HARDAYAL MILK PRODUCTS PRIVATE LIMITED,SHIKOHABAD vs. DCIT, CIRCLE-2(2)(1), FIROZABAD, FIROZABAD

Brief facts of the case: The assessee is a company engaged in the business of processing of Milk, manufacturing of Milk Products such as Pasteurized Milk, Ghee, butter etc. The manufacturing plant of the assessee company is located at Etah Road, Shikohabad, Firozabad. In this case, the return of income was filed in ITR-6 on 30.09.2015 under e-filing, declaring total income at Rs1,18,92,250/-. The case was selected for scrutiny under compulsory selection guidelines of CBDT and statutory notice u/s 143(2) was issued and served on the assessee. Notices u/s 142(1) and questionnaire was subsequently issued and served on the assessee. The Assessing Officer for the reasons stated in the assessment order rejected the books of account of the assessee by invoking the provisions of section 145(3) of the Act and considering the comparative profits by others in similar line of business which was in the range of 1.0 to 1.50% adopted the net profit @ 1.25% of the total turnover and estimated the net profit at Rs.2,32,64,681/-. Further, the Assessing Officer added a sum of Rs.2,79,729/- on account of depreciation and passed the assessment order u/s 143(3) of the Act on 30.12.2017 accordingly.

Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The ld. CIT(A) dismissed the appeal of the assessee by observing that the assessee miserably failed to file any compliance and neither the assessee nor its AR filed any written submission or filed any adjournment letter apart from what was stated earlier on page 3 of the order of the Ld. CIT(A). The ld. CIT(A), thus, held that since the assessee miserably failed to substantiate the grounds taken by him with supporting documents, the action of the Assessing Officer was justified.

Aggrieved with the said order, the assessee is in appeal before us.

The Ld. AR submitted that the ld. CIT(A) disregarded the principle of natural justice and genuineness of reasons for seeking adjournment before him and passed an ex-parte order and therefore the matter may be set- aside to the file of the ld. CIT(A) to give an opportunity to the assessee to represent his case. In this regard, the ld. AR referred to the ground no.1 of the appeal which is reproduced as under:-

The ld. DR supported the orders of the authorities below.

We have heard both the parties and perused the material available on record. The assessee’s adjournment letter dated 17.08.2024 as referred on page 3 of the order of the Ld. CIT(A) is reproduced as under:-

On perusal of the said letter of the assessee, we find that there was a genuine reason for seeking adjournment and its difficulty in appearing before the Ld. CIT(A). Therefore, the order of the Ld. CIT(A) dismissing the appeal of the assessee ex-parte cannot be sustained and the same is set- aside to the file of the ld. CIT(A) to pass an order afresh after giving a reasonable opportunity of being heard to the assessee. The assessee is also directed to represent its case before the ld. CIT(A). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.