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Facts
The assessee's appeal was dismissed by the CIT(A) NFAC for non-compliance with notices, despite the assessee citing reasons related to COVID-19 lockdowns and the indisposition of their CA. The CIT(A) issued notices, but the assessee's request for adjournment was denied, and an ex-parte order was passed. The original reassessment was completed by the AO under sections 144 read with 147 of the Income Tax Act.
Held
The Tribunal held that the CIT(A) should have addressed the adjournment application filed by the assessee rather than passing an ex-parte order. The matter was remanded back to the CIT(A) for adjudication on merits after providing a fair and reasonable opportunity to the assessee.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without providing a reasonable opportunity of being heard and by passing an ex-parte order, and whether the reassessment was bad in law due to procedural defects.
Sections Cited
144, 147, 148, 143(2), 69C, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Angel Jewellery Vs. ITO-42(1)(1) 4, Akurli Industrial Kautilya Bhavan, BKC, Estate, Akurli Road, Bandra East, Kandivali East, 400051 Mumbai-400101 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAIFA7184P Appellant .. Respondent Appellant by : K.A.Vaidyalingan Respondent by : Lieder Panicker Date of Hearing 27.12.2023 Date of Pronouncement 01.01.2024 आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assessee is directed against the order passed by the ld. CIT(A) NFAC, dated 16.08.2023 for A.Y. 2007-08. The assessee has raised the following grounds before us: “1. The learned CIT (A) erred in dismissing the appeal of the Appellant in unnecessary hurry and without giving a reasonable opportunity of being heard.
2. The learned CIT (A) failed to appreciate the fact that out of three dates given earlier, on two occasions it was impossible to respond due to COVID-19 and consequent lockdown and on the last occasion, the CA who was handling this old matter was indisposed.
3. In law and on the facts and circumstances of the case, the entire reassessment is bad in law and nullity as the learned AO erred in completing the reassessment u/s. 144 r.w.s. 147 of the Income tax Act without issuing a valid notices u/s. 148 and 143 (2) of the Act.
4. The learned CIT (A) erred in upholding the addition of Rs.24.12,640/- made by the learned AO u/s. 69C on account of alleged unsecured loan P a g e | Angel Jewellery Vs. ITO-42(1)(1) taken from M/s. Mohit Enterprise and M/s. Mayur Exports, though no such loans were taken by the Appellant from those parties. The Appellant had made genuine accounted purchases and not taken any from those parties.
The learned CIT(A) erred in not allowing set off of brought forward loss of Rs. 1,01,392/-.”
Fact in brief is that return of income declaring total income at Rs.91,410/- was filed on 16.10.2017. The case was reopened by issuing of notice u/s 148 of the Act on 15.04.2014. During the course of assessment proceedings neither the assessee has attended nor furnished any detail in respect of unsecured loan taken from (i) Mohit Enterprise; Rs.7,06,110/-; (ii) Mayor Exports; Rs. 24,12,640/-. Therefore, AO has added unsecured loan amounting to Rs.24,12,640/- to the total income of the assessee by treating the same as unexplained loan u/s 69C of the Act.
The assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assesse on the ground that assessee has not made compliance to the notices issued during the course of appellate proceedings before us.
During the course of appellate proceedings before us the ld. Counsel submitted that CIT(A) has issued 3 notices during the covid period to which assessee could not made compliance because of prevailing covid pandemic. In respect of notice issued on 14.08.2023 the assessee sought adjournment. However, the ld. CIT(A) has not provided the adjournment and dismissed the appeal of the assessee on 16.08.2023. On the other hand, the ld. D.R supported the order of lower authorities.
5. Heard both the sides and perused the material on record. Without reiterating the fact as elaborated above the last notice after the covid period was issued by the ld. CIT(A) on 14.08.2023 during the course of P a g e | Angel Jewellery Vs. ITO-42(1)(1) appellate proceedings. The assesse has sought adjournment however, without disposing off the adjournment application within two days of issuing notice the ld. CIT(A) has passed ex-parte order u/s 250 of the Act on 16.08.2023. Looking to the above facts and circumstances the ld. CIT(A) ought to have dealt with the adjournment application filed by the assessee. Therefore the matter is remanded back to the ld. First Appellate Authority for adjudication on merit after providing another fair and reasonable opportunity to the assessee. The assessee is directed to making compliance before the ld. CIT(A) without any failure. Therefore, appeal of the assessee is allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 01.01.2024