AJAX INVESTMENTS PRIVATE LIMITED, SURAT V. DCIT CIRCLE-1(1)(1), CJ- ITO WARD 1(1) (1) SURAT, SURAT

ITA 298/SRT/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6592 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-06-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 17-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Opportunity of being heard; Principle of natural justice; Difference of opinion; Change of opinion; Set aside
• Section: 148; 143(3); 142(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.298/SRT/2024 Assessment Year: (2011-12) (Hybrid Hearing) Ajax Investment Pvt. Ltd., A/1002, Murlidhar Apartment, Ajit Park Society, Opp. Krushi Farm, Ghod Dod Road, Surat – 395007 Vs. The DCIT, Circle -1(1)(1), CJ-ITO, Ward –1(1)(1), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADCA4725G (Appellant) (Respondent) Appellant by Ms Himali Mistry, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 06/06/2024 Date of Pronouncement 07/06/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal emanates from the order dated 23.01.2024 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, “the Ld.CIT(A)”] for the assessment year (AY) 2011-12. 2. The grounds of appeal raised by the assessee are as follows: “(i) Ex-parte order: (1) The leaned CIT(A) was not justified in dismissing the appeal, particularly when the appellant sought time. (2) The natural justice deserves that the appellant may be afforded one more opportunity as it is interested in pursuing the appeal. (ii) Reopening of assessment: (1) The learned CIT(A) was not justified in confirming the reopening of assessment though no income had escaped assessment. ITA No.298/SRT/2024 Ajax Investment Pvt. Ltd. 2 (2) The appellant submits that the expenses disallowed were in the profit and loss account filed and therefore, there was change of opinion by simply reappraising them. (iii) Disallowance of expenses: The learned CIT(A) was not justified in confirming disallowance a sum of Rs.20,6,,548/- when they were incurred for the purpose of business and was required to be allowed. (iv) Miscellaneous: (1) All of the above grounds are prejudice to one another. (2) The appellant craves leave to add, alter or vary any of the grounds of appeal.” 3. The facts of the case in brief are that the assessee is a private limited company. The assessee filed its return of income for AY.2011-12 on 28.09.2011, declaring total loss of Rs.17,61,570/-. The case of the assessee was reopened and notice u/s 148 of the Act was issued on 31.03.2016 and duly served upon the assessee. In response to the same, the assessee company vide letter dated 06.04.2016 had requested to consider its return of income filed on 28.09.2011 as return of income in response to the said notice. Thereafter, notice u/s 143(2) of the Act was issued 13.10.2016 along with notice u/s 142(1) of the Act calling for certain primary details. A show-cause notice was also issued on 19.07.2017 asking the assessee to explain as to why expenses amounting to Rs.21,33,146/- should not be disallowed and added back to the total income of the assessee. In response, the assessee filed reply vide letter dated 26.07.2017 which was considered by the Assessing Officer but the same was not satisfactory to the Assessing Officer. The assessment was completed u/s 143(3) r.w.s. 147 of the Act on 28.07.2017 by making ITA No.298/SRT/2024 Ajax Investment Pvt. Ltd. 3 addition of Rs.20,65,548/- on account of disallowance of expenses incurred, thereby computing the assessed income at Rs.3,03,980/-. 4. Aggrieved, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) issued 5 notices but assessee sought adjournment on 4 occasions and did not respond to the first notice. Thereafter, Ld. CIT(A) observed that assessee was not vigilant and he proceeded to decide the appeal based on material available on record. In the result, the appeal was dismissed. Aggrieved, the assessee has filed appeal before the ITAT. 5. At the outset, Learned Authorized Representative (Ld. AR) of the assessee assailed the impugned order by contending that assessee could not represent his case before Ld. CIT(A) and the order being an ex parte order, stood vitiated on account of violation of principles of natural justice. The Ld. AR submits that during the appellate proceedings, the assessee could not appear before the Ld. CIT(A) due to circumstances beyond its control. The assessee has sought adjournment before the Ld. CIT(A) which is evident from the order of Ld. CIT(A). Adequate opportunity of hearing was not given to the assessee, therefore, Ld. AR contended that one more opportunity should be given to the assessee to plead his case before the Ld. CIT(A). 5. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue submitted that assessee was negligent ITA No.298/SRT/2024 Ajax Investment Pvt. Ltd. 4 during the appellate proceedings; hence, appeal of the assessee should be dismissed. 6. We have heard both the parties. It is an undisputed fact that the assessee did not respond to the notices issued to him by the Ld. CIT(A) on 20.01.2021, 10.02.2021, 06.03.2023, 15.06.2023 and 12.01.2024. Therefore, the Ld. CIT(A) has upheld the order of the Assessing Officer and dismissed the appeal by observing that the assessee was totally non- compliant. The Ld. AR requested for one more opportunity in the interest of justice and fair play. We find that assessee could not plead his case properly before the Ld. CIT(A). We also note that Ld. CIT(A) has passed the ex parte order due to non-compliance by the assessee before him. The Ld. AR stated that one more opportunity of hearing may be given to him for presenting his case properly. We are of the view that one more opportunity should be given to the assessee to plead his case. It is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving deeper into the merits of the case, in the interest of justice, we set aside the order of Ld. CIT(A) and restore the matter back to the file of Assessing Officer for de novo adjudication and to pass a speaking order after affording sufficient opportunity of being heard to the assessee. The assessee is also directed to furnish explanation and submit the relevant details and documents ITA No.298/SRT/2024 Ajax Investment Pvt. Ltd. 5 before the Assessing Officer. For statistical purposes, the appeal of the assessee is treated as allowed. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced on 07/06/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 07/06/2024 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat