ROYAL DRINKS PTV. LTD., NAGPUR V. INCOME TAX OFFICER, WARD 4(3), NAGPUR

ITA 371/NAG/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8189 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 26-10-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY MARATHE LD.
• Assessee Lawyers: RAJESH LOYA LD.
• Keywords: Principle of natural justice
• Section: 143(1); 250; 251; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR ITAT-Nagpur Page 1 of 4 (Through Virtual hearing from ITAT, Pune) BEFORE HON’BLE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपऩल स ं . / ITA No. 371/PUN/2022 निर्धारण वषा / Assessment Year : 2017-18 Royal Drinks Pvt. Ltd. 254, Small Factory Area, Wardhaman Nagar, Nagpur-440008 PAN: AAACR9486J . . . . . . . अपीलार्थी / Appellant बिधम / V/s Income Tax Officer Ward-4(3), Nagpur. . . . . . . . प्रत्यर्थी / Respondent द्वधरध/ Appearances Assessee by : Mr Rajesh Loya [‘Ld. AR’] Revenue by : Mr Abhay Marathe [‘Ld. DR’] स ु नवाई की तारीख / Date of conclusive Hearing : 21/03/2024 घोषणा की तारीख / Date of Pronouncement : 21/03/2024 आदेश/ ORDER PER G. D. PADMAHSHALI, AM; This appeal impugns the DIN & order No. ITBA/NFAC/S/250/2022- 23/1045004100(1) dt. 29/08/2022 passed u/s 250 of the Income-tax Act, 1961 [‘the Act’ hereinafter] by the National Faceless Appellate Centre [‘NFAC’ hereinafter] for assessment year 2017-18 [‘AY’ hereinafter]. 2. Briefly stated facts of the case are that; 2.1 the assessee is a company engaged in the activity of manufacturing and trading of country liquor. The return of income filed by it declaring total Royal Drinks Pvt. Ltd. ITA No.371/NAG/2022 ITAT-Nagpur Page 2 of 4 income of ₹17,55,000/- was processed summarily u/s 143(1) of the Act without variation in the first place. Subsequently the case of the assessee was selected for scrutiny and the assessment u/s143(3) of the Act was completed by making addition of ₹1,16,94,203/-on account of unexplained cash deposits u/s 69A of the Act. 2.2 Aggrieved assessee carried the matter in appeal before first appellate authority u/s 246A(1)(a) of the Act. While dealing with assessee’s appeal the Ld. NFAC provided as much as five opportunities commencing from January 2021 to August, 2022. However, the assessee did neither comply therewith nor attend one. In the absence of any response forthcoming from the assessee or the written submission in support of grounds raised by it, the Ld. NFAC after reiterating the findings of Ld. AO, has culminated the appellate proceedings ex-parte and confirmed the additions by pressing into service the Hon’ble Apex Court’s decision in ‘CIT Vs B. N. Bhattacharjee’ reported in [1997] 118 ITR 461 (SC) and other equivalent decisions. 2.3 Aggrieved by the aforestated ex-parte adjudication of first appellate forum, the appellant assessee company set-up this appeal alleging the violation of principle of natural justice in the former to the merits thereof. 3. We have heard rival contentions, perused the material placed on record in light of rule 18 of ITAT-Rules 1963. We note that, appellant’s failure to Royal Drinks Pvt. Ltd. ITA No.371/NAG/2022 ITAT-Nagpur Page 3 of 4 furnish required details & effectively explain nature and source of cash deposits to the satisfaction of the Ld. AO has resulted into impugned addition u/s 69A of the Act. Whereas, in an appeal, the Ld. NFAC confirmed the addition ex-parte for non-prosecution of appeal by the appellant assessee. 4. Without going into the merits of the case, at the outset we note that, in absence of cogent evidential material, submission and non-compliance by the appellant, in the evince of restriction placed by 251(1)(a) of the Act, the Ld. NFAC had to culminate the proceedings ex-parte for non-prosecution. 5. We are heedful to the restriction placed by clause (a) of sub-section (1) of section 251 of the Act which obligates the Ld. CIT(A) to adjudicate the issue either by confirming or annulling the addition or reducing or enhancing the addition made by the assessing officer without the right to remand the matter back. However, while exercising the jurisdiction u/s 251(1)(a) of the Act, the Ld. CIT(A) was required to state point of determination, its decision thereon and clear reasons therefore in terms of section 250(6) of the Act. 6. A plain reading of section 250 of the Act reveals that, it is incumbent upon the Ld. CIT(A) to make necessary enquiries before passing an order and while doing so it demands it to decide each of the points arising out of the appeal i.e. grounds on merits even in an ex-parte order. In view of Section 250(4) r.w.s. 250(6) of the Act, Ld. CIT(A) has no power to dismiss Royal Drinks Pvt. Ltd. ITA No.371/NAG/2022 ITAT-Nagpur Page 4 of 4 an appeal for non-prosecution, without discussing the merits of the case, and this proposition finds supported in the decision of ‘CIT Vs Premkumar Arjunda’ [(2016) 240 TAXMAN 0133 (Bom)]. 7. Per contra in the instant case, we find that the Ld. NFAC in the event of non-prosecution, confirmed the addition in line with the assessment without adjudicating it in terms of sub-section (6) of section 250 of the Act, thus the rights & liabilities of the rival parties remain undetermined effectively. This adjudication in our considered view is not in consonance with the provision of sub-section (6) of section 250 of the Act. For the reasons, without commenting on merits of the case, we deem it proper to set-aside the impugned order and remit the matter back to the file of Ld. CIT(A) for de- nova adjudication in accordance with law with a direction to accord not more than three effective opportunities and pass a speaking order in terms of section 250(6) of the Act. Thus, ordered accordingly. 8. In the result, the appeal of the assessee is allowed for statistical purposes. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Thursday, 21st day of March, 2024. -S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER प ु णे / PUNE ; ददना ां क / Dated : 21st day of March, 2024. आदेशकीप्रनिनलनपअग्रेनषि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The Pr.CIT Concerned. 4. The NFAC Delhi 5. DR, ITAT, Nagpur Bench, Nagpur 6.गार्डफ़ाइल / Guard File. आदेशान ु सार / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादधकरण, प ु णे / ITAT, Pune.