Omya India Pvt. Ltd. Vs DCIT (ITAT, Mumbai)
Section 250 Notice Sent To An Employee Who Left In 2016 — Natural Justice Revives ₹45.84 Lakh Appeal, But With A “No More Defaults” Warning
Interest disallowance confirmed without hearing
The AO completed the assessment u/s 143(3) & made a disallowance of ₹45,84,429 u/s 36(1)(iii). One of the reasons recorded was that the assessee had not furnished any reply or submission concerning the issue.
The assessee filed an appeal before the CIT(A). However, it failed to respond to the hearing notices issued during the appellate proceedings.
The CIT(A) observed that the assessee had remained completely non-responsive. Since the contentions contained in the statement of facts could not be verified without the assessee’s participation or supporting material, he confirmed the disallowance.
Before the ITAT, the assessee challenged the addition on merits as well as the denial of a reasonable opportunity of hearing.
Five communications—and five different problems
To explain its non-compliance, the assessee filed an affidavit of its Financial Controller & Company Secretary, Shri Shyam Mahadik.
The affidavit gave a notice-by-notice explanation.
The first hearing notice u/s 250 dated 27.07.2021 was sent to Shri Mahadik’s registered email address. Although received, it was inadvertently not forwarded to the tax consultants because of the disruption & precautionary measures prevailing during the COVID-19 pandemic.
