ASHWIN GENERAL MERCHANTS PVT LTD,MUMBAI vs. INCOME TAX OFFICER, WD-6(1)(3), MUMBAI

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

Ashwin General Merchants Pvt. Ltd., AY 2010-11

“1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in passing the appeal order exparte without allowing adequate opportunity of being heard and ought to have considered the bonafide reasons which had precluded the appellant to participate in the appeal proceeding:

2.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the entire additions made in assessment, without deciding the case on merits;

3.0 On facts and circumstances of the case and in law, Ld. CIT(A) ought to have held the notice u/s 148 and consequential re-assessment order u/s. 147 as bad- in-law, since had been issued in absence of tangible material and without independent application of mind and without having reason to believe of escapement of income;

4.0 On facts and circumstances of the case and in law, Ld. CIT(A) ought to have deleted the addition made u/s.68 of the sum received from M/s JMD Sounds Ltd of Rs.5,00,000/-;

5.0 On facts and circumstances of the case and in law, Ld. CIT(A) ought to have deleted the addition u/s 69C of alleged commission paid of Rs. 10,000/- @ 2% of Rs.5,00,000/-};

6.0 On facts and circumstances of the case and in law, Ld. CIT(A) ought to have deleted the addition made u/s 68 of Unsecured loans received from 8 lenders of Rs.3,46,30,959/-;

7.0 The Ld. CIT-(A), before confirming the addition of Sec.68 of unsecured loan of Rs. 3,46,30,959/-, ought to have considered the understated vital facts being; a) The complete identity, genuineness and creditworthiness of lenders are supported with PAN/AO details, Ledger a/c, confirmation of loan, own bank statement and bank statement of the lender filed on record; b) The entire loans has been received through proper banking channels; c) The amendment to 1st Proviso to Sec.68 applies from A.Y. 2022-23 onwards and would not apply for impugned year; d) The copies of alleged contrary material/statements has not been provided to the appellant for rebuttal and also an opportunity of cross examination has not been allowed.”

Ashwin General Merchants Pvt. Ltd., AY 2010-11 3. Vide ground no.1, assessee has contested the ex parte order passed by the ld. CIT(A), without giving adequate opportunity of being heard. In this respect, we perused the order of the ld. CIT(A) to note that it has been passed ex parte since assessee did not respond to multiple opportunities provided by the ld. CIT(A).

Ashwin General Merchants Pvt. Ltd., AY 2010-11 7.1. Section 250 of the Act provides for procedure to be adopted while disposing of the appeal by the Ld. CIT(A). Sub-section (4) of section 250 of the Act provides that the Ld. CIT(A) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing officer to make further inquiry and report the result of the same to the Commissioner (Appeals). Further, sub-section (6) provides that the CIT(A) shall pass an order in writing and shall set the points for determination, the decision thereon and the reasons for the decision. Keeping in mind the provision of sections 250 of the Act, it is incumbent upon the Ld. CIT(A) to pass a speaking order on the merits of the case by examining, verifying and analyzing the material on record.

7.2. Considering the submissions made before us, in the interest of justice and fair play, we find it appropriate to remit the matter back to the file of ld. CIT(A) for denovo meritorious adjudication on the grounds of the appeal taken at the first appellate stage. We also direct the assessee to be diligent and cooperative in attending the hearings and make its submissions for expeditious and effective disposal of the appeal. It should not seek adjournments unless warranted by compelling reasons.

7.3. Since the matter is restored to the file of Ld. CIT(A) for meritorious adjudication by passing a speaking order in terms of our observations made hereinabove, we are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld. CIT(A). The observations herein made by us in remanding the matter back to the file of Ld. CIT(A) will not impair or injure the case of Ashwin General Merchants Pvt. Ltd., AY 2010-11 the Revenue nor will it cause any prejudice to the defense/explanation of the assessee.

Order is pronounced in the open court on 30 July, 2024