Introduction: In a recent development, the Income Tax Appellate Tribunal (ITAT) Mumbai has imposed a cost of Rs 5,000 on Edifice Properties Pvt Ltd for non-compliance with notices issued during their appeal against the order of the Commissioner of Income-tax (Appeals) – 48, Mumbai (CIT(A)). This article delves into the details of the case, the grounds raised by the assessee, and the ITAT’s decision.
Background of the Case: Edifice Properties Pvt Ltd had filed an appeal against the order dated 16.03.2023 passed by the CIT(A) for the assessment year 2014-15. The grounds of appeal included objections to the ex-parte order passed by the CIT(A), claiming that it was unjustified and without providing a reasonable opportunity to be heard. The appellant contended that they were prevented from making detailed submissions before the CIT(A) due to reasonable causes.
The ITAT considered the fact that the CIT(A) had passed an ex-parte order, meaning that the decision was made without taking into consideration the submissions of the assessee. The appellant argued that several notices had been issued during the appeal process, but compliance was not possible due to various reasons, including the COVID-19 pandemic.
ITAT’s Decision: The ITAT examined the dates of the notices issued to the assessee, which were as follows: 20.02.2019, 03.12.2019, and 20.02.2020. It noted that these dates were before the COVID-19 pandemic and that the appellant had not provided any reasonable cause for non-compliance with the notices.
The contention put forth by the appellant’s counsel, citing the COVID-19 pandemic as a reason for non-compliance, was found to be incorrect. The COVID-19 restrictions were imposed from 20th March 2020, while the first three dates of notice issuance were prior to that period.
The ITAT expressed its concern over the non-compliant behavior of the assessee, which had resulted in the waste of time and resources of the Income-tax Authority. To address this, the ITAT imposed a cost of Rs 5,000 on the assessee, which was directed to be paid into the Prime Minister Relief Fund within 30 days of receiving the order.
Additionally, the ITAT set aside the order of the CIT(A) and restored the matter back to him for fresh consideration, taking into account the submissions of the assessee. The appellant was also directed to cooperate and submit the necessary documents to support their claims before the CIT(A) promptly.
Conclusion: In a case involving Edifice Properties Pvt Ltd’s appeal against the CIT(A) order, the ITAT Mumbai imposed a cost of Rs 5,000 on the appellant for non-compliance with notices issued during the appeal process. The ITAT’s decision aims to deter non-compliance and ensure that both parties have a fair opportunity to present their cases during the appeal proceedings.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal has been preferred by the assessee against order dated 16.03.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – 48, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:
1) The order passed by learned CIT(A) ex-parte is unjustified, unwarranted and bad in law.
2) The order passed by CIT(A) is without providing reasonable opportunity of being heard and is therefore illegal, invalid and bad in law.
3) The assessee was prevented on account of reasonable cause in making detailed submission before Hon’ble CIT(A) and thus dismissal of appeal to be set aside for providing reasonable opportunity of being heard and to decide appeal after considering the submission of assessee.
4) The addition made by A.O. and upheld by CIT(A) at Rs. 12.97 crores is illegal, invalid and bad in law.
5) The evidence on record indicates that sale proceeds of property have been subjected tax in the case of assessee in Asst. Year 2015-16 and confirmation of addition in Asst. Year 2014 -15 is double addition of the receipts considered and assessed in Asstt. Year 2015-16.
6) The learned A.O. and CIT(A) ought to have accepted the loss as shown in the return of income at Rs.8,54,871/ -.
7) The learned A.O. and CIT(A) erred in holding that there is transfer of property during the Asst. Year 2014 -15 in order to levy tax on capital gain at Rs. 12.97 crores.
8) The assessee denies liability to pay interest under section 234A, 234B and 234C of I.T. Act 1961. Without prejceudi, levy of interest under section 234A. 234C and 234C of I. T. Act 1961 is unjustified, unwarranted and excessive.
2. At the outset, the Ld. Counsel of the assessee submitted that the Ld. CIT(A) has passed the order ex -parte qua the assessee without taking into consideration the submission of the assessee. The Ld. Counsel referred to para 5.1 of the Ld. CIT(A) and submitted that all the notices except notice dated 06.02.2023 were issued in the Covid period and therefore could not be complied. He further submitted that on 06.02.2023, the assessee applied for adjournment which was rejected by the Ld. CIT(A). Therefore, he submitted that there being a reasonable cause for not complying before the Ld. CIT(A) , the order of ld CIT(A) might be set aside and issues in dispute may restored back to the file of Ld. CIT(A) for deciding afresh after taking into consideration submission of the assessee.
3. The Ld. Departmental Representative (DR) on the other hand, objected and submitted that the first three dates of the notices i.e. 20.02.2019; 03.12.2019; and 20.02.2020 were before the Covid period and for those dates, no reasonable cause has been demonstrated by the assessee for non-compliance of the notices.
4. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. It is undisputed that the Ld. CIT(A) has decided the issue in dispute without taking into consideration submission of the assessee. On perusal of the order of the Ld. CIT(A), we find that on first three dates 20.02.2019; 03.12.2019; and 20.02.2020 , no compliance has been made by the assessee. The contention of the Ld. Counsel that non-compliance was on account of Covid period is not found to be correct, because Covid restriction were imposed from 20th March,2020 only. As the assessee has not complied before the Ld. CIT(A) on all three dates without any reasonable and sufficient cause and due to noncompliant behavior of the assessee , energy and time of the Income-tax Authority has been wasted, which could have been used for justice delivery in other cases. In the circumstances, we feel it appropriate to impose a cost of Rs. 5,000/-which the assessee shall pay into Prime Minister Relief Fund, within 30 days of receipt of this order. Subject to the payment of the cost by the assessee, the order of the Ld. CIT(A) is set aside and matter is restored back to him for deciding afresh after taking into consideration submission of the assessee. The asseesse is also directed to co-operate and submit necessary document in support of its claim before the Ld. CIT(A) at earliest. Since the ground No. 1 of the appeal of the assessee is allowed. We are not adjudicating upon the other grounds raised on merit.
5. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 30/08/2023.