DEV PLAST INDUSTRIES,JAIPUR V. INCOME TAX OFFICER(WARD-1), JAIPUR

ITA 321/JPR/2025

AI Insights

M/s. Dev Plast Industries filed an appeal against the order of the ld. Addl. CIT(A)-1, Mumbai, which upheld the disallowance of inter-head adjustment of losses amounting to Rs.1,62,302 under section 71 of the Income Tax Act, 1961. The assessee argued that the Addl. CIT(A) did not provide valid justification for confirming the addition and failed to issue a speaking order. The tribunal noted the assessee's non-compliance in previous hearings but decided to restore the matter to ensure justice and provide an opportunity for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312114 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Other Referred Cases: CIT vs. B.N. Bhattacharjee and another, Estate of Late Tukojirao Holkar vs. CWT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: DILEEP SHIVPURI
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice

Judgement Text

"vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC’’ JAIPUR Mk0 ,l- lhrky{eh]U;kf;dlnL; ,oaJhjkBkSM+ deys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihyla-@ITA. No. 321/JPR/2025 fu/kZkj.ko\"kZ@AssessmentYears : 2022-23 M/s. Dev Plast Industries 126, Laxmi Narain Puri, Jhotwara Industrial Area, RIICO, Jaipur-302012 cuke Vs. The ITO, Ward-1 Jaipur LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AALFD 9382 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Dileep Shivpuri, Advocate jktLo dh vksjls@Revenue by :Shri Gautam Singh Choudhary, Addl.CIT -DR a lquokbZ dh rkjh[k@Date of Hearing : 08/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 29 /04/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The assessee has filed an appeal against the order of the ld. Addl CIT(A)-1, Mumbai dated 29-01-2025 for the assessment year 2022-23 raising therein following grounds of appeal; ‘’1. That the ld. Addl. CIT(A) has erred in both facts and circumstances of the case in law in passing the impugned appellate order datred 29-01-2025. 2. That the ld. Addl. CIT(A) has grossly erred in upholding the order of Assessing Authority by disallowing the inter head adjustment of losses of Rs.1,62,302/- u/s 71 of the Act without providing any valid justification or reasoning. 2 ITA NO. 321/JPR/ 2025 M/S. DEV PLAST INDUTRIES VS ITO, WARD 1, JAIPUR 2.1 Apropos grounds of appeal, of the assessee, it is noticed that the ld.Addl. CIT(A) has dismissed the appeal of the assessee on the ground that nothing has been submitted by the assessee to rebut the finding of the AO. The narration as made by the ld. Addl.CIT(A) in his order is reproduced as under:- Decision:- ‘’On perusal of records, it is noticed that during the course of appellate proceedings, appellant had not filed or uploaded any response/written submissions in spite of three or more notices were issued to the appellant. The non-compliance of the appellant in response to the notices issued u/s 250 of the Act on various dated is summarized as under:- S.N. Date of notice sent Compliance date Way of service of notice Remarks 1. 28-04-2024 08-05-2024 E-Mail Seeking Adjournment 2. 20-09-2024 27-09-2024 E-Mail Seeking Adjournment 3. 22-01-2025 28-01-2025 E-Mail Seeking Adjournment Considering the non-compliance as detailed above by the appellant, it seems that the appellant is not interested to pursue its appeal. Therefore, it cannot be kept pending adjudication for indefinite period. The appellant has not bothered to comply to the notices issued during the course of appellate proceedings. This shows that the appellant is not interested in pursuing its appeal. If the appellant is not availing opportunities given, they cannot allege contravention of principles of natural justice as held in the case of P.N. Balasubramanium (AP) 112 ITR 512. Therefore, the appeal of the appellant is liable for dismissal. Such view is further supported by the following judicial pronouncements:- 1) Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharjee and another, reported in 118 ITR 461 (relevant pages 477 and 478) wherein their Lordhsips have held that:- 3 ITA NO. 321/JPR/ 2025 M/S. DEV PLAST INDUTRIES VS ITO, WARD 1, JAIPUR \"An appeal means an effective appeal. An appeal withdrawn is an appeal non est as judicial thinking suggests. Purposefully interpreted, preferring an appeal means more than formally filing it but effectively prosecuting it. Mere institution followed by withdrawal would cancel the effect and result in non-prosecution and obliteration of appeal which is the same as not preferring an appeal ii) Hon'ble M.P. High Court in the case of Estate of Late Tukojirao Holkar vs. CWT, 223 ITR 480 (MP), while dismissing the reference made at the instances of the assessee in default made following observation in their order. - \"If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference.\" However, in the interest of natural justice, the case of appellant was examined on merit in the light of SOF and grounds of appeal. It is found that the issues raised by the appellant through grounds of appeal is not supported with any submissions/evidences during the appeal proceedings as can be seen from the fact that despite a number of opportunities, the appellant has failed to file any written submission in support of grounds of appeal. Apart from uploading statement of fact, nothing has been submitted to rebut the finding of the AO. Therefore, Grounds of the appeal raised are dismissed. In the result, the appeal of the appellant is dismissed.’’ 2.2 During the course of hearing, the ld.AR of the assessee submitted that the no reason had been given by the Addl CIT(A), Mumbai for confirming the addition. Even if the assessee could not furnish a reply for some reason, he should have seen why the inter-head adjustment was denied, especially in view of the provisions of Section 71 of the Act. He further submitted that it is a trite law that any appellate order should be a speaking order, giving the facts of the case, the arguments advanced and 4 ITA NO. 321/JPR/ 2025 M/S. DEV PLAST INDUTRIES VS ITO, WARD 1, JAIPUR the reasoning behind the decision arrived at. He further submitted that the ld. Addl. CIT(A) has not done this, and his non-speaking order deserves to be quashed / set aside. The assessee may be allowed the adjustment of losses inter-head and his returned income accepted. To support his arguments, the ld. AR of the assessee has filed the following documents; S.N. Particulars Page No. 1. Written submissions 1-3 2. Documents:- Annexure A- copy of computation of income 4-6 Annexure B –Copy of the intimation u/s 143(1) of the Act 7-26 2.3 On the other hand, the ld. DR supported the order of the ld Addl. CIT(A). 2.4 We have heard both the parties and perused the materials available on record. From the records, it is noticed that the assessee firm filed its income tax return electronically on 14-10-2022, declaring a total income of Rs.4,720/-. In return of income, the assessee claimed an inter-head adjustment of losses u/s 71of the Income Tax Act, 1961 amounting to Rs.1,62,302/-. According to the ld.AR of the assessee, this adjustment was made in accordance with the provisions of the Act and it was supported by proper documentations and calculations. However, the CPC passed an order u/s 143(1) disallowing the inter-head adjustment of losses of 5 ITA NO. 321/JPR/ 2025 M/S. DEV PLAST INDUTRIES VS ITO, WARD 1, JAIPUR Rs.1,62,302/- resulting in an increase in the total income declared by the assessee and this disallowance of inter-head adjustment of losses is contrary to the provisions of the Act. In first appeal, the ld. Addl. CIT(A) has confirmed the action of the AO as the assessee had not submitted anything before the ld. Addl. CIT(A) to rebut the findings of the AO.The Bench noticed that it is an admitted fact that the assessee is ex-parte before the ld. CIT(A). Therefore, he could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. However, we are of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the ld. CIT(A) to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 6 ITA NO. 321/JPR/ 2025 M/S. DEV PLAST INDUTRIES VS ITO, WARD 1, JAIPUR 2.6 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(A) independently in accordance with law. 3.0 In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open Court on 29 /04/2025. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 29 /04/2025 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- M/s. Dev Plast Industries, Jaipur 2. izR;FkhZ@The Respondent- ITO, Ward-1, Jaipur. 3. vk;djvk;qDr@CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 5. xkMZQkbZy@Guard File {ITA No. 321/JPR/2024} vkns'kkuqlkj@By order lgk;diathdkj@Asst. Registrar "