Diamond Exporters Association Ltd, Mumbai V. Centralized Processing Centre, CPC Bangalore

ITA 2589/MUM/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8884 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 29-01-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 25-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAKOLI GHOSH
• Keywords: Reasonable cause; Revised return; Set aside
• Section: 139; 10B; 143(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 2589/MUM/2023 Assessment Year: 2016-17 M/s Diamond Exporters Association Ltd., 501/502, Mehta Bhavan, Raja Ram Mohan Roy Marg, Mumbai-400 004. Vs. Centralized Processing Centre, Post Bag No. 2, Electronic City Post Office, Bangalore-560500. PAN NO. AAATD 3855 G Appellant Respondent Assessee by : Mr. Viraj Mehta, CA Revenue by : Ms. Kakoli Ghosh, Sr. DR Date of Hearing : 30/01/2024 Date of pronouncement : 31/01/2024 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 14.06.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following grounds: 1. On facts and circumstances, Ld. CIT(A) has erred in confirming the addition made by CPC of 9,56,497/- by not allowing expenses incurred towards the object of the trust. Such addition is bad in law and erroneous in facts and liable to be deleted. 2. On facts and circumstances, Ld. CIT(A) has erred in confirming the addition made by CPC of 9,56,497/- by not allowing expenses incurred towards the object of the trust by merely denying the fact that Form 10B was not filed within the time without considering the fact that the filing of form is a procedural requirement. Such addition is bad in law and erroneous in fac 3. On facts and circumstances, Ld. CIT(A) has erred in confirming the addition without providing proper opportunity of hearing which is against the principle of natural justice. Such addition is bad in law and erroneous in fact confirmed without providing proper opportunity of hearing. 2. At the outset, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has passed the impugned order ex assessee and therefore, deciding afresh. 3. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee is a company registered u/s 25 of the Companies Act, 1956 and is engaged in the promotion and development of export trade and diamond in India. For the year under consideration, the assessee filed return of income manually Form No. 10B of Income return of income and therefore, while processing the income return, the Central Processing Centre (CPC) Bangalore denied the claim of expenses of Rs.9,56,497/ the assessee was also rejected by the CPC assessee filed appeal before the Ld. CIT(A). However, due to non compliance of various no was decided ex-parte observing as under: “4. Appellate decision: M/s Diamond Exporters Association Ltd. that Form 10B was not filed within the time without considering the fact that the filing of form is a procedural requirement. Such addition is bad in law and erroneous in facts and liable to be deleted. 3. On facts and circumstances, Ld. CIT(A) has erred in confirming the addition without providing proper opportunity of hearing which is against the principle of natural justice. Such addition is bad in law and erroneous in facts and liable to be deleted as the same is confirmed without providing proper opportunity of hearing. At the outset, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has passed the impugned order ex assessee and therefore, matter might be restored back We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that a company registered u/s 25 of the Companies Act, engaged in the promotion and development of export trade and diamond in India. For the year under consideration, the assessee filed return of income manually on 08.07.2016 however Form No. 10B of Income-tax Rules was not uploaded while filing t return of income and therefore, while processing the income the Central Processing Centre (CPC) Bangalore denied the claim of expenses of Rs.9,56,497/-. Further, rectification sought by the assessee was also rejected by the CPC Bangalore. A assessee filed appeal before the Ld. CIT(A). However, due to non compliance of various notices issued by the Ld. CIT(A), t parte observing as under: 4. Appellate decision:- M/s Diamond Exporters Association Ltd. 2 ITA No. 2589/M/2023 that Form 10B was not filed within the time without considering the fact that the filing of form is a procedural requirement. Such addition ts and liable to be deleted. 3. On facts and circumstances, Ld. CIT(A) has erred in confirming the addition without providing proper opportunity of hearing which is against the principle of natural justice. Such addition is bad in law s and liable to be deleted as the same is At the outset, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has passed the impugned order ex-parte qua the restored back to him for We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that a company registered u/s 25 of the Companies Act, engaged in the promotion and development of export trade and diamond in India. For the year under consideration, the 08.07.2016 however tax Rules was not uploaded while filing the return of income and therefore, while processing the income-tax the Central Processing Centre (CPC) Bangalore denied the . Further, rectification sought by Bangalore. Aggrieved, the assessee filed appeal before the Ld. CIT(A). However, due to non- tices issued by the Ld. CIT(A), the appeal In this case, the AO, CPC Bangalore passed 154 dated 07.08.2019 denying the expenses of Rs 9,56,497/ towards various objects of the Trust. Form 10B being audit report u/s 12Ab of the Act was not uploaded while filing the return due to some technical glitches in rectified by uploading the same while filing the revised return. Aggrieved with above order the appellant preferred the present appeal. In this regard the appellant has taken the ground of appeal that order of AO is bad in law as AO erred in making the adjustments while processing the return u/s 143(1) of Rs 9,56,497/ opportunity of hearing to the appellant to explain its case, thus AO erred and violated the principles of natural justice. In thi various opportunities u/s 250 of IT Act, 1961 was provided to the appellant during the course of appellate proceedings, however appellant failed to respond to any notice and no written submissions was furnished in support of grounds of ap in detail. Further, appellant has also raised his grievance that AO, CPC has ignored the revised return of the appellant. In this regard it is to be noted that appellant has failed to furnish any written submissions in support of his grounds despite several opportunity given to elaborate and justify the grounds taken alongwith some documentary evidence and failed to furnish any reasonable cause for not filing the Form 10B alongwith return filed u/s 139 (1) within due time as in the absence of any detailed reason and documentary evidence the disallowance of Rs 9,56,497/ and in my considered opinion I do not see any infirmity in the action of the AO. Therefore, in view circumstances of the ground of the appeal raised by the appellant is hereby dismissed. 3.1 Before us, the Ld. counsel for the assessee submitted that in the Form No. 35 i.e. Form prescribed CIT(A), the assessee provided e [e-mail] assessee by the ld CIT(A) at other e-mail address an represent before the Ld. CIT(A). According to the was a sufficient cause for non our opinion, the Ld. CIT(A) was required to decide the appeal on merit in terms of se M/s Diamond Exporters Association Ltd. In this case, the AO, CPC Bangalore passed the rectification order u/s 154 dated 07.08.2019 denying the expenses of Rs 9,56,497/ towards various objects of the Trust. Form 10B being audit report u/s 12Ab of the Act was not uploaded while filing the return due to some technical glitches in the system which nowever was sought to be rectified by uploading the same while filing the revised return. Aggrieved with above order the appellant preferred the present appeal. In this regard the appellant has taken the ground of appeal that order of is bad in law as AO erred in making the adjustments while processing the return u/s 143(1) of Rs 9,56,497/- without giving any opportunity of hearing to the appellant to explain its case, thus AO erred and violated the principles of natural justice. In this connection, the various opportunities u/s 250 of IT Act, 1961 was provided to the appellant during the course of appellate proceedings, however appellant failed to respond to any notice and no written submissions was furnished in support of grounds of appeal taken, documentary evidence in detail. Further, appellant has also raised his grievance that AO, CPC has ignored the revised return of the appellant. In this regard it is to be noted that appellant has failed to furnish any written submissions in ort of his grounds despite several opportunity given to elaborate and justify the grounds taken alongwith some documentary evidence and failed to furnish any reasonable cause for not filing the Form 10B alongwith return filed u/s 139 (1) within due time as per law. Therefore, in the absence of any detailed reason and documentary evidence the disallowance of Rs 9,56,497/- made by AO, CPC u/s 143 (1) is upheld and in my considered opinion I do not see any infirmity in the action of the AO. Therefore, in view of the above narrated facts and circumstances of the ground of the appeal raised by the appellant is hereby dismissed.” Before us, the Ld. counsel for the assessee submitted that in the Form No. 35 i.e. Form prescribed for filing appeal before the Ld. he assessee provided e-mail address as [e-mail] for serving the notice of hearing by the ld CIT(A). However, the Ld. CIT(A) has sent notices mail address and therefore, the assessee could not represent before the Ld. CIT(A). According to the ld Counsel, a sufficient cause for non-complying before the Ld. CIT(A). Ld. CIT(A) was required to decide the appeal on merit in terms of section 250(6) of the Act M/s Diamond Exporters Association Ltd. 3 ITA No. 2589/M/2023 the rectification order u/s 154 dated 07.08.2019 denying the expenses of Rs 9,56,497/- incurred towards various objects of the Trust. Form 10B being audit report u/s 12Ab of the Act was not uploaded while filing the return due to some the system which nowever was sought to be rectified by uploading the same while filing the revised return. Aggrieved with above order the appellant preferred the present appeal. In this regard the appellant has taken the ground of appeal that order of is bad in law as AO erred in making the adjustments while without giving any opportunity of hearing to the appellant to explain its case, thus AO erred s connection, the various opportunities u/s 250 of IT Act, 1961 was provided to the appellant during the course of appellate proceedings, however appellant failed to respond to any notice and no written submissions was peal taken, documentary evidence in detail. Further, appellant has also raised his grievance that AO, CPC has ignored the revised return of the appellant. In this regard it is to be noted that appellant has failed to furnish any written submissions in ort of his grounds despite several opportunity given to elaborate and justify the grounds taken alongwith some documentary evidence and failed to furnish any reasonable cause for not filing the Form 10B per law. Therefore, in the absence of any detailed reason and documentary evidence the made by AO, CPC u/s 143 (1) is upheld and in my considered opinion I do not see any infirmity in the action of of the above narrated facts and circumstances of the ground of the appeal raised by the appellant is Before us, the Ld. counsel for the assessee submitted that in g appeal before the Ld. mail address as of hearing on the . However, the Ld. CIT(A) has sent notices d therefore, the assessee could not ld Counsel, there complying before the Ld. CIT(A). In Ld. CIT(A) was required to decide the appeal on ction 250(6) of the Act despite non representation by the assessee on merit and submission of the assessee has into consideration , therefore, we feel it appropriate to set aside impugned order and restore CIT(A) for deciding afresh after giving due opportunity. 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 31/01/2024 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// M/s Diamond Exporters Association Ltd. representation by the assessee. Since appeal has not been decided on merit and submission of the assessee has also not been taken therefore, we feel it appropriate to set aside impugned order and restore the matter back to the file of the Ld. CIT(A) for deciding afresh after giving due opportunity. In the result, the appeal of the assessee is allowed for nounced in the open Court on 31/01/ Sd/- Sd/ KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai M/s Diamond Exporters Association Ltd. 4 ITA No. 2589/M/2023 . Since appeal has not been decided also not been taken therefore, we feel it appropriate to set aside the the matter back to the file of the Ld. CIT(A) for deciding afresh after giving due opportunity. In the result, the appeal of the assessee is allowed for /01/2024. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai