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Facts
The assessee's appeal against the Ld. CIT(A)'s order for AY 2013-14 was directed against a penalty order. The assessee's counsel argued that the Ld. CIT(A) passed the order ex-parte without considering submissions due to management disputes and a substantial loss during the COVID-19 pandemic. The assessee sought to restore the matter for a fresh decision.
Held
The Tribunal noted that the assessee failed to make any submissions during the appellate proceedings, leading to the conclusion that the appellant had nothing further to say. However, the Tribunal also observed that the Ld. CIT(A) decided the appeal ex-parte without discussing the merits. Consequently, the Tribunal set aside the Ld. CIT(A)'s order and restored the issue to the Ld. CIT(A) for fresh adjudication.
Key Issues
Whether the Ld. CIT(A) erred in passing an ex-parte order without considering the assessee's submissions and whether the penalty order was passed without sufficient opportunity of being heard.
Sections Cited
271(1)(c), 250(6)
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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
This appeal by the assessee is directed against order dated 01.08.2023 passed by the Ld. Commissioner of Income Tax(Appeals)-National Faceless Assessment Centre, Delhi[ In short the Ld CIT(A)] for assessment year 2013-14, raising following grounds:- 1 On the facts and circumstances of the case and law on the subject, the learned Assessing Officer erred in passing penalty order u/s 271(1) (C) of the Income Tax Act without providing sufficient order opportunity being heard & violating the rule of natural justice and the learned Commissioner of Income Tax (Appeal) erred in upholding the action of the learned AO
Sai Granite Exports & Developers Sai Granite Exports & Developers 2 Pvt LTd. ITA No. No. 3463/M/2023 without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. Hence the penalty order passed u/s 271(1)(c) of the Income the penalty order passed u/s 271(1)(c) of the Income the penalty order passed u/s 271(1)(c) of the Income Tax Act be quashed. Tax Act be quashed.
On the facts and in the circumstances of the case and law 2. On the facts and in the circumstances of the case and law 2. On the facts and in the circumstances of the case and law on the subject, the learned assessing officer erred in levying on the subject, the learned assessing officer erred in levying on the subject, the learned assessing officer erred in levying penalty of Rs.30,59,085/ penalty of Rs.30,59,085/- u/s 271(1) (c) of the Income Tax u/s 271(1) (c) of the Income Tax Act, 1961 1961 1961 vide vide vide order order order dated dated dated 30.12.2021 30.12.2021 30.12.2021 and and and the the the learned learned learned CIT(Appeals) erred in upholding the action of the learned AO, CIT(Appeals) erred in upholding the action of the learned AO, CIT(Appeals) erred in upholding the action of the learned AO, without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. without correct appreciation of facts and law on the subject. In view of the facts and circumstances of the case and law on In view of the facts and circumstances of the case and law on In view of the facts and circumstances of the case and law on the subject, the the subject, the order u/s 271(1) (c) be quashed.
The appellant craves leave to add, amend, alter or delete 3. The appellant craves leave to add, amend, alter or delete 3. The appellant craves leave to add, amend, alter or delete any ground of appeal
on or before the date of hearing any ground of appeal on or before the date of hearing any ground of appeal on or before the date of hearing
2. At the outset, the Ld. Counsel for the assessee submitted that At the outset, the Ld. Counsel for the assessee submitted that At the outset, the Ld. Counsel for the assessee submitted that the impugned order has been passe the impugned order has been passed by the Ld. CIT(A) ex d by the Ld. CIT(A) ex-parte qua the assessee without considering the submission of the assessee. the assessee without considering the submission of the assessee. the assessee without considering the submission of the assessee. He submitted that the due to management dispute in the assessee He submitted that the due to management dispute in the assessee He submitted that the due to management dispute in the assessee company, no representation could no representation could be made before the Ld. CIT(A) made before the Ld. CIT(A) from the assessee side. He furt assessee side. He further submitted that the company is her submitted that the company is engaged in the business of hotel & restaurant and it has suffered a engaged in the business of hotel & restaurant and it has suffered a engaged in the business of hotel & restaurant and it has suffered a substantial loss during COVID substantial loss during COVID-19 pandemic. He accordingly . He accordingly submitted that assessee submitted that assessee is willing to file submission and willing to file submission and representation before the Ld. CIT(A) representation before the Ld. CIT(A) ,therefore, matter matter might be restored back to the file of the Ld.CIT(A) for deciding afresh. back to the file of the Ld.CIT(A) for deciding afresh. back to the file of the Ld.CIT(A) for deciding afresh.
3. We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The finding of dispute and perused the relevant material on record. The finding of dispute and perused the relevant material on record. The finding of the Ld. CIT(A) is reproduce the Ld. CIT(A) is reproduced as under:-
4. During the course of appellate proceedings vide notices
4. During the course of appellate proceedings vide notices
4. During the course of appellate proceedings vide notices dated 15.11.2022, 06.06.2023 and the final opportunity was dated 15.11.2022, 06.06.2023 and the final opportunity was dated 15.11.2022, 06.06.2023 and the final opportunity was given on 18.07.2023 and requested the appellant to file the given on 18.07.2023 and requested the appellant to file the given on 18.07.2023 and requested the appellant to file the submission by 25.07.2023. However no submissions were submission by 25.07.2023. However no submissions were submission by 25.07.2023. However no submissions were made during th made during the entire appellate proceedings. The appellant e entire appellate proceedings. The appellant during the appellate proceedings did not comply with the during the appellate proceedings did not comply with the during the appellate proceedings did not comply with the Sai Granite Exports & Developers Sai Granite Exports & Developers 3 Pvt LTd. ITA No. No. 3463/M/2023 notices and hence made no submission in support of grounds notices and hence made no submission in support of grounds notices and hence made no submission in support of grounds of appeal. So it is held that the appellant had nothing more to of appeal. So it is held that the appellant had nothing more to of appeal. So it is held that the appellant had nothing more to submit except for raising the submit except for raising the ground.
4.1 The Hon'bleITAT in 4.1 The Hon'bleITAT in ITA No. 1025-1027/Chandi/2005 for 1027/Chandi/2005 for the A.Y. 2002 the A.Y. 2002-03 in the case of M/s Chhabra Land and 03 in the case of M/s Chhabra Land and Housing Ltd. after following the decision of Hon'ble Supreme Housing Ltd. after following the decision of Hon'ble Supreme Housing Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) held that the appe that the appeal does not mean merely filing of the appeal but al does not mean merely filing of the appeal but effectively pursuing it. Keeping in view of the aforesaid factual effectively pursuing it. Keeping in view of the aforesaid factual effectively pursuing it. Keeping in view of the aforesaid factual position, the appeal filed by the appellant is, therefore, position, the appeal filed by the appellant is, therefore, position, the appeal filed by the appellant is, therefore, decided on merits. decided on merits.
In the instance of the case the appellant failed to make any 5. In the instance of the case the appellant failed to make any 5. In the instance of the case the appellant failed to make any submissions in support of grounds of appeal
, this gives rise to submissions in support of grounds of appeal, this gives rise to submissions in support of grounds of appeal, this gives rise to an undisputable conclusion that the assessee has got nothing an undisputable conclusion that the assessee has got nothing an undisputable conclusion that the assessee has got nothing more to say in this regard. I have gone through the record more to say in this regard. I have gone through the record more to say in this regard. I have gone through the record before me and based on the record I have decided to before me and based on the record I have decided to before me and based on the record I have decided to adjudicate the issu adjudicate the issue on the merits of the case. In the instant e on the merits of the case. In the instant case the AO has rightly levied a penalty of Rs. 30,59,085/ case the AO has rightly levied a penalty of Rs. 30,59,085/ case the AO has rightly levied a penalty of Rs. 30,59,085/-. Since the appellant failed to substantiate appellant's claim Since the appellant failed to substantiate appellant's claim Since the appellant failed to substantiate appellant's claim and addition made by the Assessing Officer of Rs. and addition made by the Assessing Officer of Rs. and addition made by the Assessing Officer of Rs. 30,59,085/- is hereby confirmed.
4. Since, the Ld. CIT(A) has decided appeal ce, the Ld. CIT(A) has decided appeal ex-parte parte in absence of submission from the assessee side submission from the assessee side, without any discussion on merit , without any discussion on merit of the matter involved. U of the matter involved. Under provisions of section 250(6) of the Act, of section 250(6) of the Act, the Ld. CIT(A) is require he Ld. CIT(A) is required to pass a reasoned order on me order on merit even in cases of no representation o cases of no representation on behalf of the assessee n behalf of the assessee , therefore, we feel it appropriate to feel it appropriate to set-aside the order of ld CIT(A) and aside the order of ld CIT(A) and restore the issue-in-dispute involved involved in the appeal back to the file of the Ld. in the appeal back to the file of the Ld. CIT(A) for for for deciding deciding deciding afresh afresh afresh after after after taking taking taking into into into consideration consideration consideration submission of the assessee. submission of the assessee. The grounds of the of the appeal are accordingly allowed for statistical purposes. accordingly allowed for statistical purposes. 5 In the result, appeal of the assessee is allowed for statistical In the result, appeal of the assessee is allowed for statistical In the result, appeal of the assessee is allowed for statistical purpose.
Sai Granite Exports & Developers Sai Granite Exports & Developers 4 Pvt LTd. ITA No. No. 3463/M/2023 Order pronounced in Order pronounced in the open Court on 14/02/2024 /02/2024.