/- and disallowance under section 14A amount to Rs.2,96,31,065/-. Previously, the assessment was completed under section 143(3) with a disallowance under section 14A. The notice under section 263 was invoked and the assessment was completed under section 143(3) / 263 of the Act. The assessee filed the appeal before the ld. CIT(A). But the Ld.CIT(A) has passed the order exparte qua for assessee and confirmed the addition of the Ld.AO. The assessee has filed a paper book which is in the record. The assessee placed the order of the co-ordinate bench of ITAT, Mumbai in assesse’s own case bearing ITAs No.3710 & 3711/Mum/2019, date of pronouncement 25/11/2022 for A.Y. 2013-14 and 2014-15. The coordinate bench of ITAT-Mumbai adjudicated the issue related to disallowance of expenses related to legal and professional expenses and was allowed in favour of the assessee. The Ld.CIT(A) has passed an exparte order and assessee was unable to appear before the ld. CIT(A). The reasonable opportunity for the assessee was denied and assessee should get another chance for submission of itss documents. Accordingly, we remit the matter to the file of the ld. CIT(A) for further adjudication de novoconsideringthe grounds of the assessee. We are not expressing our view about the merit of the case which will impair the appeal proceedings. Needless to say, the assessee should get a reasonable opportunity for hearing in set aside appeal proceedings. On the other hand, the assessee should be diligent and co-operative before the appellate authority.