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Facts
The assessee declared profit from export turnover as exempt under section 10B of the Income-tax Act for assessment years 2009-10 and 2011-12. The Assessing Officer disallowed this exemption and also disallowed interest expenditure on an interest-free loan. The CIT(Appeals) confirmed these additions.
Held
The tribunal noted the assessee's lack of response to notices from the CIT(Appeals) and their irresponsible conduct. However, in the interest of justice, the tribunal decided to give a last opportunity and remitted the matters back to the CIT(Appeals).
Key Issues
Whether the assessee's claims for exemption under Section 10B were valid and whether the disallowance of interest expenditure was justified.
Sections Cited
10B, 143(3), 250
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Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI SUNIL KUMAR SINGH & SHRI MANISH AGARWAL
ORDER Per:Sunil Kumar Singh, Judicial Member: These two appeals have been preferred by assessee against the impugned orders dated 17.03.2022 and 14.03.2022 passed in Appeals No.
CIT (A), Gwalior/10804/2011-12 and CIT (A), Gwalior/11054/2014-15 by the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment years 2009-10 and 2011-12, wherein the ld. CIT(Appeals) has confirmed the disallowances made by the Assessing Officer and dismissed assessee’s first appeals.
Briefly stating, the facts relevant for disposal of these appeals are that the appellant/assessee had declared profit of Rs.2,96,07,063/- for the assessment year 2009-10 and Rs.59,99,382/- for A.Y. 2011-12, which were claimed as exempt from tax u/s. 10B of the Act, having been derived from export turnover. Accordingly, the appellant/assessee filed his returns of income for both the years under consideration on 29.09.2009 and 30.09.2011 respectively declaring Nil income. The Assessing Officer after giving statutory notices on various occasions and being not satisfied with the replies/explanations offered by the assessee, disallowed the aforesaid claims of exemption u/s. 10B of the Act on the reasoning given at pages 6 & 7 of assessment order dated 22.12.2011 for A.Y. 2009-10 and pages 6 to 8 of the assessment order dated 26.03.2014 for A.Y. 2011-12, both passed u/s. 143(3) of the Act. This apart, the Assessing Officer also disallowed interest expenditure of Rs.3,51,000/- for each of the assessment years under consideration, on interest free loan of Rs.27,00,000/-.
Aggrieved, the assessee preferred appeals before the learned CIT(Appeals) who confirmed the additions made by the learned Assessing Officer and dismissed assessee’s first appeals.
Appellant/assessee has preferred these second appeals on the ground, amongst others, that the revenue has not provided sufficient
2 | P a g e opportunity to defend his cases and Ld. CIT(Appeals) has erred in confirming the additions made by the Assessing Officer.
None responded on behalf of the assessee/appellant. Perused the records and heard learned Departmental Representative for the Revenue.
Learned DR has submitted that the assessee was provided sufficient opportunity of hearing by learned CIT(Appeals) on various occasions, but for no avail. Learned DR has supported the impugned orders.
It transpires from the perusal of records that the assessee did not respond to the notices issued by the Ld. CIT(Appeals) on 24.12.2020, 13.01.2021, 06.07.2021, 22.09.2021, 26.10.2021, 24.11.2021, 13.01.2022 and 03.03.2022 during the course of appellate proceedings for the A.Y. 2009-10. The assessee/appellant either remained irresponsive or only sought adjournments in response to notices issued on various dates.
Similar lackadaisical attitude was adopted by the assessee in response to notices issued by ld. CIT(Appeals) on 14.01.2021,07.07.2021, 22.09.2021, 26.10.2021, 24.11.2021, 13.01.2022 and 03.03.2022 during the course of appellate proceedings for A.Y. 2011-12. Such an irresponsive conduct of the assessee cannot be appreciated. However, in the interest of justice and fair play, we deem it just and appropriate to afford last opportunity to the assessee and remit both the matters back to the files of learned CIT(Appeals) for adjudication thereof afresh. We order accordingly. We 3 | P a g e further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the learned CIT(Appeals) for the expeditious and effective disposal. Assessee shall refrain from seeking any adjournment but for compelling and unavoidable reasons. Needless to say that learned CIT(Appeals) shall ensure the observance of the principles of natural justice. Both the appeals are liable to be allowed accordingly.
In the result, both the appeals are allowed for statistical purposes.
Order pronounced in the open court on 29.05.2025.