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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.S.SYAL, VP & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)-8, Pune dated 29.12.2016 for the assessment year 2010-11 as per the following grounds of appeal on record:
“The appellant would like to challenge the impugned appellate order on following grounds of appeal, which are raised without prejudice to each other:
1. 1. In the facts and circumstances of the case and in law, the learned C.I.T.[A] has erred in confirming the addition of Rs.24,87,483.00 made by the learned Assessing Officer u/s.68 of the IT Act exclusively on assumption/presumption basis and ignoring the facts and circumstances of the case. The aforesaid addition being arbitrary, perverse, based on surmises and conjecture the learned C.I.T.[A] ought to have deleted the said addition. The impugned addition may please be deleted.
2. In the facts and circumstances of the case and in law, the learned C.I.T.[A] has erred in confirming the additions of Rs.21,60,605.00 made by disallowances of statutory payment in respect of service tax payable, ignoring facts and circumstances of the case. The aforesaid addition being arbitrary, perverse, based on surmises and conjecture the learned C.I.T.[A] ought to have deleted the said addition. The impugned addition may please be deleted.
3. In the facts and circumstances of the case and in law, the AO has disallowed expenses such as rent, advertisement and legal & professional fees ignoring the facts and circumstances of the case. The aforesaid additions being arbitrary, perverse, based on surmises and conjecture the learned CIT(A) ought to have deleted the said additions. The impugned additions may pleased be deleted.
4. The appellant denied his liability to pay any interest u/s.234B and 234C of the I.T. Act, 1961 and hence, the same may pleased be deleted.
5. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.”
At the time of hearing, none appeared on behalf of the assessee. It was found that consistently, there was no appearance from the side of the assessee at the given dates of hearing. The submission of the Ld. DR is recorded and the case is heard on merits.
Ground No.1 pertains to the addition made u/s.68 of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).
The facts as enumerated at Para 7.2 of the CIT(Appeals)‟s order that the assessee has not filed any evidence before the Assessing Officer or during the course of Appellate Proceedings to corroborate assessee‟s stand. The Assessing Officer had categorically requested to the Ld. AR of the assessee to submit names, address and PAN of the parties regarding the trade payables along with confirmation letters and also informed him that the same will be disallowed u/s.68 of the Act, if he fails to submit the details. Despite such clear directions, the assessee had only furnished the names of parties without any further details as called for by the Assessing Officer.
That before the Ld. CIT(Appeals) also, the assessee was unable to furnish relevant evidences, documents to substantiate its case on merits in spite of several opportunities being granted as evident from the order of the Ld. CIT(Appeals). The Ld. CIT(Appeals) had confirmed this addition on this very basis that relevant evidences, documents were not filed and the Ld. CIT(Appeals) had decided the matter based on materials available before him. The addition, therefore, was confirmed.
We have perused the relevant documents on records available before us and it is noted that even before the Tribunal also, on the given dates of hearing, the assessee has evaded the process of law by non appearance. However, considering the fact that Income Tax Legislations are within the purview of welfare legislations and the tax payer‟s interest should be protected, therefore, we are of the considered view, one final opportunity should be provided to the assessee. In view thereof, we set aside the order of the Ld. CIT(Appeals) on this issue and restore the matter back to his file for re-adjudication while complying with the principles of natural justice. At the same time, we direct the assessee to furnish relevant details/evidences in order to substantiate their case on merits. Thus, Ground No.1 raised in appeal by the assessee is allowed for statistical purposes.
Ground No.2 pertains to the additions made on account of statutory payment in respect of service tax etc. payable.
It was observed by the Assessing Officer from the Auditor‟s report that the assessee has not been regularly depositing amounts payable on account of VAT, TDS and Service Tax which have been outstanding for more than 6 months from the date they became payable. The assessee has claimed that though such amounts are payable they do not pertain to the relevant FY except for Rs.2,25,717/- which pertains to the current year and has been disallowed in the computation of income. However, no details/evidences whatsoever have been filed by the assessee before the Assessing Officer or before the Ld. CIT(Appeals) in support of its claim that the balance amount pertains to earlier years. In absence of these evidences, the Ld. CIT(Appeals) had upheld the disallowance made by the Assessing Officer.
We have already made our observations with regard to Ground No.1 in the aforesaid Paragraph (Para No.6) and the same findings shall be applicable for this ground also since the Ld. CIT(Appeals) has upheld the disallowance for absence of evidences which the assessee was supposed to file before him. Thus, Ground No.2 raised in appeal by the assessee is allowed for statistical purposes.
Ground No.3 pertains to the disallowance on certain expenses on account of rent, advertisement and legal & professional fees.
The Ld. CIT(Appeals) at Para 9.2, 10.2 and 11.2 respectively have given his findings on these expenses. We find that Revenue Authorities i.e. Assessing Officer as well as the Ld. CIT(Appeals) has disallowed these expenses for want of details/evidences which were not furnished by the assessee. These expenses were claimed by the assessee and the onus to substantiate these expenses is on the assessee which he has not discharged. Therefore, in the interest of justice, we set aside the order of the Ld. CIT(Appeals) on this issue and restore the same to his file for re-adjudication and our findings given in respect of other two grounds specifically enumerated at Para No.6 & 9 of this order shall apply mutatis-mutandis to this ground also. Thus, Ground No.3 raised in appeal by the assessee is allowed for statistical purposes.
The issue u/s.234B & 234C of the Act is consequential to the additions made by the Assessing Officer and upheld by the Ld. CIT(Appeals). Since, other grounds raised by the assessee in this appeal is restored to the file of the Ld. CIT(Appeals), therefore, in the interest of justice, we set aside the order of the Ld. CIT(Appeal) on this issue and restore the same back to his file for re-adjudication as per law on the issue u/s.234B & 234C of the Act in compliance with the principles of natural justice. Thus, Ground No.4 raised in appeal by the assessee is allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 21st day of December, 2020.