What did the Tribunal hold?

The Tribunal found that the assessee was not given a proper opportunity to present its case. Both parties agreed that the matter should be restored to the AO for a fresh assessment.

The assessee filed an appeal against an ex-parte assessment order passed by the AO, while the Revenue appealed the CIT(A)'s direction to adopt an average GP rate. The assessee argued it was not given a proper opportunity to present its case, and an application for additional evidence was rejected.

What were the issues?

Whether the ex-parte assessment order passed by the AO was valid due to lack of proper opportunity to the assessee. Whether the CIT(A) erred in directing the AO to adopt an average GP rate.

Procyon Offshore Services P.Ltd (… vs ACIT | ITAT Mumbai 2016

Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI SANJAY GARG & SHRI RAMIT KOCHAR

For Appellant: Shri M. Subramanian, A.R

For Respondent: Dr. S. Pandian, D.R

Hearing: 30.03.2016Pronounced: 30.03.2016

Per Sanjay Garg, Judicial Member:

The present are cross appeals one by the assessee and the other by the Revenue against the order dated 21.04.2010 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2007-08.

2 M/s. Procyon Offshore Services Pvt. Ltd., (Now known as “Dolphin Offshore Shipping Ltd.) 2. The assessee in its appeal has agitated the confirmation by the Ld. CIT(A) of the action of the Assessing Officer (hereinafter referred to as the AO) in passing the ex-parte assessment order under section 144 of the Act; whereas the Revenue has agitated the action of the Ld. CIT(A) in directing the AO to adopt average GP rate as against disallowance of entire expenditure made by the AO.

The Ld. A.R. of the assessee has contended that the AO, in this case, has passed the order ex-parte under section 144 of the Act without giving proper opportunity to the assessee to present its case. He has done so because the assessment was going time barred. He has further invited our attention to the impugned order of the Ld. CIT(A) to show that this plea was also taken before the Ld. CIT(A) and the Ld. CIT(A) had also called for a remand report in this respect. The Ld. A.R. has further invited our attention to para 5.3 of the impugned order and has contended that even the assessee before the Ld. CIT(A) had moved an application under rule 46A to produce additional evidences in support of its claim but the same has been rejected by Ld. CIT(A). He, therefore, has contended that the assessee was in fact not given proper opportunity to represent its case that the ex-parte assessment order passed by the AO under section 144 of the Act is liable to be set aside.

We find that the Department has also agitated the action of the Ld. CIT(A) in adopting a particular methodology i.e. average GP rate of earlier years in framing the assessment in question. At this stage, both the Ld. Representatives of the parties have submitted that in this case the matter should be restored to the file of the AO for assessment afresh. After considering the submissions of the Ld. Representatives of the parties, we are of the view that the interest of justice will be well served if the matter is restored to the file of the AO for assessment afresh. Needless to say that the AO will give proper

3 M/s. Procyon Offshore Services Pvt. Ltd., (Now known as “Dolphin Offshore Shipping Ltd.) opportunity to the assessee to produce the necessary evidences and details and then pass a speaking order.

With the above observations both the above titled appeals of the Revenue as well as of the assessee are treated as allowed for statistical purposes.

Order pronounced in the open court on 30.03.2016.

PROCYON OFFSHORE SERVICES P.LTD ( NOW KNOWN AS DOLPHIN OFFSHORE SHIPPING LTD),MUMBAI vs. ASST CIT 5(1), MUMBAI

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