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Before: SHRI H.S. SIDHU
Date of Hearing : 14-06-2016 Date of Order : 14-06-2016
O R D E R PER H.S. SIDHU, JM
This appeal is filed by the Assessee is directed against the Order dated 24.3.2014 of the Ld. CIT(A)-XXIV, New Delhi relevant to assessment year 2009-10 on the following grounds:-
1. That the learned Commissioner of Income Tax (Appeals) XXIV, New Delhi has grossly erred both in law and on facts in disposing off the appeal on ex-parte basis by an order dated 24.3.2014 by concluding that appellant is not interested in pursuing the present appeal.
1.1 That since there was sufficient and reasonable cause on the part of the appellant for not causing on appearance on the dates fixed for hearing, the impugned order may kindly be set- aside,
2. That even otherwise the order framed by the learned Commissioner of Income Tax (Appeals) disposing off the appeal filed by the appellant in limine is illegal, invalid and not in accordance with law.
That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that since no notice uls 143(2) of the Act was served within the statutory period the order of assessment was without jurisdiction and deserved to be quashed as such.
4. That furthermore the learned Commissioner ofIncome Tax (Appeals) has further erred both in law and on facts in sustaining the following disallowances made in the order of assessment:
Sr. Particulars Amount No. (In Rs.) i) Out of expenditure incurred on salary 19,62,523/- ii) Out of vehicle running and maintenance expenses 4,010/- iii) Out of miscellaneous expenses 22,548/-
5. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding the levy of interest of Rs. 1,40,118/- under section 234B of the Act.
It is therefore prayed that order of. the learned Commissioner of Income Tax (Appeals) may kindly be set-aside and further more order of assessment be held to be without jurisdiction and disallowances made alongwith interest levied may kindly be deleted and, appeal of the appellant be allowed.”
The facts in brief are that the assessee filed her return of income for the relevant assessment year 2009-10 on 28.09.2009 declaring income of Rs. 8,27,065/-. The case was selected for scrutiny through CASS. Notice u/s 143(2) was issued and served upon the assessee. During the course of assessment proceedings, the Assessing Officer has noted that an amount of Rs. 28,00,000/- was debited to the P & L account of the assessee under the head salaries on the total turnover of Rs. 41,87,378/- which works out to 66.8% of the turnover. The Assessing Officer has asked the assessee to furnish the details of employees, their PAN, salary etc. From the details furnished by the assessee it was clear that the expenses claimed under the head salaries do not appear to be genuine.
Accordingly, to meet the ends of justice, the claim of the assessee under the head salary was restricted to 20% of the turnover which works out to Rs. 8,37,475/- and the remaining amount of Rs. 19,62,525/- was disallowed and added to the total income of the assessee. The Assessing Officer also disallowed 1/5th of vehicle running and maintenance and miscellaneous expenses on account of personal use to the tune of Rs/ 26,558/-. Thereafter assessment was completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred the Act) vide order dated 30.12.2011 at the Income of Rs. 28,16,150/- against the returned income of Rs. 8,27,065/-.
3. Aggrieved by the aforesaid addition, assessee appealed before the Ld. CIT(A) who vide impugned order dated 24.3.2014 has dismissed the Appeal exparte by holding as under:-
“4. During the course of appellate proceedings, notice u/s 250 of the Income Tax Act, was issued to the appellant on 29.07.2013 fixing the case for hearing on 3.08.2013. This notice was sent through speed post at the given address of the appellant in Form No. 35 i.e. C/o M/s N.Dhawan & Co., 411, Bhera Enclave, Paschim,Vihar, Outer Ring Road, Delhi 110087. None attended on this date. Another notice dated 01.10.2013 fixing the case for hearing on 10.10.2013 was sent through speed post. None attended nor any adjournment application was filed on this date. The case was re-fixed for 12.02.2014 vide notice dated 03.02.2014. No compliance was made on this date also. A final notice dated 13.03.2014 fixing the case for hearing on 24.03.2014 was sent through speed post. This notice also not complied with. All these notices were sent through speed post at the given address mentioned in column NO.13 Form No. 35, filed by the appellant on 27.01.2012. No notice was returned to this office. No documents/ evidences in support of the grounds raised in this appeal has been filed by the appellant. In view of these facts, it is crystal clear that the appellant is not interested in pursuing his present appeal. In the case of CIT vs B.N.Bhattacharya (1977) 118 ITR 461 (SC), the Hon'ble Apex court while dealing with the issue of prosecution of appeal has held that "preferring an appeal means more than formally filing it but effectively pursuing it" .
Relying upon the aforesaid decision of the Hon'ble Apex Court, the present appeal is being dismissed.
In the result, the appeal is dismissed.”
Against the aforesaid order of the ld. CIT(A), assessee is in appeal before the Tribunal.
5. In this case, Notice of hearing to the assessee was sent by the Registered AD post, in spite of the same, assessee, nor her authorized representative appeared to prosecute the matter in dispute, nor filed any application for adjournment. Keeping in view the facts and circumstances of the present case and the issue involved in the present Appeal, I am of the view that no useful purpose would be served to issue notice again and again to the assessee, therefore, I am deciding the present appeal exparte qua assessee, after hearing the Ld. DR and perusing the records.
During the hearing, Ld. DR relied upon the orders passed by the Ld. CIT(A) and stated that the sufficient opportunity has been given to the assessee by the Ld. CIT(A), but assessee remained non-cooperative.
Therefore, he requested that the impugned order may be upheld.
I have heard the Ld. DR and perused the records, especially the order of the First Appellate Authority. After perusing the impugned order of the Ld. CIT(A), I find that Ld. CIT(A) has not passed a speaking order because he summarily dismissed the appeal by applying the Apex Court decision in the case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC). In my considered opinion, Ld. CIT(A) has erred in this regard.
Ld. CIT(A) should have adjudicated the issue on merits. It is a settled law that even the administrative orders have to be consistent with the rules of natural justice. However, there is no doubt that the Assessee remained non-cooperative before the lower authorities as well as before the Tribunal. But in the interest of justice, I am of the view that in this case the issues in dispute needs to be remitted back to the file of the Ld. CIT(A) to decide the same afresh on merits, as per law. Accordingly, Ld. CIT(A) is directed to consider the issues in dispute afresh and pass a proper and speaking order considering the merits of the case. Needless to add that the assessee should be given adequate opportunity of being heard. The assessee is directed to fully cooperate with the ld. CIT(A) and not to take unnecessary adjournment.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the Open Court on 14-06-2016.