UNITY FORGE PRIVATE LIMITED,KANCHIPURAM vs. ITO, CORPORATE CIRCLE 3(1), CHENNAI, CHENNAI

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ITA 2177/CHNY/2024Status: DisposedITAT Chennai21 October 2024AY 2021-224 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that both the AO and the CIT(A) passed orders without considering the assessee's reply and without deciding the case on merits, respectively. The Tribunal found that the AO made a disallowance of Rs. 24,44,170/- without considering the assessee's reply. The CIT(A) dismissed the appeal ex-parte. In adherence to the principles of natural justice, the Tribunal opined that the assessee should be granted another opportunity to present its case before the AO. Consequently, the Tribunal set aside the orders of the lower authorities and remitted the matter back to the AO for adjudication afresh, after providing a reasonable opportunity to the assessee. The assessee was also directed to appear before the AO on the date of hearing without fail. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, M/s. Unity Forge Pvt. Ltd., is in appeal against the order of the Commissioner of Income Tax (NFAC), Delhi, dated 18.06.2024. This order confirmed an ex-parte assessment order passed by the Assessing Officer (AO) under Section 143(3) read with Section 144B of the Income Tax Act, 1961, on 21.12.2022. The AO had made an addition of Rs. 24,44,170/- towards miscellaneous expenses without awaiting the assessee's reply to a show cause notice. The assessee had filed its return for Assessment Year 2021-22 declaring a loss of Rs. 4,41,59,301/-. The CIT(A) confirmed the addition without adjudicating on the merits of the case.

What were the issues?

1. Whether the lower authorities erred in passing ex-parte orders without providing the assessee with adequate opportunity to present its case, thereby violating principles of natural justice? Assessee's Contention: The assessee argued that the AO issued a show cause notice on 07.12.2022 and the assessee requested an adjournment until 24.12.2022. However, the AO passed the assessment order on 21.12.2022 without waiting for the assessee's response. The assessee further contended that the CIT(A) also passed an ex-parte order without providing an opportunity for a hearing and deciding the case on merits. The assessee prayed for the matter to be restored to the AO. Revenue's Contention: The Revenue's representative relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI MAHAVIR SINGH & SHRI JAGADISH

Pronounced: 21.10.2024

आदेश / O R D E R

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee is against the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] date18.06.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s 144B of the Income Tax Act, 1961 (hereinafter “the Act”) on 21.12.2022.

against the order of Ld. CIT(A) in confirming the ex-parte order passed by A.O.

3.

The assessee-company has filed return of income declaring loss of Rs. 4,41,59,301/-. The A.O has passed order u/s. 143(3) of the Act making addition of miscellaneous expenses of Rs.24,44,170/- without awaiting reply of show cause notice. On appeal, the Ld. CIT(A) has confirmed the addition without going into merits of the case relying on the order of ITAT, Delhi in the case of CIT vs. Multiplan India Pvt. Ltd. reported in 38 ITD 320 (Delhi).

4.

The Ld. Authorized Representative (A.R) of the assessee before us has submitted that the A.O has issued show cause notice on 07.12.2022 and the assessee sought adjournment till 24.12.2022.

1.

However, the A.O has passed order on 21.12.2022 without waiting for assessee’s response. The Ld. AR has submitted that the Ld. CIT(A) has also passed order ex-parte without providing opportunity and deciding the case on merits. Therefore, prayed to restore the matter back to the A.O.

5.

The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities.

1.

3 -: 6. We have heard the rival submissions, and perused the materials available on record. On perusal of the order of the A.O, we find that the order has been passed without considering reply of the assessee while making disallowance of Rs. 24,44,170/-. The Ld. CIT(A) has not decided the case on merit and dismissed the appeal ex-parte. We are of the opinion that keeping in view the principles of natural justice, the assessee be provided with another opportunity of hearing to substantiate his case before the A.O. Accordingly, we set aside the orders passed by the lower authorities and remit the matter back to the file of the A.O to adjudicate this appeal afresh in accordance with law, after giving reasonable opportunity to the assessee. We also direct the assessee to appear before the A.O on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 21st October, 2024.

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