Blackstone Infracon Pvt. Ltd. vs. ITO Ward-5(1), New Delhi: Case Filed for 2014-15 Assessment Year – Appeal Against Ex-Parte Order

Blackstone Infracon Pvt. Ltd. vs. ITO Ward-5(1), New Delhi: Case Filed for 2014-15 Assessment Year – Appeal Against Ex-Parte Order

Case Number: ITA 6005/DEL/2019

Appellant: Blackstone Infracon Pvt. Ltd., New Delhi

Respondent: Income Tax Officer, Ward-5(1), New Delhi

Assessment Year: 2014-15

Case Filed On: 12th July 2019

Order Type: Final Tribunal Order

Date of Order: 16th June 2021

Pronounced On: 16th June 2021

Background of the Case

Blackstone Infracon Pvt. Ltd., a company based in New Delhi, filed an appeal against the ex-parte order passed by the Commissioner of Income Tax (Appeals)-2, New Delhi, on 26th February 2019. The case pertains to the assessment year 2014-15. The core issue revolves around the ex-parte confirmation of various additions made by the Assessing Officer (AO), which resulted in determining the total income at Rs. 26,97,772 against the returned loss of Rs. 79,129.

The appellant initially filed its return of income for the assessment year 2014-15 on 28th September 2015, declaring a loss of Rs. 79,129. However, due to the absence of representation by the appellant during the assessment proceedings, the AO completed the assessment under Section 144 of the Income Tax Act on 28th December 2016, determining the total income at Rs. 26,97,772. The appellant’s failure to appear before the CIT(A) despite multiple opportunities led to the dismissal of the appeal by the CIT(A) for want of prosecution.

Proceedings in the Tribunal

The appeal was heard by the Delhi Bench ‘SMC-2’ of the Income Tax Appellate Tribunal via video conferencing. The bench was presided over by Shri R.K. Panda, Accountant Member. The hearing occurred on 16th June 2021, with the final order pronounced on the same day.

During the hearing, no one appeared on behalf of the appellant, and the case was decided based on the materials available on record and after hearing the Departmental Representative (DR), Shri R.K. Gupta. The central issue in this appeal was the appellant’s challenge to the ex-parte order passed by the CIT(A), which confirmed the additions made by the AO without considering the merits of the case.

The Dispute Over Ex-Parte Order

The appellant argued that the CIT(A) erred in dismissing the appeal for want of prosecution without addressing the substantive issues on their merits. The appellant contended that the CIT(A) was required to adjudicate on the issues raised in the appeal and provide a reasoned decision, even in the absence of the appellant. The ex-parte dismissal, without considering the merits of the case, was challenged as a violation of the principles of natural justice.

The Tribunal noted that the CIT(A) had relied on various judicial precedents, including the judgment of the Punjab & Haryana High Court in the case of Shahbad Cooperative Sugar Mills Ltd. and the Supreme Court’s decision in CIT vs. B.N. Bhattacharya, to justify the dismissal of the appeal for want of prosecution. However, the Tribunal emphasized that the CIT(A) was obligated under Section 250(6) of the Income Tax Act to dispose of the appeal by stating the points for determination, the decision thereon, and the reasons for such decision, even if the appeal was heard ex-parte.

Tribunal’s Analysis and Decision

The Tribunal reviewed the materials on record and concluded that the CIT(A) had indeed failed to discharge its statutory duty by not deciding the appeal on its merits. The Tribunal underscored that the CIT(A) was expected to pass a speaking order that addressed the substantive issues raised in the appeal, regardless of the appellant’s absence.

In light of the above, the Tribunal found it appropriate to restore the matter to the file of the CIT(A) for fresh adjudication. The Tribunal directed the CIT(A) to grant one final opportunity to the appellant to substantiate its claims and to decide the issues on their merits as per the facts and law. The Tribunal also instructed the appellant to cooperate with the proceedings before the CIT(A) and to avoid seeking unnecessary adjournments.

The Tribunal allowed the appeal for statistical purposes, emphasizing the need for a fair hearing and a reasoned decision on the merits of the case.

Conclusion

The case of Blackstone Infracon Pvt. Ltd. vs. ITO Ward-5(1), New Delhi, highlights the importance of adhering to the principles of natural justice in appellate proceedings. The Tribunal’s decision to restore the matter for fresh adjudication serves as a reminder that ex-parte dismissals, without considering the merits of the case, can be a violation of the statutory obligations of appellate authorities.

This case underscores the need for appellate authorities to provide reasoned decisions, even in the absence of the appellant, and to ensure that the substantive issues raised in appeals are properly addressed. The Tribunal’s order reflects its commitment to upholding the principles of fairness and justice in tax litigation.

For taxpayers and tax professionals, this case serves as a cautionary tale about the importance of participating in appellate proceedings and presenting a robust defense, even when the odds seem challenging. The final order, pronounced on 16th June 2021 by Shri R.K. Panda, Accountant Member, underscores the Tribunal’s role in ensuring that appeals are decided on their merits, in line with the law and the facts of the case.

Order Pronounced By: Shri R.K. Panda, Accountant Member

Final Order: Appeal Allowed for Statistical Purposes, Matter Restored to CIT(A)

Blackstone Infracon Pvt. Ltd. vs. ITO Ward-5(1), New Delhi: Case Filed for 2014-15 Assessment Year – Appeal Against Ex-Parte Order