Facts of the Case

The assessee, Jharkhand State Food and Civil Supplies Corporation Limited, filed an appeal against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi for Assessment Year 2018-19. During the assessment proceedings as well as appellate proceedings before the CIT(A), the assessee failed to comply with statutory notices and did not produce documentary evidence in support of its case. The Assessing Officer completed the assessment after granting multiple opportunities, noting only a minimal and non-substantive response from the assessee. The CIT(A) confirmed the assessment due to complete absence of supporting material. Before the Tribunal also, no representative appeared on behalf of the assessee.

Issues Involved

Whether the appeal of the assessee could be dismissed outright due to absolute non-representation and non-cooperation, or whether the matter deserved restoration to the Assessing Officer to provide one final opportunity in the interest of justice, and whether exemplary costs were warranted for repeated non-compliance.

Petitioner’s Arguments

No arguments were advanced on behalf of the assessee due to non-appearance before the Tribunal.

Respondent’s Arguments

The Revenue submitted that the assessee consistently failed to comply with statutory notices before the Assessing Officer and the CIT(A), and even before the Tribunal there was no representation. It was argued that public sector undertakings often display habitual non-compliance and therefore the appeal deserved dismissal. Alternatively, it was submitted that if the matter were to be restored, exemplary costs should be imposed to deter such conduct.

Court Order / Findings

The ITAT Ranchi observed that the assessment order clearly recorded multiple opportunities granted to the assessee and persistent failure to furnish relevant details. The Tribunal noted that the CIT(A) also provided adequate opportunity but no documentary evidence was produced. However, in the interest of justice and to afford the assessee one final opportunity, the Tribunal deemed it appropriate to restore the issues to the file of the Assessing Officer for fresh adjudication after granting adequate opportunity of being heard. Considering the repeated non-cooperation and the submissions of the Departmental Representative, the Tribunal imposed an exemplary cost of ₹50,000 on the assessee.

Important Clarification

The Tribunal clarified that while principles of natural justice require that adequate opportunity be provided, such opportunity cannot be abused through persistent non-cooperation. Imposition of exemplary costs was warranted to balance fairness with accountability. It was further clarified that failure to pay the imposed cost within the prescribed time would result in confirmation of the order passed by the CIT(A).

Final Outcome

The appeal filed by the assessee was partly allowed for statistical purposes. The matter was restored to the file of the Assessing Officer for fresh adjudication subject to payment of exemplary cost of ₹50,000 to the Jharkhand State Legal Services Authority, Ranchi, within 60 days, failing which the order of the CIT(A) shall stand confirmed.

Link to Download Order- https://www.mytaxexpert.co.in/uploads/1769079471_JHARKHANDSTATEFOODANDCIVILSUPPLIESCORPORATIONLIMITEDJSFCBHAWANVS.PTNC511RANCHI.pdf

 

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