G&T OILFIELD AND OFFSHORE SERVICES PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

During the course of hearing nobody was present on behalf of the assessee neither any adjournment was sought. Therefore, the appeal is decided ex-parte after hearing the ld. DR on merit.

The only grievance of the assessee in this appeal relates to the confirmation of addition of Rs.4,25,444/- made by the AO on account of disallowance u/s 14A of the Income Tax Act, 1961 (hereinafter referred to as the Act).

Facts of the case in brief are that the assessee filed the return of income on 29.09.2012 declaring an income of Rs.42,12,889/- which was processed u/s 143(1) of the Act. Later on, the case was selected for 2 G&T Oilfield and Offshore Services scrutiny. The AO framed the assessment at an income of Rs.46,71,423/- by making the additions of Rs.4,25,444/- on account of disallowance u/s 14A of the Act and Rs.33,090/- on account of disallowance out of business promotion expenses, considering the same as personal in nature.

Being aggrieved the assessee carried the matter to the ld. CIT(A) who partly allowed the appeal of the assessee. The ld. CIT(A) passed the ex-parte order and observed that he asked the AO to confirm the statutory validity of the appeal. However, no reply had been received from the AO and that the appeal of the assessee was adjourned on 04.08.2016 and then 10.08.2016. However, there was no compliance on 10.08.2016. The ld. CIT(A) confirmed the addition made by the AO u/s 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. The another addition of Rs.33,090/- was deleted. Now the assessee is in appeal.

The ld. DR submitted that the ld. CIT(A) has disposed off the appeal on merit in spite of the fact that the assessee did not cooperate and that a part-relief has been granted to the assessee. Therefore, the ld. CIT(A) was justified in deciding the appeal ex-parte by considering the non-cooperative attitude of the assessee.

I have considered the submissions of the ld. DR and perused the material available on the record. In the present case, the assessee stated 3 G&T Oilfield and Offshore Services in Ground No. 1 of the appeal that the assessee applied for adjournment a day in advance on 09.08.2016 and it was informed by the office of the ld. CIT(A) that the case stood adjourned to 17.08.2016 and that when the Authorized Representative of the assessee appeared alongwith submission on 17.08.2016, it was informed that the case had already been decided ex-parte. From the aforesaid narrated facts, it appears that a due and reasonable opportunity of being heard was not provided to the assessee. It is well settled that nobody should condemned unheard as per maxim “audi alteram partem”. I, therefore, considering the totality of the facts, deem it appropriate to set aside the issue back to the file of the ld. CIT(A) to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

In the result, appeal of the assessee is allowed for statistical purposes. (Order Pronounced in the Court on 30/11/2016)