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Facts
The assessee filed its return of income and it was processed under Section 143(1). The assessee failed to represent its case before the CIT(A), leading to an ex-parte order. The assessee has now appealed against the CIT(A)'s order to the ITAT.
Held
The ITAT noted that the CIT(A) passed an ex-parte order without delving into the merits of the case due to the assessee's failure to appear. The Tribunal decided to restore the matter back to the CIT(A) for a fresh hearing.
Key Issues
Whether the CIT(A) erred by passing an ex-parte order without considering the merits of the case, and whether the AO's adjustments and disallowances were justified.
Sections Cited
143(1), 250, 34(c), 234A, 234B, 234C, 90, 91
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI PAWAN KUMAR GADALE & SHRI GAGAN GOYAL&
1. The Order passed by the Ld. CIT (A) is contrary to law, facts and circumstances of the case and therefore, the Order passed by the Ld. CIT (A) is bad in law and liable to be set aside.
(A.Y.2021-22) Economic Laws Practice
2. On facts and in circumstances of the case, the additions/ disallowances/ adjustments made by the Assistant Director of Income Tax, CPC Bengaluru ("AO") and confirmed by the Ld. CIT(A) are contrary to the statutory provisions under the IT Act, devoid of merits and liable to be deleted. Violation of Principle of Natural Justice 3. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in passing the Order without providing adequate opportunity of being heard to the Assessee. 4. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in dismissing the appeal in limini without deciding the issues raised in the appeal on merits. Disallowance of interest paid on delayed payment of Tax Deducted at Source ("TDS") amounting to INR 3, 07,770/- 5. On facts and in circumstances of the case and in law, the Ld. CIT(A) has grossly erred in confirming the disallowance of INR 3,07,770/- made by the AO in respect of interest paid on delayed payment of TDS merely on the basis of reporting under Clause 34(c) of the tax audit report. 6. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in disregarding the law laid down by the jurisdictional High Court by confirming the disallowance of interest paid on delayed payment of TDS by the learned AO without evaluating the allowability of the expense. Short grant of TDS credit by INR 59, 30,008/- 7. On facts and in circumstances of the case and in law, the Ld. CIT(A) has grossly erred in upholding the action of the AO in granting of TDS credit of INR 4,95,41,945/- only as compared to TDS credit of INR 5,54,71,953/- claimed by the Assessee in the return of income thereby resulting in short
(A.Y.2021-22) Economic Laws Practice
On facts and in circumstances of the case and in law, the Ld. CIT(A) failed to appreciate the fact that the Assessee has rightly claimed TDS credit of INR 5,54,71,953/- which is corresponding to the income offered by the Assessee in the return of income. Levy of interest under Section 234A, 2348 and 234C of the IT Act 9. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in confirming the levy of interest under Section 234A, Section 2348 and Section 234C of the IT Act. 10. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in confirming the action of the AO in not considering the credit under Section 90 and Section 91 of the IT Act while computing interest under Section 234A, 2348 and 234C of the IT Act and computing interest under Section 234C of the IT Act on the basis of assessed income instead of returned income of the Assessee.
The Order passed by the Ld. CIT (A) is contrary to law, facts and circumstances of the case and therefore, the Order passed by the Ld. CIT (A) is bad in law and liable to be set-aside.
On facts and in circumstances of the case, the disallowances / adjustments made by the Assistant Director of Income Tax, CPC Bengaluru ("AO") and confirmed by the Ld. CIT(A) are contrary to the statutory provisions under the IT Act, devoid of merits and liable to be deleted. Violation of Principle of Natural Justice 3. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in passing the Order without providing adequate opportunity of being heard to the Assessee.
(A.Y.2021-22) Economic Laws Practice
4. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in dismissing the appeal in limini without deciding the issues raised in the appeal on merits. Short grant of TDS credit by INR 10, 85,014/- 5. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in upholding the action of the AO in granting of TDS credit of INR 9, 26, 36,775/- only as compared to TDS credit of INR 9, 37, 21,789/- claimed by the Assessee in the return of income thereby resulting in short grant of TDS credit by INR 10, 85,014/-. 6. On facts and in circumstances of the case and in law, the Ld. CIT (A) failed to appreciate the fact that the Assessee has rightly claimed TDS credit of INR 9,37,21,789/- which is corresponding to the income offered by the Assessee in the return of income. Levy of interest under Section 2348 and 234C of the IT Act 7. On facts and in circumstances of the case and in law, the Ld. CIT (A) has grossly erred in confirming the levy of interest under Section 234B and Section 234C of the IT Act. 8. On facts and in circumstances of the case and in law, the Ld. CIT(A) has grossly erred in confirming the action of the AO in not considering the credit under Section 90 and Section 91 of the IT Act while computing interest under 2348 and 234C of the IT Act. 2. The Assessee submits that each of the above grounds/sub-grounds are in the alternative and without prejudice to one another.
These two appeals are filed against the order of Ld. CIT (A) vide his order dated 13.7.2023 passed u/s. 250 of the Act. As the issues involved are identical in both the (A.Y.2021-22) Economic Laws Practice years, we are taking A.Y. 2021-22 as lead case, decision will apply mutatis mutandis to the matter of A.Y. 2022-23 also. Brief facts of the case are that assessee firm filed its return of income on 31.1.2022 declaring total income at Rs. 29,03,73,640/-. Return of the assessee was processed u/s. 143(1) of the Act vide intimation dated 2.11.2022.
We have gone through the intimation issued u/s. 143(1) of the Act, order of Ld. CIT (A) passed u/s. 250 of the Act and grounds taken by the assessee. It is observed that assessee firm has failed to represent its matter before the First Appellate Authority vide para 3.3 of the order. It was categorically mentioned by the Ld. CIT (A) that before him either the assessee sought adjournment or not responded against the notices issued. In view of the above, appeal order was passed ex parte. As there is no findings of Ld. CIT (A) on the merits of the case, we restore the matter back to the file of Ld. CIT (A) with the direction that a proper opportunity of being heard is to be given to the assessee and assessee is also directed to cooperate in the appeal proceedings and attend the hearings without fail for seeking any adjournment.
In the result, appeals of the assessee are being allowed for statistical purposes with the above directions.