METRO HERITAGE PVT.LTD.,VADODARA vs. DY.CIT., CIRCLE-2(1)(2), VADODARA

The assessee-company filed its return of income for the A.Y. 2016-17 on 13-10-2016 declaring total income of Rs.17,97,090/-. The case was selected for the scrutiny under CASS. Notices under sections 143(2) and 142(1) of the Act were issued to the assessee but the assessee failed to furnish the details as required. Hence, the AO also issued a show cause notice to the assessee stating that why penalty u/s 271(1)(b) of the Act shall be levied for non-compliance. On failure to comply with the notice, an order of penalty u/s. 271(1)(b) of the Act was also passed by the AO. The AO observed that the assessee had submitted the details called for through online facility provided under E-proceedings. During the course of assessment proceedings, the AO observed that the assessee has not disclosed interest income of Rs.5,47,553/-. The AO asked to furnish the details to justify the claim of depreciation of Rs.26,96,496/- with proper evidence. As the assessee failed to furnish the details as asked for, the AO added interest of Rs.5,47,553/- under the head “income from other sources” and Rs.26,96,495/- as disallowance of depreciation. Additionally, the AO also asked the assessee to furnish the details of large share premium received during the year under consideration along with the detailed calculations u/s Rule 11U and 11UA and confirmations from each party. In response to which the assessee submitted that the shares were issued with premium as per the fair market value of equity shares calculated on the basis of last audited balance-sheet of the company as on 31-03-2014 which came to Rs.108.99 (approx. Rs.110 per share) and, therefore, the shares were issued at Rs.110/- per share. The AO concluded that the assessee has not calculated the value as per Rule 11UA of the I.T. Rules, 1962 and calculated Asst. Year : 2016-17

The assessee preferred an appeal before the Ld.CIT(A) on the grounds on which additions were made. The Ld.CIT(A) dismissed all the grounds of assessee and confirmed the addition on the basis of order of AO stating that the assessee remained non-compliant, and assessee failed to produce necessary evidence.

Aggrieved by the order of the Ld.CIT(A), the assessee in appeal before us with following grounds of appeal:

The Ld.Authorised Representative (AR) for the assessee stated that due to CORONA pandemic situation prevailed all over India, there were lot of disruptions in the day to day activities owing to which the first notice of the Ld.CIT(A) dated 23-12-2020 could not be complied with and subsequently due to devastating fire in the hotel building, the records maintained in the office of the assessee were wither destroyed or misplaced. He also stated that during F.Y. 2020-21 the consultant who was handling accounting and taxation work also left the work which deteriorated the record keeping of the company. Because of these reasons, the assessee could not comply with the notices of the Ld.CIT(A).

The Ld.AR filed an affidavit stating these facts and requested to restore the matter back to the Ld.CIT(A) as no proper opportunity of being heard was offered to the assessee even after seeking adjournment. Asst. Year : 2016-17

The Ld.Departmental Representative (DR), considering the facts, did not object to the request of the Ld.AR.

We have heard the rival parties, perused the material available on record. We have also noted that the Ld.AR filed an affidavit stating these facts and requested that the matter may be restored to the file of the Ld.CIT(A) as no proper opportunity for being heard was provided, despite seeking adjournments. We also noted that the Ld.AR has filed a paper-book containing many documents in support of his claim which need proper verification.

Upon careful consideration of the facts and the submissions made by the Ld.AR, it is observed that the assessee faced unprecedented disruptions due to the pandemic and the fire incident, significantly impacting its ability to comply with the Ld.CIT(A)'s proceedings. Furthermore, the Ld.CIT(A) appears not to have granted a fair opportunity for the assessee to present its case fully.

Given the assessee’s Affidavit and the paper-book containing supporting documents, it is evident that a proper verification of the evidence is necessary to ensure a fair adjudication of the matter. In the interest of justice, we deem it appropriate, without going into the merit of the case, to set aside the order of the Ld.CIT(A) and restore the matter to his file for fresh adjudication. The Ld.CIT(A) is directed to provide the assessee with an adequate opportunity to present all necessary evidences and explanations. The assessee is also directed to co-operate with the Metro Heritage Pvt.Ltd. vs. Dy.CIT Asst. Year : 2016-17

In result the appeal of the Assessee is treated as allowed for statistical purposes. Order pronounced in the Open Court on 1 Aug, 2024 at Ahmedabad. (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER

""यथ" / The Respondent. 3. संबं"धत आयकर आयु"त / Concerned CIT 4. आयकर आयु"त ( अपील ) / The CIT(A)-(NFAC), Delhi

"वभागीय ""त"न"ध , आयकर अपील"य अ"धकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड" फाईल /Guard file.