M/s SHRI BALAJI FARMS AND RICE PROCESSING PVT. LTD., BAREILLY V. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2, BAREILLY, BAREILLY

ITA 52/LKW/2021

AI Insights

The case involves M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd., the appellant, contesting an ex parte order from the Commissioner of Income Tax (Appeals) - Bareilly, concerning the assessment year 2017-18. The primary contention was the lack of adequate opportunity for the assessee to comply with hearing notices due to the pandemic, which the assessee argued led to the dismissal of their appeal without proper consideration. The Tribunal noted the procedural lapses and the Supreme Court's directive in the Tin Box Company case, emphasizing the need for a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136110 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 29-11-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 16-06-2021
• Other Referred Cases: Tin Box Company vs. CIT (2001) 249 ITR 216 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Condonation of delay; Set aside
• Section: 143(3); 250; 251

Judgement Text

। आयकर अपीलीय अिधकरण Ɋायपीठ, लखनऊ । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, LUCKNOW BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT & SHRI GIRISH AGRAWAL, HON’BLE ACCOUNTANT MEMBER ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. D-35, Royal Suncity Vistaar Bareilly - 243122 [PAN: AAQCS5893J] Vs. ACIT, Circle-2, Bareilly (Appellant) (Respondent) Assessee by : Shri Abhinav Mehrotra, Advocate Revenue by : Smt. Alka Singh, D/R सुनवाई की तारीख/Date of Hearing : 30/11/2022 घोषणा की तारीख/Date of Pronouncement : 20/02/2023 O R D E R PER BENCH : This appeal by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals) - Bareilly, (hereinafter the “ld. CIT(A)”) dated 19/08/2020 for Assessment Year 2017-18 against the assessment order passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by ACIT-2, Bareilly-New, dated 30/12/2019. 2. At the outset, we note that there is a delay of 79 days in filing the present appeal, for which application for condonation of delay is placed on record. We note that order of ld. CIT(A) is dated 19/08/2020 and hence the period of limitation falls during the period of pandemic of Covid-19. Petition for condonation of delay is placed on record by assessee explaining the reasons for delay, owing to Pandemic of Covid-19 during that time. It is noted that the period of delay falls during the time of Pandemic of Covid-19 which has been ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. 2 excluded by the Hon’ble Supreme Court in the case of suo moto Writ Petition (C) No. 3 of 2020 dated 10/01/2022 by which the period from 15/03/2020 to 28/02/2022 has been directed to be excluded for the purpose of limitation. Vide this order a further period of 90 days has been granted for providing the limitation from 01/03/2022. Accordingly, we condone the delay and proceed to admit the appeal for hearing. 3. Though the assessee has filed as many as 6 grounds of appeal but the sole issue involved in this appeal of the assessee is against the ex parte order passed by the Ld. CIT(A) without affording reasonable time to the assessee to comply with the hearing notice issued four notices on 24/02/2020, 02/03/2020, 06/05/2020 and 24/07/2020 fixing the date of hearings on 26/02/2020, 16/03/2020, 26/05/2020 and 06/08/2020 respectively. According to the Ld. CIT(A) since notices for hearing on the above dates have been sent electronically through ITBA and notice has not been revert back to the department, the Ld. CIT(A) dismissed the appeal of the assessee ex parte without giving sufficient opportunity of hearing to the assessee. So he urged before the bench to set aside the order of the Ld. CIT(A) and restore the matter to his file to pass a speaking order after affording reasonable opportunity of being heard to the assessee. On the other hand, the Ld. DR relied on the order of Ld. CIT(A) and urged before the bench to confirm the order of Ld. CIT(A). 4. We have heard rival submissions and gone through the facts and circumstances of the case. We find that in the first appellate order the Ld. CIT(A) stated that since notices for hearing on the above dates have been sent through ITBA and notice has not been revert back to the department, the appeal of the assessee is dismissed ex parte. This action of the Ld. CIT(A) cannot be countenanced. The assessee should be given proper opportunity to produce the documents and explanation in respect of the queries raised by the lower ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. 3 authorities. Since the assessee had reasonable cause for not producing the same before the lower authorities in such a scenario, we take note of the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs. CIT reported in (2001) 249 ITR 216 (SC) wherein the Hon’ble Supreme Court has directed that the assessee should be given proper opportunity during the assessment proceedings and failure to do so then the matter should be remitted back to the A.O. The order of the Hon’ble Supreme Court in Tin Box Co. (supra) are as under: “1. It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus: "We will straightaway agree with the assessee's submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard." 2. That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of selling out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard. 3. Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income-tax Officer had not given a proper opportunity of hearing to the assessee ?" 4. In our opinion, there can only be one answer to this question which is inherent in the question itself : in the negative and in favour of the asses-see. 5. The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as afore-stated. No order as to costs.” ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. 4 5. We also find that no effective cognizance of the submissions made by the assessee in the course of the appellate proceedings have been taken by the Ld. CIT(A) while disposing of the appeal. The Act provides for the powers of Commissioner (Appeal) u/s. 251 which adequately deals with the powers in disposing of the appeal by the Ld. CIT(A). The section is reproduced as under: “Powers of the Commissioner (Appeals) 251. (1) In disposing off an appeal, the Commissioner (Appeals), shall have the following powers: (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty — he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case — he may pass such orders in the appeal as he thinks fit. The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation – In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant.” ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. 5 6. Section 250 of the Act provides for procedure to be adopted and disposing of the appeal by the Ld. CIT(A). Sub-section (4) of section 250 of the Act provides that the Ld. CIT(A) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing officer to make further inquiry and report the result of the same to the Commissioner (Appeals). Further, sub-section (6) provides that the CIT(A) shall pass an order in writing and shall set the points for determination, the decision thereon and the reasons for the decision. The section is reproduced as under: “250. Procedure in appeal (1) The 7 Deputy Commissioner (Appeals)] 8 or, as the case may be, the Commissioner (Appeals)] shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the 9 Assessing] Officer against whose order the appeal is preferred. (2) The following shall have the right to be heard at the hearing of the appeal- (a) the appellant, either in person or by an authorised representative; (b) the 10 Assessing] Officer, either- in person or by a representative. (3) The 1 Deputy Commissioner (Appeals)] 2 or, as the case may be, the Commissioner (Appeals)] shall have the power to adjourn the hearing of the appeal from time to time. (4) The 3 Deputy Commissioner (Appeals)] 4 or, as the case may be, the Commissioner (Appeals)] may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the 5 Assessing] Officer to make further inquiry and report the result of the same to the 6 Deputy Commissioner (Appeals)] 7 or, as the case may be, the Commissioner (Appeals)]. (5) The 8 Deputy Commissioner (Appeals)] 9 or, as the case may be, the Commissioner (Appeals)] may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if the 10 Deputy Commissioner (Appeals)] 11 or, as the case may be, the Commissioner (Appeals)] is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable. ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. 6 (6) The order of the 12 Deputy Commissioner (Appeals)] 13 or, as the case may be, the Commissioner (Appeals)] disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. (7) On the disposal of the appeal, the 14 Deputy Commissioner (Appeals)] 15 or, as the case may be, the Commissioner (Appeals)] shall communicate the order passed by him to the assessee and to the 16 Chief Commissioner or Commissioner]. 7. Principles governing the exercise of powers by the First Appellate Authority are contemplated under sections 250 and 251 of the Act, breach of which has far reaching consequences on the administration of justice culminating in the litigant approaching the higher appellate authority. It is required that the first appellate authority viz. CIT(A) will appreciate the evidence, consider the arguments and apply the law on the given set of facts and circumstances and arrive at findings. 8. Keeping in mind the provision of sections 250 and 251 of the Act and the decision of the Hon’ble Supreme Court in the case of Tin Box Ltd. (supra) referred as above it is incumbent upon the Ld. CIT(A) to pass a speaking order on the merits of the case by examining, verifying and analyzing the material on record. Since there are no meritorious finding given by the Ld. CIT(A) on the submissions made by the assessee and also considering the grounds raised by the assessee where the Ld. CIT(A) has passed an ex parte order without giving opportunity of being heard, we find it fit to remit the matter back to the file of the Ld. CIT(A) for his objective and meritorious observations and findings on the submissions made by the assessee. Needless to say the assessee be given reasonable opportunity of being heard and the assessee shall also be cooperating for the effective disposal of the appeal and will be at liberty to make further submissions as deem fit. Since the matter is restored to the file of Ld. CIT(A) for meritorious adjudication by passing a speaking order in terms of ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. 7 our observations made hereinabove, we are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld. CIT(A). The observations herein made by us in remanding the matter back to the file of Ld. CIT(A) will not impair or injure the case of the Revenue nor will it cause any prejudice to the defense/explanation of the assessee. Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the matter back to the file of the Ld. CIT(A) to decide afresh after affording reasonable opportunity of being heard to the assessee and the assessee is directed to be diligent in the appellate proceedings. 9. In the result, the appeal of assessee is allowed for statistical purpose. Order pronounced under Rule 34(4) of the ITAT Rules, 1963, by placing result on the notice board on 20.02.2023. Sd/- Sd/- (MAHAVIR SINGH) (GIRISH AGRAWAL) VICE PRESIDENT ACCOUNTANT MEMBER Lucknow, Dated: 20.02.2023 SC. Sr. P.S. ITA No. 52/LKW/2021 Assessment Years: 2017-18 M/s. Shri Balaji Farms and Rice Processing Pvt. Ltd. 8 Copy to: 1. The Appellant: 2. Respondent : 3. The CIT(A)- Lucknow 4. The CIT , Lucknow 5. The DR ITAT, Lucknow //True Copy// By Order Assistant Registrar ITAT, Lucknow Benches, Lucknow