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Facts
The assessee, Surbhit Impex Private Limited, filed its return for AY 2015-16, reporting an income of Rs.19,38,800/-. During assessment, the AO added Rs. 57,08,625/-, treating an unsecured loan from Parth Tradelinks Pvt. Ltd. as unexplained cash credits under Section 68 of the Income-tax Act. The CIT(A) subsequently dismissed the assessee's appeal ex-parte due to non-prosecution, alleging non-compliance with hearing notices.
Held
The Tribunal observed that the assessee had submitted relevant documents during assessment and provided reasons for non-attendance before the CIT(A). Recognizing that the CIT(A) dismissed the appeal ex-parte without adjudicating on merits, the Tribunal remitted the matter back to the CIT(A) for a de novo meritorious adjudication, emphasizing the need for the assessee's diligence in future hearings.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without considering the merits of the case; and whether the matter should be remanded for a de novo adjudication on the addition made under Section 68 of the Income-tax Act.
Sections Cited
Section 68 of the Income-tax Act, 1961, Section 133(6) of the Income-tax Act, 1961, Section 143(3) of the Income-tax Act, 1961, Section 250 of the Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH MUMBAI
Before: SHRI PAVAN KUMAR GADALE
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi,vide order no. ITBA/NFAC/S/250/2023-24/1054372002(1), dated 14.07.2023 passed against the assessment order by the Deputy Commissioner of Income Tax, Circle 8(2)(2), Mumbai, u/s.143(3) of the Income-tax Act(hereinafter referred to as the “Act”), dated 19.12.2017 for Assessment Year 2015-16.
Surbhit Impex Pvt. Ltd., AY 2015-16 2. Grounds taken by the assessee are reproduced as under:
“1. On facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre (NFAC) has erred in dismissing the appeal of the assessee ex parte, whereas the NFAC should have decided the appeal on the merits of the case. 2. On facts and circumstances of the case and in law, the Ld. NFAC erred in not considering the grounds of appeal
, statement of facts and paper book on record while deciding the appeal.
3. Without prejudice to the above, on the facts and circumstances of the case and in law, the Ld. NFAC has erred in dismissing the appeal of the assessee when the assessee did not receive any real-time alert on the mobile phone or email in accordance with CBDT Notification dated 4 of 2017 dated April 03, 2017.
4. Without prejudice to the above, on facts and circumstances of the case and in law, the Ld. NFAC erred in dismissing the appeal of the Assessee and confirming the decision of the Ld. Assessing Officer (AO) wherein the Ld. AO has erred in treating the sum of Rs. 57,08,625/- i.e. trade advance as unexplained cash credits and added the same under section 68 of the Income-tax Act, 1961.”
Brief facts of the case as culled out from records are that the assessee filed its return of income on 30.09.2015 reporting a total income at Rs.19,38,800/-. In the course of assessment, it was observed that assessee had received unsecured loan of Rs.57,08,625/- from one Parth Tradelinks Pvt. Ltd. for which necessary details and explanations were called for. Assessee made its submissions along with response to notice u/s.133(6) of the Act. Submissions made by the assessee were considered but were found not tenable by the ld. Assessing Officer, resulting into an addition of the said amount. Aggrieved, assessee went into appeal before the CIT(A).
3.1. Ld. CIT(A) summarily dismissed the appeal of the assessee on account of non-prosecution on the part of the assessee. While dismissing the appeal, ld. CIT(A) has observed that assessee was issued and served with three notices for hearing which remained un- complied. Owing to no response from the assessee, ld. CIT(A) without Surbhit Impex Pvt. Ltd., AY 2015-16 adjudicating on the grounds dismissed the appeal of the assessee. Aggrieved, assessee is in appeal before the Tribunal.
Before us, ld. Counsel for the assessee placed on record a paper book containing 91 pages to substantiate that all the necessary explanations and documents were on record before the ld. Assessing Officer which have not been considered while dismissing the appeal by the ld. CIT(A). He specifically referred to ground no.1 and 2 raised before us, whereby the first appeal has been dismissed ex-parte without considering the grounds, statement of facts and paper book on record. He also referred to ground no.3, whereby assessee had not received any real time alert on the mobile phone or email in accordance with CBDT notification No.4 of 2017, dated 03.04.2017. In this respect, an affidavit by the Managing Director of the assessee is placed on record explaining the reasons along with supporting documents, why the hearings before the ld. CIT(A) could not be attended. 4.1. It was thus submitted that the matter may be remanded back to the file of ld. CIT(A) for denovo meritorious adjudication by taking into consideration the submissions already on record. It was also prayed that reasonable opportunities may be given to the assessee to make any further submissions, if so required.
Per contra, ld. Sr.DR raised no objection on the prayer made by the ld. Counsel.
We have heard the rival contentions and perused the material on record. We note that assessee had made its submissions alongwith relevant documentary evidences in the course of assessment proceedings, fact of which is noted in the impugned assessment order, duly substantiated by placing a paper book on record. However, an adverse view had been taken by the ld. AO for which the matter went
Surbhit Impex Pvt. Ltd., AY 2015-16 into appeal. At the first appellate stage, there are lapses on the part of the assessee to attend the hearings for an effective and meritorious disposal of its appeal. Also, ld. CIT(A) has dismissed the appeal for lack of prosecution. 6.1. 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.
6.2. 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.
6.3. 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 Surbhit Impex Pvt. Ltd., AY 2015-16 matter back to the file of Ld. CIT(A) will not impair or injure the case of the Revenue nor will it cause any prejudice to the defense/explanation of the assessee.
In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 29 May, 2024