KAMDHENU CORPORATION,KAMDHENU CORPORATION, PIPLOD V. .INCOME TAX OFFICER CENTRAL CIRCLE -2(3), AAYAKAR BHAVAN, SURAT

ITA 624/SRT/2024

AI Insights

Kamdhenu Corporation appealed against the order of the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals), which confirmed the additions made by the Assessing Officer under section 143(3) of the Income Tax Act, 1961. The additions included disallowed interest expenses and excess depreciation claims. The primary contention was the lack of adequate opportunity for the assessee to present its case during the CIT(A)'s proceedings, as only two notices were issued over a span of four years, one during the COVID-19 pandemic. The tribunal found that the CIT(A) did not properly consider the assessee's submissions and the basic facts of the case, leading to the decision to remand the case back for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29815 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: DALZINI MADAN
• Keywords: Business income; Opportunity of being heard; Depreciation
• Section: 143(3)

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 624/SRT/2024 (AY 2016-17) (Physical court hearing) Kamdhenu Corporation Plot No.13, TPD No.6, Kamdhenu Corporation, Dumas Road, Piplod, Surat-395 007 [PAN : AAHFK 6041 J] बनाम Vs Income Tax Officer, Ward-2(3), Surat, Aaykar Bhawan, Majura Gate, Surat-395 001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Ms. Dalzini Madan, CA राजˢ की ओर से /Revenue by Shri Mukesh Jain– Sr-DR अपील पंजीकरण/Appeal instituted on 27.05.2024 सुनवाई की तारीख/Date of hearing 16.12.2024 उद ्घोषणा की तारीख/Date of pronouncement 16.12.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals) [for short to as “NFAC/Ld.CIT(A)] dated 27.03.2024 for assessment year (AY) 2016-17, which in turn arises out of assessment order passed by Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) 27.12.2018. The assessee has raised the following grounds of appeal:- “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in passing ex-parte order without giving reasonable and sufficient opportunity of being heard. ITA No.624/SRT/2024 (A.Y.16-17) Kamdhenu Corporation 2 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has. erred in dismissing the appeal without passing speaking order. 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.32,06,349/- being pre-loan interest on hospital building. 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.3,22,481/- being depreciation claimed on newly constructed building. 5. 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.2,49,413/- being excess depreciation claimed for car. 6. It is therefore prayed that addition made by the Assessing Officer and confirmed by CIT(A) may please be deleted or the matter may please be set aside to the file of CIT(A) for fresh adjudication. 7. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 2. Rival submission of both the parties heard. Record perused. The Ld. Authorized Representative (Ld.AR) for the assessee submits that no fair and reasonable opportunity was given by ld. CIT(A) before passing the ex parte order. The Ld. CIT(a) issued only two notices, i.e., one notice in 2021 during severe Covid-19 pandemic period and second/final notice in 2024. The Ld. AR of the assessee submits that while filing appeal before Ld.CIT(A) in Form-35 mentioned e-mail id “[e-mail]”, however, in the column wherein notice/communication may be sent to e-mail, the assessee opted “no”. No physical copy of notice was ever served upon assessee. The Ld. AR of the assessee submits that one more opportunity may be allowed assessee to contest its case on merit. The Ld. AR of the assessee submits that assessee ITA No.624/SRT/2024 (A.Y.16-17) Kamdhenu Corporation 3 has good case on merit and is likely to succeed if one more opportunity is allowed to contest the addition on merit. 3. On the other hand, Ld. Senior Departmental Representative (Ld. Sr-DR) for the Revenue submits that assessee was given reasonable and sufficient opportunity of hearing. It is the assessee who has not made compliance. 4. We have considered the rival submissions of both the parties and have gone through order of lower authorities carefully. We find that assessment was completed under section 143(3) of the Act on 27.12.2018. In the assessment order, Assessing Office made additions on account of excess depreciation on car of Rs.2,49,413/-, other disallowance of depreciation on building of Rs.3,22,481/- and disallowed interest expenses of Rs. 32,06,349/- claimed prior to loan period. The Ld. CIT(A) confirmed the action of Assessing Officer in ex parte proceedings. We find that assessee filed appeal before Ld, CIT(A) on 22.01.2019. The appeal of assessee was adjudicated vide order dated 27.03.2024. The Ld. AR of the assessee submits that only two notices, for fixing the date of hearing issued to assessee. First notice issued in the year 2020 and last notice in 2024, such facts are not disputed by ld Sr DR of the revenue. We find that Ld.CIT(A) has not recorded anywhere about the issuance of notices or service thereon whether notices were sent through e-mail id or otherwise. Moreover, the assessee while filing appeal has filed detailed statement of fact explaining the nature of business and the assets employed for earning business income. The Ld. CIT(A) has not considered the basic facts while adjudicating the appeal of assessee. In our view, the order passed by Ld. CIT(A) is not in consonance with the provisions of Section 250(6) of the Act. ITA No.624/SRT/2024 (A.Y.16-17) Kamdhenu Corporation 4 Therefore, in our considered view assessee deserves one more opportunity to contest his case on merit before ld CIT(A). Hence, the case is restored back to the file of ld CIT(A) for passing order afresh. Needless to direct that before passing the order ld CIT(A) shall allow fair and reasonable opportunity to assessee. The assessee is also directed to be more vigilant in future in making compliance in time and not to seek further adjournment without any valid reason and furnish all relevant and necessary evidences, if so desire. With these directions the appeal of assessee is 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 16/12/2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 16/12/2024 Dkp Outsourcing Sr.P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "