Haier Appliances India Private Limited, New Delhi V. ACIT, Circle-11(2), Delhi

ITA 1490/DEL/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4000 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 26-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 250; 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘B’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI YOGESH KUMAR US, JUDICIAL MEMBER ITA No.1490/Del./2022 (ASSESSMENT YEAR : 2016-17) Haier Appliances India Private Ltd., vs. ACIT, Circle 11 (2), Building No.1, Okhla Estate Phase 3, Delhi. New Delhi – 110 020. (PAN : AABCH3162L) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Tarandeep Singh, Advocate REVENUE BY : Shri Sumit Kumar Verma, Sr. DR Date of Hearing : 21.09.2022 Date of Order : 23.09.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of ld. CIT (Appeals) dated 06.05.2022 for the Assessment Year 2016-17. 2. The grounds of appeal raised by the assessee read as under :- “1. That on facts and in law, the impugned order passed by the C!T(A) is bad in law and void-ab-initio inter alia as under: a. CIT(A) has passed the impugned order in violation to the principle of natural justice, ie, without providing adequate opportunity of being heard, b. By deciding the appeal ex-party only, for alleged non-prosecution without any discussion on merits, ITA No.1490/Del./2022 2 c. Holding/Observing that the appellant has not complied with notices issued under Sec 250 of the Act, d. Without appreciating that there is no default committed by the appellant in replying to notices under See 250 of the Act [Refer Affidavit annexed as Annexure A]. 2. That the CIT(A) has erred, both on facts and in law, in confirming the order of the AO for assessing the income at Rs.22,61,19,011/-, as against the returned income of Rs.18,34,25,270/-. 3. That the C!T(A) has erred, both on facts and in law, in confirming the addition of Rs.4,26,93,741/- under Sec 28(iv) of the Act, since: (i). There arose no benefit or perquisite from the exercise of business activities of the assessee; (ii). The assessee was bound to issue the share capital at face value, owing to the regulations prescribed by Companies Act, 2013; (iii). The issuance of share capital is a capital transaction and hence, cannot be made taxable as a revenue receipt; (iv). There wasn't any non-monetary benefit that arose out of the transaction of issuance of share capital, thereby prohibiting the applicability of Sec 28(iv). (v). Without prejudice, the notional fair value of Rs 9.57/- per share is without reasonable basis. 4. That the order passed by the AO under Sec 143 (3) is bad, both in law and on facts.” 3. In the present case, pursuant to framing of the assessment order, assessee filed appeal before the ld. CIT (A). Ld. CIT (A) in his order reproduced the order of AO. Thereafter, he noted that the assessee was given several opportunities to appear in the appellate proceedings but assessee did not seem to be interested in prosecuting the appeal, hence he dismissed the appeal for want of prosecution. ITA No.1490/Del./2022 3 4. Against this order, assessee is in appeal before us. We have heard both the parties and perused the record. 5. As evident from the facts narrated above, upon assessee’s appeal pursuant to assessment order, ld. CIT (A) has dismissed the appeal for non-prosecution and has not adjudicated upon the merits of the case. We find that u/s 251 of the Income-tax Act, 1961 (for short ‘the Act’), ld. CIT(A) has no power to dismiss the appeal for non-prosecution. It is incumbent upon the ld. CIT(A) to pass a speaking order on merits on the appeals filed before him. Ld. Counsel of the assessee in this regard has further submitted that there was no willful default by the assessee in not appearing before the appellate proceedings. We find that the interest of justice in this case demands that the issue be remitted back to ld. CIT (A). Ld. CIT (A) is directed to reconsider the issue afresh and pass a speaking order on the merits of the case. Needless to add, assessee should be granted adequate opportunity of being heard. 6. In the result, this appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open court on this 23 rd day of September, 2022. Sd/- sd/- (YOGESH KUMAR US) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 23 rd day of September, 2022/TS ITA No.1490/Del./2022 4 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT (A) 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.