GREEN BIO TECH ,HYDERABAD vs. INCOME TAX OFFICER, WARD-15(1), HYDERABAD
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Income Tax Appellate Tribunal, Hyderabad ‘B‘ Bench, Hyderabad
Before: Shri R.K. Panda, Vice- & Shri Laliet Kumar
ITA No 529 of 2023 Green Bio Tech Hyderabad
आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B‘ Bench, Hyderabad Before Shri R.K. Panda, Vice-President AND Shri Laliet Kumar, Judicial Member आ.अपी.सं /ITA No. 529/Hyd/2023 (िनधा�रण वष�/Assessment Year: 2018-19) Green Bio Tech Vs. Income Tax Officer Hyderabad Ward 15(1) PAN:AAIFG4254G Hyderabad (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Advocate T. Chaitanya Kumar राज� व �ारा/Revenue by:: Smt. Sheetal Sarin, DR सुनवाई की तारीख/Date of hearing: 18/01/2024 घोषणा की तारीख/Pronouncement: 18/01/2024 ORDER Per R.K. Panda, Vice-President This appeal filed by the assessee is directed against the ex-parte order dated of the learned CIT (A)-NFAC Delhi, relating to A.Y.2018-19.
Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the learned CIT (A) NFAC in confirming the penalty of Rs.22,78,444/- levied by the Assessing Officer u/s 270A of the Act.
Facts of the case, in brief, are that the assessee is a partnership firm carrying on the business of manufacturing and trading in bio agricultural products and filed its return of income on 11.10.2018 declaring total income of Rs.36,72,970/-. The Page 1 of 7
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Assessing Officer passed the order u/s 143(3) on 29.5.2021 determining the total income at Rs.74,02,698/-. During the course of assessement proceedings the Assessing Officer had noted that the assessee has under reported/misreported certain items for which the Assessing Officer had initiated penalty proceedings u/s 270A of the I.T. Act, 1961. Accordingly, notice was issued to the assessee asking it to explain as to why the penalty u/s 270A of the Act shall not be imposed. It was explained by the assessee that its targeted business area of operation is over Telangana, Andhra Pradesh, Karnataka & West Bengal States. The Assessing Officer observed that this does not necessitate the promotion of products abroad and that the expenditure related to foreign tour is incidental to the business expenditure. The Assessing Officer further noted that the assessee has claimed expenses of Rs.31,88,290/- under the head “Sales Promotion” as paid to “ Le Passage to India Tours & Travels Pvt. Ltd” on account of Russia Tour and that expenses of Rs.3,69,738/- under the head “Sales Promotion” has been paid to “Sri Sai Maruthi Travel” on account of Thailand Tour. Further various sales promotion expenses were paid in cash. Since the assessee failed to submit any documentary evidence to substantiate with evidence to the satisfaction such as name of the person who visited, purpose of visit, which entity visited by the person in Russia and Thailand and documentary evidence for meetings and countries etc., the Assessing Officer had disallowed all these expenses being in admissible. Therefore, penalty proceedings u/s 270A were initiated for under reporting of income which is in consequence of misreporting thereof. Further there was a violation of provisions of section 40A(3) for a sum of Rs.1,71,700/-. Considering the facts and circumstances of the case and rejecting the various explanation given by the assessee, Page 2 of 7
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the Assessing Officer levied penalty of Rs.22,78,444/- u/s 270A of the Act, the details of which are as under:
Since the assessee did not appear before the learned CIT (A) NFAC despite number of opportunities granted, the learned CIT (A) NFAC in the ex-parte order passed by him dismissed the appeal filed by the assessee and upheld the penalty levied by the Assessing Officer.
Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal by raising the following grounds:
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The learned Counsel for the assessee at the outset submitted that the learned CIT (A) NFAC had not granted proper opportunity to the assessee to substantiate its case. He submitted that given an opportunity the assessee is in a position to substantiate with evidence to the satisfaction of the learned CIT (A) NFAC. He accordingly submitted that in the interest of justice, the assessee should be given an opportunity to represent its case before the learned CIT (A) NFAC.
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ITA No 529 of 2023 Green Bio Tech Hyderabad
The learned DR, on the other hand, strongly opposed the arguments advanced by the assessee. Referring to the order of the learned CIT (A) NFAC, she submitted that the assessee was given number of opportunities to substantiate its case which the assessee did not avail of. She accordingly submitted that the order of the learned CIT (A) NFAC should be upheld.
We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both the sides. We find the assessee in the instant case filed the return of income on 11.10.2019 declaring total income of Rs.36,72,970/- and the case was selected for limited scrutiny under CASS. The assessment was completed u/s 143(3) of the Act determining the total income at Rs.74,02,698/-. We find the Assessing Officer on the basis of various additions made in the assessment order, initiated penalty proceedings u/s 270A of the Act for misreporting of income. Rejecting various explanations given by the assessee the Assessing Officer levied penalty of Rs.22,78,444/- u/s 270A of the Act. We find due to non- appearance before the learned CIT (A) NFAC despite three opportunities granted, the learned CIT (A) NFAC, following the decision of the Tribunal in the case of CIT vs. Multiplan India Pvt. Ltd (381 ITD 320), the decision of the Hon'ble M.P High Court in the case Tukojirao Holkar vs. CWT (223 ITR 480) and the decision of the Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharya (118 ITR 461) dismissed the appeal for want of prosecution. From the perusal of the order of the learned CIT (A) NFAC we find learned CIT (A) NFAC had issued notice on 17.05.2022, however, there was no compliance. On the next date of hearing on 6.7.2023, the assessee filed an application for Page 5 of 7
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adjournment and the matter was adjourned 23.07.2023 and again there was also non-compliance for which the learned CIT (A) NFAC dismissed the appeal filed by the assessee for want of prosecution. It is the submission of the learned Counsel for the assessee that given an opportunity in the interest of justice, the assessee is in a position to substantiate its case by producing the relevant details before the learned CIT (A) NFAC. Considering the totality of the facts of the case and in the interest of justice we deem it proper to restore the issue to the file of the learned CIT (A) NFAC with a direction to grant one final opportunity to the assessee to substantiate its case by filing the necessary documents and decide the issue as per fact and law. The assessee is also hereby directed to participate in the appeal proceedings before the learned CIT (A) NFAC by filing the requisite details without seeking any adjournment under any pretext failing which the learned CIT (A) NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the Open Court at the time of hearing itself i.e. on 18th January, 2024. Sd/- Sd/- (LALIET KUMAR) (R.K. PANDA) JUDICIAL MEMBER VICE-PRESIDENT
Hyderabad, dated 18th January, 2024 Vinodan/sps
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ITA No 529 of 2023 Green Bio Tech Hyderabad
Copy to: S.No Addresses 1 Green Bio Tech, H.No.3-6-195/B, Flat No.102, Gowri Apts, Urdu Hall Lane, Himayatnagar, Telangana 500029 2 Income Tax Officer Ward 15(1) IT Towers, AC Guards, Masab Tank,Hyderabad 500004 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order
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