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Facts
The Revenue appealed an order by the CIT(A) that partly allowed the assessee's appeal against an assessment. The assessment was completed under Section 143(3) and later reopened under Section 147 for AY 2009-10. The assessee's returned income was Rs. 10,72,501, but the assessed income was Rs. 22,09,90,159. The CIT(A) had deleted additions of Rs. 12,93,59,200 and Rs. 9,10,00,000.
Held
The Tribunal noted that the respondent (assessee) did not appear for hearings despite service of notice. The Tribunal decided to proceed ex-parte. Due to various procedural issues raised by the Revenue regarding the CIT(A)'s order and the respondent's absence, the Tribunal set aside the impugned order.
Key Issues
Whether the CIT(A) was justified in allowing the assessee's appeal by ignoring findings of fact, re-opening based on credible material, and allowing submissions without proper opportunity to the AO. The Tribunal also considered the respondent's non-appearance.
Sections Cited
143(3), 147, 148, 68
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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI S RIFAUR RAHMAN & SHRI SUDHIR PAREEK
ORDER
PER SUDHIR PAREEK, JM:
This appeal has been preferred by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)-6, Delhi, dated 05.07.2017 for A.Y. 2009-10.
ITA No.- 5684/Del/2017 Nester Trading Pvt. Ltd. 2. The Revenue has raised following grounds of appeal for adjudication: -
1. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in allowing appeal of the assessee by ignoring finding of facts recorded by the Assessing Officer (the AO) that the assessee failed to prove that transaction occurred by ABW group with other entities (which later on merged with the assessee company) was genuine even after providing sufficient opportunity to the assessee?
2. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in allowing appeal of the assessee by ignoring the fact that re-opening of the assessment was based on the credible material related to the assessee company and also action of the AO issuing notice u/s 148 of the Act was upheld by the Ld CIT(A) itself vide para no. 3.1.3 of the appellate order?
3. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in allowing appeal of the assessee on the basis of the details and submission adduced by the assessee during appellate proceedings even when the assessee has not fulfilled conditions as laid down under Rule 46A of Income Tax Rule, 1962 (the Rule) and without providing opportunity of being heard to the AO?
4. That the appellant craves leave to add, Amend, Alter or forgo any ground/(s) of appeal either before or at the time of hearing of the appeal.” Modified grounds: “1. Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld. CIT(A) is justified in law in deleting the addition of Rs. 12,93,59,200/- made u/s 68 of the 1.T. Act, 1961 on account of unexplained income." 2. "Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld. CIT(A) is justified in law in deleting the addition of Rs. 12,93,59,200/-by not relying that the loss of Rs. 12,93,59,200/- credited by the to set off against the compensation received of Rs. 12,93,59,200/- was also disallowed in absence of supporting evidences."
ITA No.- 5684/Del/2017 Nester Trading Pvt. Ltd. 3. "Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld. CIT(A) is justified in law in deleting the addition of Rs. 9,10,00,000/- made u/s 68 of the I.T. Act, 1961 on account of unexplained credit." 4. "Whether on the facts and circumstances of the case for the assessment year under consideration, the Ld. CIT(A) is justified in law in deleting the addition of Rs. 9,10,00,000/- 00/- by not relying that the loss of Rs. 9,08:41:125/-credited by the to set off against the compensation received of Rs. 9,10,00,000/- was also disallowed in absence of supporting evidence."
5. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in allowing appeal of the assessee by ignoring finding of facts recorded by the Assessing Officer (the AO) that the assessee failed to prove that transaction occurred by ABW group with other entities (which later on merged with the assessee company) was genuine even after providing sufficient opportunity to the assessee?" 6. "Whether on facts and in circumstances of the case, the Ld. CIT (A) is legally justified in allowing appeal of the assessee by ignoring the fact that re-opening of the assessment was based on the credible material related to the assessee company and also action of the AO issuing notice a/s 148 of the Act was upheld by the Ld. CIT(A) itself vide para No. 3.1.3 of the appellate order?"
Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in allowing appeal of the assessee on the basis of the details and submission adduced by the assessee during appellate proceedings even when the assessee had not fulfilled conditions as laid down under Rule 46 A of Income Tax Rule, 1962 (the Rule) and without providing opportunity of being heard to the AO?" 8."The appellant craves, leave or reserves right to amend, modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal."
At the outset, it is noted from the record that despite service of notice, none appeared on behalf of the respondent, nor any ITA No.- 5684/Del/2017 Nester Trading Pvt. Ltd. adjournment request was sought for. From the bare perusal of record, it reveals that since long period, nobody appeared on behalf of the respondent on listed dates for hearing, so it appears to us that the respondent had due opportunity to appear, and accordingly, we proceed to adjudicate the appeal ex-parte qua the respondent, on the basis of material available on record and after hearing the Ld. CIT(DR).
Brief facts of the case are that the assessment was completed under section 143(3) of the Income Tax Act, 1961 (the Act) at an assessed income of Rs. 17,73,750/- as against the returned income of Rs. 10,72,501/- vide order dated 27.12.2011. Subsequently, proceeding u/s 147 of the Act, were initiated on 30.03.2016 . Notice u/s 148 of the Act was issued on 30.03.2016, for the A.Y 2009-10, said to be after recording the reasons with the prior approval of the competent authority. Income of the assessee assessed at Rs 22,09,90,159/- and on being dissatisfied with the same, appellant knocked the door of the Learned CIT(A) by way of appeal, which was partly allowed.
3. The Revenue assails the above order before us by present appeal, by stating that the Learned CIT(A) ignored the fact recorded by the 4 ITA No.- 5684/Del/2017 Nester Trading Pvt. Ltd. Learned AO regarding failure of assessee to prove that transaction occurred by ABW Group with other entities and re-opening of the assessment was based on the credible material related to assessee company and further allowed appeal on the basis of the material placed by the assessee during appellate proceeding even non fulfilment of condition under Rule 46A of the Income Tax Rules, 1962 without providing opportunity of being heard to the Learned AO.
From the perusal of record, it reveals that the respondent never appeared before us and vide Letter via email ( placed on record) Assistant Commissioner Of Income Tax, central circle, Ajmer communicated that notice of hearing served on 07/04/2025 on email ID: rocfiling111@gmail.com, as provided in latest ITR of the assessee company for AY 2024-25 and so, It is evident from the record that the respondent did not appear before the ITAT despite service of notice and there is no any reason available on record regarding prolonged absence of respondent.
Accordingly, on the basis of aforesaid fact situation, we deem it fit to set aside the impugned order and restore the matter to the file of the Learned CIT(A), with the direction to decide the appeal afresh after providing opportunity to both the parties. 5 ITA No.- 5684/Del/2017 Nester Trading Pvt. Ltd. 5. Consequently, the appeal of the Revenue is allowed for statistical purposes as indicated above.