MARVEL INDUSTRIES LIMITED, MUMBAI V. DY COMM. OF INCOME TAX, CIRCLE 2(2)(2) MUMBAI, MUMBAI

ITA 779/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5815 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Onus to prove; TDS; Liquidation
• Section: 147; 68; 144; 250

Judgement Text

ITA No. 779/Mum/2022 Assessment year: 2012-13 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI 'A' BENCH, MUMBAI [Coram: Pramod Kumar (Vice President), and Pavan Kumar Gadale (Judicial Member)] ITA No. 779/Mum/2022 Assessment year: 2012-13 Marvel Industries Limited ...................... Appellant 20, Podar Chambers, S A Brelvi Road, Mumbai 400 023 [PAN:AAACM3243J] Vs. Deputy Commissioner of Income Tax, Circle 2(2)(2) Mumbai .................. Respondent Appearances by None for the appellant Shailja Rai for the respondent Date of concluding the hearing : July 19, 2022 Date of pronouncement the order : July 19, 2022 ORDER Per Pramod Kumar, VP: 1. By way of this appeal, the assessee appellant has the challenged correctness of the ex- parte order dated 28 th March 2022 passed by the CIT(A). While so summarily dismissing the appeal, learned CIT(A) has observed as follows: 5. During the course of appellate proceedings, notices for hearing were issued to appellant on 22.01.2021, 22.12.2021 and 14.03.2022. All these notices were issued through ITBA System vis e-Mail ID provided in the ITBA Portal. In response, appellant failed to file any submissions in support of the grounds raised by him nor did appellant seek any adjournment. 6. It is clear from the above that appellant has been granted opportunities to represent its case in the appellate proceedings but has failed to make any submissions in support of the grounds of appeal. Appellant is not interested in prosecuting the appeal filed. In the appellate proceedings, burden of proof lies on the appellant to prove that the facts and the findings of the Assessing Officer are incorrect. Since the appellant has chosen not to attend the hearing notices issued, the appeal is decided on the basis of material available on record. ITA No. 779/Mum/2022 Assessment year: 2012-13 Page 2 of 5 7. I have considered the facts and circumstances of the case, the observations of the AO and material available on record on the above matter. As mentioned in above paragraph of this appeal order, this office has issued several letters to file written submission. However, neither any adjournment was sought for nor any written submissions were filed. The letters were issued through ITBA System at the e-mail ID provided in ITBA System. From the above conduct of the assessee, it is evident that the assessee is no more interested in pursuing the appeal. The Hon'ble Supreme Court in the case of CIT Vs B.N. Bhattachariee and others [1979] 10 CTR 354 (SC) observed that preferring an appeal, means effectively pursuing it. The Hon'ble M.P. High Court in the case of Estate of Late Tukojirao Holkar Vs CWT [1979] 223 ITR 480 (M.P.) dismissed the reference filed at the instance of the assessee for default and for not taking necessary steps. Considering the conduct of the assessee in the present circumstance, I am of the view that the assessee is not interested in pursuing the appeal. This view has been affirmed by Hon'ble ITAT Ahmedabad in case of Amitkumar H. Shah Vs. ACIT in ITA No. 2985/Ahd/2010 vide their order dated 31.12.2013, wherein following the order of ITAT Delhi Bench in the case of CIT Vs Multiplan India Pvt. Ltd., [1991] 38 ITD 320 (Del), ITAT has dismissed the appeal filed by the assessee for want of persuasion. Under these circumstances, the current appeal of the appellant is liable to be dismissed. 2. When this appeal came up for hearing, it was noticed that in the impugned ex-parte order, there is no adjudication on merits. Learned CIT(A) has simply dismissed the appeal summarily without even referring to the elaborate statement of facts and specific issues raised in the grounds of appeal. When we pointed out this position to the learned Commissioner (DR), she relied upon the stand of the learned CIT(A) and submitted that, in the absence of any specific submissions by the assessee, learned CIT(A) could not have done anything more. It was also pointed out that the assessee has been completely non-operative in the appellate proceedings. We were thus urged to confirm the action of the learned CIT(A) and decline to interfere in the matter. 3. Whether an appellant appears before the CIT(A) or not, it is the statutory obligation of the CIT(A) to dispose of an appeal on merits. The scheme of section 250 does not visualize any situation in which an appeal can be summarily dismissed disregarding the material on recorder. Section 250 (6) lays down that the CIT(A)’s order “disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision”. As for the points of determination, in our considered view, it cannot be open to the learned CIT(A) to disregard what the assessee has placed before him by way of a statement of facts and the grounds of appeal. In the present case, the assessee-appellant has set out, in column 11, a statement of facts, and in column 13, self-explanatory grounds of appeal which are reproduced below: Statement of facts The assessee has not filed return of income since the company was under liquidation. Based on the information received from Non-Filer Monitoring System, the assessee case re-opened u/s 147 of the Act by issuing a notice u/s 147 of the Act on 29.03.2019. The assessment was completed u/s 144 r.ws. 144 of the Act with assessed income at Rs. 1,24,53,595/-. The Income Tax Department had collected information from various sources such as Annual Information Return, Central Information Branch, Tax Deduction at Source (TDS) statement that the ITA No. 779/Mum/2022 Assessment year: 2012-13 Page 3 of 5 assessee had deposited cash aggregating Rs. 62,50,000/- and as per 26AS, had received income from contractors of Rs. 10,62,03,595/-. The AO held that as the assessee has neither complied with any of the aforementioned issued notices nor attended before the undersigned in respect of the re-assessment proceedings, it can be constituted as that the assessee is not willing to comply with the statutory notices and is not in possession or any supporting evidences and made the addition of Rs. 11,24,53,595/- as unexplained income u/s 68 of the IT Act. AS REGARDS GROUND I With regards to the above mentioned addition your appellant submits that the assessee company was in liquidation vide High Court, Bombay order dated 03.02.2012 in company petition No. 232 of 2004 and all the asset and liabilities are taken over by official liquidator appointed by High Court. The assessee neither had any control nor had any access to the books and records of the company. Your appellant submits that the assessee has timely informed the assessing officer about the company being into liquidation and the O/O. Official Liquidator was in charge. Your appellant submits that the Official Liquidator failed to file replies and attend the notices issued by the Income Tax Dept and the assessee shall not be held liable for the non-compliance done by the O/o of Official Liquidator. Your appellant submits that the assessee did not adequate opportunity being hears which is against the principle of natural justice and bad at law. The Appellant therefore prays that the assessment completed u/s 144 r.w.s 147 of the Act may please be send back to the concerned AO. GROUND II (Without prejudice to the Ground I) The AO added made the addition of the full amount of Rs. 10,62,03,595/- appearing in 26AS of the assessee towards contractual receipts. Your appellant submits that the AO failed to appreciate the fact that the whole amount mentioned cannot be income of the assessee. No Income can be earned without expenses. Your appellant submits that the amount appearing in 26AS of the assessee is gross amount of revenue of the assessee. Your appellant submits that the total revenue cannot be the Income. The allowance should be given to the expenses against the revenue which can result in income. Your appellant submits that the Assessee is liable to tax only to the extent of profit earned on the aid income and not on the whole revenue appearing in the 26AS of the Thus, appellant prays that the addition us 68 of the Act of Rs.10,62,03,595/- towards amount credited in 26AS of the assessee may please be restricted to the profit of the assessee. GROUND II (Without prejudice to the Ground I and II) With regards to cash posited during the year, your appellant states that the amount of cash deposited is out of same receipts which is already added to the income by way of income appearing in 26AS of the assessee. Addition of cash deposited again separately has resulted into double taxation in the hands of the assessee. Your appellant submits that the amount of cash deposited is out of same receipts which is already added to the income by way of income appearing in 26AS of the assessee. Your appellant submits that the addition of cash deposited again separately has resulted into double taxation in the hands of the assessee. Thus, appellant prays that the addition u/s 68 of the Act of Rs. 62,50,000/- towards the cash deposited during the year may please be deleted. Grounds of Appeal GROUND I a) On the facts and circumstances of the case, and in Law, the CIT Appeals, erred in confirming the addition u/s 68 of Rs.11,24,53,595/- of the Act which is bad at law. b) On the facts and circumstances of the case and in law the AO failed to appreciate that ITA No. 779/Mum/2022 Assessment year: 2012-13 Page 4 of 5 i) The assesse is under liquidation and O/o of the official liquidator appointed by High Court, Bombay is in charge of all assets and records of the company ii) The assessee was not given proper opportunity of being heard and assessment was done ex-parte. iii) The assessee shall not be held liable for non compliance on the part of official liquidator. c) The Appellant therefore prays that the assessment completed us 144 r.w.s 147 of the Act may please be send back to the concerned AO. GROUND II (Without prejudice to the Ground I) a) On the facts and circumstances of the case, and in Law, the CIT Appeals, erred in confirming addition u/s 68 of the Act of Rs. 10,62.03,595/- towards amount credited in 26AS of the assessee. b) On the facts and circumstances of the case and in law the AO failed to appreciate that i) The amount appearing in 26AS of the assessee is gross amount of revenue of the assessee. ii) The total revenue can not be the Income. The allowance should be given to the expenses against the revenue which can result in income. iii) Assessee is liable to tax only to the extent of profit earned on the said income and not on the whole revenue appearing in the 26AS of the assessee. c) Thus, appellant prays that the addition u/s 68 of the Act of Rs.10,62,03,595/- towards amount credited in 26AS of the assessee may please be restricted to the profit of the assessee. GROUND III (Without prejudice to the Ground I and II). a) On the facts and circumstances of the case, and in Law, the CIT Appeals, erred in confirming the addition u/s 68 of the Act of Rs. 62,50,000/- towards cash deposited into bank during the year. b) On the facts and circumstances of the case and in law the AO failed to appreciate that:- i. The amount of cash deposited is out of same receipts which is already added to the income by way of income appearing in 26AS of the assessee. i. Addition of cash deposited again separately has resulted into double taxation in the hands of the assessee. c) Thus, appellant prays that the addition u/s 68 of the Act of Rs. 62,50,000/- towards the cash deposited during the year may please be deleted. The appellant craves leave to add to, alter, and/or amend the above grounds of appeal. ITA No. 779/Mum/2022 Assessment year: 2012-13 Page 5 of 5 4. The issues implicit in the statement of facts in the grounds of appeals, as extracted above, do raise specific “points for determination” calling for adjudication by the learned CIT(A). While an assessee indeed has, under section 250(2)(a), “the right to be heard at the hearing of the appeal”, such a right of the assessee-appellant cannot be put against the assessee inasmuch while the assessee-appellant is to be essentially extended a fair and reasonable opportunity of hearing before an appeal can be disposed of, the non-exercise of this right by the assessee- appellant cannot be a reason enough for the CIT(A)’s not dealing with the points so raised before him on merits. The exercise of the “right to be heard at the hearing of the appeal” by “the appellant, either in person or by an authorized representative condition”, under section 250(2)(a), is not a condition precedent for the disposal of appeal on merits in accordance with the scheme of Section 250(6). In our considered view, irrespective of the non-appearance of the assessee before the CIT(A), the CIT(A) ought to have dealt with the issues so raised by the assessee-appellant on merits and by way of speaking order and in accordance with the law. We, therefore, deem it fit and proper to remit the matter to the file of the CIT(A) for adjudication on merits, in the light of the above observation. As the matter is being remitted to the file of the learned CIT(A), we also deem it appropriate to direct the learned CIT(A) to provide the assessee yet another fair and reasonable opportunity of hearing. Ordered, accordingly. As the matter is being remitted to the file of the learned CIT(A) for adjudication on merits, the grievances of the assessee, on merits, do not call for any adjudication at this stage. 5. In the result, the appeal is allowed for statistical purposes in the terms indicated above. Pronounced in the open court today on the 19 th day of July 2022 Sd/- Sd/- Pavan Kumar Gadale Pramod Kumar (Judicial Member) (Vice President) Mumbai, dated the 19 th July, 2022 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) DR (6) Guard File By order True Copy Assistant Registrar/ Sr. PS Income Tax Appellate Tribunal Mumbai benches, Mumbai