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Facts
The assessee filed an appeal against an ex-parte order by the learned CIT(A) that dismissed their appeal. The assessee had not responded to notices from the Assessing Officer and subsequently from the learned CIT(A), leading to ex-parte proceedings. The Assessing Officer had made an ad-hoc disallowance of 20% of expenses claimed.
Held
The Tribunal noted the assessee's failure to appear and respond to notices, attributing it to the negligence of their erstwhile counsel. While acknowledging this, the Tribunal decided to provide one more opportunity for the assessee to present their case, citing natural justice.
Key Issues
Whether the assessee should be granted another opportunity to present their case before the CIT(A) after failing to respond to notices in ex-parte proceedings.
Sections Cited
IT Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “G” Bench, Mumbai.
Before: Justice (Rtd.) C.V. Bhadang & Shri B.R. Baskaran (AM)
The assessee has filed this appeal challenging the order dated 3.10.2023 passed by the learned CIT(A), National Faceless Appeal Centre, Delhi and it relates to A.Y. 2017-18. The assessee is aggrieved by the decision of the learned CIT(A) in dismissing the appeal of the assessee in an ex-parte order passed by him.
We heard the parties and perused the record. We noticed that the assessee did not respond to various notices issued by the Assessing Officer and hence the Assessing Officer completed the assessment by making adhoc disallowance of 20% of the aggregate amount of expenses claimed by the assessee. Even though the assessee challenged the assessment order by filing the appeal before the learned CIT(A) yet it did not respond to the notices issued by the learned CIT(A). Hence the learned CIT(A) proceeded to dispose
2 Sacho Satram Enterprises of the appeal of the assessee ex-parte. On noticing that the assessee did not substantiate various expenses claimed by it, the learned CIT(A) confirmed the addition made by the Assessing Officer.
With regard to action of the assessee in not responding to various notices issued by the tax authorities, the Ld counsel appearing for the assessee submitted that the assessee had engaged another counsel before the tax authorities and he did not respond to the notices issued by the tax authorities. Accordingly, he submitted that the failure to respond to the notices has occurred due to the negligence of the erstwhile Counsel. The Learned AR submitted that the assessee has prepared a paper book containing all relevant evidences and accordingly prayed that the order passed by the learned CIT(A) may be set aside and the matter may be restored to the file of the Assessing Officer for examining them afresh.
On the contrary, the learned DR strongly objected to the plea put forth by learned AR. He submitted that both the tax authorities have given ample opportunities to the assessee, but the assessee has failed to avail the same. He further submitted that, if at all the bench prefers to restore the matters, they may be restored to the file of Ld CIT(A).
We have heard the rival contentions and perused the record. Admittedly, the assessee did not appear before both the tax authorities even though a number of opportunities were given to it. Though it is submitted the same has occurred on account of professional negligence of erstwhile counsel, yet we noticed that the above said submission of the learned AR is bald one without any supporting material. However considering the fact that the assessee could not furnish relevant details, we are of the view that, in the interest of natural justice, the assessee may be provided with one more opportunity to present its case properly before the learned CIT(A). However the same will be at a cost i.e. the assessee shall pay a sum of Rs. 10,000/-
3 Sacho Satram Enterprises (Rupees Ten Thousand) to the credit of Income tax department as “other fees” within two months from the date of receipt of this order.
Subject to the payment of the above said cost, which fact shall be verified by the learned CIT(A) in the set aside proceedings, the impugned order passed by the learned CIT(A) is set aside and all issues are restored to his file for adjudicating them afresh after affording adequate opportunity of being heard to the assessee. We also direct the assessee to fully cooperate with the learned CIT(A) for expeditious disposal of the appeal.
In the result, appeal filed by the assessee is treated as allowed for statistical purposes.
Order pronounced on 05.03.2024.