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Income Tax Appellate Tribunal, KOLKATA BENCH ‘C’, KOLKATA
Before: Shri N.V.Vasudevan, J.M. &Dr.A.L.Saini, A.M.)
ORDER Per Dr. A.L.Saini, A.M.:
The captioned appeal filed by the assessee pertaining to assessment year 2010-11, is directed against the order passed by the Commissioner of Income-tax (Appeals)-2, Kolkata in Appeal No. 1250/CIT(A)-2/2014-15, dated 05-02-2016, which in turn arises out of an order passed by the Assessing Officer u/s. 143(3) of the Income-Tax Act, 1961 (in short, the Act),dated 23-03-2013.
The facts of the case are stated in brief. The assessee company furnished its return of income for the assessment year 2010-11 by e-filing on 27-09-2010 for a total income of Rs.2,80,147/-. The return was duly processed u/s. 143(1). M/s. Melcon (Vizag)Pvt. Ltd 1 Subsequently, the case was selected for scrutiny u/s. 143(3) of the Act. The Assessing Officer has completed the assessment U/s 143(3) of the Act, by making various additions on 23-03-2013. The Assessing Officer disallowed rent charges at Rs.1,80,000/- and repair charges at Rs.32,591/-, holding that the house was used exclusively for director’s residence.
Aggrieved from the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals)-2, Kolkata, who has also confirmed the action of the Assessing Officer by observing the following:- “2. The appeal was fixed for hearing first on 10/12/2015. The AR of the assessee filed a letter on 10/12/2015, seeking adjournment of the hearing in the 2nd week of January, 2016. Accordingly, hearing was re-fixed on 12/01/2016 and duly acknowledged. Nobody attended or filed any written submission till date. It is thus presumed that the assessee is not interested to pursue the appeal and has nothing to say in defence of the grounds taken. The AO made the addition of Rs.2,12,591/- by disallowing rent charges and repair charges after due deliberation. There is nothing on record to controvert the decision of the AO. Therefore, the addition of Rs.2,12,591/- is confirmed.“
4. Not being satisfied with the order of the Commissioner of Income-tax (Appeals), the assessee is in further appeal before us and has taken the following grounds of appeal:- l. That in view of what is stated in Para 6 under the head 'FACTS OF THECASE' annexed hereto and forming part hereof, the Ld. CIT(A)- 2, Kol has erred in law as well as on facts in dismissing the Appeal filed by your Appellant before him on the alleged ground of non- appearance or non-filing of written submission by your Appellant on the date fixed by him for hearing or upto the date of his order dated 05.02.2016 and therefore confirming the additions erroneously, unjustifiably and or illegally made by the Ld. AO. M/s. Melcon (Vizag)Pvt. Ltd 1
2. That the Ld. AO has erred in law as well as on facts by adding back / disallowing and the Ld. CIT(A) - 2, Kol has also erred in law as well as on facts by upholding/ sustaining on the alleged ground of the said addition of Rs. 1,80,000/-- under the head Rent for the premises wholly, exclusively and or genuinely used by your appellant company for the stay of its staff and visitors whether in transit or otherwise for the business purposes. The same should therefore be allowed in full.
3. That the Ld. AO has erred in law as well as on facts by adding back and or disallowing erroneously, illegally and or unjustifiably on the alleged ground and on estimate the proportionate maintenance charges of Rs. 32,591/- for the premises for which rent of Rs. 1,80,000/- as aforesaid was paid and the Ld. CIT(A) - 2, Kol has also erred in law as well as on facts by upholding/ sustaining the same on the alleged ground. The same should have been and therefore should be allowed in full.
That both the impugned orders namely the Assessment Order as well as the Appellate order are without application of mind and or otherwise vexatious, arbitrary, based on surmises, guesses and conjectures, illogical and or unjustified and therefore illegal and/or void ab-initio and are liable to be quashed, set aside, cancelled, rescinded, annulled, amended, altered, revised, modified and/or otherwise nullified.”
First ground of appeal relates to non appearance or non filing of written submission by the assessee before the Commissioner of Income-tax (Appeals), therefore, he passed the ex-parte order without the presence of the assessee.
6. The ld AR for the assessee has submitted that, the solitary grievance of the assessee in this case is that the ld CIT (A) has passed the order without taking into account the written submissions filed by the assessee. The order of the ld CIT (A) is dated 05/02/2016. The assessee filed its written submissions before the ld.CIT(A), on dated 12/01/2016. The assessee has adduced the proof before us that written M/s. Melcon (Vizag)Pvt. Ltd 1 submissions were filed by him before ld CIT(A), well in advance on dated 12/01/2016 which have not been considered by him therefore the action of the ld.CIT(A) is against the principle of natural justice.
6.1 The ld.AR for the assessee has further submitted that the appeal was fixed for hearing on 10-12-2015. Then the ld.AR of the assessee filed a letter on 10-12-2015 seeking adjournment of the hearing in the 2nd of January, 2016. Accordingly, hearing was re-fixed on 12-01-2016. The assessee filed written submission before the Commissioner of Income-tax (Appeals) on 12-01-2016,but the Commissioner of Income-tax (Appeals) did not consider the submissions of the assessee at all, therefore it is a gross negligence on the part of the ld CIT(A).
The ld.DR for the revenue has primarily reiterated the stand as taken by the Commissioner of Income-tax (Appeals), which we have already noted in our earlier para of this order, and is not being repeated for the sake of brevity.
Having heard the rival submissions, we are of the view that there is merit in the submissions of the assessee, as the propositions canvassed by the ld.AR for the assessee are supported by the facts narrated above, it is very much clear that the assessee has submitted written submission, but the Commissioner of Income-tax (Appeals) has ignored it, which is tantamount to unjustice and against the principle of natural justice. Therefore, we are of the view that the issue involved in this appeal requires fresh examination at the end of the Commissioner of Income-tax (Appeals). Accordingly, we set aside the impugned order of the Commissioner of Income-tax (Appeals) and restore this issue to his file with the direction to decide the issue afresh after giving proper opportunity of being heard to the assessee. In view of the above M/s. Melcon (Vizag)Pvt. Ltd 1 conclusion on the preliminary issue, the other grounds challenging additions made on merits are not taken into consideration.
In the result, the appeal filed by the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 23-09 -2016