TRANSWEAVE SOLUTIONS PVT LTD.,CHENNAI vs. ACIT, CHENNAI

आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:

The appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-11, Chennai dated 20.03.2015 in for the assessment year

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2008-2009 passed under sections 143(3) and 250 of the Income Tax Act, 1961 (in short ‘’the Act’’).

The brief facts of the case are that the assessee is a Private 2.

Limited Company having offices in India, USA and Canada offering complete end to end training and certification in SAP IS (industry solution) with SAP India education. The assessee filed return of income on 27.09.2008 disclosing loss of (-)�16,01,837/-.

Subsequently, the Assessing Officer issued notices u/s.143(2) and 115 WE(2) of the Act dated 25.08.2009 followed by notice u/s.142(1) calling for furnishing of various details. In responses to above notices, the ld. Authorised Representative appeared from time to time and furnished the details and explained that training programme is conducted for the students and fees is collected depending upon the module of the course. The ld. Assessing Officer considered the information and verified the documents and completed the assessment u/s.143(3) of the Act dated 27.12.2010 by making disallowance u/s.43(b) for non payment of P.F contribution to the Government �1,03,473/- and also disallowance of service tax collected from the students but not remitted to the Government account u/s.43B(a) of the Act and further disallowed �10,04,921/- pertaining to the salaries paid to students cum employees who have worked to gain experience with the company and capitalization of partner edge programme fees

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�3,79,050/- and assessed total income at �4,21,428/- and raised the demand.

The assessee preferred an appeal against order 143(3) of 3. the Act with Commissioner of Income Tax (Appeals) on 31.01.2011 raising various grounds in respect of additions by the Assessing Officer.

Meanwhile the case was transferred from the Commissioner of Income Tax (Appeals)-I (erstwhile CIT(A)-III), Chennai as per the notification of the CCIT, Chennai-I, in CHE/Coord/112(Jursdn)/2012-13 dated 23.04.2013 and 26.04.2013 and notification of Principal CCIT, Tamilnadu in CHE/Coord/112(2) (JURSDN)/2014-15, Dated 15.11.2014. The ld. Commissioner of Income Tax (Appeals) passed order on 20.03.2015 with observation that the case was posted on various dates. Nobody has appeared and the assessee has neither sought an adjournment or filed any explanation nor submitted any documentary evidence to substantiate the case. Considering the information from the records of the Assessing Officer, the appeal was dismissed and sustained the additions made by the Assessing Officer relying on the decisions including co-ordinate bench decision in the case of M/s. Helios and Matheson Information Technology Ltd vs. ITO in dated 05.07.2011 and the ratio laid down in of CIT vs. Multiplan (India) Private Ltd 38 ITD 320 (Del) and further relied on the decision of Apex Court in the case of CIT vs. B.N.

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Bhattacharjee and another 10 CTR 354 were it was observed that the appeal means an ‘’effective appeal’’ and also expression prefer an appeal would mean ‘’effectively prosecuting an appeal’’ and adjudicated the appeal ex-parte.

Aggrieved by the order of the Commissioner of Income Tax 4.

(Appeals), the assessee filed an appeal alleging that the company has not received notice of posting nor any communication on various dates from Income Tax department. The ld.AR submitted that the appeal was heard after a period of four years from the date of filing on 31.01.2011 and pleaded for allowing of appeal. On the other hand, the ld.DR submitted that the assessee was not serious in perusing the case inspite of giving adequate opportunity of hearing on various dates and ld.CIT(A) was justified in dismissing the appeal.

We have heard the rival submissions of both the parties and 5. orders of the lower authorities and perused the material on record.

Without going into merits of the additions made by the Assessing Officer and the contentions raised in the grounds of appeal, we are of the opinion that the ld. CIT(A) being the first appellate authority, empowered to enhance the assessment, has to re-appreciate the material on record and pass a speaking order. It is pertained to mention that the case was transferred from Commissioner of Income Tax (A)-I to Commissioner of Income Tax (A)-11 and there was no ITA No.1291/Mds/2015 :- 5 -: communication to the assessee on this issue. Further the appeal was filed on 31.01.2011 whereas the exparte order was passed on 20.03.2015 after a period of four years. The ld.CIT(A) merely because the assessee failed to appear in hearing proceedings cannot confirm the Assessing Officer order. In the above facts, we set aside the order of Commissioner of Income Tax (Appeals) and the entire disputed issue is remitted back to the file of the CIT(A). The ld. CIT(A) shall provide adequate opportunity of being heard to the assessee and pass a speaking order by adjudicating the case on merits. If the assessee fails to avail the opportunity given by the Commissioner of Income Tax (Appeals) to present its case before him, the Commissioner of Income Tax (Appeals) is at liberty to decide the issue on merits in accordance with law.

In the result, the appeal of the assessee in ITA 6. No.1291/Mds/2015 is allowed for statistical purposes. Order pronounced on Friday, the 6th day of November, 2015, at Chennai.