D S KULKARNI AND COMPANY,PUNE V. DCIT CIRCLE 2, PUNE

ITA 2419/PUN/2024

AI Insights

The case involves D. S. Kulkarni And Company, a firm engaged in construction, which faced reassessment and penalties under the Income Tax Act for the assessment years 2013-14, 2014-15, and 2016-17. The firm had accepted public deposits and failed to return the principal and interest, leading to a significant interest claim of Rs.29,35,06,820 being disallowed. The reassessment was contested due to alleged non-compliance with notices from the CIT(A), attributed to the firm's operational disruptions following a serious accident and legal issues faced by its principal. The Tribunal found that the CIT(A) had not provided a proper opportunity for the assessee to present its case, leading to the setting aside of the ex-parte order and remanding the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312451 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KHAIRNAR
• Assessee Lawyers: NIKHIL S. PATHAK
• Keywords: Additional evidence; Reasonable cause; Non compliance
• Section: 147; 148; 271(1)(c)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.2417 to 2421/PUN/2024 िनधाᭅरण वषᭅ / Assessment Years : 2013-14, 2014-15 & 2016-17 D. S. Kulkarni And Company, Flat No.701, Modi Baug, DSK Haryali, Shivajinagar, Pune- 411016. PAN : AAEFD2122L Vs. DCIT, Cricle-2, Pune Appellant Respondent आदेश / ORDER PER BENCH: These appeals filed by the assessee are directed against the separate orders dated 24.09.2024 passed by Ld. CIT(A)/NFAC for the assessment years 2013-14, 2014-15 & 2016-17 respectively. 2. Since the identical facts and common issues are involved in all the above captioned five appeals of the assessee, we proceed to dispose of the same by this common order. Assessee by : Shri Nikhil S. Pathak Revenue by : Shri Amol Khairnar Date of hearing : 19.02.2025 Date of pronouncement : 30.04.2025 ITA Nos.2417 to 2421/PUN/2024 2 3. First, we shall take up the appeal of the assessee in ITA No.2418/PUN/2024 for assessment year 2016-17 as a lead case for adjudication. ITA No.2418/PUN/2024, A.Y. 2016-17 : 4. The appellant has raised the following grounds of appeal :- “1] The learned CIT(A) erred in dismissing the appeal of the assessee ex-parte on the ground that there was non compliance on the part of the assessee to the various notices issued by him and thereby erred in confirming the addition of Rs.29,35,06,820/- made by the learned A.O. 2] The assessee submits that there was a reasonable cause on its part for the non compliance to the notices issued by the learned CIT(A) and accordingly, requests for one more opportunity to present its case before the learned CIT(A). 3] The assessee submits that it had not received the notices issued by the learned CIT(A) and therefore, there was non compliance on its part to the notices issued by the learned CIT(A) and hence, requests for one more opportunity to present its case before the learned CIT(A). 4] The assessee submits that the reopening u/s. 147 is bad in law and accordingly, the reassessment order be declared null and void. 5] The assessee submits that the disallowance of interest made by learned A.O. of Rs.29,35,06,820/- is not justified and accordingly, the learned CIT(A) ought to have deleted the said addition. 6] The assessee requests for admission of additional evidences in support of its case. 7] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” 5. Facts of the case, in brief, are that the assessee is a firm engaged in the business of construction work. The assessee filed its ITA Nos.2417 to 2421/PUN/2024 3 return of income for assessment year 2016-17 on 17.10.2016 declaring total income of Rs.1,17,11,354/-. The assessee has violated the norms of Reserve Bank of India since they have accepted deposits from public at large & failed to return the principal as well as interest. The assessee has also claimed huge amount of interest of Rs.29,35,06,820/- in the name of financial charges. Accordingly, the case of the assessee was reopened and notice u/s 148 of the IT Act was issued on 30.03.2021. The assessee did not responded to the notices issued by the AO. The assessment was completed by determining total income of Rs.30,52,18,170/- as against income returned by the assessee at Rs.1,17,11,350/-. The above assessed income includes disallowance of interest of Rs.29,35,06,820/- being the interest claimed on deposits taken from the public against the law. 6. Since the assessee remained absent before Ld. CIT(A)/NFAC, the appeal of the assessee was dismissed. It is this order against which the assessee is in appeal before this Tribunal. 7. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR further submitted that Ld. CIT(A)/NFAC has not provided proper opportunity to the assessee. It was submitted by Ld. AR of ITA Nos.2417 to 2421/PUN/2024 4 the assessee that the circumstances were beyond the control of the assessee since he met with a serious accident & thereafter several cases & police FIR was lodged against him with regard to not refunding the amount of the public & ultimately he was arrested by the police. All his properties including office premises were seized & the staff also left the job. In such kind of situation even if any notices were issued there was no one to look after those notices, which resulted in ex-parte orders passed by the subordinate authorities. It was therefore submitted by Ld. AR of the assessee that the assessee has reasonable cause for non-compliance to the notices issued by Ld. CIT(A)/NFAC and therefore he requested for one more opportunity to substantiate its case. Accordingly, it was requested before the Bench to set-aside the ex-parte order passed by Ld. CIT(A)/NFAC. 8. Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same. 9. We have heard Ld. Counsels from both the sides and perused the material available on record. In this regard, we find that admittedly Ld. CIT(A)/NFAC has issued hearing notices and since the assessee was in prison & his office premises was seized , his ITA Nos.2417 to 2421/PUN/2024 5 staff also left the job, he could not respond to above notices which resulted in unfortunate ex-parte order . Considering the totality of the facts of the case, & in the interest of justice, without going into merits of the case, we deem it appropriate to set-aside the impugned ex-parte order passed by Ld. CIT(A)/NFAC and restore the matter back to him with a direction to decide the appeal afresh on merits of the case as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and produce requisite documents/ additional evidences/explanations in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee are partly allowed. 10. In the result, the appeal filed by the assessee in ITA No.2418/PUN/2024 for A.Y. 2016-17 is allowed for statistical purposes. ITA Nos.2419 & 2421/PUN/2024, A.Ys. 2013-14 & 2014-15 : 11. Since the facts and issues involved in above two appeals of the assessee are identical, therefore, our decision in ITA ITA Nos.2417 to 2421/PUN/2024 6 No.2418/PUN/2024 for A.Y. 2016-17 shall apply mutatis mutandis to the above two appeals of the assessee in ITA Nos.2419 & 2421/PUN/2024 for A.Ys. 2013-14 & A Yr 2014-15 respectively. 12. In the result, both the appeals of the assessee in ITA Nos.2419 & 2421/PUN/2024 for A.Ys. 2013-14 & 2014-15 are allowed for statistical purposes. ITA Nos.2417 & 2420/PUN/2024, A.Ys. 2016-17 & 2013-14 : 13. In the above two appeals assessee has challenged the confirmation of penalty u/s 271(1)(c) of the IT Act by Ld. CIT(A)/NFAC. Since we have set-aside the quantum appeals of the assessee and remanded the matter back to the file of Ld. CIT(A)/NFAC to decide the appeal afresh, therefore, this being the consequential penalty order also needs to be set-aside and accordingly we set-aside and remand the penalty appeal order back to the file of Ld. CIT(A)/NFAC to decide the penalty appeal afresh after providing reasonable opportunity of hearing to the assessee. Thus, the grounds raised by the assessee in both the above appeals are partly allowed. ITA Nos.2417 to 2421/PUN/2024 7 14. In the result, the appeal filed by the assessee in ITA Nos.2417 & 2420/PUN/2024 for A.Ys. 2016-17 & 2013-14 are allowed for statistical purposes. 15. To sum up, all the above captioned five appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 30th day of April, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 30th April, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT/CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "