M/S. SRIRAM COMPOUNDS,NOIDA vs. DCIT, NOIDA

We have heard learned representative of both the parties and perused the orders of the authorities below.

The assessee filed the appeal against the order of learned CIT(A)-I Noida dated 30th September, 2016 for assessment year 2012-2013, challenging the impugned order in enhancing assessment and thereby quantifying taxable income at Rs. 3,11,49,960/- without a speaking order.

The assessee filed return of income at Rs. 1.51 Crore and the AO passed the assessment order u/s 143(3) dated 27th March, 2015 computing the total income at Rs. 1.59 Crores.

Learned CIT(A) noted that assessee did not respond to the notice issued for hearing of the appeal. The assessee did not seek adjournment as well as did not appear at the appellate proceedings. It was noted that assessee has claimed deduction u/s 10AA of the Income Tax Act amounting to Rs. 1,53,12,486/- which was not considered by the AO during the assessment proceedings. The learned CIT(A) noted that the claim of the assessee for deduction u/s 10AA is prima facie inadmissible. Show cause notice was issued to the assessee as to why the assessment be not enhanced by withdrawing deduction claimed u/s 10AA of the Income Tax Act. In the absence of any appearance from the side of the assessee, appeal of the assessee was dismissed for non prosecution. The deduction claimed u/s 10AA was withdrawn and assessment was enhanced by Rs. 1.51 Crore and taxable income was computed at Rs. 3,11,49,960/-.

The assessee filed the stay application seeking stay against the outstanding demand. With the consent of both the parties, the appeal was also fixed for hearing alongwith stay application.

After considering rival submissions, we are of the view that the matter requires reconsideration at the level of the learned CIT(A). The learned CIT(A) simply dismissed the appeal of the assessee in default for non prosecution without deciding the appeal of the assessee on merits. According to Section 250 (6) of the Income Tax Act, the order of the learned CIT(A) disposing of the appeal shall be in writing and shall state the points for determination, decision thereon and the reasons for the decision. However, in the present impugned order, learned CIT(A) did not pass the reasoned order even if the assessee did not appear before him. The order of the learned CIT(A) therefore cannot be sustained in law. Even if the assessee did not appear before the learned CIT(A), the learned CIT(A) was required to decide the appeal of the assessee on merits giving reasons for decision in the appellate order.

In this way of the matter, we set aside the order of the learned CIT(A) and restore the appeal of the assessee to his file with a direction to re-decide the appeal of the assessee on merits by giving reasonable sufficient opportunity of being heard to the assessee. Assessee is directed to cooperate with learned CIT(A) in finalization of the appeal.

In the result, appeal of the assessee is allowed for statistical purposes.