VEERAJ CONSTRUCTION,NASHIK vs. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, NASHIK, NASHIK
What did the Tribunal hold?
The Tribunal held that the CIT(A)/NFAC erred in deciding the appeal ex-parte, especially as notices were sent to an email address not mentioned in the appeal memo, leading to the assessee's unawareness. The Tribunal set aside the ex-parte order.
What were the facts?
The assessee, a construction firm, filed its return of income. The Assessing Officer made additions to the total income, including a significant amount for the difference in closing and opening stock. The assessee appealed to the CIT(A)/NFAC, but the appeal was dismissed ex-parte due to the assessee's absence.
What were the issues?
Whether the CIT(A)/NFAC was justified in dismissing the appeal ex-parte without deciding on merits, and if the notices of hearing were properly served.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 26.12.2023 passed by LD CIT(A)/NFAC, Delhi for the assessment year 2017-18.
The appellant has raised the following grounds of appeal :- “1. The order passed is illegal, invalid and bad in law.
2. The Ld, AO erred on facts and circumstances of the case and in law in making addition of Rs. 1,34,11.152/- to the total income of the appellant towards difference in closing stock and opening stock.
The Ld. AO erred on facts and circumstances of the case and in law in making addition of Rs.10,058/- to the total income of the appellant towards interest on late payment of TDS.
4. The Ld. AO erred in passing the assessment order assessing total income at Rs.1,82.50,170/- 5. The learned Assessing Officer erred in charging interest and initiating penalty proceeding under section 270A of the I.T. Act, 1961. 6. The above grounds of appeal
are without prejudice and notwithstanding each other. Any consequential relief, to which the Appellant may be entitled under the law in pursuance of the aforesaid grounds of appeal, or otherwise, may be thus granted. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the above grounds of appeal, and the factual and legal arguments against the addition made by the Ld. AO at the time or before the course of appellate proceedings in interest of natural justice.”
3. The facts, in brief, are that the assessee is a partnership firm carrying on business of construction activity, filed its return of income on 27.10.2017 declaring total income of Rs.48,28,960/- for assessment year 2017-18. The case was selected for scrutiny under CASS. Notices u/s 143(2) & 142(1) were issued on 21-09-2018 & 07-08-2019 respectively. After considering the reply of the assessee, the AO made addition of Rs.1,34,11,152/- towards difference in opening & closing stock & vide order dated 26-12-2019 passed the assessment order determining total income at Rs.1,82,50,170/-.
Being aggrieved the assessee preferred an appeal before LD CIT(A)/NFAC. Since the assessee remained absent the appeal was dismissed vide order dated 26-12-2023 by LD CIT(A)/NFAC.
Being aggrieved with the ex-parte decision of ld. CIT(A)/NFAC, the assessee is in appeal before this Tribunal. 6. LD counsel of the assessee submitted before the bench that LD CIT(A)/NFAC was not justified in deciding the appeal ex-parte & the appellate order was required to be passed on merits of the case. It was further submitted that the assesse was unaware of notices of hearing since the notice was issued on email id which was not mentioned in Form 35 & due to this reason the hearing notice remained un-complied. A written submission is also furnished before the bench in support of grounds of appeal
. Under these circumstances, the counsel of the assessee requested before the bench to set-a-side the ex-parte order passed by LD CIT(A)/NFAC & restore the matter back to the file of LD CIT(A)/NFAC to decide the appeal on merits of the case after providing reasonable opportunity of hearing to the assesse.
7. On the other hand, LD DR supported the order passed by LD CIT(A)/NFAC.
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