Hindustan Commart P. Ltd vs. ACIT Circle-1, Noida: Appeal on Jurisdictional Grounds and Disallowances – ITA 5781/DEL/2019

Hindustan Commart P. Ltd vs. ACIT Circle-1, Noida: Appeal on Jurisdictional Grounds and Disallowances – ITA 5781/DEL/2019

Case Number: ITA 5781/DEL/2019

Appellant: Hindustan Commart P. Ltd, Muzaffarnagar

Respondent: ACIT, Circle-1, Noida

Assessment Year: 2012-13

Case Filed on: 2019-07-03

Order Type: Final Tribunal Order

Date of Order: 2022-10-19

Pronounced on: 2022-10-19

Introduction

This case involves an appeal filed by Hindustan Commart P. Ltd against the order of the Additional Commissioner of Income Tax (ACIT), Circle-1, Noida, for the assessment year 2012-13. The appellant challenged the jurisdictional grounds and disallowances confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)] on merits.

Background

Hindustan Commart P. Ltd, based in Muzaffarnagar, filed its income tax returns for the assessment year 2012-13. During the assessment, discrepancies were noted by the ACIT, leading to disallowances and additions. The company contested these decisions and filed appeals with the CIT(A), which were dismissed in the absence of the assessee. The appellant then took the case to the Income Tax Appellate Tribunal (ITAT).

Grounds of Appeal

The primary grounds of appeal included jurisdictional issues and the disallowances/additions confirmed by the CIT(A) on merits. The appellant raised concerns about the inordinate delay in the communication of the appellate order, which was served to the assessee six months after it was passed.

Hearing and Representation

When the matter was called for hearing on October 19, 2022, no one appeared on behalf of the assessee. The Revenue was represented by Ms. Yagya Saini Kakkar, CIT-DR. The Tribunal decided to proceed with the case based on the submissions and records available.

Observations by the Tribunal

The Tribunal observed that the first appellate orders were ex-parte, primarily due to the absence of the assessee. The CIT(A) disposed of the appeals against the assessee on the grounds that the assessee failed to substantiate their grievances with any substantive evidence.

The Tribunal noted an inordinate delay of about six months in the service of the appellate orders, which were passed on December 31, 2018, but communicated to the assessee on June 12, 2019. Such delays can create doubts about the fairness and transparency of the proceedings.

CBDT Instructions and Fair Play

The Tribunal highlighted that the Central Board of Direct Taxes (CBDT) has issued instructions to ensure timely dispatch of orders to avoid any suspicion of backdating or malafide intent. The Tribunal emphasized the importance of adhering to these instructions to maintain the integrity of the tax administration process.

Tribunal’s Decision

Considering the procedural lapse and the ex-parte nature of the appellate orders, the Tribunal found it appropriate to restore the issue back to the CIT(A) for fresh adjudication. The Tribunal instructed the CIT(A) to provide a proper opportunity to the assessee to present their case.

The Tribunal also cautioned the assessee to diligently participate in the appellate proceedings and cooperate fully in the inquiry and explanation process.

The Tribunal’s order stated:

“We consider it expedient to restore the issue back to the file of the CIT(A) for de novo adjudication in accordance with law after giving proper opportunity to the assessee. The assessee is also cautioned to diligently attend the first appellate proceedings and extend full cooperation in the inquiry and explanation as may be sought by the CIT(A). With these observations, all the impugned orders of the CIT(A) are set aside and restored back to the file of the CIT(A) for fresh adjudication in accordance with law.”

Conclusion

The appeal filed by Hindustan Commart P. Ltd against the ACIT, Circle-1, Noida, was allowed for statistical purposes. The Tribunal’s decision to restore the matter to the CIT(A) for fresh adjudication underscores the importance of procedural fairness and timely communication in the tax dispute resolution process.

Order Pronounced

The order was pronounced in the open court on October 19, 2022.

Members:

• Diva Singh, Judicial Member
• Pradip Kumar Kedia, Accountant Member

By Order

Assistant Registrar, ITAT, New Delhi.

Hindustan Commart P. Ltd vs. ACIT Circle-1, Noida: Appeal on Jurisdictional Grounds and Disallowances – ITA 5781/DEL/2019