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Facts
The assessee, a manufacturer of PP bags, filed an appeal against the order of the NFAC which emanated from the AO's order. The NFAC passed an ex-parte order without considering the assessee's submission, upholding the assessment order. The assessee argued that they had filed all necessary documents and evidence.
Held
The Tribunal held that the Ld.CIT(A) passed the appeal order without considering the submission made by the assessee within the due date, which is a violation of natural justice and denial of reasonable opportunity. Therefore, the matter was remitted back to the Ld.CIT(A) to pass an order on merit.
Key Issues
Whether the Ld.CIT(A) erred by passing an ex-parte order without considering the assessee's submissions, violating natural justice and reasonable opportunity.
Sections Cited
250 of the Income-tax Act, 1961, 143(3), 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “K (SMC
Before: SHRI AMARJIT SINGH & SHRI ANIKESH BANERJEE
The instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre, Delhi (NFAC)[for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2018-19, date of order 16.02.2024.The impugned order was emanated from the order of the National e-Assessment Centre, Delhi (in short, ‘the A.O.’) passed under section 143(3)read with section 144B of the Act, date of order30/04/2021.
Neobags Overseas Private Limited 2. The assessee has taken the following grounds of appeal:-
“1. On the facts and circumstances of the case and in law the Learned Commissioner of Income Tax has erred in confirming an addition of Rs. 1,75,18,530/- for disallowing the depreciation claimed by the appellant. However, the same shall be allowed in full.
On the facts and circumstances of the case and in law the Learned Commissioner has erred i confirming addition of Rs. 43,89,169/- for not charging interest on opening balance c interest-free advance amounting to Rs. 3,02,70,129/- given to the director of the company under the Head Income from Other Sources. However, the same shall deleted in full.
On the facts and circumstances of the case and in law the Learned Commissioner has erred ii without considering the fact that the appellant company has huge amount to unabsorbed brought forward business and depreciation losses which is entitled to be set off against the income assessed from the aforesaid additions so made under the assessment proceedings However, the same shall the allowed to set off against the income so assessed.
On the facts and circumstances of the case and in law the Learned Commissioner ought tc have considered the submission made by your appellant on 09.02.2024 before passing order u/s 250 on 16.02.2024. Hence the order passed is bad in law.
5. The Learned Commissioner of Income Tax ought to have appreciated the fact that all the details were properly submitted before the Assessing Officer at the time of passing the assessment order and hence the said order was erroneous and prejudicial.
Your appellant craves leave to add, alter, amend, modify and/or delete any of the Grounds of Appeal.”
3. The brief facts of the case are that the assessee, a manufacturer of PP bags, filed its return of income for A.Y. 2018-19dated 05/10/2018 declaring net loss of Neobags Overseas Private Limited Rs.1,53,47,473/-. which was eventually assessed at income of Rs.43,51,701/- in an assessment passed under section 143(3) r.w.s. 144B of Act. Aggrieved assessee filed an appeal before ld. CIT(A). the Ld.CIT(A) passed an order exparte without considering the submission of the assessee which was submitted on dated 09/02/2024 and upheld the assessment order.Being aggrieved on the appeal order, the assessee filed an appeal before us.
4. The Ld.AR argued and filed a written submission which is kept in the record (in short, APB). The Ld.AR has invited our attention in the appeal order para 3, which is reproduced as below: - “3. The hearing in this case was fixed on the following dates with due intimation electronically. SL.NO. DAE OF NOTICE DATE OF REMARKS HEARING 1. 03/08/2023 18/08/2023 No Reply 2. 16/10/2023 25/10/2023 No Reply 3. 09/11/2023 16/11/2023 No Reply 4. 04/01/2024 19/01/2024 No Reply 5. 02/02/2024 09/02/2024 No Reply There was no compliance to above notices which were sent on the email id.registered under e-filing portal. Despite being given repeated opportunities of being heard, there has been no compliance to the notices. It is apparent that the appellant is not interested in pursuing his appeal. In the absence of any submission from the appellant, the grounds of appeal are decided on merits on the basis of facts available on record.”
Neobags Overseas Private Limited The Ld.AR argued that the assessee filed the documents and evidence as per the notice issued by the ld.CIT(A) during the appeal proceedings. The compliance was made on 09/02/2024 for ‘e-processing response acknowledgement’ is annexed in APB pages 8 to 9 which is reproduced as below: - Neobags Overseas Private Limited Neobags Overseas Private Limited Neobags Overseas Private Limited The ld.AR prayed that for further hearing before the ld. CIT(A) considering the submission of the assessee.
The Ld.DR argued and accepted the fact and did not make any adverse comment against the submission of the assessee.
6. We heard the rival submissions, considered the documents available in the record. The assessee has complied with the notice issued by the Ld.CIT(A) on dated 02/02/2024. On dated 09/02/2024, the documents are duly filed but in the appeal order, the ld.CIT(A) mentioned that no documents are filed by the assessee. The details of this submission with forwarding letter are duly annexed in APB pages 10-17. The reference of letter VSM/278/F dated 09thFebruary 2024. But without considering the submission, the appeal order was passed on 16/02/2024 which is violation of natural justice and denial of reasonable opportunity. In our considered view, the natural justice is denied to the assessee by not accepting the submission which was made by the assessee within the due date. Therefore, we remit the matter to the file of theld.CIT(A) and direct him to pass an order on merit. The submission duly made by the assessee should be considered and the speaking order should be passed by considering the submission of the assessee. Needless to say, the Ld.CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence / explanation submitted by the assessee in its defense shall be admitted byld.CIT(A) and adjudicate the matter on merit, in accordance with law. We order accordingly.
Neobags Overseas Private Limited