9911796707
TMI Blog2024 (11) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... ad reads as under:- "1. The order passed u/s 250 passed on 25.09.2023 by NFAC, Delhi for AY 2010-11 upholding the disallowance of freight expenses of Rs. 8,29,90,590/- u/s 40(a)(ia) made by AO is wholly illegal, unlawful and against the principles of natural justice. 2.1 The ld. NFAC has grievously erred in law and or on facts in not appreciating that there could not be compliance to the notices claimed to be issued mainly on account of closure of business at Tintoi long back, death of the tax consultant and closure of his office, non-availability of the details, documents/evidences etc, unawareness about the IT Portal details and notices uploaded on portal etc. Thus, there was a sufficient cause for failure to comply with the notices claimed to be issued by both the lower authorities. 2.2 The ld. NFAC has failed to appreciate that there was a sufficient cause for failure to respond to the notices of hearing and produce necessary details/documents. 3.1 The ld. NFAC has grievously erred in law and or on facts in upholding the disallowance of freight expenses of Rs. 8,29,90,450/0 u/s 40(a)(ia) made by A.O.. 3.2 That the in facts and circumstances of the ld. NFAC ought not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making further enquiry that an ex-parte appellate order has been passed by ld. CIT(A), and then steps were taken to file appeal with ITAT.It is also averred that the matter being old, the partners are trying to locate the old records as well the AO is requested to provide the copies of relevant documents/records. Thus, in nut-shell, prayers are made to condone the delay in filing this appeal belatedly by the assessee with ITAT by 83 days beyond the time prescribed u/s 253(3) of the 1961 Act. The ld. CIT-DR fairly submitted that the matter is left to the discretion of the Bench, although the department has objection to the aforesaid delay. One of the reasons for the delay as averred by the assessee in its application for delay in filing this appeal was that the appellate order was posted on ITBA on 25.09.2023 but it was downloaded by the assessee on 04.01.2024(appeal filed with ITAT on 15.02.2024) when the SMS alert was received on the mobile of former accountant on 04.01.2024 asking assessee to submit online response to notice issued by the department which notice was in context of recovery of tax demand outstanding against the assessee, and at this stage the assessee came to know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper Book in this regard whose contents are not disputed Even at revenue's behest. Learned counsel inter alia pleads thereafter that section 40(a)(ia) second proviso inserted in the Act vide Finance Act 2012 w.e.f. 01.04.2013 envisaging non-application of impugned disallowance in the case the assessee is not the one in default in light of section 201(1) squarely applies in facts of the instant case. The Revenue however opposes this contention by submitting that the second proviso is made applicable w.e.f. 01.04.2013 only. Learned counsel representing assessee at this stage quotes Tribunal's decision in Rajeev Kumar Agarwal vs. Addl. CIT-ITA No. 331/Agra/2013 decided on 29.05.2013 holding above stated proviso to be curative in nature with retrospective effect from 01.04.2005. He further quote Hon'ble Delhi High Court's decision in the case of IT vs. Ansal land mark Township (P) Ltd in Tax Appeal No. 2160/2015 decided on 26.08.2015 upholding above stated Tribunal's decision. 5. Learned departmental Representative fails to rebut this legal position. We thus accept assessee's legal contention and direct the Assessing Officer to pass a fresh order after conducting necessary verificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such discontinuance of business within fifteen days thereof. There is clearly a failure on the part of the assessee, as no such evidence is brought on record that the assessee did inform the AO about such discontinuance of its business. An evidence which could be produced but is not shall be deemed to be against the person who withheld the same. Thus, there is a failure on the part of the assessee in making compliance of Section 176(3). The assessee is a partnership firm, and Reference is drawn to Section 189(1), which is relevant. Similarly Section 189(3) provides that in case the firm is dissolved or business discontinued, every person who has at the time of such discontinuance or dissolution a partner of the firm, and the legal representative of any such person who is deceased shall be jointly and severally liable for the amount of tax, penalty or other sum payable and all the provisions of this Act, so far as may be shall apply to any such assessment or imposition of penalty or other sum. Further reference is also drawn to provisions of Section 189(4), which stipulates that where such discontinuance or dissolution takes place after any proceedings in respect of an assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, apply accordingly. (5) Nothing in this section shall affect the provisions of sub-section (6) of section 159" 5.2 The assessee did not comply with the notices issued by ld. CIT(A) and it is a matter of record that ld. CIT(A) issued as many as 8 notices which remained non compliant by the assessee and the ld. CIT(A) was compelled to pass an ex- parte appellate order dated 25.09.2023 based on the material on record mainly statement of fact (SOF) filed by the assessee. The assessee has not responded to any of 8 notices issued by ld. CIT(A). However, claim is made in the paper book that the assessee filed documents listed at page 79-109,128-169 and 177-225 before ld. CIT(A). In any case it is a disputed fact. However, the assessee did not mention about closure of its business in the statement of fact (SOF) filed before ld. CIT(A). This is a new fact brought by the assessee on record before the ITAT, w.r.t. discontinuance of its business many years back, in the statement of fact (SOF) filed along with its appeal before ITAT, as well in the application for condonation of delay filed with the ITAT. These are especial facts which are within the knowledge of the assessee and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eight notices to the assessee, but there was no compliance on the part of the assessee. The ld. CIT(A) passed the appellate order on merits based on material on record mainly Statement of Fact (SOF) filed before ld. CIT(A), by holding as under: "5......The appellant filed only submissions along with filing of appeal which have considered. However, the assessment in question being consequent upon the Hon'ble ITAT directions, it is to be seen from the angle of those directions only. Since, the AO could not find anything on record which shows that the payees have disclosed receipts from appellant in their return of income, there is no scope to deviate from the finding of the AO and accordingly, the order of the AO is confirmed. 6. Regarding applicability of section 194C of the Act, the CIT(A) in earlier proceedings has discussed in detail wherein he has observed that the entire facts of the case, it is noted that the claim of the appellant that it was acting as a commission agent is not supported by facts. All the freight received by it has been recorded in the books of accounts on the receipt and subsequently the payment has also been recorded on the payment side. Secondly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en they came to know about the orders passed ex-parte. Even today the partner's are not having sufficient details/documents /evidences with them and they are trying their best to procure the same from various sources because the old record is not traceable at the office of the previous tax consultant being closed after the death of Shri Girish A Mehta. The appellant has also asked the AO to furnish copy of the documents/orders from his record vide letter dtd. 29.01.2024 and filed in the office AO on 30.01.2024. Therefore," 6.3 Thus, it could be seen that the assessee did not participated at all in the appellate proceedings conducted before ld. CIT(A), for the reasons cited in SOF. This is second round of litigation. Huge additions were made by the AO even in second round of litigation and huge demand of tax and interest was raised by Revenue against the assessee. The assessee filed its appeal before ld. CIT(A) challenging the additions as were made by the AO in second round of litigation, and it is for the assessee to have remained vigilant once the appeal was filed by it before ld. CIT(A). The assessee and its partners were fully aware of the huge additions to the tune of Rs. 8,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s considered fit and appropriate that in accordance with principles of natural justice, one more opportunity is required to be given to the assessee and hence the appellate order passed by ld. CIT(A) dated 25.09.2023 is set aside and the matter can go back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law after giving opportunities to both the parties. The assessee on his part is also directed to comply with the direction/notices of CIT(A) and in case of failure of the assessee, the ld. CIT(A) shall be free to pass such appellate order as deemed fit in accordance with law on merits. Thus, the matter is restored back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee on merit in accordance with law. Needless to say powers of ld. CIT(A) are co-terminus with the powers of the AO. The ld. CIT(A) shall also conduct inquiries or cause inquiries to be made by the AO, as may deem fit (Refer: Section 250(4)), keeping in view provisions of Section189(1), 189(3) 189(4) read with Section 176(3), before disposing of the appeal. Keeping in view peculiar facts arising in this appeal as enumerated above, we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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