AI Insights
The case involves M/s Tera Naturals Resources Pvt. Ltd., which appealed against the order of the Ld. Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, Delhi, for the assessment year 2018-19. The primary contention was regarding the addition of Rs. 54,61,29,865 under sections 68 and 69 of the Income Tax Act, 1961, which was confirmed by the Ld. CIT(A). The addition was based on unexplained expenditure related to foreign remittances. The assessee argued that the CIT(A) erred in confirming the addition without independent inquiries and merely relied on the findings of the National e-Assessment Center (NeAC). The Tribunal noted the non-compliance of the assessee in both the lower authorities and decided to restore the matter to the CIT(A) for a decision on merits, subject to the condition of depositing the specified cost.
Appeal Details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 123438 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
4 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-08-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
E
Next Hearing Date
07-08-2023
Assessment Year
2018-2019
Appeal Filed On
26-03-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 968/MUM/2023 Assessment Year: 2018-19 M/s Tera Naturals Resources Pvt. Ltd., 401/411 Raheja Centre, Nariman Point, Mumbai-400021. Vs. ITO Ward 3(3)(3), Room No. 672, Aayakar Bhavan, M.K. Road, Churchgate, Mumbai-400020. PAN No. AAECT 8904 B Appellant Respondent Assessee by : Mr. Dharan Gandhi Revenue by : Mr. Sanjay Deshmukh, CIT-DR Date of Hearing : 08/08/2023 Date of pronouncement : 21/08/2023 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 25.01.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds: 1. (a) The Ld. CIT (Appeals) erred in law and facts in confirming the addition made by the National e-Assessment Center (NeAC) amounting to Rs.54,61,29,865/-u/s.68 and 69 of the Act without conducting any independent enquiries to pursue the actual facts of the case and merely relying on findings of the NeAC which itself was based on surmises and conjectures. 2. Briefly stated facts of the case are that for the year under consideration, the return of income filed by the assessee was selected for limited scrutiny for verification of foreign remittances sent by the assessee. The statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied with. However, no details were submitted by the ass Assessing Officer. T assessment order passed on 07.05.2021 u/s 143(3) of the Act mentioned e various notices issued made except seeking adjournment by the assessee. Officer verified the available records and observed and loss account, sales and purchases were disclosed at Rs. Nil. The other income was only Rs.500 only claimed in the profit and loss also observed that the information colle was not found matching with remittance. The assessee took the plea of the prevailing Covid situation and death of the accountant still after availing the filed before the AO, basis of the evidence available on record and made addition for unexplained expenditure of to Rs 54,61,29,865/- M/s Tera Naturals Resources Pvt. Ltd. findings of the NeAC which itself was based on surmises and conjectures. Briefly stated facts of the case are that for the year under consideration, the return of income filed by the assessee was selected for limited scrutiny for verification of foreign remittances sent by the assessee. The statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and complied with. However, no details were submitted by the ass Assessing Officer. The Assessing Officer (AO) in p assessment order passed on 07.05.2021 u/s 143(3) of the Act mentioned e various notices issued, of which no compliance except seeking adjournment by the assessee. Officer verified the available records and observed that in the profit sales and purchases were disclosed at Rs. Nil. The other income was only Rs.500 and net loss of Rs.23,256/ only claimed in the profit and loss account. The Assessing Officer the information collected from DBS Bank Ltd. was not found matching with the outward and inward foreign The assessee took the plea of the prevailing Covid situation and death of the accountant for seeking adjournment still after availing the adjournments, ultimately no information was thus, the AO decided the assessment on the he evidence available on record and made addition for unexplained expenditure of outward foreign remittance amounting - u/s 68 & 69 of the Act. On further appeal, M/s Tera Naturals Resources Pvt. Ltd. 2 ITA No. 968/Mum/2023 findings of the NeAC which itself was based on surmises Briefly stated facts of the case are that for the year under consideration, the return of income filed by the assessee was selected for limited scrutiny for verification of foreign outward remittances sent by the assessee. The statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and complied with. However, no details were submitted by the assessee to the in para 4 of the assessment order passed on 07.05.2021 u/s 143(3) of the Act, has no compliance was except seeking adjournment by the assessee. The Assessing that in the profit sales and purchases were disclosed at Rs. Nil. of Rs.23,256/- was The Assessing Officer cted from DBS Bank Ltd. outward and inward foreign The assessee took the plea of the prevailing Covid for seeking adjournment but no information was decided the assessment on the he evidence available on record and made addition for foreign remittance amounting On further appeal, the assessee took two adjournments before the Ld. CIT(A) and thereafter no compliance was made circumstances, the Ld. CIT(A) dismissed the appeal of the assessee in default observing as under: “6.2 The facts of the case as noted above are that the appellant has not pursued assessee being granted several opportunities. In response to the notices dated 29.08.2022 & 22.09.2022 the assessee had requested for adjournments which were con and further opportunities were given to the assessee. Vide notices dated 01.11.2022 & 10.01.2023 it was also made clear that already adjournments had been provided twice and in case no reply was received then it shall be deemed that you have nothing to say in this matter and the case would be adjudicated as per material available on record. Clearly therefore no details, documents or submissions have been provided to come to any conclusion other than those arrived at by the assessing off quite aware of these facts and the possible conclusions that may be drawn the assessee did not file any written submissions. That clearly Connotes that the assessee deems itself to be on weak footing and thus remained in assessment order also it gets revealed that assessee was not co proceedings. As per assessment order, at first the assessee denied any foreign outward remittance then on being confronted with evidence bank in possession of the department the assessed decided, in its own wisdom, not to respond even after adjournments had been granted. If is evident from insight portal as well as the information provided by.DBS Bank the filetl 133(6) of the IT Act that t remitted (su The DBS Bank in its compliance furnished KYC of M/s Tera Naturals Resources Pvt. Ltd. the assessee took two adjournments before the Ld. CIT(A) and thereafter no compliance was made on other two occasions. In the circumstances, the Ld. CIT(A) dismissed the appeal of the assessee in default observing as under: The facts of the case as noted above are that the appellant has not pursued the appeal despite assessee being granted several opportunities. In response to the notices dated 29.08.2022 & 22.09.2022 the assessee had requested for adjournments which were considered at that time and further opportunities were given to the assessee. Vide notices dated 01.11.2022 & 10.01.2023 it was also made clear that already adjournments had been provided twice and in case no reply was received then it shall be deemed that u have nothing to say in this matter and the case would be adjudicated as per material available on record. Clearly therefore no details, documents or submissions have been provided to come to any conclusion other than those arrived at by the assessing officer in the assessment order. Being quite aware of these facts and the possible conclusions that may be drawn the assessee did not file any written submissions. That clearly Connotes that the assessee deems itself to be on weak footing and thus remained incommunicado. On perusal of assessment order also it gets revealed that assessee was not co-operating during assessment proceedings. As per assessment order, at first the assessee denied any foreign outward remittance then on being confronted with evidence from DBS bank in possession of the department the assessed decided, in its own wisdom, not to respond even after adjournments had been granted. If is evident from insight portal as well as the information provided by.DBS Bank the filetl as caffed for wis 33(6) of the IT Act that the assessee company remitted (substantial amounts through DBS Bank. The DBS Bank in its compliance furnished KYC of M/s Tera Naturals Resources Pvt. Ltd. 3 ITA No. 968/Mum/2023 the assessee took two adjournments before the Ld. CIT(A) and other two occasions. In the circumstances, the Ld. CIT(A) dismissed the appeal of the assessee The facts of the case as noted above are that the appeal despite assessee being granted several opportunities. In response to the notices dated 29.08.2022 & 22.09.2022 the assessee had requested for sidered at that time and further opportunities were given to the assessee. Vide notices dated 01.11.2022 & 10.01.2023 it was also made clear that already adjournments had been provided twice and in case no reply was received then it shall be deemed that u have nothing to say in this matter and the case would be adjudicated as per material available on record. Clearly therefore no details, documents or submissions have been provided to come to any conclusion other than those arrived at by the icer in the assessment order. Being quite aware of these facts and the possible conclusions that may be drawn the assessee did not file any written submissions. That clearly Connotes that the assessee deems itself to be on weak footing communicado. On perusal of assessment order also it gets revealed that operating during assessment proceedings. As per assessment order, at first the assessee denied any foreign outward remittance from DBS bank in possession of the department the assessed decided, in its own wisdom, not to respond even after adjournments had been granted. If is evident from insight portal as well as the information as caffed for wis he assessee company bstantial amounts through DBS Bank. The DBS Bank in its compliance furnished KYC of the accounts and bank statement of the assessee company. On close perusal of bank statement of the assessee total charges of 399 counts comes to Rs. 54,61,29,865/ and corresponding credits of 215 counts comes to Rs.54,61,16,548/ information elements, it was also evident that the remitted amount was not balance sheet or profit or loss accounts of the company. The department in the absence of any pursuance in the matter of any sort even till the date of passing order is left with no choice but to finalize the case against the assesse propounded in respect of what was claimed in the "Statement of facts" namely wrong addition of Rs. 54,61,29,865/ outward foreign remittances. There are no evidences canvassed in respect of the o 'Statement of Facts' either. The AO's order needs no intervention. There is nothing to rebut what had been arrived at by the AO after diligent enquiries and sufficient opportunities. The findings, in respect of all the above issues, intervention. 3. Before the Tribunal 22.05.2023 for hearing dated 19.06.2023 Thereafter, another notice was issu On that day none attended but only a adjournment. The case was adjourned to was issued through registered post which was also served through income report submitted by the ld alongwith Inspector report is reproduced as under: M/s Tera Naturals Resources Pvt. Ltd. the accounts and bank statement of the assessee company. On close perusal of bank statement of the assessee total of remitted amount and remitting charges of 399 counts comes to Rs. 54,61,29,865/ and corresponding credits of 215 counts comes to Rs.54,61,16,548/- On going through the underlying information elements, it was also evident that the remitted amount was not commensurate with the balance sheet or profit or loss accounts of the The department in the absence of any pursuance in the matter of any sort even till the date of passing order is left with no choice but to finalize the case against the assessee. There is no evidence propounded in respect of what was claimed in the "Statement of facts" namely wrong addition of Rs. 54,61,29,865/- u/s 68 & 69 of the Act on account of outward foreign remittances. There are no evidences canvassed in respect of the other claims made in the 'Statement of Facts' either. The AO's order needs no intervention. There is nothing to rebut what had been arrived at by the AO after diligent enquiries and sufficient opportunities. The findings, in respect of all the above issues, clearly require no intervention.” the Tribunal, in response to the notice sent on 22.05.2023 for hearing dated 19.06.2023, none attended another notice was issued for hearing dated 24.07.2023 On that day none attended but only a written request was filed for The case was adjourned to 27/07/23 was issued through registered post for intimation and one copy of which was also served through income-tax Department. The service report submitted by the ld. Departmental Representative (DR) alongwith Inspector report is reproduced as under: M/s Tera Naturals Resources Pvt. Ltd. 4 ITA No. 968/Mum/2023 the accounts and bank statement of the assessee company. On close perusal of bank statement of the of remitted amount and remitting charges of 399 counts comes to Rs. 54,61,29,865/- and corresponding credits of 215 counts comes to On going through the underlying information elements, it was also evident that the commensurate with the balance sheet or profit or loss accounts of the The department in the absence of any pursuance in the matter of any sort even till the date of passing order is left with no choice but to finalize the case e. There is no evidence propounded in respect of what was claimed in the "Statement of facts" namely wrong addition of Rs. u/s 68 & 69 of the Act on account of outward foreign remittances. There are no evidences ther claims made in the 'Statement of Facts' either. The AO's order needs no intervention. There is nothing to rebut what had been arrived at by the AO after diligent enquiries and sufficient opportunities. The findings, in respect clearly require no , in response to the notice sent on none attended. ed for hearing dated 24.07.2023. written request was filed for 27/07/23 and a notice and one copy of tax Department. The service mental Representative (DR) M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 5 ITA No. 968/Mum/2023 3.1 On hearing dated 27/7/23, written request was the assessee for seeking further time. Accordingly, matter was posted for hearing adjournment was filed by his junior, but no letter of authority in first round of call person attended was asked to file letter of authority in favour of Mr Dharan V Gandhi .In second Gandhi appeared and submitted M/s Tera Naturals Resources Pvt. Ltd. On hearing dated 27/7/23, again none attended however was made on behalf of the authorised signatory of for seeking further time. Accordingly, matter was for hearing on 08.08.2023. On said date again adjournment was filed on behalf of Advocate Shri Dharan no letter of authority by the assessee was filed of call, adjournment request was rejected and the person attended was asked to file letter of authority in favour of Mr In second round of call of case, Mr Djaran V Gandhi appeared and submitted that he would file the said letter of M/s Tera Naturals Resources Pvt. Ltd. 6 ITA No. 968/Mum/2023 none attended however a made on behalf of the authorised signatory of for seeking further time. Accordingly, matter was 08.08.2023. On said date again an Dharan V. Gandhi by the assessee was filed. So , adjournment request was rejected and the person attended was asked to file letter of authority in favour of Mr of call of case, Mr Djaran V would file the said letter of authority by 2.00 P.M. of that day arguments on behalf of the assessee were heard. He also complied with his undertaking of filing the letter of authority before the time permitted. 4. We have heard rival submission of the the assessee is non- also before the Assessing Officer us has not been decided on merit the ld Counsel pleaded for res officer for the reason that once it is restored to the not be any liability to pay outstanding tax demand. We don’t agree with said prayer, because additional evidences to be examined by the AO. It is the case of no representation before the ld CIT(A) an CIT(A). If the assess before the ld CIT(A), then he may follow the procedure laid down Rule 46A of Income- decide the issue in accordance with law appropriate to restore this issue back to the Ld. CIT(A) to the non-compliance behavior of the assessee authorities and wastage of their time and energy of Rs.25,000/-. The CIT(A) subject to deposit of said cost Fund within 15 days of receipt of th M/s Tera Naturals Resources Pvt. Ltd. by 2.00 P.M. of that day. Accordingly, on his undertaking arguments on behalf of the assessee were heard. He also complied with his undertaking of filing the letter of authority before the time We have heard rival submission of the parties. -compliant not only before the Ld. CIT(A) but also before the Assessing Officer. The issue in dispute raised before has not been decided on merit by the Ld. CIT(A) also. the ld Counsel pleaded for restoring the case back to the Assessing officer for the reason that once it is restored to the liability to pay outstanding tax demand. We don’t agree with said prayer, because before us the assessee has not filed any dences to be examined by the AO. It is the case of no representation before the ld CIT(A) and ex-partee decision by the ld CIT(A). If the assessee is so advised for filing additional evidence before the ld CIT(A), then he may follow the procedure laid down -tax Rules, 1962 and then the ld CIT(A) in accordance with law. Therefore, we feel it appropriate to restore this issue back to the Ld. CIT(A) compliance behavior of the assessee before the lower authorities and wastage of their time and energy, we . The appeal is accordingly restored back to the Ld. CIT(A) subject to deposit of said cost to the Prime Minister Relief Fund within 15 days of receipt of this order. The Ld. CIT(A) shall M/s Tera Naturals Resources Pvt. Ltd. 7 ITA No. 968/Mum/2023 . Accordingly, on his undertaking, arguments on behalf of the assessee were heard. He also complied with his undertaking of filing the letter of authority before the time parties. We find that not only before the Ld. CIT(A) but . The issue in dispute raised before the Ld. CIT(A) also. Before us toring the case back to the Assessing officer for the reason that once it is restored to the AO, there will liability to pay outstanding tax demand. We don’t agree us the assessee has not filed any dences to be examined by the AO. It is the case of no decision by the ld so advised for filing additional evidence before the ld CIT(A), then he may follow the procedure laid down in the ld CIT(A) may Therefore, we feel it appropriate to restore this issue back to the Ld. CIT(A), but looking before the lower we impose a cost restored back to the Ld. to the Prime Minister Relief . The Ld. CIT(A) shall verify deposit of the cost by the assessee proceeding before him. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 21 Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 21/08/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// M/s Tera Naturals Resources Pvt. Ltd. verify deposit of the cost by the assessee before commencing the proceeding before him. In the result, the appeal filed by the assessee is allowed for nounced in the open Court on 21/08/20 Sd/- KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai M/s Tera Naturals Resources Pvt. Ltd. 8 ITA No. 968/Mum/2023 before commencing the In the result, the appeal filed by the assessee is allowed for /08/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai
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