KIRTI FOODS AND BEVERAGES,MUMBAI V. ACIT, CENTRAL CIRCLE -2(2), MUMBAI

ITA 5892/MUM/2024

AI Insights

The case involves M/s Kirti Foods & Beverages appealing against the order of the Learned Commissioner of Income-tax (Appeals)-48, Mumbai, which was initially based on the order from the Learned Assistant Commissioner of Income-tax, Central Circle 2(2), Mumbai. The primary contention in the appeal was the addition of Rs.2,52,00,027 under section 69A of the Income-tax Act, 1961, read with section 115BBE, and an additional Rs.38,40,056 related to unreconciled stock. The CIT(A) had passed an ex-parte order due to the assessee's non-compliance with multiple hearing notices, leading to the decision being made without the assessee's input. The Income Tax Appellate Tribunal (ITAT) found that despite the non-compliance, in the interest of natural justice, the assessee should be given another opportunity to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24035 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2021-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: SHRIGAURAV KABRA VIRTUALLY APPEARED
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 250; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND MISS PADMAVATHY S., ACCOUNTANT MEMBER ITA No.5892/Mum/2024 (Assessment Year: 2021-22) M/s Kirti Foods & Beverages, Mumbai Survey No.106, Richard Compound, Manicha Pada, Pelhar, Vasai East, Vasai- 401208 PAN : AANFK8043L vs Assistant Commissioner of Income Tax, Central Circle-2(2), Mumbai. 8th Floor, Room No-806, Prathishtha Bhavan, M.K.Road, Mumbai, Pin- 400020. APPELLANT RESPONDENT Assessee by :ShriGaurav Kabra (Virtually appeared) Respondent by : Shri Hemanshu Joshi, Sr.DR Date of hearing : 02/01/2025 Date of pronouncement : 03/01/2025 O R D E R PER ANIKESH BANERJEE, JM: Instant appeal of the assessee was filed against the order of the Learned Commissioner of Income-tax (Appeals)-48, Mumbai *for brevity, ‘Ld.CIT(A)’) passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act’), date of order 17/10/2024 for A.Y. 2021-22. The impugned order was emanated from the order of the Learned Assistant Commissioner of Income-tax, Central Circle 2 ITA No.5892 /Mum/2024 Kirti Foods & Beverages 2(2), Mumbai (in brevity, ‘Ld.AO) passed under section 143(3) of the Act, date of order 07/04/2022. 2. The brief facts of the case are that the assessment was completed and the additions were confirmed amount to Rs.2,52,00,027/- under section 69A of the Act read with section 115BBE of the Act and also Rs.38,40,056/- was also added back under the same sections in relation to unreconciled stock. The aggrieved assessee assailed an appeal before the Ld. CIT(A). The Ld.CIT(A) had passed an exparte order and the several opportunities for hearing were allowed to the assessee and the assessee filed the adjournment petitions accordingly. The last adjournment petition was filed by the assessee on 15/12/2023, but after that date the assessee had made no compliance before the Ld. CIT(A) and finally the order was passed on 17/10/2024. The observation of the Ld.CIT(A) in para 7 of impugned appeal order is as below:- “7. It is pertinent that in order to decide this appeal in a timely manner a number of notices/ communications through ITBA portal were sent to the appellant, viz. Communications dated 28.04.2023, 20.06.2023, 28.09.2023, 02.11.2023, 01.12.2023 and 23.04.2024, In response the appellant has merely sought for adjournment vide letters dated 10.05.2023, 26.06.2023, 10.10.2023 and 15.12.2023. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on his part to purposefully and co-operatively pursue the same in a worthwhile manner, which the appellant has evidently failed to do. It clearly appears that the appellant has not even bothered to pursue this appeal in any productive manner. Hence, in view of the aforesaid total non-compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed off, ex-parte, primarily on the basis documents/details available on record, which is as under.” 3 ITA No.5892 /Mum/2024 Kirti Foods & Beverages 3. We have considered the rival submissions and perused the documents on record. It is observed that the Ld. CIT(A) had provided reasonable opportunities and scheduled hearing dates for the assessee during the appeal proceedings. The assessee filed a final adjournment request on 15/12/2023, but subsequently failed to comply with the hearing notices issued by the Ld. CIT(A), leading to the passing of an ex-parte order. Consequently, the assessee was denied the opportunity to present evidence before the Ld. CIT(A). The Ld. CIT(A) has explicitly documented his findings and ensured that the hearing dates were communicated through the Income Tax Department's website. However, in the interest of natural justice, we believe the assessee should be granted one more opportunity to present its case before the Ld. CIT(A).Given that the assessee has not provided a satisfactory explanation for noncompliance with the notices, we consider it appropriate to impose a cost of Rs. 5,000/- (Rupees five thousand only) on the assessee. This amount shall be paid to the credit of the Income Tax Department within two months from the date of receipt of this order. Compliance with this payment will be verified by the Ld. CIT(A). The Ld. AR has accepted this finding and requested the appeal to be remanded back to the Ld. CIT(A). The Ld. DR has raised no objections to this prayer. Accordingly, all issues are remanded to the file of the Ld. CIT(A) for adjudication on merits. We make no observations regarding the merits of the case, so as to preserve the appellate process before the Ld. CIT(A). The assessee must be afforded a reasonable opportunity of being heard and is expected to diligently participate in the proceedings to ensure the timely resolution of the appeal. 4 ITA No.5892 /Mum/2024 Kirti Foods & Beverages 4. In the result, the appeal of the assessee bearing ITA No.5892/Mum/2024 is allowed for statistical purpose. Order pronounced in the open court on 03rd day of January, 2025. Sd/- sd/- (PADMAVATHY S.) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 03/01/2025 Pavanan Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "