Comfortable Abode Private Limited Vs ACIT (ITAT Bangalore)
Introduction: In a recent case between Comfortable Abode Private Limited and the Assistant Commissioner of Income Tax (ACIT), the Income Tax Appellate Tribunal (ITAT), Bangalore, directed re-adjudication. The tribunal held that the assessment proceedings completed by the National Faceless Appeal Centre (NFAC) Delhi did not give sufficient opportunity to the assessee.
Analysis: The case originated with the assessment for the year 2016-17, wherein the company had declared a current year loss. Following scrutiny and notices, the assessment was finalized with an assessed loss of a lower amount. Dissatisfied, Comfortable Abode appealed before NFAC, which confirmed the assessment order due to the assessee’s non-compliance with the hearing notices.
The assessee then appealed to ITAT, claiming that they were not provided sufficient opportunities to represent their case. They also challenged the addition of notional interest on property advance and the disallowance under section 36[1][iii] of the Act.
The ITAT, after considering the submissions, ruled in favor of the assessee, in part, agreeing that there was a lack of sufficient opportunity for the company to represent its case. It ordered a fresh decision to be made after providing an opportunity for the assessee to be heard.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal by assessee is directed against order of NFAC Delhi for the assessment year 2016-17 dated 2.2.2023.
2. Facts of the case are that the assessee company is in the field of business of undertaking development and construction of residential apartments. The company filed its original return of income for the AY 2016-17 on 30.11.2018 declaring current year loss of Rs.(-) 1,04,02,808/-. The case was selected for scrutiny through CASS. Statutory notice u/s 143(2) of the Income-tax Act, 1961 [‘the Act’ for short] dated 1.8.2017 was issued and served on the assessee company. Due to change in the incumbent officer, a notice u/s 142(1) r.w.s. 129 of the Act was issued on 10.11.2018. Notice u/s 142(1) of the Act were issued on 23.11.2018. Accordingly, assessment was completed u/ 143(3) of the Act on 28.12.2018 at assessed loss of Rs.6,92,061/-.
2.1 Aggrieved, the assessee went in appeal before NFAC. The NFAC has given notices of hearing to the assessee as follows:
