K.D.REALTIES PVT.LTD,BHIWANDI V. .NATIONAL E ASSESSMENT CENTRE, DELHI

ITA 3379/MUM/2024

AI Insights

K.D Realties Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, which had dismissed their appeal for non-prosecution without adjudicating on the merits. The primary contention was the improper issuance of notices to an incorrect email address, which led to the assessee's inability to respond and participate in the proceedings. The tribunal acknowledged the procedural lapses and the importance of issuing notices to the correct contact information as provided in Form No. 35. The tribunal also referenced the decision of the Hon'ble Bombay High Court in CIT vs. Premkumar Arjundas Luthra (HUF), which underscored the necessity of deciding issues on their merits despite non-compliance by the assessee.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 24029 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2018-2019
• Other Referred Cases: CIT vs. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: TANMAY MILIND PHADKE
• Keywords: Set aside; Business income; Principle of natural justice
• Section: 144; 250; 251

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 3379/MUM/2024 Assessment Year: 2018-19 K.D Realties Pvt. Ltd., H. No. 1078/I Buidling, Gala No. 28, 29, K.D. Logistic Park, Yevai Naka, Panjrapur, BMC Road, Near Al Saint School, Lonad Village, Bhiwandi-421302. Vs. National E Assessment Centre, Delhi, Room No. 401, 2nd floor, E Ramp Jawaharlal Nehru Stadium New Delhi- 110003. PAN NO. AADCK 3114 H Appellant Respondent Assessee by : Mr. Tanmay Milind Phadke Revenue by : Mr. Hemanshu Joshi, Sr. DR Date of Hearing : 09/12/2024 Date of pronouncement : 17/12/2024 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 29.04.2024 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. On the facts and circumstances of the case and in law, the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) ['the learned Commissioner (Appeals)] erred in deciding the appeal ex Thus, the order dated 29.04.2024 may be set aside and the matter may be restored back to the file of the learned Commissioner (Appeals) or the Respondent/the learned assessing officer for fresh adjudication. 2. Without preju the case and in law, the order dated 29.04.2024 as passed by the learned Commissioner (Appeals) is bad in law since it dismisses the appeal on the reason of non not adjudicate on the the issues under consideration. The said order being in violation of the provisions of Section 250 and 251 of the Act and the decision of the Hon'ble jurisdictional Bombay High Court in \"CIT vs. Premkumar Arjundas 407 (Bombay)\" may be quashed. 3. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in taxing the rental income of Rs. 1,99,46,239/ as business income. Thus, the said rental income may be directed to be taxed under the head income from house property and the stand of the Appellant in this regard may be upheld. 4. On the facts and circumstances of the case and as per the law, the learned asse (Appeals) erred in disallowing the expenses of Rs. 58,91,594. Thus the said disallowance may be deleted. 5. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned (Appeals) erred in disallowing the rental expenses of Rs. 1,19,31,182/. Thus the said disallowance may be deleted 6. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in adding the loans of Rs. 3,30,00,000/ the Act. Thus, the said addition may be deleted. 7. On the facts and in the circumstances of the case and as per law, the learned assessing officer and the learned Commissioner (Appeals) erred in ta rate of 60 percent u/s 115BBE of the Act. Thus, it may be reversed. 8. On the facts and circumstances of the case and as per the law, the learned assessing officer erred in making disallowance of Rs. 1,33,84,632/ said disallowance may be deleted. 9. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in adding Rs. 47, 75,855/ addition may be deleted On the facts and circumstances of the case and in law, the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) ['the learned Commissioner (Appeals)] erred in deciding the appeal ex-parte in violation of the principle of natural justice. Thus, the order dated 29.04.2024 may be set aside and the matter may be restored back to the file of the learned Commissioner (Appeals) or the Respondent/the learned assessing officer for fresh adjudication. Without prejudice to the above, on the facts and circumstances of the case and in law, the order dated 29.04.2024 as passed by the learned Commissioner (Appeals) is bad in law since it dismisses the appeal on the reason of non-prosecution and does not adjudicate on the grounds/additional grounds of appeal and the issues under consideration. The said order being in violation of the provisions of Section 250 and 251 of the Act and the decision of the Hon'ble jurisdictional Bombay High Court in \"CIT Premkumar Arjundas Luthra (HUF)- [2016] 69 taxmann.com 407 (Bombay)\" may be quashed. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in taxing the rental income of Rs. 1,99,46,239/ business income. Thus, the said rental income may be directed to be taxed under the head income from house property and the stand of the Appellant in this regard may be upheld. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in disallowing the expenses of Rs. 58,91,594. Thus the said disallowance may be deleted. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in disallowing the rental expenses of Rs. 1,19,31,182/. Thus the said disallowance may be deleted On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner ls) erred in adding the loans of Rs. 3,30,00,000/ the Act. Thus, the said addition may be deleted. On the facts and in the circumstances of the case and as per law, the learned assessing officer and the learned Commissioner (Appeals) erred in taxing the addition of Rs. 3,30,00,000/ rate of 60 percent u/s 115BBE of the Act. Thus, it may be reversed. On the facts and circumstances of the case and as per the law, the learned assessing officer erred in making disallowance of Rs. 1,33,84,632/- pertaining to purchase of stock in trade. Thus, the said disallowance may be deleted. On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in adding Rs. 47, 75,855/-. Thus addition may be deleted K.D Realties Pvt. Ltd. 2 ITA No. 3379/MUM/2024 On the facts and circumstances of the case and in law, the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) ['the learned Commissioner (Appeals)] erred in deciding the principle of natural justice. Thus, the order dated 29.04.2024 may be set aside and the matter may be restored back to the file of the learned Commissioner (Appeals) or the Respondent/the learned assessing dice to the above, on the facts and circumstances of the case and in law, the order dated 29.04.2024 as passed by the learned Commissioner (Appeals) is bad in law since it prosecution and does grounds/additional grounds of appeal and the issues under consideration. The said order being in violation of the provisions of Section 250 and 251 of the Act and the decision of the Hon'ble jurisdictional Bombay High Court in \"CIT [2016] 69 taxmann.com On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner (Appeals) erred in taxing the rental income of Rs. 1,99,46,239/- business income. Thus, the said rental income may be directed to be taxed under the head income from house property and the stand of the Appellant in this regard may be upheld. On the facts and circumstances of the case and as per the law, ssing officer and the learned Commissioner (Appeals) erred in disallowing the expenses of Rs. 58,91,594. On the facts and circumstances of the case and as per the law, Commissioner (Appeals) erred in disallowing the rental expenses of Rs. 1,19,31,182/. Thus the said disallowance may be deleted On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner ls) erred in adding the loans of Rs. 3,30,00,000/- u/s 68 of On the facts and in the circumstances of the case and as per law, the learned assessing officer and the learned Commissioner xing the addition of Rs. 3,30,00,000/-at the rate of 60 percent u/s 115BBE of the Act. Thus, it may be On the facts and circumstances of the case and as per the law, the learned assessing officer erred in making disallowance of Rs. pertaining to purchase of stock in trade. Thus, the On the facts and circumstances of the case and as per the law, the learned assessing officer and the learned Commissioner . Thus, the said 2. At the outset, the Ld. counsel for the assessee submitted that in the impugned order the appeal of the assessee has been dismissed for non-prosecution dispute on merit. The Ld. counsel the impugned order has been challenged on two grounds. for violation of the principle of natural justice and deciding the issue on merit. Regarding the first objection counsel submitted that in the Form No. 35 i.e. the Form prescribed for filing appeal before the Ld. CIT(A) provided was of [e-mail] issued the notice on counsel submitted that therefore notice remained to be responded. He submitted that for the same reason assessment order Accordingly, the Ld. counsel submitted that the matter may be restored back to the file of the Ld. CIT(A) for deciding afresh. Regarding second objection, case of non-compliance on the part of th cannot dismiss the appeal for non to decide the issue on merit in view of decision of the Hon’ble Bombay High Court in the case of CIT v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bom At the outset, the Ld. counsel for the assessee submitted that in the impugned order the appeal of the assessee has been prosecution but without deciding the issue in dispute on merit. The Ld. counsel for the assessee submitted that the impugned order has been challenged on two grounds. for violation of the principle of natural justice and secondly deciding the issue on merit. Regarding the first objection hat in the Form No. 35 i.e. the Form prescribed filing appeal before the Ld. CIT(A), e-mail ID for communication [e-mail], whereas the Ld. CIT(A) another ID [e-mail] counsel submitted that said e-mail ID was not seen frequently and therefore notice remained to be responded. He submitted that for the same reason assessment order was also passed ex Accordingly, the Ld. counsel submitted that the matter may be restored back to the file of the Ld. CIT(A) for deciding afresh. Regarding second objection, the Ld. counsel submitted that even in compliance on the part of the assessee, cannot dismiss the appeal for non-prosecution and he to decide the issue on merit in view of decision of the Hon’ble Bombay High Court in the case of CIT v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay). K.D Realties Pvt. Ltd. 3 ITA No. 3379/MUM/2024 At the outset, the Ld. counsel for the assessee submitted that in the impugned order the appeal of the assessee has been without deciding the issue in for the assessee submitted that the impugned order has been challenged on two grounds. Firstly, secondly, for not deciding the issue on merit. Regarding the first objection, the Ld. hat in the Form No. 35 i.e. the Form prescribed mail ID for communication whereas the Ld. CIT(A) [e-mail]. The Ld. not seen frequently and therefore notice remained to be responded. He submitted that for passed ex-parte. Accordingly, the Ld. counsel submitted that the matter may be restored back to the file of the Ld. CIT(A) for deciding afresh. the Ld. counsel submitted that even in , the Ld. CIT (A) prosecution and he was required to decide the issue on merit in view of decision of the Hon’ble Bombay High Court in the case of CIT v. Premkumar Arjundas bay). 3. On the contrary, the Ld. Departmental Representative (DR) did not object for restoring deciding afresh. 4. We have heard rival submission of the parties and perused the relevant material on record. It issued by the ld CIT(A) on assessee in Form No. 35 in the return of income. being not in operation of the Act. In our opinion t compliance of notices it appropriate to set aside the order of the Ld. CIT(A) and restore the matter back to the file of the Ld. CIT(A) non-receipt of the notices as well as for the reason that he was required to decide th compliance on the part of the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; On the contrary, the Ld. Departmental Representative (DR) did not object for restoring the matter back to the file of We have heard rival submission of the parties and perused the relevant material on record. It is evident that notices were not issued by the ld CIT(A) on the e-mail ID, which was given by the assessee in Form No. 35 but issued on e-mail ID, which in the return of income. In view of e-mail given in return of income in operation, the assessment was also completed u/s 144 In our opinion there is a sufficient cause for non s issued by the Ld. CIT(A), accordingly, w it appropriate to set aside the order of the Ld. CIT(A) and restore the the file of the Ld. CIT(A), both on the ground receipt of the notices as well as for the reason that he was required to decide the issue on merit, even in absence of the non compliance on the part of the assessee. Accordingly, the grounds the assessee are allowed for statistical purposes. In the result, the appeal of the assessee is allowed for statistical purposes. nounced in the open Court on 17/12/2024. - Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER K.D Realties Pvt. Ltd. 4 ITA No. 3379/MUM/2024 On the contrary, the Ld. Departmental Representative (DR) did file of Ld. CIT(A) for We have heard rival submission of the parties and perused the notices were not was given by the , which was given mail given in return of income ssessment was also completed u/s 144 a sufficient cause for non- ssued by the Ld. CIT(A), accordingly, we feel it appropriate to set aside the order of the Ld. CIT(A) and restore the both on the grounds of receipt of the notices as well as for the reason that he was ven in absence of the non- compliance on the part of the assessee. Accordingly, the grounds the assessee are allowed for statistical purposes. In the result, the appeal of the assessee is allowed for /12/2024. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Dated: 17/12/2024 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// Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai K.D Realties Pvt. Ltd. 5 ITA No. 3379/MUM/2024 BY ORDER, (Assistant Registrar) ITAT, Mumbai "