NATIONAL STEEL INDUSTRIES, GWALIOR,GWALIOR V. JAO/ITO-1(2) , GWALIOR, GWALIOR

ITA 64/AGR/2022

AI Insights

The case involves National Steel Industries, which filed an appeal against the order of the CIT(A) concerning the assessment year 2019-20. The primary contention arose from the processing of the income tax return by the CPC, which significantly enhanced the declared income. The CIT(A) dismissed the appeal ex parte due to the assessee's non-compliance in responding to multiple notices. The ITAT found that the CIT(A) had not adjudicated the appeal on merits as required by section 250(6) of the Income-tax Act, leading to the setting aside of the CIT(A)'s order and remanding the case for a fresh decision.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23180 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-11-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 18-05-2022
• Other Referred Cases: CIT Vs B.N. Bhattacharjee and others [1979] 10 CTR 354 (SC), Estate of Late Tukojirao Holkar Vs CWT [1979] 223 ITR 480 (M.P.), Amitkumar H. Shah Vs. ACIT in ITA No. 2985/Ahd/2010, CIT Vs Multiplan India Pvt. Ltd. [1991] 38 ITD 320 (Del), Collector of Land Acquisition, Anantnag v. Mst. Katiji (1987 AIR 1353(SC))
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Assessee Lawyers: LD. APPEALS
• Keywords: Set aside
• Section: 250; 154; 143(1); 139(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 64/Agr/2022 Assessment Year: 2019-20 National Steel Industries, Baraghat Industrial Area, Jhansi Road, Gwalior. PAN:AAJFN4401H v. ADIT, CPC, Bangaluru. (Appellant) (Respondent) Assessee by: None (Adj. Application filed) Revenue by: Sh. Shailendra Srivastava, Sr. DR Date of hearing : 19/11/2024 Date of Pronouncement : 19/11/2024 ORDER This appeal has been filed by the assessee, which has arisen from the appellate order dated 16.03.2022, passed by learned CIT(Appeals) u/s. 250 of the Income-tax Act, 1961, bearing DIN & Order No. ITBA/NFAC/S/250/2021-22/1040895380(1), for the assessment year 2019-20. 2. Brief facts of the case are that the assessee has filed return of income u/s. 139(1) of the Act on 31.10.2019, which is within the extended due date for filing the return u/s. 139(1) of the Act, declaring ITA No. 64/Agr/2022 2 income of Rs.13,560/-, which is processed by the CPC u/s. 143(1) computing the income of the assessee at Rs.3,73,430/-. Assessee, being aggrieved, filed rectification application u/s. 154 of the Act on 29.05.2020, which was disposed of by the Revenue vide order dated 25.06.2020 and the income of the assessee was computed at Rs.3,73,425/- vide order u/s. 154 of the Act. Two additions were claimed by assessee to have been made by the Revenue while processing return of income u/s. 143(1) of the Act, towards employees’ contribution to ESI deposit to the tune of Rs.2,480/- on being belatedly deposited and towards interest paid to partners to the tune of Rs.3,57,389/-. 3. Assessee, being aggrieved, filed first appeal before ld. CIT(Appeals). Learned CIT(Appeals) issued notices to the assessee dated 16.01.2021, 21.10.2021, 26.10.2021, 02.11.2021, 13.12.2021 and 02.03.2022 but the assessee did not file any reply or document in response to the notices issued by ld. CIT(Appeals). Learned CIT(Appeals) observed that the assessee is not interested in prosecuting its appeal and the appeal of the assessee was dismissed ITA No. 64/Agr/2022 3 by Ld. CIT(Appeals) ex parte in limine without considering the issues on merits by holding as under : “9. In this case Notice/Notices dated 16.01.2021, 21.10.2021, 26.10.2021, 13.12.2021 and 02.03.2022 were issued but appellant has not submitted any reply or document in its case. 9.1 It is clear from the above that appellant has been granted ample opportunities to represent its case in the appellate proceedings but has failed to make any submissions in support of the grounds of appeal filed by it. The appellant is not interested in prosecuting the appeal filed by it. 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 the attend hearing, the appeal is decided on the basis of material available on record. 9.2 I have considered the facts and circumstances of the case, the observations of the Assessing Officer and material available on record on the above matter. As mentioned in paragraph 9 of this appeal order, this office has issued several letters/notices to file written submission. However, neither any adjournment was sought for nor any written submission was filed. The letters were issued through ITBA System at the e-mail ID provided by the appellant. From the above conduct of the appellant, it is evident that the appellant is no more interested in pursuing the appeal. The Hon'ble Supreme Court in the case of CIT Vs B.N. Bhattacharjee 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 ITA No. 64/Agr/2022 4 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 (sic prosecution). Under these circumstances, the current appeal of the appellant is liable to be dismissed. Ground of appeal number 1 to 6 are hereby dismissed.” 4. Aggrieved, the assessee has filed second appeal with the Income Tax Appellate Tribunal, which is filed belatedly by one day. I do not find any mala fide on the part of the assessee in filing this appeal belatedly by one day with the Tribunal, as the assessee is not likely to gain anything by filing this appeal belatedly by one day. When technicalities are pitted against the substantial justice, the Courts will lean towards advancement of substantial justice rather than technicalities, unless the mala fide on the part of the assessee is at writ large. Under the facts and circumstances, I do not find any mala fide on the part of the assessee in filing this appeal belatedly, and in the interest of justice, I condone the delay of one day and proceed to adjudicate this appeal on merits in accordance with law. ITA No. 64/Agr/2022 5 Reference is drawn to the decision of Hon’ble Supreme Court in the case of Collector of Land Acquisition, Anantnag v. Mst. Katiji (1987 AIR 1353(SC)). 5. None appeared on behalf of the assessee when this appeal was called for hearing. However, adjournment application was filed by ld. Counsel for the assessee, CA Ashok Vijaywargiya. Said application stands rejected and I proceed to hear the matter. Ld. Sr. DR supported the orders of the authorities below and prayed that the appeal of the assessee be dismissed. 6. I have considered the submission of ld. Sr. DR and perused the material on record. I observe that the assessee has filed return of income u/s. 139(1) of the Act within the due date, declaring income of Rs. 13,560/-. Learned CPC while processing the return u/s. 143(1) has enhanced the income to Rs. 3,73,430/-. Assessee filed rectification application, which also stood dismissed by the CPC. Assessee has filed first appeal before Ld. CIT(Appeals), but there was no compliance on behalf of the assessee to the notices issued to the assessee by Ld. CIT(Appeals). ITA No. 64/Agr/2022 6 7. I observe that the ld. CIT(Appeals) too has not decided the appeal on merits. The ld. CIT(A) is required and obligated to pass order in compliance with the provisions of section 250(6), as ld CIT(A) is required to pass reasoned and speaking order on merits in accordance with law. The appellate order passed by ld. CIT(A) is subject to further appeal with ITAT u/s 253. The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A. The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issues are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of ld. CIT(A) in deciding the issues. If the ld. CIT(A) simply dismiss the appeal merely because the assessee did not comply with the notices issued by ld. CIT(A) in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in ITA No. 64/Agr/2022 7 view provisions of Section 250(6) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits . The appellate order of the CIT(A) is clearly in violation of section 250(6) of the Act and liable to be set aside. Merely stating the assessment order passed by AO is upheld , and that the assessee has not submitted details/documents is not sufficient . The ld. CIT(A) is not toothless as his powers are co- terminus with the powers of the AO., which even includes power of enhancement. It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents to support his contentions. Thus, the assessee is equally responsible for its woes. Under these circumstances and fairness to both the parties, in the interest of justice, the appellate order of CIT(A) is set aside and the matter can go back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties. The ld. CIT(A) shall pass the order in compliance with the provision of section 250(6) of the Act on merit ITA No. 64/Agr/2022 8 in accordance with law, in set aside proceedings , after giving opportunity to both the parties in compliance with principles of natural justice. The assessee on his part is also directed to comply with the direction/notices of CIT(A) , and in case of failure of the assessee, the ld. CIT(A) shall be free to pass such order as deemed fit ex-parte in accordance with law on merits and after complying with the provisions of section 250(6) of the Act. Thus, the appeal of the assessee is allowed for statistical purposes and the matter is restored back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law. I clarify that I have not commented on the merits of the issues in the appeal. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19/11/2024 just after conclusion of hearing in the presence of Ld. Sr. DR. Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated: 19/11/2024 *aks/- "