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Facts
The assessee, Divya Agrofood Private Limited, filed an appeal against the order of the CIT(A) which had dismissed its appeal ex-parte for non-prosecution. The original assessment was reopened under section 147 for additional depreciation on certain plant and machinery, which was disallowed. The CIT(A) dismissed the appeal for non-compliance with notices.
Held
The Tribunal condoned the 11-day delay in filing the appeal, noting that the assessee did not receive proper communication regarding the CIT(A)'s order. The Tribunal found that the assessee was not given adequate opportunity to present its case. Therefore, the Tribunal decided to remand the matter back to the Assessing Officer.
Key Issues
Whether the appeal should be allowed for statistical purpose and remanded to the Assessing Officer, considering the assessee's claim of not receiving proper opportunity and communication.
Sections Cited
147, 144B, 143(3), 142(1), 250, 282, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 851/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2013-14 Divya Agrofood Private Limited cuke The DCIT, ACIT, 2-K-15, Vigyan Nagar, Vs. Central Circle-2, Kota. Kota. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AADCD6381R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri B.V. Maheshwari (C.A.) jktLo dh vksj ls@ Revenue by : Shri A. S. Nehra (Addl. CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 28/08/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 09/09/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by the assessee aggrieved from the order of the CIT(A), National Faceless Appeal Centre, Delhi dated 27.03.2024 [ for short CIT(A)] for the assessment year 2013-14, which in turn arise from the order dated 17.03.2022 passed under section 147 read with section 144B of the Income Tax Act, [for short Act ] by the National Faceless Assessment Centre [ for short AO ].
Divya Agrofood Product Pvt. Ltd. 2. The assessee has marched this appeal on the following grounds:- “1. That the Ld. CIT(A)-Faceless grossly erred in passing the ex-parte order.
2. That the Ld. AO grossly erred in reopening the case u/s 147/148 of I.T. Act, 1961 and the Ld. CIT(A) have not considered the ground.
3. That the Ld. AO grossly erred in not allowing the additional depreciation on certain plant and machinery which are necessary and important P and M of the company engaged in dairy business by disallowing the said additional depreciation and made addition of Rs. 1,11,06,994.00 and the Ld. CIT(A) have not looked the ground being passed ex-parte order.
That appellant, craves to leave, add, alter the grounds of appeal.”
3.1 At the outset of hearing, the Bench observed that there is delay of 11 days in filing of the present appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay. The prayer of the assessee reads as under :
“ The Ld. CIT(A), Faceless passed the ex-parte order & put on portal but no e-mail or not used other mode of communication to inform the assessee company. Usually when the order is passed the massage (SMS) is given but it was not given in this case. The company staff checked the portal today & find the ex-parte order hence could not file the appeal as per date of order. We thus request your honour to condone the delay allow the appeal to be filed.”
Divya Agrofood Product Pvt. Ltd. 3.2 On the other hand, ld. DR objected to such a delay of 11days but submitted that the Court may decide the issue as deem fit and proper in the case.
3.3 We have heard both the parties and perused the material available on record. The Bench noted that there is a delay of 11 days in filing the appeal by the assessee. The plea taken by the assessee in its condonation application that it has not received any communication either on e-mail or other mode of communication. The Bench feels that service of order to the assessee is essential to make him aware about the outcome of the order passed by the Ld. CIT(A) which has not occurred in assessee’s case. In this situation the delay of 11 days is condoned, and the appeal is admitted being decided on merits of the case.
Brief fact as culled out from the record is that the assessee is a private limited company engaged in the business of procuring/ manufacturing, processing & selling of milk and milk related products, such as milk powder, Ghee, Paneer, etc. The assessee filed its return of income on 27.09.2013 declaring income at Nil and the assessment u/s 143(3) was completed on 23.03.2016. The Divya Agrofood Product Pvt. Ltd. case of the assessee was re-opened to verify the additional depreciation claimed for an amount of Rs. 1,11,06,994/- which escaped the assessment.
The ld. AO noted that the assessee has claimed additional deprecation on firefighting, ink jet printer, other utilities and RO plant. The ld. AO contended that these assets do not fall in the category of plant and machinery and therefore, the claim of additional depreciation on that assets considering them as plant and machinery was not considered and was added to the income of the assessee.
Aggrieved by the order of the ld. AO, the assessee preferred an appeal before the ld. CIT(A). The Ld. CIT(A) observed that various notices were issued on 09.11.2022, 04.01.2024, 10.01.2024, 18.01.2024, 29.01.2024, 06.02.2024, 14.02.2024 and 21.03.2024 and requiring the assessee to file the details in support of grounds taken by the assessee.
Since the assessee has not complied with the notices so issued, ld. CIT(A) dismissed the appeal of the assessee ex-parte order, while doing so he observed as under:-
Divya Agrofood Product Pvt. Ltd. “3. It is pertinent to state that to decide this appeal in a timely manner several notices u/s 250 of the Income Tax Act, 1961 (the Act) were issued to the appellant through ITBA portal, as noted in para 2 above, which amounts to service of notice as provided u/s 282 of the Act. However, there has been no response from the appellant till date. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on its part to pursue the same in a worthwhile manner, which the appellant has failed to do. Hence, in view of the aforesaid total non-compliance of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed of, as under, ex-parte and on the basis of documentation available on record. 3.1 Firstly, it is stated at the outset, that in the situation as obtaining in the instant case, as seen from the above, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court which held in CIT v. B.N. Bhattarcharjee and Another (10 CTR 354) that an appeal means an effective appeal and that to "prefer an appeal" would mean effectively prosecuting an appeal purposefully and constructively. Therefore, preferring an appeal means more than formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray. 3.2 It is relevant to add here that law assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known maxim "Vigilantibus non dormientibus jura subveniunt." It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured. And the one who is careless is prejudiced. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the onus is on person making the claim, and the primary onus for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the assessee/appellant. In the present case, the appellant has not been able to even discharge the primary onus/burden statutorily and judicially cast upon it to substantiate the claims made in the grounds of appeal despite adequate time and opportunity given, as brought out in the foregoing paras. 3.3 In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/s Chemipol v/s. Union of India [Central Excise Appeal No.62 of 2009] clearly states, that every court, judicial body or authority, which has a duty to decide a matter between two parties, Divya Agrofood Product Pvt. Ltd. inherently possesses the power to dismiss the case in default. For the sake of reference, the relevant extract of the judicial pronouncement rendered by the Hon'ble High Court of Mumbai quoting decision of Hon'ble Supreme Court in case of Nandramdas Dwarkadas, AIR 1958 MP 260, is reproduced below: "Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses." 3.3.1 The principle that every court that is to decide on a matter of dispute, inherently possesses the power to dismiss the case for default, has been upheld by the Hon'ble Supreme Court in case of Dr. P. Nalla Thampy Vs. Shankar (1984 (Supp) SCC 63 and the case of New India Assurance vs. Srinivasan (2000) 3 SCC 242. In the latter case, the Apex Court has held as follows, "That every court or judicial body or authority, which has a duty to decide a lis between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi-judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function of the court or, for that matter of a judicial or quasi judicial body. In the absence of the complainant, therefore, the court will be within its jurisdiction to dismiss the complaint for non prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non appearance of the complainant.” 3.3.2 The Hon'ble Bombay High Court has also laid down the proposition that where the appellant in spite of notice is persistently absent and the Tribunal on facts of the case is of the view that the appellant is not interested in prosecuting the appeal, it can in exercise its inherent power to dismiss the appeal for non-prosecution. 3.3.3 The Hon'ble ITAT Delhi (ITR No.2006/Del/2011 dt. 19.12.2001) in the case of Whirlpool of India Ltd. v. DCIT had dismissed appeal for non-attendance at hearings, inferring that assessee was not interested in prosecuting of appeal. Thereafter, in another decision, in the case of Chadha Finlease Ltd. V. ACIT (ITA No.3013/Del/2011 date of order Divya Agrofood Product Pvt. Ltd. 20.12.2011) the Hon'ble ITAT had dismissed the appeal for non attendance at hearings. 3.3.4 In a decision in the case of CIT v. Gold Leaf Capital Corporation Ltd. on 02.09.2011 (ΙΤΑ No.798 of 2009), the Hon'ble High Court of Delhi had held that a negligent assessee should not be given many opportunities just because the quantum of amount involved is high. Necessary course of action is to draw adverse inference; otherwise, it would amount to give premium to the assessee for his negligence. When the assessee is non-cooperative, it can naturally be safely concluded that the assessee did not want to adduce evidence as it would expose falsity and lack of genuineness. 3.4 It is settled law that where the assessee fails to discharge the onus by producing cogent evidence and explanation, the AO would be justified in making the additions back into the income of the assessee as held in Kale Khan Mohammad Hanif v CIT [1963] 50 ITR 1 (SC) and Roshan Di Hatti v. CIT [1977] 107 ITR 938 (SC). The appellant has failed and therefore the grounds hold no merit and are dismissed. 3.5 It is true that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions made by the AO u/s 147 r.w.s. 144B of the Income Tax Act, 1961 is sustained in terms of the observations herein-above.
In the result, the appeal is dismissed.”
Feeling dissatisfied from the above orders of the ld. CIT(A), the assessee has preferred the present appeals on the ground as stated hereinabove. In support of the grounds so raised the ld. AR appearing on behalf of the assessee has placed reliance on the written submission which is kept in record.
Divya Agrofood Product Pvt. Ltd. 7. To support the various grounds so raised by the ld. AR of the assessee he also relied upon the following evidences in support of the contentions so raised:-
S No. Particulars Page No. 1. Order u/s 250 of Hon. CIT(A), NFAC, Delhi 1-6 2. Assessment order u/s 147 read with 144B 7-13 3. Show cause notice & detailed reply 14-116 4. Notice u/s 142(1) dtd. 03.12.2021 117-118 5. ITR filed u/s 148 Acknowledgement 119 6. Reply for notice u/s 143(2) & notice 120-124 7. Assessment order u/s 143(3) dtd. 23.03.2016 125-129 8. Notice u/s 143(3)/142(1) dtd. 21.07.2015 130 9. Reply u/s 143(3) 131 10. Acknowledgment & computation 132-134 11. Balance Sheet 135-147
During the course of hearing, the ld. AR for the assessee prayed that the Id. CIT(A) and the AO both have not provided adequate opportunity of being heard. Thus, the assessee may be provided one more opportunity to advance his arguments / submissions before the ld. AO on merits as the orders of the both the authority are ex parte, and the assessee prayed to grant one Divya Agrofood Product Pvt. Ltd. chance to provide the details in connection with the merits of its case to support the claim of additional evidence and will reduce the substantial liability of tax. Therefore, in the interest of equity and natural justice the assessee praying for the one chance before the ld. AO to advance the argument on the merits of the case.
Per contra, ld. DR objected to the prayer of the assessee and submitted that even the assessee did not represent case before the ld. AO and CIT(A) both stage and now there are praying for equity and justice. Therefore, in that case if the Bench feels the matter may be restored to the file of the Assessing Officer, then with fine may be sent back to the file of the ld. AO.
We have heard both the parties and perused the materials available on record. The bench noted from the order of ld. CIT(A) that the appeal of the assessee was dismissed by the ld. CIT (A) for want of non-prosecution of the appeal. The assessee did not appear or file any reply to the notices which were issued by the ld. AO during the assessment proceedings, finally the assessment completed with considering the submission of the assessee and the assessee was not given proper opportunity of being heard in the matter. The Bench further Divya Agrofood Product Pvt. Ltd. noted the grievance from the grounds of appeal of the assessee wherein they submitted that “That the Ld. CIT(A)-Faceless grossly erred in passing the ex-parte order. That Ld. AO grossly erred in reopening the case u/s 147/148 of I.T. Act, 1961 and the Ld. CIT(A) have not considered the ground. That the Ld. AO grossly erred in not allowing the additional depreciation on certain plant and machinery which are necessary and important P and M of the company engaged in dairy business by disallowing the said additional depreciation and made addition of Rs. 1,11,06,994.00 and the Ld. CIT(A) have not looked the ground being passed ex- parte order.” Looking to these aspect of the matter the Bench feels that the assessee could not advance their arguments / submissions to contest the case before the ld. CIT(A) and the ld. AR for the assessee also prayed to give one more opportunity to submit the evidences concerning the issue in question, with grounds so raised by the assessee, to decide it afresh by providing one more opportunity of hearing. Considering that aspect of the matter we hold to remand back the matter to the file of the ld. AO who will decide the issue based on evidence and submission of the assessee. However, the assessee will not seek any adjournment
Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 09/09/2024. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 09/09/2024 *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant-Divya Agrofood Product Pvt. Ltd., Kota. 2. izR;FkhZ@ The Respondent- DCIT, ACIT, Central Circle-2, Kota. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { By order सहायक पंजीकार@Aेेज. त्महपेजतंत