In a recent case before Income Tax Appellate Tribunal ( ITAT ), Bangalore the ex-parte order passed by Commissioner of Income Tax (Appeals) (CIT(A) ) due to lack of response to the notices of CIT(A) by the assessee, was remitted for reconsideration to CIT(A), as the lack of response was due to and ongoing litigation with State Bank of India.
Theassessee, Saiganapath Hotel Pvt. Ltd filed an appeal against the respondent, Income Tax Officer, Bangalore. The appeal was filed on the grounds that the Commissioner of Income Tax (Appeals) had passed an order against the assessee contrary to laws and natural justice. Also the assessee argued that the CIT(A) had erred in concluding the cash deposits.
Therefore the case was reassessed under section 147 of the Income Tax Act, 1961. The Assessing Officer (AO) had issued notices u/s148 and 142(1) of the Act directing the assessee to produce relevant details regarding the cash deposit-. Responding to which the assessee had submitted relevant details along with an acknowledgment on filing the return of income.
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The AO assessed the return of income of the assessee as Rs.1,31,95,698/- towards cash deposits during the financial year 2011-12. Aggrieved by this the assessee filed an appeal before CIT(A), on which an ex-parte order was passed confirming the additions made by AO, as the assessee had failed to respond to the issued notices.
The assessee filed further appeal before ITAT. The assessee’s counsel was represented by Shri. Brijesh S (CA) submitted that the assessee was in a pre-operative construction stage and had no business income and on 31.03.2012 the investment capital in work-in-progress was Rs.14,8,17,317/-. The assessee did not file any return of income as the company had no income at that time.
The CIT(A) had issued four notices u/s 250 of the Act from February, 2021 to June, 2024 to which the assessee failed to respond. The CIT(A) had dismissed the appeal after considering the available records.
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On enquiry by the bench on lack of response to CIT(A)’s notices the assessee’s counsel submitted that the appellant had an ongoing litigation proceeding with the State Bank of India (SBI) before the Debt Recovery Tribunal, hence was unable to attend the appellate proceedings before CIT(A). The counsel had submitted records evidencing the litigation proceedings.
The counsel prayed to provide the assessee with one more opportunity in the interest of natural justice and fair play.
The tribunal comprising Judicial Member, Prakash Chand Yadav and Accountant Member Padmavathy S. gave the assessee one more opportunity and remitted the appeal back to CIT(A) to adjudicate the appeal on merits. Hence the appeal filed by assessee was allowed for statistical purposes and the assessee was directed to furnish necessary details and cooperate with the appellate proceedings.
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