ALFA DISTILLERIES PVT LTD,MUMBAI V. INCOME TAX OFFICER -2(1)(1), MUMBAI

ITA 2389/MUM/2025

AI Insights

The case involves Alfa Distilleries Pvt. Ltd., the appellant, contesting an ex-parte order passed by the National Faceless Appeal Centre (NFAC), Delhi, which was upheld by the CIT(A). The appellant argued that the NFAC and CIT(A) failed to provide adequate opportunity to present its case, leading to an unjust ex-parte decision. The Tribunal noted that the CIT(A) did not address the grounds of appeal on merits and merely acknowledged the absence of the appellant's documentation, which was contested by the appellant. The Tribunal found the CIT(A)'s approach contrary to the legal requirements under Section 250(6) of the Income Tax Act, 1961, which mandates a detailed examination of the grounds of appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668982 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Other Referred Cases: ITA No.3593/Mum/2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA No.2389/MUM/2025 (Assessment Year: 2012-2013) Alfa Distilleries Pvt. Ltd. 5, Alfa house, Varma Chambers, 11, Homi Street, Fort, Mumbai - 400001, Maharashtra. [PAN:AACA5488K] …………. Appellant Income Tax Officer 2(1)(1), Mumbai Aayakar Bhavan, M. K. Road, Mumbai – 400020, Maharashtra. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Ms. Neelam Jadhav Shri Asif Karmali Date Conclusion of hearing Pronouncement of order : : 19.06.2025 25.06.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal preferred by the Assessee is directed against the order, dated 04/02/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] whereby the Ld. CIT(A) had disposed off the appeal against the Assessment Order, dated 20/03/2015, passed under Section 143(3) of the Act for the Assessment Year 2012-2013. 2. The Assessee has raised, inter alia, the following grounds of appeal : “I. Natural Justice Ex-Parte Order 1. On the facts and circumstance of the case, the learned National Faceless Appeal Centre issued two notices dated 24/01/2025, for which the response was to be submitted on 03/02/2025, ITA No.2389/Mum/2025 Assessment Year 2012-2013 2 and 27/01/2025, for which the response was to be submitted on 04/02/2025. However, the learned National Faceless Appeal Centre erred in passing an ex parte order dated 04/02/2025 without appreciating the fact that on the first date of hearing, i.e. 03/02/2025, the Appellant had requested for time to file the details required, as this is the second round of appeal before the CIT (A) and details were under compilation. However, without considering the request of the appellant and without granting any further reasonable opportunity to the Appellant to present its case, the very next day, ie. on 04/02/2025 passed the ex-parte order. Therefore, the order passed u/s.250 r.w.s.254 may be set aside to the CIT (A). II. Wrong observation of facts: 2. The learned National Faceless Appeal Centre erred in understanding the facts that \"taxpayer is not interested in agitating the appeal, since the disputed tax demand is \"0\" taxpayer may not be interested in outcome of appeal\" without appreciating that there is a tax demand outstanding of Rs.18,40,600/- for AY 2012-2013. Hence, the observation made and order passed by the NFAC may be set aside to the CIT (A). III. No window open for appeal Proceedings: 3. On the facts and circumstance of the case, the direction given by the NFAC for initiation of the appeal proceedings once again through e proceedings, if necessitated, the appellant submits that the window for appeal proceedings was closed, and there is no chance to file further proceedings details on the portal. Hence, the order passed by the NFAC may be set aside, and one more opportunity may be given to present the case.” 3. Heard both the sides and have perused the material on record. 4. This is the second round of litigation. In the first round vide order, dated 31/07/2017, passed in ITA No.3593/Mum/2017, the Tribunal had disposed off the appeal preferred by the Assessee against the order, dated 28/02/2017, passed by the Learned CIT(A) in the first round with the following directions: “5. I have carefully considered the rival submissions and perused the affidavit dated 24/07/2017 (supra). Ostensibly, the CIT(A) has proceeded to dismiss the appeal of the assessee for the reason that the assessee has not appeared before him on the date of hearing. Be that as it may, in my view, the manner in which the CIT(A) has disposed of the appeal is contrary to the legal position contained in section 250((6) of the Act. A perusal ITA No.2389/Mum/2025 Assessment Year 2012-2013 3 of the impugned order reveals that the appeal has been dismissed merely noticing the absence of the assessee, without dealing the Grounds of appeal raised by the assessee on merits. Section 250(6) of the Act obligates the CIT(A) to dispose of the appeal by stating the points for determination, the decision thereon and the reasons for such decision. The said approach is conspicuous by its absence in the impugned order of CIT(A). On this ground itself, I find that the order of the CIT(A) is unsustainable. Be that as it may, I deem fit and proper to set aside the order of the CIT(A) and restore the matter back to his file for adjudication afresh, after allowing a reasonable opportunity of being heard to the assessee as per law. 6. In the result, appeal of the assessee is allowed for statistical purposes as above.” 5. Thus, the Tribunal gave specific directions to the Ld. CIT(A) to decide the appeal on merits after considering the grounds raised by the Assessee. Pursuant to the above directions of the Tribunal, the CIT(A) has passed the impugned order which reads as under: “The appeal is filed under section 246A of the Income Tax Act. An order u/s. 143(3) was passed on 20/03/2015 against which appeal was filed before appellate authority. The CIT(Appeals) passed the order on 31/7/2017. The ITAT set aside the order and restored it to the CIT(Appeals). The assessment year involve dis 2012-13. The set aside appeal no is NFAC/2011-12/10306521. The appellate order no is 3593/Mum/2017. The disputed demand is 0. The taxpayer after initiating the appeal proceedings, has not done anything for furtherance of appeal. There is no Form 35, Statement of Facts, Grounds of Appeal, copy of order appealed against etc. IT is understood that taxpayer is not interest in agitating the appeal. Since the disputed demand is 0 taxpayer may not be interested in the outcome of appeal. During appeal proceedings the case was posted for hearing 3/2/2025, 4/2/2025. Considering these facts, the appeal is treated as withdrawn. Taxpayer is free to initiate appeal proceedings once again through e-proceedings, if necessitated. The appeal is treated as allowed for statistical purposes.” (Emphasis Supplied) 6. The Assessee has impugned the above order passed by the Ld. CIT(A) in appeal before the Tribunal. On perusal of the same, it ITA No.2389/Mum/2025 Assessment Year 2012-2013 4 becomes evident that despite taking note of the Order, dated 31/07/2017, passed by the Tribunal in ITA No.3593/Mum/2017, the CIT(A) has passed order without dealing with the grounds raised by the Assessee on merits. The Ld. CIT(A) has stated that the Form 35 is not available and that disputed demand is ‘Nil’. While the CIT(A) has treated the appeal as withdrawn, the CIT(A) has also stated that the Assessee may initiate appellate proceedings once again. The approach adopted by the Ld. CIT(A) cannot be countenanced as the same in contrary to the provisions of the Act and shows lack of application of mind on the part of first appellate authority. Further, on perusal of records we find that the Ld. CIT(A) had issued notice of hearing dated, 24/01/2025 fixing on 03/02/2025 as a date of hearing. Thereafter, another notice dated, 27/01/2025, was issued fixing date of hearing of appeal as 04/02/2025. On 03/02/2025, Assessee filed an application seeking adjournment. However, the Ld CIT(A) proceeded to pass the impugned order on 04/02/2025 disposing off the appeal without examining the grounds raised on merits. The Learned Authorized Representative for the Assessee appearing before us had submitted that adjournment was sought by the Assessee since records relating to the appeal were to be received from the earlier tax consultant handling the appeal. She submitted that all the relevant documents/details are available with the Assessee. It was further submitted that the disputed demand was not ‘nil’ and that the Assessee wanted to pursue the appeal. On perusal of record, we find that the finding returned by the CIT(A) are factually incorrect and legally unsustainable. Keeping in view the overall facts and circumstances of the case, we set aside the impugned Order, dated 04/02/2025, passed by the Learned CIT(A) and restore the issues back to the file of the CIT(A) for adjudication afresh after taking into consideration the submissions of the Assessee and the documents/details to be furnished by the Assessee in support of the claims/contentions. The Assessee is also directed to ITA No.2389/Mum/2025 Assessment Year 2012-2013 5 co-operate in the appellate proceedings and forthwith file details, documents & submission in support of its claims/contentions before the CIT(A). It is clarified that the Ld. CIT(A) shall grant reasonable opportunity of being heard to the Assessee. The Assessee is directed to be vigilant and track the appellate proceedings through Income Tax Business Application Portal. In case the Assessee fails to enter appearance and/or fails to file details/documents/submission in response to notice of hearing, the CIT(A) shall be at liberty to decide the issues on merits on the basis of material on record as per the directions given by the Tribunal vide order, dated 31/07/2017, passed in ITA No.3593/Mum/2017. In terms of the aforesaid, Ground No. 1 to 3 raised by the Assessee are allowed while all other grounds are dismissed as having been rendered infructuous. 7. In result, the present appeal preferred by the Assessee is allowed for statistical purposes. Order pronounced on 25.06.2025. Sd/- Sd/- (Omkareshwar Chidara) Accountant Member (Rahul Chaudhary) Judicial Member मुंबई Mumbai; िदनांक Dated : 25.06.2025 Milan,LDC ITA No.2389/Mum/2025 Assessment Year 2012-2013 6 आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. आयकर आयुƅ/ The CIT 4. Ůधान आयकर आयुƅ / Pr.CIT 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण ,मुंबई / DR, ITAT, Mumbai 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// उप/सहायक पंजीकार /(Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, मुंबई / ITAT, Mumbai "