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Facts
The assessee's appeal arose from an order of the CIT(A)-NFAC which dismissed the appeal in limine. The original assessment was framed ex-parte under section 144 of the Income Tax Act, 1961, with an addition of Rs.16,21,52,504/- as unexplained cash credit.
Held
The Tribunal noted that the assessment order was ex-parte and the CIT(A)-NFAC's order was also based on it without considering the merits. While the AO claimed to have given opportunities, the assessee stated they were not heard. In the interest of justice, the Tribunal felt the assessee should be given another opportunity.
Key Issues
Whether the lower authorities erred by not providing a reasonable opportunity of being heard to the assessee and by dismissing the appeal without considering the submissions on merit.
Sections Cited
144, 144B, 68, 115BBE, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R. RAGHUNATHA
Year: 2018-19 M/s. Gemini Arts (P) Ltd., The Income Tax Officer, (Represented by – Liquidator: Ms. Vs. Non-corporate Ward-10(6), Sripriya Kumar), Chennai. No.224A, (New 346/1), Avvai Shanmugam Salai, Gopalapuram, Chennai-600086. [PAN: AAACG 1181D] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथE की ओर से/ Appellant by : Shri Shrenik Chordia, C.A GHथE की ओर से /Respondent by : Shri V. Nandakumar, CIT सुनवाई की तारीख/Date of Hearing : 25.06.2024 घोषणा की तारीख /Date of Pronouncement : 28.08.2024 आदेश / O R D E R PER S.R. RAGHUNATHA, A.M : This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), (NFAC), Delhi [hereinafter “CIT(A)] in DIN & Order No.ITBA/NFAC/S/250/2023- 24/1060306304(1), dated 31.01.2024. The assessment was framed by the Income Tax Officer, National e.Assessment Centre, Delhi for the 1961 (hereinafter the ‘Act’), vide order dated 25.04.2021.
At the outset, the Ld. AR for the assessee stated that the issue in this appeal of assessee is as regards to the order of CIT(A)-NFAC dismissing the appeal in limine by confirming the action of A.O in computing income by making an addition of Rs.16,21,52,504/- as unexplained cash credit U/s.68 of the Act and taxed U/s.115BBE of the Act for the AY 2018-19, without appreciating the submissions made by the assessee or providing reasonable opportunity of being heard either by the AO or by the CIT(A). The ld. AR for the assessee first of all stated that the assessment was framed ex-parte u/s.144 of the Act and the CIT(A)-NFAC has not considered the written submissions filed by assessee dated 2012.2023 and 26.12.2023. The ld. AR took us through the assessment order and stated that the AO has treated the borrowings of the Company of Rs.16,21,52,504/- as unexplained cash credit U/s.68 of the Act and taxed U/s.115BBE of the Act. He stated that the AO passed this assessment order ex-parte dated 25/04/2021 without providing reasonable opportunity of being heard to the assessee and the CIT(A)-NFAC also confirmed the same by his order dated 31/01/2024 without considering the submissions of the assessee by dismissing the appeal in limine. Therefore, he requested for an orders of lower authorities be set aside and matter be remanded back to the file of the AO for fresh adjudication after allowing reasonable opportunity of being heard to the assessee.
When these facts were confronted to ld. CIT-DR, he vehemently contested and stated that the assessee as noted by AO, lot of opportunities have been provided and notice u/s.142(1) of the Act was also served but no response. Hence the AO has no other alternative except to frame assessment ex-parte u/s.144 of the Act i.e, best judgment assessment based on material available with him. As regards to the order of CIT(A)-NFAC, the ld. CIT-DR stated that the CIT(A)-NFAC has passed the appellate order, based on the Resolution Plan approval order of the Hon’ble NCLT, Chennai dated 11/08/2023, holding that till the completion of moratorium period or upon the revival of corporate debtor as per the resolution plan approved by the adjudicating authority, the appeal filed by the assessee is treated as dismissed in limine. Hence, he requested confirmation of order of CIT(A) and that of the AO.
We have heard rival contentions and gone through facts and circumstances of the case. We noted that the assessment order is on best judgment assessment u/s.144 of the Act and the AO has allowed cooperative. It is noted that the assessee has filed the details of the borrowings before the CIT(A)-NFAC. However, the CIT(A)-NFAC has dismissed the appeal in limine stating that the Resolution Plan approval order of the Hon’ble NCLT, Chennai dated 11/08/2023 has already been existing and hence, the moratorium period has commenced, without considering the issue on merit. Therefore, in the interest of justice, we feel that the assessment order is ex-parte and the order of CIT(A)-NFAC is also based on the same without calling for any details or remand report from the AO. Considering the facts and to compute real income, the assessee should be allowed one more opportunity before the AO. Hence, we set aside the order of CIT(A)- NFAC as well as that of the AO and remand the matter in entirety back to the file of the AO for fresh adjudication after allowing reasonable opportunity of being heard to the assessee. The assessee is also directed to cooperate with the AO and file all the necessary details as required as per law. In term of the above, the matter is remanded back to the file of AO for fresh adjudication after allowing reasonable opportunity of being heard to the assessee. Accordingly, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 28th August, 2024.