CORK PRODUCT PRIVATE LIMITED,DELHI V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 6(2), DELHI., NEW DELHI

ITA 3586/DEL/2023

AI Insights

The case involves Cork Product Pvt Ltd, which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, confirming an ex-parte order by the Assessing Officer for the Assessment Year 2017-18. The assessee had initially declared a loss in its return, which was subjected to scrutiny. Due to non-compliance in responding to notices, the AO assessed the income on a best judgment basis, resulting in a different loss figure. The CIT(A) provided partial relief, but the assessee sought further appeal due to non-compliance attributed to internal negligence and the impact of the COVID-19 pandemic. The Tribunal considered the circumstances and decided to restore the matter to the AO for a fair reassessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33611 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 11-12-2023
• Other Referred Cases: Brij Bhushan Lal Parduman Kumar V CIT (1978) 115 ITR 524 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA RAMAVAT
• Assessee Lawyers: RAVI KUMAR
• Section: 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3586/DEL/2023 [A.Y 2017-18] Cork Product Pvt Ltd Vs. The A.C.I.T 50, Sunder Nagar, Delhi Circle -6(2), Delhi PAN: AAACC 5545 R (Applicant) (Respondent) Assessee By : Shri Ravi Kumar, CA Department By : Shri Krishna Ramavat, Sr. DR Date of Hearing : 12.09.2024 Date of Pronouncement : 24.10.2024 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 24.10.2023 pertaining to A.Y 2017-18. 2 2. The sum and substance of the grievances of the assessee is that the CIT(A) erred in confirming the exparte order of the Assessing Officer. 3. Briefly stated, the facts of the case are that the assessee originally filed its Return of Income on 06.11.2017 declaring loss of Rs. 4,83,11,142/-. Return was selected for complete scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee. 4. The Assessing Officer observed that throughout the assessment proceedings, the assessee did not submit any reply to the notices and questionnaire sent to the assessee on various dates. Left with no choice, the Assessing Officer invoked the provisions of section 144 of the Act and assessed the total income of the assessee on best judgment basis at a loss of Rs. 3,17,46,160/-. 5. Aggrieved, the assessee carried the matter before the CIT(A). 3 6. After careful consideration of the facts and submissions, the ld. CIT(A) gave part relief to the assessee. 7. Aggrieved further, the assessee is in appeal before us. 8. Before us, the ld. counsel for the assessee stated that the assessee company was unable to comply with the notices issued under the assessment proceedings due to the negligence of the finance manager of the assessee who was resigning from the company and was negligent and ultimately resigned without fulfilling the notice period. The ld. counsel for the assessee also contended that due to the rise of covid pandemic, the exparte order came to the knowledge of the assessee in October/November 2020.It was submitted that the appellate proceedings also remained unattended because of negligence of another counsel of the assessee. It was prayed that for restoration of the file to the AO for proper representation. 9. The ld. counsel for the assessee relied on the decision of Supreme Court in the case of Brij Bhushan Lal Parduman Kumar V CIT reported in (1978) 115 ITR 524 (SC) for the 4 proposition that the Assessing Officer must make what he honestly believes to be a fair estimate of the proper figure of assessment and for this purpose, he must be able to take into consideration local knowledge and repute with regard to the assessee’s circumstances and own knowledge of previous returns by any assessment of the assessee. The ld. counsel for the assessee relied upon various judicial pronouncements in support of his contention. 10. On the other hand, the ld. DR supported the findings of the CIT(A). 11. We have heard the rival submissions and have perused the relevant material on record. We have also carefully perused the orders of the authorities below. We have also gone through the affidavit filed by the assessee. We find that both the AO and the CIT(A) provided several opportunities to the assessee. We are of the considered opinion that the reasons cited in the affidavit and by the ld. counsel for the assessee, for non-compliance from the side of the assessee, are quite plausible. In the interest of justice 5 and fair play therefore, we restore the matter to the file of theAO. The AO is directed to afford reasonable opportunity of being heard to the assessee and decide the appeal on merits. 12. We also direct the assessee to follow its sworn affidavit- to actively participate in the assessment proceedings and comply with the directions given by the authorities and produce the requisite documents and materials to substantiate its case. 13. In the result, the appeal of the assessee in ITA No. 3586/DEL/2023 is allowed for statistical purposes. The order is pronounced in the open court on 24.10.2024. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 24th OCTOBER, 2024. VL/ 6 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order "