Midas Infratech Pvt. Ltd., Lucknow V. DCIT, Range-4, Lucknow

ITA 371/LKW/2020

AI Insights

Midas Infratech Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals), Lucknow, which had dismissed their earlier appeal due to non-appearance. The original assessment by the Deputy Commissioner of Income Tax (DCIT) had made significant additions to the assessee's income, which the assessee contested. The ITAT found that the CIT(A) had not adjudicated the issues on merits and directed a re-examination of the case, emphasizing the need for adherence to the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123009 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-05-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 12-11-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARISH GIDWANI
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation; Reasonable cause; Time period of passing order; TDS
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.371/Lkw/2020 Assessment Year: 2014-15 Midas Infratech Pvt. Ltd., B3/76, Vishal Khand, Gomti Nagar, Lucknow-226010 (U.P.) PAN-AAFCM7506H Vs. DCIT, Range-04, Aaykar Bhavan, 5 Ashok Marg, Lucknow (U.P.) (Appellant) (Respondent) O R D E R PER SUDHANSHU SRIVASTAVA, J.M.: This appeal is preferred by the assessee against the order dated 27.05.2020 passed by the Commissioner of Income Tax (Appeals), Lucknow-2 (hereinafter called ‘the Act’) for the Assessment Year 2014-15. 2. The brief facts of the case are that the assessee company had filed return of income, declaring total income of Rs.99,50,740/- and the assessee’s case was selected for limited scrutiny under the CASS. When the case was fixed for hearing, the assessee requested adjournment. However, the adjournment was not granted and the assessment was completed in terms of Section 144 of the Act after making additions amounting to Rs.2,80,67,071/-. The assessee’s appeal before the ld. First Appellate Appellant by None (Adj. Application) Respondent by Shri Harish Gidwani, (DR) Date of hearing 10/05/2023 Date of pronouncement 11/05/2023 I.T.A. No.371/Lkw/2020 2 Authority was also dismissed for the reason that the assessee did not appear before the ld. First Appellate Authority. 3. Now, the assessee has approached this Tribunal and has raised the following grounds of appeal: “1. That on the facts & in the circumstances of the case and in law, the order passed by the Ld. Commissioner of Income Tax (Appeals) [CIT(A)] is wrong and bad in law. 2. That the Ld. CTT (A) and Ld. AO erred both on facts and circumstances of the case and in law in Rs. 2,32,67,071/- to the income of the appellant as unrecorded turnover relating to the unclaimed TDS amount of Rs. 4,65,334.72. The appellant had declared total receipts properly and accurately though TDS was not reflected in 26AS and consequently was not claimed in the return but shown as debtor in the balance sheet. The satisfaction recorded by Ld AO is erroneous and bad in law. 3. The Ld AO has erred in making addition of Rs. 48,00,000/- to the income of the appellant on the plea that there is a mismatch of figure as claimed in the return with reference to the audit report. The addition has been wrongly made since the payment made to the related person covered by Section 40A(2)(b) of the Act is in accordance with the figure reported in the audit report. The Appellant stated that seized photocopy of receipt does not belong to it. 4. That on the facts of the case and in law, the assessing officer has erred in observing that there is a mismatch in amount of TDS as claimed in the return with reference to the amount of TDS as reported in 26AS as well as in observing that there is mismatch of the payment made to the related person covered by Section 40A(2Xb) of the Act when compared to the audit report. The observation is made, the basis adopted and finding recorded are irrelevant, unwarranted, unjustified and bad in law 5. That the Ld. CIT(A) did not provided the sufficient opportunity of being heard, thus failed to follow the principle of Natural justice and passed the ex-parte order.” I.T.A. No.371/Lkw/2020 3 4. None was present on behalf of the assessee when the appeal was called out for hearing. However, an adjournment application from the office of one Mr. Rohit Tiwari, Advocate, Delhi was placed before us seeking adjournment as the counsel was in the process of collecting certain documents. We note that this appeal was filed with the Registry of the Tribunal on 09.12.2020 and it came up for hearing earlier on 13.09.2022 and it was adjourned at the request of the counsel of the assessee. We are of the considered view that the assessee had more than two and half years to file the documents and seeking adjournment at this juncture for the purpose of collecting documents should not be allowed. Therefore, looking into the facts and circumstances of the case, we reject the adjournment application and proceed to hear the appeal ex-parte qua the assessee. 5. Perusal of the records further shows that this appeal is time barred by 110 days. However, in this regard the assessee has filed an application stating that the order of the ld. CIT(A) was dated 27.05.2020 whereas the appeal before the ITAT could be filed only on 13.11.2020. The reason for the delay has been stated as lockdown due to the impact of the COVID- 19 virus. The assessee has also placed reliance on the order of the Hon'ble Apex Court in suo moto Writ Petition (Civil) No(s).3/2020 wherein the Hon'ble Apex Court had extended the limitation period w.e.f. 15 th March, 2020 till further orders. We note that the limitation period stood extended by the orders of the Hon'ble Apex Court till 14.03.2021. Thus, the assessee had a reasonable cause for not filing the appeal within the prescribed time and, therefore, in view of the order of the Hon'ble Apex Court, as aforementioned, we condone the delay. 6. The ld. Sr. DR, also has no objection to such condonation of delay. 7. A perusal of the record shows that the appeal of the assessee before the ld. CIT(A) was dismissed for the reason of non appearance and I.T.A. No.371/Lkw/2020 4 further the ld. CIT(A) has not adjudicated the issues before her on merits which was incumbent upon her irrespective of the fact as to whether the assessee had put in an appearance before her or not. In such a situation, in the interest of substantial justice, we deem it appropriate to restore this file to the office of the ld. First Appellate Authority with the direction to adjudicate the issues on merits and, thereafter, pass the order in accordance with law after giving the assessee a proper opportunity to present its case. We also direct the assessee to cooperate in the proceedings before the Ld. First Appellate Authority this time and properly avail the opportunity being granted failing which the ld. First Appellate Authority shall be at liberty to decide the issues in accordance with law on merits ex-parte qua the assessee. 8. In the result, appeal filed by the assessee stands allowed for statistical purpose. (Order pronounced in the open court on 11/05/2023) Sd/- Sd/- ( ANADEE NATH MISSHRA ) (SUDHANSHU SRIVASTAVA) Accountant Member Judicial Member Dated: 11/05/2023 Aks Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow By Order Asstt. Registrar