TOPZONE MERCANTILE COMPANY LLP,MUMBAI V. .THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 21(3), MUMBAI, MUMBAI

ITA 4294/MUM/2024

AI Insights

The case involves M/s. Topzone Mercantile Company LLP, which appealed against the additions made by the AO in the assessment order for the assessment year 2016-17. The additions included disallowances for various expenses totaling approximately Rs. 6.5 crores. The CIT(A) upheld these additions due to the appellant's failure to respond adequately to notices under section 250 of the Income Tax Act. The appellant argued before the ITAT that they were not given a proper opportunity to present their case, leading to an ex-parte order by the CIT(A). The ITAT found merit in the appellant's arguments, noting the lack of a proper hearing and the cryptic nature of the CIT(A)'s order, and thus remitted the matter back to the CIT(A) for a fresh examination.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471287 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Appeal Filed On: 23-08-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BISWANATH DAS
• Assessee Lawyers: RONAK DOSHI
• Keywords: Principle of natural justice
• Section: 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “E” Bench, Mumbai. Before Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM) I.T.A. No. 4294/Mum/2024 (A.Y. 2016-17) M/s. Topzone Mercantile Company LLP 8th Floor, Piramal Tower Ganpatrao Kadam Marg Lower Parel Mumbai-400 013. PAN : AAGFT9070R Vs. ACIT, Circle 21(3) Piramal Chamber Lalbagu Parel Mumbai-400012. (Appellant) (Respondent) Assessee by Shri Ronak Doshi Department by Shri Biswanath Das Date of Hearing 14.11.2024 Date of Pronouncement 11.12.2024 O R D E R Per Omkareshwar Chidara (AM) :- In the above cited appeal, the learned Assessing Officer (AO for short) made additions as follows while completing the assessment order :- a) Disallowance of payment towards relinquishment of rights by Piramal Enterprises Ltd. – Rs. 14 lakhs. b) Disallowance of management fees – Rs. 76,66,199/- c) Marketing support services – Rs. 9,20,489/- d) Disallowance of project expenses – Rs. 5,47,47,934/- e) Security retainer charges – Rs. 10,73,438/- f) Other expenses – Rs. 59,18,159/- 2. Aggrieved by the above additions, the appellant filed an appeal before the learned Commissioner of Income Tax (Appeals) [CIT(A) for short], who confimred the above additions, as the appellant did not file the proper response to the notices issued u/s. 250 of the I.T. Act. M/s. Topzone Mercantile Company LLP 2 3. Aggrieved further by the order of the Ld. CIT(A), the appellant filed this appeal before the ITAT, Mumbai. 4. During the hearing proceedings before the Bench, the Ld. Authorised Representative (AR for short) of the appellant has stated that he was never given any opportunity to present submissions of the appellant before the Ld. CIT(A) and passed an ex-parte order. Ld. AR of the appellant has argued that National Faceless Appeal Centre- CIT(A) gave one opportunity during Covid period in 2020 and subsequently there was no correspondence and suddenly an order was passed by the Ld. CIT(A) in 2024 i.e. after four years of the initial notice given by National Faceless Appeal Centre. As there was no effective opportunity to present case, Ld. AR of the appellant argued that principles of natural justice are violated. It was further argued that there is no proper reasoning given by the lower authorities for making such huge additions and orders passed by them were very cryptic. In view of the above, ld. AR of the appellant submitted that all the additions should be deleted. 5. Ld. DR supported the orders of the Ld. AO and the Ld. CIT(A) and submitted that the appellant has not presented its case and hence orders were passed accordingly. 6. Heard both sides. From the order of the Ld. CIT(A), it is observed that all the additions made by the Ld. AO were confirmed without any reasoning and the orders were quite cryptic. Moreover, it is not proper to not to give any notice during interregnum period of four years. As the Ld. CIT(A) has confirmed all the additions made by Ld. AO without any basis or evidences, it is decided that all the issues are remitted to the file of the Ld. CIT(A) with a direction to him to examine all issues afresh and pass a speaking order after giving an effective opportunity to the appellant company. The appellant is directed to submit all his replies/explanations and cooperate with the Department in passing the appeal order at the earliest. M/s. Topzone Mercantile Company LLP 3 7. Appeal of the appellant is allowed for statistical purposes. Order pronounced in the open court on 11th December, 2024. Sd/- Sd/- (Kavitha Rajagopal) (Omkareshwar Chidara) Judicial Member Accountant Member Mumbai : 11.12.2024 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai. 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai "