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Facts
The case was reopened based on information that the assessee debited Rs. 22,02,22,002/- as purchase from M/s Raves Trades Pvt Ltd, which the revenue treated as an accommodation entry and added back under section 68 of the Income-tax Act. The Ld. CIT(A) passed an ex-parte order upholding this assessment, leading the assessee to appeal before the Tribunal, claiming denial of reasonable opportunity.
Held
The Tribunal noted the assessee's non-compliance with notices during the CIT(A) proceedings. In the interest of natural justice, the Tribunal restored all issues to the file of the Ld. CIT(A) for fresh adjudication on merits, subject to the assessee paying a cost of Rs. 5,000/- to the Income Tax Department within two months for their lack of diligence.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order and upholding the assessment without granting reasonable opportunity to the assessee, and the validity of the addition made under section 68.
Sections Cited
Section 250, Section 143(3), Section 147, Section 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI GAGAN GOYAL
Instant appeal of the assessee is preferred against the order of theNational Faceless Appeal Centre, 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 13.12.2022.The impugned order was emanated from the order of the Ld.ACIT 3(1)(2),Mumbai (in short, ‘the A.O.’) passed under section 143(3)r.w.s. 147of the Act date of order26/12/2019.
Cranes Real Estate Pvt Ltd 2. The assesseehas taken the following grounds of appeal:-
1. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in deciding the appeal exparte.
2. On the facts and circumstances in the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in confirming re-opening the assessment done by the Assessing Officer u/s 147 of the Act.
3. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in sustaining the addition made by the Id. A.O. u/s section 68 of the Act of Rs. 22,02,22,002 on account of alleged non genuine purchases.
4. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (Appeals) has erred in holding the purchases as unexplained investment in the hands of appellant (para 9 &10 of the assessment order) & thus the order passed is without any application of mind.
5. The appellant craves leave to alter, amend, modify or substitute any ground / grounds and to add any new ground or grounds on or before the appeal is disposed off.”
When the appeal was called for hearing, none was present on behalf of the assessee. No adjournment petition was filed. The registry has noted that no power of attorney is submitted with the appeal petition. The appeal order was passed exparte. Considering the issue and merit of the case, we proceed to dispose of the appeal petition onexparte qua for assessee after hearing the Ld.DR.
Brief fact of the case is that the case was reopened as per the information received from DDIT(Inv), Unit-1, Vapi. The allegation against the assessee was that the assesseedebiteda total amount of Rs.22,02,22,002/- as purchase from M/s Raves Trades Pvt Ltd in the impugned assessment year. The revenue has treated it as accommodation entry. The total amount was added back with the Cranes Real Estate Pvt Ltd total income under section 68 of the Act. Being aggrieved, the assessee filed an appeal before the ld. CIT(A). The Ld.CIT(A) passed order exparte and upheld the assessment order. Being aggrieved, the assessee filed an appeal before us.
We heard Ld.DR, considered the documents available in the record and perused the orders of revenue authorities. The assessment was completed with an addition of Rs.22,02,22,002/-. During the appeal proceedings, no notice of the ld. CIT(A) was complied. So, the Ld.CIT(A) has passed an exparte order. The assessee has taken ground that the reasonable opportunity was denied, and the assessee was unable to submit the documents before the Ld.CIT(A). Hence, we are of the view that, in the interest of natural justice that assessee may be given one more opportunity to represent its case properly before the ld. CIT(A). Since the assesseeis not able to provide satisfactory explanation about noncompliance of notices issued by the ld. CIT(A), we are of the view that the assessee should we imposed a cost in order to make him understand the importance of income tax proceedings. Accordingly, we impose the costamount to Rs.5,000/- (Rupees five thousand only) upon the assessee which shall be paid to the credit of Income Tax Department within two months from the date of receipt of this order. Subject to the payment of above cost which shall be verified by the ld. CIT(A). All the issues are restored to the file of the ld. CIT(A) for adjudicating the case on merits. We are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld. CIT(A).Needless to say, theassessee should get reasonable opportunity of hearing. On the other hand, the assessee should be diligent in appeal proceeding for expeditious disposal of appeal.