MASN PAPER TRADING PRIVATE LIMITED, HYDERABAD V. ITO, WARD 16(3), HYDERABAD

ITA 263/Hyd/2022

AI Insights

The case involves MASN Paper Trading (P) Ltd, which appealed against the order of the CIT (A) NFAC Delhi, which confirmed the Assessing Officer's decision that significantly increased the assessed income of the company from the returned income. The company had filed its return disclosing an income of Rs.6,33,240, which was drastically altered to Rs.5,23,20,234 by the Assessing Officer. The Tribunal found that the company was not given a proper opportunity to present its case, particularly in light of the COVID-19 pandemic affecting the directors of the company, which was not adequately considered by the lower authorities.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302958 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 30-07-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 28-06-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINOD KATHEPALLY
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1)

Judgement Text

ITA 263 of 2022 MASN Paper Trading P Ltd Page 1 of 7 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad Before Shri R.K. Panda, Vice-President AND Shri Laliet Kumar, Judicial Member ITA No.263/Hyd/2022 Assessment Year: 2018-19 MASN Paper Trading (P) Ltd, Hyderabad PAN:AAKCM9783F Vs. Income Tax Officer Ward 16(3) Hyderabad (Appellant) (Respondent) Assessee by : Shri Vinod Kathepally, Adv. Revenue by: Shri Shakeer Ahmed, DR Date of hearing: 31/07/2023 Date of pronouncement: 31/07/2023 ORDER Per R.K. Panda, Vice-President This appeal filed by the assessee is directed against the order dated 4.4.2022 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2018-19. 2. At the outset, it is seen that there is a delay of 25 days in filing of this appeal by the assessee for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application and after hearing both sides, the delay in filing of this appeal by the assessee is condoned and the appeal is admitted for adjudication. ITA 263 of 2022 MASN Paper Trading P Ltd Page 2 of 7 3. Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Learned CIT (A) NFAC in confirming the order passed by the Assessing Officer determining the income at Rs.5,23,20,234/- as against the returned income of Rs.6,33,240/-. 4. Facts of the case, in brief, are that the assessee is a private limited company and filed its return of income on 30.03.2021 disclosing a total income of Rs.6,33,240/-. The return was selected for complete scrutiny and statutory notices u/s 143(2) & 142(1) were issued to the assessee asking to file various details. The assessee furnished some details before the Assessing Officer, however, complete details were not furnished. The Assessing Officer passed the draft assessment order which the assessee received on 6.8.2021 wherein the assessee was directed to furnish the requisite details. However, the assessee sought adjournment on the ground that both the Directors of the company are affected by COVID and are at their native place. The Assessing Officer did not accept the request of the assessee for adjournment and final order u/s 143(3) r.w.s. 144B was passed assessing the total income of the assessee at Rs.5,23,20,230/-. 5. Before the learned CIT (A) NFAC, the assessee challenged the determination of the income at Rs.5,23,20,230/- as against the returned income of Rs.6,33,240/- without giving adequate opportunity for production of document before completing the assessment. However, the learned CIT (A) NFAC was also not satisfied with the arguments and dismissed the appeal filed by the assessee by observing as under: ITA 263 of 2022 MASN Paper Trading P Ltd Page 3 of 7 ITA 263 of 2022 MASN Paper Trading P Ltd Page 4 of 7 ITA 263 of 2022 MASN Paper Trading P Ltd Page 5 of 7 6. Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal. 7. The learned Counsel for the assessee submitted that high pitch assessment has been made by the Assessing Officer without giving due opportunity of being heard to the assessee and without following the principles of natural justice. Even the learned CIT (A) NFAC has also not given due opportunity of being heard to the assessee and he rejected the adjournment application filed by the assessee and upheld the actin of the Assessing Officer. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case before the Assessing Officer. 8. The learned DR, on the other hand, while supporting the order of the Assessing Officer and the learned CIT (A) NFAC submitted that despite number of opportunities granted by both the lower authorities below, the assessee did not respond to such notices for which addition has been made which is just and proper. Therefore, the addition made by the Assessing Officer and sustained by the learned CIT (A) NFAC should be upheld. ITA 263 of 2022 MASN Paper Trading P Ltd Page 6 of 7 9. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We find the AO in the instant case determined the total income of the assessee at Rs.5,23,20,234/- as against the returned income of Rs.6,33,240/- by making various additions. While doing so, he rejected the adjournment application filed by the assessee wherein it was stated that the Directors have been affected by COVID and are residing at their native places and are not in a position to file the requisite details. We find the learned CIT (A) NFAC without giving adequate opportunity has upheld the action of the Assessing Officer, the reasons of which are already reproduced in the preceding paragraph. It is the submission of the learned Counsel for the assessee that due opportunity of being heard to the assessee was not given by either of the authorities below and therefore, the matter should be restored to the file of the Assessing Officer with a direction to give one final opportunity to the assessee to substantiate its case. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one last opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to file the requisite details before the Assessing Officer as asked for without seeking any adjournment under any pretext failing which the Assessing Officer is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. ITA 263 of 2022 MASN Paper Trading P Ltd Page 7 of 7 Order pronounced in the Open Court at the time of hearing itself i.e. on 31 st July, 2023. Sd/- Sd/- (LALIET KUMAR) JUDICIAL MEMBER (R.K. PANDA) VICE-PRESIDENT Hyderabad, dated 31 st July, 2023. Vinodan/sps Copy to: S.No Addresses 1 MASN Paper Trading (P) Ltd., 1-2-911 Domalguda, Hyderabad 500029 2 Income Tax Officer Ward 16(3) IT Towers, Masab Tank, Hyderabad 3 DR, ITAT Hyderabad Benches 4 Guard File By Order