MOHIT FURNACE PRIVATE LIMITED,LUDHIANA vs. ASSESSMENT UNIT, FACELESS

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ITA 746/CHANDI/2023Status: DisposedITAT Chandigarh13 September 2024AY 2021-22Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)4 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A)'s order was not speaking and lacked reasoning on merits. Therefore, the Tribunal set aside the impugned order and remanded the case back to the CIT(A) for a fresh decision.

What were the facts?

The assessee company filed its return of income declaring NIL income. The Assessing Officer made additions under Section 69C for unexplained expenditure and Section 68 for unexplained cash credits. The CIT(A) dismissed the assessee's appeal without providing a speaking order.

What were the issues?

Whether the CIT(A) passed a speaking order on merits and whether the principles of natural justice were violated by not providing adequate opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 69C,Section 68,Section 143(2),Section 144,Section 144B,Section 250,Section 253

AI-generated summary — verify with the full judgment below

Order PER PARESH M. JOSHI, J.M. : This is an appeal filed by the Assessee company in terms of Section 253 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). The relevant Assessment Year is 2021-22 and corresponding previous year is 2020-21. The assessee is aggrieved by the order of the Ld. CIT(A) bearing No. ITBA/NFAC/250/2023-24/1056598225(1) dt. 27/09/2023 passed under section 250 of the Act, which is hereinafter referred to as the “impugned order”.

2.

At the outset, it is noted that there is delay of 03 days in filing the appeal by the Assessee as pointed out by the Registry.

3.

Since the assessee has shown sufficient cause for delay in filing the appeal, therefore delay of 03 days in filing the appeal is hereby condoned and the appeal of the assessee is admitted for adjudication. Factual Matrix 4. The assessee, a company, filed the return of income on 15/03/2022 for the A.Y. 2021-22, declaring total income of Rs. NIL/-. Subsequently, the case was selected under CASS under category 'Complete scrutiny.' Accordingly notice u/s 143(2) of the I T Act & other notices were issued and the assessment was completed u/s 144 r.w.s 144B of the Income Tax Act, 1961 on 27/12/2022 with the following additions: 1. Disallowance of Rs. 6,57,77,844/- u/s.69C of the Act and 2. Cash deposits of Rs. 28,95,000/- in Karnataka Bank was treated as unexplained cash credits u/s.68 of the Act.

4.1 Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A).

1.

4.2 The Assessee has remained non-compliant during the appellate proceedings and has not provided any concrete evidence relating to the addition made by the AO during the course of assessment, for which the assessee filed an appeal, rebutting the same with various grounds of appeal. Thus the assessee has not been able to controvert the stand taken by the Assessing Officer during the Appellate proceedings before the Ld CIT(A). The law aids those who are vigilant, not those who sleep upon their rights. This principle is embodied in the well-known dictum, "VIGILANTIBUS NON DORMIENTIBUS JURA SUBVENIUNT". Therefore, the Ld. CIT(A) saw no reason to interfere with the orders of the Assessing Officer. Thus, the appeal raised by the assessee was dismissed.

5.

The assessee being aggrieved by the impugned order has filed an appeal before us in Form No. 36 which is form of appeal to this Tribunal and has raised following grounds:

1. On the facts and circumstances of the case, the order passed by the Learned Commissioner of Income Tax (Appeals) [C1T(A)] is bad both in the eye of law and on facts. 2. (i) On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law in passing the order without giving assessee an opportunity of being heard in violation of the principle of natural justice, (ii) That the nonappearance before the Ld. CIT(A) was due to reasons beyond the control of the assessee. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts and in law, in confirming the income of the appellant at Rs. 6,86,72,844/- as against income of Rs. 1 1,87,735/-

4. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts & in law in confirming the addition of Rs. 6,57,77,844/- u/s 69C" of the Act by treating the purchases or part of the purchases as unexplained expenditure.

5. On the facts and circumstances of the case, the Ld. CIT(A) has erred both on facts & in law in confirming the addition of cash deposits in the bank account of the appellant of Rs. 28,95,000/- u/s 68 r.w.s 115BBE of the Act by treating the same as unexplained credits. 6. In the alternative and without prejudice to the above, the Ld. CIT(A) has erred both on facts and in law in not taking the allegation to the logical conclusion after having held that the purchases are not genuine its obvious implication would have been that the sales are also not genuine. 7. On the facts and circumstances of the case, Ld. CIT(A) has erred both on facts and in law in drawing adverse inference against the assesses on the basis of material collected at. the hack of it, without giving it an opportunity to rebut the same, in violation of principle of natural justice. 8. The appellant craves leave to add, amend or alter any of the grounds of appeal

Record of Hearing

6. The hearing in the matter took place before this Tribunal on 04/09/2024 when both the Ld. DR for the Department and the Ld. AR for the assessee appeared before us. Both of them were heard at length for some time on their respective contentions. The debate was mostly on nature of exparte impugned order being violative of the principles of natural justice. The Ld. AR interalia contended before us that impugned order besides being exparte is a non speaking order with no plausible reasons given on merits of the case. It was incumbent upon Ld. CIT(A) to have disposed off the case on merits even otherwise. The Ld. DR contended that despite four opportunities afforded to assessee not a single opportunity was availed of and placed reliance on para 3 of the impugned order of Ld. CIT(A) to demonstrate this phenomenon. However DR conquered with view Ld. AR that impugned order is not a speaking order and well reasoned order on merits of the case.

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