PLACEWELL JOB PRIVATE LIMITED, MUMBAI V. WARD 7(3)(3), MUMBAI

ITA 3255/MUM/2022

AI Insights

The case involves Placewell Jobs Private Limited appealing against the order of the National Faceless Appeal Centre (NFAC), Delhi, which enhanced the disallowance of interest and confirmed disallowances on website charges and business promotion expenses for the Assessment Year 2016-17. The primary contention was the lack of proper notice to the assessee, as the notices were sent to an incorrect email address, leading to a claim of violation of the principles of natural justice. The Tribunal found merit in the assessee's argument and remanded the case back to the CIT(A) for a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130100 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-03-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 26-12-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Capital expenditure
• Section: 143(3); 143(2)

Judgement Text

P a g e | 1 ITA No. 3255/Mum/2022 Placewell Jobs Pvt. Ltd. Vs. ITO, Ward- 7(3)(3) IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 3255/Mum/2022 (A.Y.2016-17) Placewell Jobs Private Limited, Shiv Krupa Plot No. E68 Sector 3, Belapada Opp Khargar Railway Station Maharashtra – 410 210 Vs. Income Tax Officer Ward 7(3)(3) Mumbai 400 020 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACB6389E Appellant .. Respondent Appellant by : None Respondent by : Abhishek Kumar Singh Date of Hearing 08.03.2023 Date of Pronouncement 08.03.2023 आदेश / O R D E R Per Amarjit Singh (AM): The present appeal filed by the assessee is directed against the order passed by the NFAC, Delhi, dated 30.08.2022 for A.Y. 2016-17. The assessee has raised the following grounds before us: “(1) Disallowance under section 36(1)(iii) The Ld. CIT(A) of National Faceless Appeal Centre (NFAC), Delhi has erred in law and fact in enhancing the disallowance of interest Rs. 1,19,80,032 without giving proper opportunity of heard to the appellant On the facts of the case the notice was served on the wrong email id which is never received by the receipiant. Then the order passed by the officer is bad in law and principle of natural justice. Hence the appellant prays that the order passed by the CIT(A) should be set aside and opportunity of being heard should be given to the appellant. (2) Website charges On the facts and circumstances of the case, the appellant stay that the Ld. Commissioner of NFAC has erred in law in confirming the P a g e | 2 ITA No. 3255/Mum/2022 Placewell Jobs Pvt. Ltd. Vs. ITO, Ward- 7(3)(3) disallowance of website expenses Rs. 1,31,237. By treating the said expenditure as capital expenditure. Without prejudice above, the Ld. Commissioner would have allowed 60% depreciation on website if the expenditure is treated as capital expenditure. (3) Business promotion expenses On the facts and circumstances of case, the Ld. Commissioner has erred in law in confirming the disallowance of Rs.1,00,000 sales and business expenditure without giving proper opportunity of being heard. Appellant craves leave to add to, alter, amend or delete all or any of the above grounds of appeal, which are independent and without prejudice to each other, on or before the date of hearing.” 2. Fact in brief is that assesse has filed return of income declaring nil income on 17.10.2016. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 11.07.2017. The assessment u/s 143(3) of the Act was finalised on 28.12.2018 and total income of the assesse was assessed at Rs.76,893/- after making disallowance of interest u/s 36(1)(iii) of Rs.13,19,125/- website charges of Rs.1,31,237/- and business promotion expenses of Rs. 1,00,000/-. 3. The assessee filed the appeal before the ld. CIT(A). However, the ld. CIT(A) has not adjudicated the ground of appeal of the assessee on merit but dismissed the appeal of the assessee for want of prosecution and enhanced the disallowance of interest expenses by Rs.1,06,60,907/-. 4. Heard the ld. D.R and perused the material on record. The ld. CIT(A) has dismissed the appeal of the assessee on the ground that assessee has not responded to the notices issued by the ld. CIT(A) during the course of appellate proceedings. In this regard, the assessee has submitted in its ground of appeal that the notice of hearing by the ld. CIT(A) were served on the wrong email id which were never received by the assessee and therefore, requested that opportunity of hearing should be given to the assessee. P a g e | 3 ITA No. 3255/Mum/2022 Placewell Jobs Pvt. Ltd. Vs. ITO, Ward- 7(3)(3) Sec. 250(6) of the Income Tax contemplates that the CIT(A) would determine point in dispute and therefore record reasons of such point in support of his conclusion. Considering the fact that assesse has not received the notice served on the email we are of the view that a fair and reasonable opportunity of hearing is essentially to be extended to the assessee for deciding the appeal on merit. It is noticed that in the form no. 35 the assessee has provided email id as [e-mail]. However, in the email id mentioned in the form no. 36 is given as [e-mail]. The assessee is directed to verify the correctness of the email and recommunicate to the Income Tax Department within 15 days of receipt of this order. Therefore, the matter is remanded back to the ld. CIT(A) for adjudication on merit after providing adequate opportunity of hearing to the assessee. Accordingly, the appeal of the assessee is allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 08.03.2023 Sd/- Sd/- (Vikas Awasthy) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 08.03.2023 Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. P a g e | 4 ITA No. 3255/Mum/2022 Placewell Jobs Pvt. Ltd. Vs. ITO, Ward- 7(3)(3) सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.