D More Fashion Private Limited, Surat V. Dy. Commissioner of Income Tax, Circle -1,(1)(1), Surat

ITA 426/SRT/2023

AI Insights

The case involves D More Fashion Pvt. Ltd., the appellant, contesting an order from the National Faceless Appeal Centre (NFAC)/Ld. CIT(A) regarding the assessment year 2010-11. The primary issues in the appeal included the non-admission of the appeal by the NFAC/Ld. CIT(A) due to alleged defects in the filing, the legality of the re-opening of the assessment under section 147, and the additions made under section 68 and section 69C of the Income Tax Act, 1961. The Tribunal noted that the NFAC/Ld. CIT(A) had not considered the assessee's submissions and documents properly, leading to an ex parte order. The Tribunal emphasized the need for adherence to the principles of natural justice and fair play, mandating a re-examination of the case with proper hearings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301966 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 22-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus Share capital; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 148; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A.L. SAINI, AM आयकर अपील सं./ITA No.426/SRT/2023 (िनधाŊरणवषŊ / Assessment Year: (2010-11) (Virtual Court Hearing) D More Fashion Pvt. Ltd. 145, Mahalaxmi Marke Ring Road, Opp. Surat Textile Market, Surat-395002 Vs. Dy. Commissioner of Income- tax, Circle-(1)(1)(1), Aaykar Bhawan, Majura Gate, Opp. New Civil Hospital, Surat- 395001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.: AADCD 2876 M (अपीलाथŎ /Appellant) (ŮȑथŎ/Respondent) िनधाŊįरती की ओर से /Assessee by : Ms. Chaitali Shah, C.A राजèव कȧ ओर से /Respondent by : Shri Vinod Kumar, Sr-DR सुनवाईकीतारीख/ Date of Hearing : 28/08/2023 घोषणाकीतारीख/Date of Pronouncement : 29/08/2023 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2010-11, is directed against the order passed by the National Faceless Appeal Centre, Delhi [‘NFAC/Ld.CIT(A)’ for short] dated 27.04.2023, which in turn arises out of an order passed by the Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short ‘the Act’), dated 28.12.2017. 2. The grounds of appeal raised by the assessee are as follows:- “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in not admitting the appeal on the ground that the assessment order was not uploaded with the appeal memo although it was duly uploaded by the assessee while filing Form-35. 2. On the facts and circumstances of the case as well as law on the subject, the learned Assessing Officer has erred in re-opening assessment u/s 147 by issuing notice u/s 148 of the I.T. Act, 1961. Page | 2 ITA No.426/SRT/2023 A.Y. 10-11 D More Fashion Pvt. Ltd 3. On the facts and circumstances of the case as well as law on the subject, the learned Assessing Officer has erred in making addition of Rs.1,55,00,000/- u/s 68 of the Act on account of alleged bogus share capital and share premium. 4.On the facts and circumstances of the case as well as law on the subject, the learned Assessing Officer has erred in making addition of Rs.3,10,000/- on account of alleged undisclosed commission expenses. 5. It is therefore prayed that assessment framed u/s 147 r.w.s. 144B of the Act may kindly be quashed and/or addition made by Assessing Officer may please be deleted. 6. Appellant craves leave to add, alter, or delete any ground(s) either before or in the course of hearing of the appeal.” 3. At the outset Learned Counsel for the assessee submitted that the NFAC/Ld. CIT(A) has dismissed the appeal of assessee by stating that “primary enclosures to be annexed with Form No.35” such as assessment order and demand notice were not filed by the assessee. As per NFAC/Ld. CIT(A) the defect memo has already been issued to the assessee to rectify such defect. The assessee has rectified such defects, however, NFAC/Ld. CIT(A) did not take care to see the submissions of assessee. The ld. Counsel contended that soon after receiving the defects notice, the assessee has rectified such defect and uploaded the assessment order and demand notice. The Ld. Counsel submitted before us the screen shot ITBA portal, wherein the assessment order and the demand notice were uploaded on the ITBA portal by assessee, however, the NFAC/Ld. CIT(A) did not consider / open the assessee’s mail and passed impugned ex parte order without giving opportunity of being heard to the assessee. The Ld. Counsel therefore contended that another opportunity should be given to assessee to contest its case before NFAC/Ld. CIT(A). 4. On the other hand, Ld. Senior DR for the Revenue did not have any objection if the matter may be remitted back to the file of the NFAC/Ld. CIT(A). Page | 3 ITA No.426/SRT/2023 A.Y. 10-11 D More Fashion Pvt. Ltd 5. We have heard both the sides and gone through the relevant material on record. We note that assessee filed assessment order and demand notice. However, NFAC/Ld. CIT(A) did not consider / open the assessee’s mail, therefore assessee could not file further documents and evidences before ld CIT(A) and as a result, NFAC/Ld. CIT(A) has passed the impugned order, as ex parte. Considering the above facts, we note that assessee has not given sufficient opportunity of being heard and could not plead its case successfully before the NFAC/Ld. CIT(A). We note that the NFAC/Ld. CIT(A) did not discuss the assessee’s case on merits based on the material available before him hence it is a violation of principle of natural justice. We further note that 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 its case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of NFAC/Ld. CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest its stand forthwith. Therefore, we deem it fit and proper to set aside the order of the NFAC/Ld. CIT(A) and remit the matter back to the file of the NFAC/Ld. CIT(A) to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced on 29/08/2023 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 29/08/2023 Dkp Outsourcing Sr.P.S. Page | 4 ITA No.426/SRT/2023 A.Y. 10-11 D More Fashion Pvt. Ltd Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat