Mehsana District Co-operative Milk Producers Union Ltd., Mehsana V. The ACIT, Mehsana Circle Mehsana Present Juridiction Dy.CIT, Circle Gandhinagar, Gandhinagar

ITA 152/AHD/2023

AI Insights

The appeals by the Mehsana District Cooperative Milk Producers Union Ltd. were against orders from the National Faceless Appeal Centre (NFAC), which had dismissed their earlier appeals ex parte. The Tribunal noted that the assessee had previously engaged in substantial communication and submission of documents during the initial stages of the appeal process with the Commissioner of Income Tax (Appeals) in Gandhinagar. However, due to the transition to the NFAC and changes in the assessee's tax consultant, critical communications and submissions were not properly managed, leading to the ex parte dismissals. The Tribunal found this procedural oversight constituted a violation of the principles of natural justice and warranted a re-examination of the cases.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125405 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 31-05-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 09-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Condonation of delay
• Section: 154; 143(3); 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./I. T. A. Nos. 152 & 153 /Ahd/2023 ( नधा रण वष / A ss es sment Year : 2013-14) Me h s a n a D i s tr ic t C o- op e ra t i ve M ilk Pro d uc e r s U ni on L t d . D u dh sa ga r D a i r y, P .O . B ox N o. 1, M eh s a na , 38 4 0 02 , G uj ar a t , I nd ia बनाम/ Vs . As s t. C o m m i ss io ne r of I n c o m e T ax M e h s a na C ir c l e, M e hs an a ( A t P r e s e nt J ur i sd ic tio n O f f ic e is De pu t y C o mm i s s i on er of I n c o m e Ta x , C i r c le- G an d h ina ga r थायी लेखा सं./जीआइआर सं./P A N/ G I R N o . : A A A A M 0 3 2 9 F (अपीलाथ /Appellant) . . ( यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri Yogesh Shah & Shri Rajesh Shah, A.Rs. यथ क ओर से/Respondent by : Shri A. P. Singh, CIT. D.R. स ु नवाई क तार ख / D a t e o f H e a r i ng 01/06/2023 घोषणा क तार ख /D a t e o f P ro n o u nc e me n t 16/06/2023 O R D E R PER Ms. MADHUMITA ROY - JM: Both instant appeals filed by the assessee are directed against the order dated 30.08.2022 & 06.02.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 31.03.2016 & 16.05.2016 passed by the ACIT, Mehsana Circle, Mehsana under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) & 154 of the Act, respectively for Assessment Year 2013-14. ITA Nos. 152 & 153/Ahd/2023 (Mehsana District Coop. Milk Producers Union Ltd. vs. DCIT) A.Y.– 2013-14 - 2 - 2. Since both the appeals filed by the same assessee these are heard analogously and are being disposed of by a common order for the sake of convenience. ITA No. 152/Ahd/2023 3. The instant appeal filed by the assessee is directed against the order dated 30.01.2022 by the National Faceless Appeal Centre (in short “NFAC”), Delhi arising out of the order dated ACIT, Mehsana Circle, Mehsana under Section 143(3) of the Act for A.Y. 2013-14. The appeal is found to be time barred and an application for condonation of delay against the impugned order has been filed by the assessee before us on 06.03.2023. The contest whereof is as follows:- In the present case, the appellant has filed the appeal against appellate order passed by the National Faceless appellate Centre (NFAC) dated 30-08-2022 for A.Y. 2013-14. At the outset, the appellant submits that the order has been received by the appellant on 11-02- 2023, therefore, the appeal is field within the time prescribed u/s.253(3) of the Act. Hence, there is no delay in filing the appeal before Your Honours. Without prejudice to above, the appellant submits the facts as under. (1) The appellant filed the appeal before the Commissioner of Income Tax (Appeals)- Gandhinagar on 15-04-2016 against the order passed by the Assistant Commissioner of Income Tax, Mehsana Circle, Mehsana u/s. 143(3) of the Act. The first date of hearing was fixed on 20-06-2017. During the course of the appeal proceedings the appellant has made the three written submissions and two paper books containing 242 pages. The CIT(A) had discussed the issue and asked for remand report from the Assessing officer (the learned AO). Before the learned AO the appellant appeared and made the submissions from time to time. On the basis of the submissions, the AO has issued the remand report dated 29-06-2020 to the learned CIT(A). The learned CIT(A) has forwarded the remand report to the appellant vide notice dated 06-08-2020 and asked to submit the rejoinder. (2) Meanwhile, the Government has introduced the faceless appellate scheme on 25- 09-2020 and transferred the case to National Faceless Appellate Centre (NFAC). Therefore, no further proceedings were carried out with Jurisdictional CIT(A) though issued notice on 23-12-2020 The appellant was waiting for notice from the NFAC. (1) Mr. Shailesh Parikh was appointed as Authorised Person for the alleged appeal since 2016. A copy of Letter of Authority is attached at Annexure 1. At the time of filing appeal before the CIT(A), his email address was given. A copy of form No. 35 is ITA Nos. 152 & 153/Ahd/2023 (Mehsana District Coop. Milk Producers Union Ltd. vs. DCIT) A.Y.– 2013-14 - 3 - attached herewith at Annexure-2. So he was looking after the communication with department. From 01-04-2022 M/s. Ashvin K Yagnik & Co., was appointed as Tax Consultant. A copy of appointed letter is attached herewith at Annexure-3. Since the appellant has changed consultant from 01-04-2022, Mr. Shailesh Parikh stopped sending such communications to the appellant. On 24-08-2022, while going through the website it came to the knowledge of the appellant that notice of hearing dated 12- 04-2022 and 05- 08-2022 have been und by the department. As time was lapsed and voluminous documents were required to be uploaded, the appellant filed the adjournment application dated 25-08-2022 immediately seeking time of 20 days. A copy of adjournment letter is attached herewith at Annexure-4. Thereafter, the appellant had time and again tried to upload the documents but website was not functioning, therefore, appellant was not able to upload the documents. Considering that adjournment letter is uploaded, the appellant was under bonafide belief that adjournment has been granted and was awaiting fresh notice for hearing (4) M/s. Ashvin K Yagnik & Co., which is appointed as Tax Consultant while going through the website on 11 February, 2023 it came to its notice that three orders were passed and uploaded on the website which include the alleged appellate order which was passed on 30-08-2122. Till date, even there is not any single correspondence from the department side though 5 months’ time are passed after the CIT(A)'s order i.e. order giving effect to the order of the CIT(A), demand collecting notice etc. (5) Immediately realizing this, the appellant immediately approached the consultant and draft the appeal and got it signed by the General Manager - F&A and filed the same. In view of the above, considering that appellate order passed on 30-08-2022 and is deemed to be received on same day, under the situation, appeal was required to be filed on or before 30-10-2022. Therefore, this appeal is delayed for 130 days. For this purpose, the appellant submits that delay was unintentional, caused due to the reasonable cause beyond the control of the appellant and hence please be condoned. Looking to the above mentioned peculiar facts and circumstances and the fact that appellant is co-operative society working for the interest of the farmers, the appellant prays Your Honours to condone the delay in filing the appeal and interest of the justice admit the same for adjudication on merits of the case. In this regard, Affidavit of the General Manger - F&A of the appellant society is also attached at Annexure-5.” 4. It appears from the above that the assessee during the course of proceeding change the consultant from 01.04.2022 of the said consultant namely M/s. Shailesh Parekh stopped sending communications to the appellant. Only upon going through the website on 24.08.2022 the appellant would come to learn that notice of hearing dated 23.04.2022 and 05.08.2022 ITA Nos. 152 & 153/Ahd/2023 (Mehsana District Coop. Milk Producers Union Ltd. vs. DCIT) A.Y.– 2013-14 - 4 - were issued by the Department. Since voluminous document required to be upheld the appellant prayed for time for 20 days but ultimately due to non- functioning of the website properly the same could not be uploaded. Finally on 11.02.2023 through the new tax consultant namely M/s. Ashvin K Yagnik & Co. it was learned that three notice orders were passed and uploaded on the website including the appellate order dated 30.08.2022. It has been categorically stated by the assessee that no correspondence from the Department site was forthcoming in spite of elapse of 5 months after the passing of the order of the CIT(A) and the demand calling notices. Reasonable cause shown in the explanation rendered by the assessee seems to be genuine for the reason assigned hereinabove and the delay of 134 days is, thus, condoned. 5. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. 6. The case of assessee before us is this that the appellant, a co-operative Society engaged in the business of processing of milk, manufacturing of milk products and cattle feed, filed the return of income for the A.Y. 2013-14 on 30.09.2013, declaring total income of Rs. (-) 31,61,18,032/- which was revised showing the same gross total income of Rs. (-) 31,61,18,032/-. The assessment was finalized by the Ld AO under Section 143(3) of the Act making disallowance of Rs.103,91,00,000/- and assessed income at Rs.2,98,48,695/-. It appears from the order passed by the Ld. CIT(A) that the notice of hearing was given by the Ld. CIT(A), National Faceless Appeal Centre (NFAC) on five occasions and the appellant neither appeared nor responded to such notices. Such notices were sent through registered mail. ITA Nos. 152 & 153/Ahd/2023 (Mehsana District Coop. Milk Producers Union Ltd. vs. DCIT) A.Y.– 2013-14 - 5 - Finding the assessee not interested in pursuing the matter, the Ld. CIT(A) dismissed the matter in limine ex parte. 7. Before us, at the time of hearing of the matter, the Ld. Counsel appearing for the assessee submitted that during the pendency of the appellate proceeding before the Ld. CIT(A), Gandhinagar, the appellant time-to-time filed three written notes of submission and two paper books containing 242 pages, whereupon, the Ld. CIT(A) discussed the issue and asked for remand report from the Ld. AO who, in turn, on 29.06.2020 filed the remand report before the Ld. CIT(A). Upon perusal of the said remand report as forwarded to the appellant for its comment, it appears that the Ld. AO agreed to the contention made by the appellant in respect of one of the additions. 8. Meanwhile, with the introduction of the Faceless Appellate Scheme on 25.09.2020, the case was transferred to National Faceless Appeal Centre (NFAC) and no proceedings were carried out thereafter with the jurisdiction of the Ld. CIT(A), Gandhinagar. The appellant also changed it’s Consultant Mr. Shailesh Parikh and appointed M/s. Ashvin K Yagnik & Co. and has not been able to know the issuance of notices by the NFAC due to lack of communication with the Consultant and therefore could not attend the proceeding. Only upon going through the website on 11.02.2023 by the subsequent Consultant M/s. Ashvin K Yagnik & Co. it has come to the notice that three orders were passed and uploaded on the website including the appellate order dated 30.08.2022, whereby and whereunder the appeal preferred by the assessee was summarily dismissed. His main contention before us is this that though written notes of submission was filed before the Ld. CIT(A) before the jurisdiction was conferred upon the NFAC for ITA Nos. 152 & 153/Ahd/2023 (Mehsana District Coop. Milk Producers Union Ltd. vs. DCIT) A.Y.– 2013-14 - 6 - adjudication perhaps the same was not transmitted to the file of the Ld. CIT(A), NFAC and ultimately the submissions and/or case made out by the assessee were not taken into consideration in its proper perspective as the said documents were not examined by the Ld. CIT(A), NFAC for some reasons or the other. Under these premises, the Ld. Counsel for the assessee submitted that there is a gross violation of principle of natural justice and prayed for restoring the matter to the file of NFAC for re-consideration of the same in the interest of justice. We note that the Ld. DR has also not been able to justify such stand taken by the Ld. CIT(A) and thus considering the Ld. CIT(A) passing an ex parte order without considering written submissions which are also filed before us by the assessee by way of paper book and further the remand report filed by the Ld. AO, the matter is required to be adjudicated afresh in order to prevent the miscarriage of justice. In that view of the matter, the impugned order is quashed with the direction upon the Ld. CIT(A) to re-adjudicate the matter afresh upon granting opportunity of being heard to the assessee and upon considering the entire set of documents filed by the assessee including written notes of submission, paper book and remand report filed by the Ld. AO and the reply, if any, to be given by the appellant within a period of six months from the date of this order and to pass a reasoned order strictly in accordance with law. 9. In the result, Assessee’s appeal is allowed for statistical purposes. ITA No. 153/Ahd/2023 10. The instant appeal is arising out of the order passed by the National Faceless Appeal Centre (NFAC), Delhi, under Section 154 of the Act. Practically, the order is ex parte one. The case of the Revenue is this that in ITA Nos. 152 & 153/Ahd/2023 (Mehsana District Coop. Milk Producers Union Ltd. vs. DCIT) A.Y.– 2013-14 - 7 - spite of giving notice to the assessee for a number of occasions through registered mail, the assessee did not appear. The Ld. CIT(A), NFAC presumed that the assessee is not interest in pursuing the matter, thus, dismissed the same ex parte. The line of argument advanced by the assessee is on the same footing as already narrated hereinabove in ITA No. 152/Ahd/2023 being change of Consultant and not been able to know the issuance of notices by the Ld. CIT(A), NFAC which according to us seems to be genuine. In that view of the matter, we are quashing the order impugned and restoring the matter to the file of Ld. CIT(A), NFAC with a direction upon him to adjudicate the same upon granting opportunity of being heard to the assessee and upon considering the evidences which assessee may choose to file at the time of hearing of the matter. 11. In the combined result, assessee’s both appeals are allowed for statistical purposes. This Order pronounced on 16/06/2023 Sd/- Sd/- (ANNAPURNA GUPTA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 16/06/2023 S. K. SINHA True Copy आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं%धत आयकर आय ु 'त / Concerned CIT 4. आयकर आय ु 'त(अपील) / The CIT(A)- 5. *वभागीय -त-न%ध, आयकर अपील य अ%धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड3 फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad