Samriddhi Petro Products Private Limited Vs DCIT (ITAT Hyderabad)
Summary: The Hyderabad Bench of the Income Tax Appellate Tribunal considered the appeal of Samriddhi Petro Products Private Limited against the Principal Commissioner of Income Tax-3, Hyderabad’s revision order dated 28 February 2019 under Section 263, relating to Assessment Year 2014-15. The assessee challenged the finding that the original assessment dated 12 September 2016 was erroneous and prejudicial to the Revenue.
The grounds of appeal concerned the discounted cash flow method adopted for share valuation, projections of domestic sales, verification of loans totalling ₹2,38,82,326, and alleged acceptance of loans or advances in cash contrary to Section 269SS. The assessee also argued that the revision was made without establishing the statutory conditions for invoking Section 263. At the hearing, the assessee’s representative submitted that the Principal Commissioner had passed the revision order ex parte without a proper opportunity to present the assessee’s case and requested a remand. The departmental representative opposed the request, explaining that the case had been listed on three occasions and neither the assessee nor its representative appeared.
The Tribunal accepted that the Principal Commissioner had afforded three opportunities and was justified in proceeding ex parte when there was no appearance. Nevertheless, considering the issues involved and the assessee’s request, it restored the matter to the Principal Commissioner for fresh consideration on merits after providing one more opportunity of hearing. The Tribunal cautioned the assessee to cooperate promptly; otherwise the Principal Commissioner could decide the matter according to law on the available record. The appeal was allowed for statistical purposes, without a final determination of the underlying valuation and loan issues.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT HYDERABAD
This appeal is filed by the assessee against the order of the Ld. Principal Commissioner of Income Tax-3, Hyderabad in F.No. Pr. CIT- 3/Hyd/263/2018-19, date 28/02/2019 passed U/s. 143(3) r.w.s 263 of the Act for the A.Y. 2014-15.
2. The assessee has raised eight grounds in its appeal and they are extracted herein below for reference:- “
1. The order of the Ld. Commissioner is against the law, weight of evidence and probabilities of case.
2. The Ld. Commissioner erred in considering the order U/s. 143(3) dated 12/09/2016 as erroneous and prejudicial to the interest of revenue.
3. The Ld. Commissioner erred in assuming that the method adopted by the assessee ie discounted cash flow method, as not correct.
4. The Learned Commissioner erred in assuming that estimates made in respect of domestic sales are exorbitantly increased from year to year in the valuation report.
5. The Learned Commissioner erred in assuming that the loans, totalling to Rs. 2,38,82,326/- from various persons are required to be verified therefore, erred in setting aside the order dated 12/09/2016 made U/s. 143(3) of the Act.
6. The Learned Commissioner erred in assuming that the assessee obtained loans / advances in cash in violations of section 269SS of the IT Act.
7. The Learned Commissioner erred in setting aside the order without establishing the fact that the order originally passed U/s. 143(3) is erroneous and prejudicial to the interest of revenue.
8. The Appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary.”
3. At the outset, the Ld. AR submitted before us stating that the Ld. Pr. CIT has passed ex-parte order U/s.263 of the Act without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld Pr. CIT in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that sufficient opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee nor its Representative appeared before the Ld. Pr. CIT. Therefore the Ld. Pr. CIT had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. Pr. CIT does not call for any interference.
4. We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, We find merit in the submissions of the Ld. DR. The Ld. Pr. CIT had posted the case on three occasions. However, none appeared on behalf of the assessee before the Ld. Pr. CIT on the dates of hearing. Therefore, the Ld. Pr. CIT was left with no other option except to adjudicate the appeal ex-parte. In this situation, We do not find much strength in the arguments advanced by the ld. AR. However, considering the prayer of the Ld. AR and the issues involved in the appeal, in the interest of justice, We hereby remit the matter back to the file of Ld. Pr. CIT in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, We also hereby caution the assessee to promptly co-operate before the Ld. Ld. Pr. CIT in the proceedings failing which the Ld. Pr. CIT shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.
5. In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.
Pronounced in the open Court on the 29th June, 2021.
