M/s. Comfortable Abode Private Limited, Bengaluru V. Assistant Commissioner of Income Tax, Circle-2(1)(1), Bengaluru

ITA 124/BANG/2023

AI Insights

The case involves M/s. Comfortable Abode Private Limited, which appealed against the order of the NFAC Delhi for the assessment year 2016-17. The company, engaged in the development and construction of residential apartments, had filed a return declaring a loss, which was later assessed differently by the Assessing Officer (AO). The NFAC upheld the AO's decision due to non-compliance by the assessee in previous hearings. The Tribunal noted the assessee's lack of participation was due to the managing director's unfamiliarity with the electronic notice system (ITBA portal) and decided to remit the case back to the NFAC for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129248 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 31-05-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 26-02-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Notional interest
• Section: 143(3); 142(1); 143(2)

Judgement Text

ITA No.124/Bang/2023 M/s. Comfortable Abode Private Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No.124/Bang/2023 Assessment Year: 2016-17 M/s. Comfortable Abode Private Limited No.41, Mantri House Vittal Mallya Road Bangalore 560 001 PAN NO : AAGCP2087B Vs. ACIT Circle-2(1)(1) Bangalore APPELLANT RESPONDENT Appellant by : Smt. Sunaina Bhatia, A.R. Respondent by : Shri Sankar Ganesh K., D.R. Date of Hearing : 01.06.2023 Date of Pronouncement : 01.06.2023 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This appeal by assessee is directed against order of NFAC Delhi for the assessment year 2016-17 dated 2.2.2023. 2. Facts of the case are that the assessee company is in the field of business of undertaking development and construction of residential a partments. The company filed its original return of income for the AY 2016-17 on 30.11.2018 decla ring current year loss of Rs.(-) 1,04,02,808/-. The case was selected for scrutiny through CASS. Statutory notice u/s 143(2) of the Income-tax Act,1961 ['the Act' for short] dated 1.8.2017 was issued and ITA No.124/Bang/2023 M/s. Comfortable Abode Private Limited, Bangalore Page 2 of 4 served on the assessee company. Due to change in the incumbent officer, a notice u/s 142(1) r.w.s. 129 of the Act was issued on 10.11.2018. Notice u/s 142(1) of the Act were issued on 23.11.2018. Accordingly, assessment was completed u/ 143(3) of the Act on 28.12.2018 at assessed loss of Rs.6,92,061/-. 2.1 Aggrieved, the assessee went in appeal before NFAC. The NFAC has given notices of hearing to the assessee as follows: S.No. Date of issue Date of compliance Remarks 1 20.02.2020 04.03.2020 No written submission filed in support of grounds of appeal. No request of adjournment made. 2 29.01.2021 04.02.2021 3 11.01.2023 17.01.2023 4 18.01.2023 25.01.2023 In view of this non-compliance from the assessee’s side, the NFAC confirmed the order of AO. Against this assessee is in appeal before us by way of following grounds: 1) The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2) The learned CIT[A] is not justified in disposing off the appeal ex- parte without allowing sufficient and real opportunity to the appellant to represent the case and hence. the impugned order passed requires to be cancelled. 3) Without prejudice to the above, the learned CIT [A] is not justified in sustaining the addition in respect of notional interest on property advance to the extent of Rs. Rs.89,70,956/- under the facts and in the circumstances of the appellant's case. 4) Without prejudice to the above, and assuming that the impugned disallowance was made in terms of section 36[1][iii] of the Act, the learned CIT[A] ought to have held that the interest paid on ITA No.124/Bang/2023 M/s. Comfortable Abode Private Limited, Bangalore Page 3 of 4 ICD also had to be regarded as part of the closing work-in- progress of the project and accordingly inventorised under the facts and in the circumstances of the appellant’s case. 3. Before us, the ld. A.R. submitted that all the notices stated in para 2.1 above were issued electronically through ITBA portal. The person incharge Mr. Mohankumar Singapura Jayanna, Managing Director of the Company was not conversant with ITBA portal and failed to see or verify the notices sent electronically. Hence, he failed to take note of the above notices and failed to represent the case before the NFAC. 4. The ld. D.R. submitted that assessee has not make use of opportunities given to it before this NFAC. Hence, appeal be decided on merit only. 5. We have heard the rival submissions and perused the materials available on record. In this case, admittedly, assessee has not participated before NFAC by filing requisite information and the NFAC decide the issue ex-parte. In our opinion, in the interest of justice, it is appropriate to remit the entire issue in dispute to the file of NFAC to decide the issue afresh after giving an opportunity of hearing to the assessee. 6. In the result, the assessee’s appeal is partly allowed for statistical purposes. Order pronounced in the open court on 1 st June, 2023 Sd/- (Beena Pillai) Judicial Member Sd/- (Chandra Poojari) Accountant Member Bangalore, Dated 1 st June, 2023. VG/SPS ITA No.124/Bang/2023 M/s. Comfortable Abode Private Limited, Bangalore Page 4 of 4 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(Judicial) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore