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Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI MAKARAND V. MAHADEOKAR
"ी िस"ाथ" नौिटयाल, "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम$। ] ] BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं / Year : 2017-18 Amjay Medimax India The Dy.CIT बनाम/ Pvt.Ltd. Circle-1(1)(1) v/s. 4th Floor, Medi Max House Ahmedabad - 380 015 Opp.Karnavati Hospital Ellisbridge Ahmedabad – 380 006 "थायी लेखा सं./PAN: AABCA 8241 R (अपीलाथ%/ Appellant) (&' यथ%/ Respondent) Assessee by : Shri Aseem Thakkar, AR Revenue by : Shri V. Nandakumar, CIT-DR सुनवाई की तारीख/Date of Hearing : 03/12/2024 घोषणा की तारीख /Date of Pronouncement: 09/12/2024 आदेश/O R D E R
PER MAKARAND V. MAHADEOKAR, AM:
This appeal by the assessee is directed against the order dated 23/02/2024, passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”], for the Assessment Year (A.Y.) 2017-18. The impugned order of the CIT(A) arose out of the assessment order passed by the Assessing Amjay Medimax India Pvt.Ltd. vs. DCIT Asst. Year : 2017-18 Officer [hereinafter referred to as “AO”] under section 143(3) of the Act, 1961, dated 09/12/2019. Facts of the Case:
2. The assessee filed its original return of income on 31/10/2017, declaring total income of Rs.60,40,300/- and subsequently, filed a revised return on 05/06/2018, declaring the same income. The case was selected for scrutiny and a notice under section 143(2) of the Act was issued. After completing the assessment proceedings, the AO passed an order under section 143(3) of the Act determining the total income at Rs.7,92,42,171/-. The AO made the following additions and disallowances: • Addition under section 68 of the Act (unexplained cash credits): Rs.2,34,90,000/-. • Disallowance under section 14A r.w. Rule 8D: Rs.25,41,178/-. Short-term capital loss treated as a colourable device: Rs.33,60,000/-. • Disallowance under section 37(1): Rs.4,36,87,857/-.
• Disallowance for delayed payment of employees’ contribution to PF/ESI: Rs.1,22,836/-.
Aggrieved by the assessment order, the assessee filed an appeal before the CIT(A). Multiple notices were issued by the CIT(A) under section 250 of the Act on 13/01/2021, 17/10/2023, 17/11/2023 and 12/02/2024, requiring the assessee to furnish submissions in support of the grounds of appeal
. All the notices were sent on the e-mail address provided in the Form
35. However, no submissions were filed by the assessee except for one adjournment request on 23/10/2023. The CIT(A) dismissed the appeal Amjay Medimax India Pvt.Ltd. vs. DCIT Asst. Year : 2017-18 ex-parte for non-prosecution and confirmed the additions and disallowances made by the AO without adjudicating the grounds of appeal on merits.
Aggrieved by the order of the CIT(A), the assessee is in appeal before us with following grounds of appeal:
1. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in passing an Ex Parte Order dismissing the appeal without providing reasonable opportunity of being heard to the appellant Hence the same being against the principles of natural justice and equity requires to be quashed.
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in dismissing the appeal on the ground of non- prosecution and not adjudicating any of the grounds of appeal raised on its merits.
3. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the addition of Rs.2,34,90,000/- as alleged unexplained cash credits u/s.68 of the I. T. Act, 1961 treating the unsecured loans received by the appellant from 1. Tulsi Trimpex P. Ltd. Rs.64 Lakh, 2. Neuromed Imaging Centre Rs.1.69 Cr. and 3. Balaji Estate Rs.1.90 Lakh.
4. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing officer in making disallowance of Rs.25,41,178/- u/s.14A of the I.T.Act, 1961 r. w. Rule 8D of the Rules.
5. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing officer computing book profit under MAT at loss of Rs.3,96,19,397/- as against loss of Rs.4,21,60,575/-declared by the appellant in the return of income filed.
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing officer in making disallowance of Rs.25,41,178/- u/s.14A of the I.T.Act,1961 r. w. Rule 8D of the Rules as per clause (f) to explanation 1 to section 115JB(1) of the Act..
7. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing officer in making disallowance of Rs.33.60.,000/- Treating the short term capital loss in Amjay Medimax India Pvt.Ltd. vs. DCIT Asst. Year : 2017-18 respect of transaction of purchase and sale of shares of Sona Alloys Pvt. Ltd. as colourable device to reduce the tax liability. He further erred in initiating penalty proceedings u/s.270A of the Act for misreporting of income under clause (a) and (c) of sub section 9.
8. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing officer in making disallowance of expenses of Rs.4,36,87,857/- comprising of Radiology Consultancy Charges of Rs.1,37,51,743/-, Transportation charges of Rs.2,41,09,408/-, Claim for Short Material of Rs.47,83,726/- and Travelling Expenses-Foreign of Rs.10,42,980/-holding the same as not incurred wholly and exclusively for the purpose of business u/s.37(1) of the Act. 9. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing officer in making addition of Rs.1,22,836/- for the alleged late payment of employees contribution to Provident Fund and ESI u/s.2(24)(x) r.w.s.36(1)(va) of the I.T.Act, 1961. 10. The appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.
During the course of hearing before us, the Authorized Representative (AR) of the assessee stated the CIT(A) has not decided the issue on merit and has simply dismissed the appeal and requested to remand back the matter to CIT(A). The Departmental Representative (DR) pointed out the consistent non-compliance by the assessee and therefore argued to impose the cost on the assessee. However, the DR agreed that the issue is required to be decided on merit.
We have heard the rival parties and perused the material available on records. It is observed that the CIT(A) dismissed the appeal solely on the ground of non-prosecution. There is no doubt that the CIT(A) failed to adjudicate the issues raised in the grounds of appeal and did not examine the material available on record. Such dismissal without deciding the appeal on Amjay Medimax India Pvt.Ltd. vs. DCIT Asst. Year : 2017-18 merits is contrary to the principles of natural justice. It is settled law that it is the duty of the appellate authority to dispose of an appeal on merits after considering the material on record, even if the appellant fails to appear.
7.1. However, it is a fundamental duty of the assessee to diligently pursue the appeal and comply with the notices and proceedings initiated by the revenue authorities. The framework of the Act, and the e-proceedings system rely heavily on the cooperation and active participation of the taxpayer. In the present case, the assessee failed to demonstrate even a minimal level of responsibility in monitoring the e-filing portal for updates and notices related to its appeal. Despite the issuance of multiple notices under section 250 of the Act by the CIT(A), no substantive response or explanation was submitted except for a solitary adjournment request dated 23/10/2023. 7.2. The assessee’s contention of non-receipt of notices cannot absolve it of its duty to follow up on its appeal. With the advent of the faceless appeal scheme and digital advancements, the e-filing portal serves as a centralized platform for communication. It is incumbent upon the assessee to check the portal regularly and remain vigilant about pending proceedings. The failure of the assessee to take any initiative reflects gross negligence and an indifference that is unacceptable, particularly when the appeal involves significant additions and disallowances amounting to crores of rupees.
7.3. It is pertinent to note that the principles of natural justice operate both ways—while the revenue authorities are required to provide a reasonable opportunity of being heard, the taxpayer is equally obligated to co-operate with the authorities and utilize the opportunities extended. In the present Amjay Medimax India Pvt.Ltd. vs. DCIT Asst. Year : 2017-18 case, despite receiving adequate opportunities, the assessee displayed a casual approach and indifference, which not only delayed the appellate proceedings but also burdened the judicial system.
7.4. Such conduct cannot be condoned. Taxpayers are expected to act responsibly, especially when significant sums and complex issues are under dispute. The inability or unwillingness to pursue the matter actively not only disrupts the judicial process but also undermines the efficient functioning of the appellate mechanism.
7.5. In light of the above, the levy of costs is fully justified. The cost serves as a necessary deterrent to ensure that taxpayers act with due diligence in pursuing their appeals and respecting the timelines and processes laid down under the law. It also emphasizes the principle that while justice must be ensured, the system cannot cater to indolence or negligence on the part of the assessee.
7.6. In view of the above, we set aside the ex-parte order of the CIT(A) and restore the matter to his file for fresh adjudication. The CIT(A) is directed to decide the appeal on merits after providing a reasonable opportunity of being heard to the assessee.
7.7. Considering the assessee’s failure to monitor the e-filing portal and lack of diligence in pursuing the appeal, we impose a cost of Rs.5,000/- on the assessee. The cost shall be deposited to the credit of the Government within 30 days of the receipt of this order, and proof of payment shall be submitted before the CIT(A). Amjay Medimax India Pvt.Ltd. vs. DCIT Asst. Year : 2017-18
In the result, the appeal of the assessee is allowed for statistical purposes, subject to the levy of costs as specified above.