Case Law Details
Sh. Iqbal Singh HUF Vs DCIT (ITAT Chandigarh)
Sh. Iqbal Singh HUF filed an appeal before the ITAT Chandigarh against the ex parte order passed by the NFAC, Delhi for the assessment year 2018-19. The NFAC dismissed the assessee’s appeal on the grounds of non-compliance, without considering the merits of the case. The appellant approached the ITAT, challenging the order and seeking a fresh decision on the merits.
The NFAC dismissed the appeal of Sh. Iqbal Singh HUF due to non-compliance during the proceedings. However, the ITAT opined that non-compliance with the order of the Commissioner of Income Tax (Appeals) cannot be the sole reason to justify an addition on the taxpayer. The ITAT set aside the ex parte order and restored the appeal to the NFAC for a fresh decision. The NFAC was directed to provide proper and sufficient opportunity to the assessee to present their case. The assessee was also instructed to fully cooperate in the proceedings and avoid seeking undue adjournments.
The ITAT Chandigarh allowed the appeal of Sh. Iqbal Singh HUF and set aside the ex parte order passed by the NFAC. The case has been remanded to the NFAC for a fresh decision on the merits, with directions to provide adequate opportunity to the assessee. The ITAT emphasized that non-compliance alone cannot be the basis for allowing an addition on the taxpayer, and a proper examination of the merits is required.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
Per Sudhanshu Srivastava, Judicial Member:
This appeal is preferred by the assessee against the order dated 01.12.2021passed by the National Faceless Appeal Centre, (NFAC), Delhi for Assessment Year 20 18-19.
2. The brief facts of the case are that the Central Processing Unit (CPC), Bangalore has processed the assessee’s return of income u/s. 143(1) of the Income Tax Act, 1961 (hereinafter called ‘the Act’) by creating a demand of Rs.22,16,870/- after giving credit of Rs.25,35,014/- of tax deducted at source as against the amount of Rs.42,88,612/- claimed by the assessee.
3. Aggrieved, the assessee preferred an appeal before the NFAC, wherein the assessee challenged the processing of the return of Income on various grounds. However, the NFAC dismissed the assessee’s appeal without entering into the merits of the case by observing that the assessee was non compliant during the entire proceedings before it and, therefore, the issues raised in the grounds of appeal cannot be adjudicated. The NFAC, in the impugned order in paragraph-3, has given the list of dates on which the assessee was required to furnish the required documents but the assessee had only filed adjournment applications on those given dates. Accordingly, the NFAC proceeded to dismiss the assessee’s appeal on the ground of non compliance.
4. Now, the assessee has approached this Tribunal and has raised the following grounds of appeal:
1. That the order passed under section 250 by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi in Appeal No. ITBA/NFAC/S/250/ 2021-22/ 1037413829(1) dated 01.12.2021 is contrary to law and facts of the case.
2. That in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) gravelly erred in deciding the appeal exparte without affording reasonable opportunity of being heard.
3. That in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) gravelly erred in not considering the adjournment letter of the appellant seeking more time as the documents required for the preparation of the case.
4. That in the facts and of the case, the Ld. Commissioner of Income Tax (Appeals) gravelly erred in not deciding the issues involved in appeal on merits.
5. That in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) gravelly erred in upholding the addition of Rs. 1,76,41,713/-made by the ld. Assessing Officer whereas the amount of Rs. 1,76,41,713/- is part of compensation which is exempt under Section 10(37) of the Income Tax Act, 1961.
6. That the appellant craves to add, amend or alter any ground of appeal before or at the time of hearing of appeal, with the permission of the Hon’ble Income Tax Appellate Tribunal, Chandigarh.”
5. We have heard the rival parties and have gone through the material placed on record. We note that the NFAC has passed the ex-parte order as according to it, the assessee was non-compliant during the whole proceedings before it. However, we feel that one more opportunity should be given to the assessee as the NFAC has not decided the appeal on merits. We, therefore, in the interest of justice, set aside the order of NFAC and restore the appeal to the file of the NFAC with the direction that the NFAC shall decide the appeal afresh after giving proper and sufficient opportunity to the assessee. The assessee is also directed to now fully cooperate in the set aside proceedings and not seek undue adjournments.
6.0 In the final result, the appeal of the assessee stands allowed for statistical purposes.
(Order pronounced in the open Court on 06/06/2023)
