R M PRIME SOLUTIONS,CHENNAI V. ASSISTANT COMMISSIONER OF INCOME TAX, CHENNAI

ITA 3362/CHNY/2024

AI Insights

The case involves R.M. Prime Solutions, a partnership firm, which appealed against the ex-parte dismissal of their appeal concerning the disallowance of business promotion expenses amounting to Rs.18,11,72,522 for the Assessment Year 2010-11. Initially, the Assessing Officer disallowed these expenses, which was later contested and led to a series of appeals and remittances between the Tribunal and the CIT(A). The core issue arose when the CIT(A) dismissed the appeal ex-parte due to non-compliance with notices, which the assessee claimed not to have received due to the closure of the business and inaccessibility of the recorded email address. The Tribunal, considering the circumstances, decided to provide another opportunity for the assessee to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396398 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. MARUTHU PANDIAN
• Assessee Lawyers: BIMLENDU BHUSHAN; C.A
• Keywords: Set aside; Opportunity of being heard
• Section: 143(3)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘बी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI \u0019ी यस यस िव ने रिव, \u0011ा ियक सद एवं \u0019ी जगदीश, लेखा सद क े सम( BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3362/Chny/2024 िनधा 9रण वष9 /Assessment Year: 2010-11 R.M. Prime Solutiioins, 126, Thambu Chetty Street, 3rd Floor, George Town, Chennai – 600 001. Vs. The Asst. Commissioner of Income Tax, Non Corporate Circle-12(1), Chennai. [PAN: AAKFR 9899N] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीला थF की ओर से/ Appellant by : Shri Bimlendu Bhushan, C.A HIथF की ओर से /Respondent by : Shri S. Maruthu Pandian, CIT सुनवा ई की ता रीख/Date of Hearing : 03.04.2025 घोषणा की ता रीख /Date of Pronouncement : 26.05.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2010-11 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 24.07.2024 in the matter of assessment framed by Assessing Officer [AO] u/s. 143(3) r.w.s 254 of the Income-tax Act, 1961 (hereinafter “the Act”) dated 20.12.2019. ITA No.3362/Chny/2024 :- 2 -: 2. There is a delay of 91 days in filing the appeal by the assessee. The assessee has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned. 3. The effective ground of appeal in this appeal of assessee is against the ex-parte dismissal of the appeal and in confirming the disallowance of business promotion expenses amounting to Rs.18,11,72,522/-. 4. The assessee is a partnership firm and had filed its return of income declaring a total income of Rs. 4,05,17,325/-. The A.O in the assessment order passed u/s. 143(3) of the Act, has disallowed business promotion expenses of Rs.18,11,72,522/-. Aggrieved by this, the assessee filed an appeal before the Ld. CIT(A), and the appeal was allowed vide order dated 28.03.2016. The Revenue preferred an appeal against the said order, and the Tribunal vide order dated 26.10.2018 remitted the matter to the file of A.O. The A.O in consequent passed assessment order dated 20.12.2019, again disallowed 80% of the business promotion expenses amounting to ITA No.3362/Chny/2024 :- 3 -: Rs.18,11,72,522/-. The assessee filed appeal before the Ld. CIT(A), which was dismissed ex-parte due to non-compliance with the notices issued by the NFAC through email and assessee is in appeal against the ex-parte order passed by the NFAC. 5. The Ld. Authorized Representative of the assessee (AR) has submitted that the assessee has not received any of the notices issued as the business entity was closed long ago, and the assessee had no access to the address on record. It was further submitted that the notices were sent to the mail ID [e-mail], which was no longer in use, as the person who previously managed the email account had left the organization. The Ld. AR therefore, requested that one more opportunity be granted to the assessee to present evidence and substantiate its claim. 6. On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities. 7. We have heard the rival submissions, and perused the materials available on record. It is observed that the A.O had made disallowance of 80% of the business promotion expenses in the line of disallowances made in the first round of assessment proceedings. The Ld. CIT(A) had issued six notices to the assessee, but the ITA No.3362/Chny/2024 :- 4 -: assessee did not comply any of them. The Ld CIT(A), therefore confirmed the disallowances in the ex–parte order. Considering the explanation offered by the Ld. AR regarding the non-receipt of notices and in the interests of justice, we are of the opinion that the assessee deserves another opportunity to present its case before the Ld. CIT(A). Accordingly, we set aside the order passed by the Ld. CIT(A) and remit the matter back to his file for adjudication afresh after affording due opportunity of being heard to the assessee in accordance with law. The assessee is also directed to cooperate with the proceedings and appear before the Ld. Addl. CIT(A) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 26th May, 2025. Sd/- Sd/- (यस यस िव ने रिव) (SS Viswanethra Ravi) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / Judicial Member (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 26th May, 2025. EDN/- ITA No.3362/Chny/2024 :- 5 -: आदेश क\u0019 \bितिल प अ े षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "