AKHILESH SOOD,SECUNDERABAD vs. ITO, WARD-10(1), HYDERABAD
What did the Tribunal hold?
The ITAT held that the CIT(A) should not dismiss an appeal in limine for non-prosecution but should decide on merits. The tribunal quashed the orders and remitted the issue back to the CIT(A) for fresh consideration.
What were the facts?
The assessee, an individual deriving income from contract works, filed an appeal against the CIT(A)'s dismissal. The CIT(A) dismissed the appeal for non-cooperation and non-submission of basic documents by the assessee.
What were the issues?
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without deciding on merits. Whether the assessee should be granted an opportunity to produce relevant documents.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI RAMA KANTA PANDA, VICE- & SHRI K.NARASIMHA CHARY
आदेश / ORDER PER K. NARASIMHA CHARY, JM: Aggrieved by the order dated 26/09/2022 passed by the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Akhilesh Sood (“the assessee”) for the assessment year 2012-13, assessee preferred this appeal. 2. Brief facts of the case are that assessee is an individual, deriving income from contract works. For the assessment year 2012-13 the assessee executed work contracts to an extent of Rs. 8,53,50,000/-. The entire work was done for the principal contractor Global Enterprises. As the work involved is mostly labour oriented, the cost of labour and charges towards earth moving were the major expenses incurred. As per the books of accounts, the income of the assessee was arrived at Rs. 9,48,930/- and the same was admitted in the return of income filed on 03/09/2012.
Learned Assessing Officer was of the view that certain payments were made towards labour charges and towards earth moving machines for which tax TDS is to be deducted, hence he applied the provisions of section 40(a)(ia) of the Act. Learned Assessing Officer was also of the view that the debit to the blasting material is not properly explained. Regarding labour charges and earth moving machine expenditure, learned Assessing Officer did not accept the contentions of assessee and assessment was completed under section 143(3) of the Act on 31/03/2015, determining the total income at Rs. 7,25,61,895/- as against the gross receipts of Rs. 8,53,50,000/-.
Aggrieved by such an action of the learned Assessing Officer, assessee preferred appeal before the learned CIT(A). The impugned order reveals that the assessee did not co-operate with the authorities and, therefore, the learned CIT(A) opined that the assessee is not ready to pursue his appeal and bring to its logical conclusion. Learned CIT(A) accordingly dismissed the appeal of the assessee. Aggrieved, assessee preferred appeal before us, raising various grounds.
Learned AR for the assessee submitted that the appeal was filed on 06/05/2015 and good number of physical hearings have taken place, twice remand reports called for and the same on record, hence appeal cannot be dismissed for non-submission of basic records, since all the documents have been uploaded. It was also submitted by the learned AR that the statement of real income was the subject matter of the remand report, where in the facts were not denied by the learned Assessing Officer as well as the Addl.CIT, Range-10. Learned AR further submitted that the learned AR erred in adding/disallowing some amounts by applying provisions of section 40(a)(ia) of the Act. He further submitted that disallowing 50% of the cost of blasting material is not correct and also submitted that in the absence of any amounts received or work executed as per the work order received from M/s. Global Enterprises, there is no income or expenditure, therefore, no real income can be subjected to tax. He also submitted that based on the bank statement, a statement of real income is enclosed, which may be considered as taxable income. Finally, the learned AR submitted that due to ill-health also, the assessee could not able to project his case properly, hence prayed to grant an opportunity to file all the relevant documents and also requested to quash the order under section 143(3) of the Act.
Per contra, learned DR submitted that the authorities below are justified in dismissing the appeal of assessee, and the learned CIT(A) is not expected to wait for the assessee for any indefinite period of time.
We have gone through the record in the light of the submissions made on either side. As per record, it is observed that learned CIT(A) dismissed the appeal by giving a reason that the assessee is not co- operating with the Department by filing the basic documents for the purpose of adjudication of his appeal and the assessee is uploading documents as per his sweet will and not as per requisitions made, time and again. Learned CIT(A) finally came to a conclusion that since the assessee is not ready to pursue his appeal and bring the same to its logical conclusion, dismissed the appeal.
Under section 250(6) of the Act, the learned CIT(A) shall state the points for determination, the decision thereon that reason for the decision and it is not open for the learned CIT(A) to dismiss the appeal in limine, stating that for non-prosecution, the appeal deserves to be dismissed. Even in the absence of the assessee, the learned CIT(A) could have gone through the record available before him and verify the veracity of the assessment order and to pass an order on merits, referring to the points for determination and the reasons for upholding the assessment order, in terms of section 250(6) of the Act.
Having regard to the facts and circumstances stated above, and also taking into consideration the plea of illness of the assessee, we are of the considered opinion that ends of justice would be met by remitting the issue back to the file of learned CIT(A) for fresh consideration, by taking all the relevant documents. In these circumstances, we are of the considered opinion that giving an opportunity to the assessee to produce all the relevant documents before the learned learned CIT(A) for fact verification would meet the ends of justice. Hence, we quash the orders of the authorities below and restore the issue to the file of the learned CIT(A) to decide it, after hearing the assessee. It is made clear that it is the last opportunity to the assessee and no further lenience will be taken. Grounds are accordingly treated as allowed for statistical purposes.
In the result, appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on this the 22nd day of June, 2023.
More judgments on Section 40(a)(ia)
- Rekha Agarwal, Jaipur vs ITO WD 4(1), JaipurITA 844/JPR/2025[2021-22]Status: Disposed21 Oct 2026AY 2021-22
- Cdg Petchem Limited, Hyderabad vs ITO, Ward - 1(1), HyderabadITA 1900/HYD/2025[2018-2019]Status: Disposed16 Oct 2026AY 2018-2019
- M/S. Shree Laminators Ltd., Kolkata vs DCIT, Circle 4(4), KolkataITA 1534/KOL/2026[2011-2012]Status: Disposed15 Oct 2026AY 2011-2012
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1493/KOL/2026[2015-2016]Status: Disposed15 Oct 2026AY 2015-2016
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1492/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
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