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Income Tax Appellate Tribunal, MUMBAI BENCHES “J”, MUMBAI
Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)
These two appeals have been preferred by the assessee against two orders dated 09/01/2015 passed by the Ld. CIT(Appeals)-33 Mumbai for the Asst. Year 2010-11 and 2011-12 respectively, whereby the Ld. CIT(A) dismissed both the appeals filed by the assessee against the assessment order u/s 144 of the Income Tax Act, 1961 (in short ‘the Act’). Since the issues involved in both the appeals are common, the same were clubbed, heard together and are being disposed of by this common order for the sake of convenience.
Brief facts of the case pertaining to the assessment year 2010-11 are that the assessee filed its return of income for the relevant assessment year declaring the total income of Rs. 58,25,240/-. The case was selected for scrutiny as there was a survey operation u/s 133A of the Act against the assessee during the previous year. In response to the notice issued u/s 142(2) and subsequent notice u/s 142(1) of the Act the assessee submitted certain details through its authorized representative (AR). Thereafter neither the assessee nor his AR appeared before the AO. Accordingly, the AO passed the assessment order u/s 144 of the Act, determining the total income of the assessee at Rs. 1,16,02,860/-. Aggrieved by the action of the AO the assessee preferred first appeal before the Ld. CIT(A).
3. The Ld. CIT(A), posted the case for hearing. On the first date of hearing the case was adjourned on the request of the assessee’s authorized representative. On the second date of hearing again adjournment was sought by the assessee. The Ld. CIT(A) adjourned the case and granted last opportunity to the assessee to present its appeal. However, on the appointed date none appeared on behalf of the assessee. Again a fresh notice was issued but neither the assessee nor his authorized representative appeared before the Ld. CIT(A). Accordingly, the Ld. CIT(A) proceeded ex parte against the assessee observing as under:-
“From the above sequence of non compliance and the non seriousness of the appellant in the matter of present appeal and from such conduct of the appellant, it appears that they are not interested in prosecuting the appeal. Therefore this appeal is being decided on merits as per the material available on record.”
The assessee is in appeal before the Tribunal on the following effective grounds:- “1. Under the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals), (Ld. CIT(A)) erred in making observation and there upon concluding that the appellant is not interested in prosecuting the appeal of the Appellant.
2. Under the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals), (Ld. CIT(A)) erred in holding the view that the appellant is not vigilant and sleeps upon their rights.
Under the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals), (Ld. CIT(A)) erred in making observation and there upon concluding that the appellant has not effectively pursued the appeal after filing the appeal.
4. Under the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals), (Ld. CIT(A)) erred in upholding the addition made by the Assessing Officer and dismissing the appeal of the appellant.”
At the outset the Ld. Counsel for the assessee submitted that both the authorities below have passed their orders without hearing the assessee. Since, the AO had passed the assessment order u/s144 of the Act, the Ld, CIT(A) ought to have heard the assessee before passing the impugned order. The Ld. Counsel further submitted that the assessee may be granted an opportunity to present its case before the AO.
On the other hand the Ld. CIT(A) relying on the order passed by thy Ld. CIT(A) submitted that since the assessee failed to present its case before the authorities below despite sufficient opportunity granted to it, there is no merit in the contention of the assessee, therefore, the appeal is liable to be set aside.
We have heard the rival submissions and perused the orders passed by the authorities below. We notice that the AO has not mentioned the details of notices issued/served upon the assessee to ensure its presence during assessment proceedings. In the absence of the said details it cannot be concluded that non appearance of the assessee was a deliberately act. So far as the appellate order is concerned, though the Ld. CIT(A) has mentioned the details of date of hearings and notices issued/ served upon the appellant to justify the ex parte proceedings yet in our considered view, since the assessment order has been passed on the basis of material on record without hearing the assessee, the assessee should get an opportunity to present his case before the assessing officer in the interest of justice and fair play. Keeping in view the cardinal principles of natural justice we set aside the impugned order passed by the Ld. CIT(A) and restore the appeal to the file of AO with the direction to pass the assessment order afresh after affording reasonable opportunity of being heard to the assessee. We also direct the assessee not to seek any adjournment on frivolous grounds during the assessment proceedings.
ITA No 2357/MUM/2016, AY. 2011-12
The facts and the grounds of appeal of this appeal are identical to the appeal of the assessee for the assessment year 2010-11 aforesaid (except the amount involved) and since we have set aside the impugned order passed by the Ld. CIT(A) the appeal pertaining to the assessment year 2010-11 and restored the matter to the file of AO with the direction to pass the assessment order afresh, we also set aside the impugned order passed by the Ld. CIT(A) in this case and restore the matter to the file of AO for passing assessment order afresh after hearing the assessee. In the result, the assessee’s appeals for Asst. year 2010-11 & 2011-12 are allowed for statistical purposes.