ITAT directs Income Tax Dept to Re-do Assessment against Yash Raj Films [Read Order]

In a ruling pronounced last week, the Income Tax Appellate Tribunal (ITAT), Mumbai has directed the income tax department to re-consider the assessment completed against Bollywood’s famous Director and Producer Karan Johar’s Yash Raj Films.

An assessment was framed under section 144 of the Income Tax Act, 1961 where disallowances and additions on various grounds were made against the assessee-Company. On first appeal, the Commissioner of Income Tax (Appeals) passed an ex-parte order without considering the facts of the case on merits.

Before the Tribunal, the assessee contended that the learned CIT(A) has passed an ex-parte order without granting sufficient opportunity to the assessee.

Allowing the above contentions, Vice President Mahavir Singh and Accountant Member M. Balaganesh observed that “on perusal of the order of the learned CIT(A), we find that fair opportunities were indeed given to the assessee for representation which were not complied with by the assessee. The learned AR before us prayed for one final opportunity to be given before the learned Commissioner of Income Tax (Appeals). The learned AR also assured that he will not take any adjournment before the learned CIT(A) and would co-operate in the early disposal of the appeal before the learned CIT(A).”

Directing the department to re-do the assessment, the Tribunal concluded that “we find that since, ex-parte order has been passed by the learned CIT(A), this is a fit case for remanding the appeal before the learned CIT(A) to give more effective opportunity to the assessee and the assessee is also directed to cooperate with the expeditious disposal of the appeal by the learned CIT(A) by not seeking any adjournment except due to exceptional or unavoidable circumstances. In view of this decision, the various grounds raised by the assessee on merits are left open and are remanded back to the file of learned CIT(A) for denovo adjudication.”

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