RUSAN PHARMA LTD,MUMBAI vs. DCIT 9(3), MUMBAI

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ITA 3167/MUM/2013Status: DisposedITAT Mumbai23 March 2016AY 2007-085 pages
AI SummaryRemanded

What did the Tribunal hold?

The ITAT noted that the CIT(A) had passed an ex parte order without the assessee being present to substantiate their grounds. Therefore, the Tribunal set aside the CIT(A)'s order and restored the case for a fresh decision after providing the assessee an opportunity to be heard.

What were the facts?

The assessee filed an appeal against a penalty order of Rs. 66,01,074/- levied under section 271(1)(c). The penalty was based on additions made during the assessment for AY 2007-08, including exclusion of income, disallowance of expenses, and addition of unrealized export proceeds.

What were the issues?

Whether the CIT(A) erred in passing an ex parte order without providing the assessee an adequate opportunity to be heard, violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI B.R. BASKARAN, AM & SHRI SANDEEP GOSAIN, JM

For Appellant: Shri Uday B. Jakke

आदेश / O R D E R Per Sandeep Gosain, J. M.: The Present Appeal has been filed by the Assessee against the order of Commissioner of Income Tax (Appeals)- 20, dated 21.02.2013 for A.Y. 2007-08 thereby upholding the order of penalty passed by DCIT-9(3), on the following grounds of appeal.

1.

(A.Y. 2007-08) Rusan Pharma Ltd. vs. DCIT 1. “In the facts and circumstances of the case and in law the Learned

CIT(Appeals) erred in confirming the Penalty levied by A.O of Rs.66,01,074/- under section 271(1)(c) of the Income Tax Act 1961. 2. Reasons given by learned CIT (Appeals) for confirming the Penalty levied by A.O. of Rs.66,01,074/- under section 271 (1)(c) of the Income Tax Act 1961, are wrong insufficient and contrary to the facts and evidence on record. 3. The appellant craves leave to add, amend, alter, modify or omit any of the aforesaid Grounds of Appeal as occasion may arise of demand.”

2. The brief facts of the case are that the order u/s 143(3) of the Income Tax Act,1961 was passed on 18.12.2009 determining total income at Rs.59,71,190/- against the loss of Rs.1,83,48,646/- as per the return of income filed by the assessee. During the course of assessment proceeding, following additions/disallowances were made on which penalty proceedings were initiated by serving statutory notice. The details of which are as under:

Sr. Nature of disallowances/additions Amount involved No. (in Rs.) 01 Exclusion of other income from profits exemp 83,21,090 u/s10A & 10B 02 Disallowance of expenses relating to Dehradun 11,06,715 Unit. 03 Addition of unrealized export proceeds 1,01,83,229 TOTAL 1,96,11,034

(A.Y. 2007-08) Rusan Pharma Ltd. vs. DCIT Although appeal was filed before CIT(A) but after minor variations CIT(A) upheld the order of assessment passed by AO. On the basis of additions made by AO in assessment order passed u/s 143(3) penalty proceedings were initiated and after considering the reply of assessee penalty order was passed thereby levying penalty of Rs.66,01,074/- .

3.

Aggrieved by the order of Penalty passed by DCIT, assessee filed the appeal before CIT(A) and the CIT(A) after considering the case of the assessee had partly allowed the appeal vide its order dated 21.02.2013 restricting the quantum of penalty.

4.

Aggrieved by the order of CIT(A), the assessee filed the present appeal before us on the grounds mentioned herein above.

5.

At the very outset ld. AR representing the assessee argued on the merits of the case while challenging the impugned order passed by the CIT(A) however on perusal of the impugned order passed by the CIT(A), we noticed that the order passed by the CIT(A) was passed ex parte in the absence of the assessee and in this regard relevant para is reproduced below:

(A.Y. 2007-08) Rusan Pharma Ltd. vs. DCIT “After receipt of appeal case was fixed for hearing by issue of Notice

No.CIT (A)20/DCIT-9(3)/IT-190/12-13 dated 13.12.2012 on 07.01.2013 at 10.45 AM. This notice was served upon the appellant through RPAD and acknowledgement is kept on record. But it is found that inspite of receipt of notice appellant does not want to represent the case or substantiate the grounds of appeal, therefore, it is taken on record that appellant does not want to prosecute the appeal hence deserves dismissal. However, appeal is decided on merit.”

6.

After analyzing the afore mentioned order we found that nobody appeared on behalf of assessee before the CIT(A) to substantiate the grounds of appeal and therefore, the CIT(A) taken it on record that the assessee do not want to prosecute the appeal and therefore decided the appeal on merits ex parte.

7. Since before us, ld. AR has challenged the impugned order passed by the CIT(A) therefore in our considered view while considering the principles of natural justice set aside the impugned order and restore the case back to the file of the CIT(A) with a direction to pass afresh order after providing opportunity of being heard to the assessee.

(A.Y. 2007-08) Rusan Pharma Ltd. vs. DCIT 8. In the result, the Assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on 23rd March, 2016

Sd/- Sd/- (B.R. Baskaran) (Sandeep Gosain) लेखा सद�य / Accountant Member �या�यक सद�य / Judicial Member मुंबई Mumbai; �दनांक Dated :23.03.2016 Ps. Ashwini आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. आयकर आयु�त(अपील) / The CIT(A) 4. आयकर आयु�त / CIT - concerned 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard File आदेशानुसार/ BY ORDER,

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