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Income Tax Appellate Tribunal, DELHI BENCH “C”: NEW DELHI
Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA
O R D E R PER KUL BHARAT, JM:
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-32, New Delhi, dated 15.02.2017, pertaining to the assessment year 2012-13. The assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad, both in the eye of law and on the facts.
2. (i). On the fact and circumstances of the case, Id. CIT(A) has erred both on facts and in law in passing the order without giving assessee a fair and adequate opportunity of being heard. (ii) That the non appearance before the CIT(A) was on account of reasons beyond the control of the assessee. 3. On the fact and circumstances of the case, Id. CIT(A) has erred both on facts and in law in passing the order without giving any finding on the merits of the case.
(i) On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming an addition of Rs. 4,00,00,000/- under section 68 of the Act, on account of share capital received.
(ii) That the above said addition has been confirmed despite the assessee having all relevant explanation and evidences to prove the identity and credit worthiness of shareholder as well as the genuineness of the transaction.
(iii) That the notice for hearing before the CIT(A) was never received by the assessee.
5. On the facts and circumstances of the case, Id. CIT(A) has erred both on facts and in law in confirming the addition despite the same having been made on the basis of material collected/ statement recorded at the back of the assessee without giving it an opportunity to rebut/ cross examine the same in gross violation of the principles of natural justice.
6. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 6,00,000/- made by A.O. on account of commission
(ii) That the commission has been charged @ 1.5%, without there being any basis for the same.
7. The appellant craves leave to add, amend or alter any of the grounds of appeal.
Facts giving rise to the present appeal are that for A.Y. 2012-13 the assessee filed its return on 29.09.2012 declaring income of Rs. 7,72,602/-. Subsequently, the assessee filed revised return declaring same income. The return was processed u/s 143(1) of the Income-tax Act, 1961 (the “Act”). Subsequently the case was selected for scrutiny assessment through CASS. The Assessing Officer completed the assessment u/s 143(3) of the Act at Rs. 4,17,54,134/- by making following additions to the returned income of Rs. 7,72,602/-:
i) Addition on account of Section 68 4,00,00,000/- ii) Addition on account of commission expenses 6,00,000/- iii) Addition per provision of Section 2(22)(e) 1,07,683/- iv) Addition being capital expenses 2,73,849/- 3. Aggrieved against it the assessee preferred appeal to the learned CIT(Appeals), who vide impugned order dated 15.02.2017 dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before this Tribunal.
4. At the outset learned counsel for the assessee submitted that no notice of hearing was received by the assessee from the learned CIT(Appeals), as such there could be no representation before the learned CIT(Appeals). The learned CIT(Appeals) has dismissed the assessee’s appeal without giving any finding on merit. He prayed that the matter may be remitted back to the file of learned CIT(Appeals) to decide the appeal on merit after affording reasonable opportunity
of being heard to the assessee. In support of his contention, the learned counsel has also filed synopsis. For the sake of clarity the same is reproduced as below:
‘Synopsis
“The only request before your honours is to send the matter back to the file of the ld. CIT(A) as no finding on the merits of the case has been given by the ld. CIT(A) in the order passed by him.
Further, to state that the assessee could not present itself before the CIT(A) due to the non receipt of notices of hearing. The assessee company stopped working and opening its office from November, 2015. Also, the company could not receive any notice as the registered office of the company was the residence address of one of the director who had to leave his house along with his family as a result of pressure from the lenders, life threats and other criminal cases lodged against him.
Had the intention of the assessee being to not to present itself before the Id. CIT(A), he would have also avoided presenting himself before the Id Assessing Officer. The following being the circumstances, the assessee therefore request Your Honours to kindly refer the matter back to the file of the ld. CIT(A)”.
Per contra, learned DR opposed the submissions made on behalf of the assessee and submitted that the assessee was negligent in not furnishing correct address and in not making representation before the learned CIT(Appeals) despite sufficient opportunity was given. He supported the orders of authorities below.
We have heard rival submissions and gone through the material available on record. We find that the learned CIT(Appeals) has dismissed the appeal, inter alia, by observing as under:-
“4.7 The appellant has not substantiate d the grounds raised in appeal and no written submission has been filed. In the absence of any evidence to support the claim of the appellant, the grounds raised in appeal are rejected.”
Considering the fact that the learned CIT(Appeals) has decided the appeal ex parte, qua the assessee, without going into the merits on the issues raised by the assessee in the grounds of appeal as also to sub serve the interest of natural justice we are constrained to set aside the impugned order and remit the matter back to the learned CIT(Appeals) with the direction to decide the appeal of the assessee on merit by affording reasonable opportunity of being heard to the assessee. We order accordingly.
In the result, assessee’s appeal stands allowed for statistical purposes only.
Order pronounced in open court on 21st April, 2023.