ALR CONSTRUCTIONS,THENI vs. DCIT, MADURAI

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT(A)] dated 01.01.2026 for Assessment Year 2020-21. 2. In the instant appeals, the registry has noted the delay of 15 days in filing the captioned appeal. We have gone through the condonation petition along with affidavit filed, we find that the reasons given by the assessee are sufficient cause for delay in filing

ITA No 2119/Chny/2026 (AY 2020-21) ALR Constructions Vs DCIT :: 2 :: the captioned appeal. Hence, we condone the delay and admit the appeals for adjudication. 3. Brief facts of the case: During the course of assessment proceedings, the Assessing Officer (AO) disallowed a sum of Rs. 93,83,140/-, being 10% of the wages and coolie expenses, without properly appreciating the submissions and explanations furnished by the appellant. The appellant had produced the details and supporting information called for by the AO to the extent reasonably possible, considering the nature of the business. However, the AO failed to consider the appellant's explanations in their proper perspective. The impugned disallowance has been made purely on an ad hoc basis without assigning any cogent reasons or identifying any specific defect in the books of account, supporting records, or vouchers. The assessment order does not disclose any rationale or methodology for adopting the figure of 10% as the basis for disallowance. In the absence of any material evidence demonstrating that the expenditure was excessive, non-genuine, or not incurred wholly and exclusively for business purposes, the ad hoc disallowance is arbitrary and unsustainable in law. The appellant is engaged in the business of civil construction, where payment of wages and coolie charges on a daily basis is an inherent and unavoidable feature of the business. Owing to the practical nature of such operations, complete third-party documentation for every payment may not always be feasible. This commercial reality was duly explained during the assessment proceedings but was not properly appreciated by the AO. Accordingly, the disallowance of 10% of the wages and coolie expenses deserves to be deleted.

ITA No 2119/Chny/2026 (AY 2020-21) ALR Constructions Vs DCIT :: 3 :: 4. Being aggrieved with the assessment order passed by the AO, the assessee preferred an appeal before the Ld. CIT(A), who upheld the order of AO and dismissed the appeal of the assessee ex-parte being failure to substantiate its grounds with relevant and adequate documents. 5. Being dissatisfied with the order of the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal. 6. The Ld. AR for the Assessee submitted that assessee has not received the notices for hearing in appellate proceedings which culminated into ex-parte order. He pleaded for one more opportunity to prosecute the case before the ld.CIT(A). 7. The ld. Departmental Representative (DR), on the other hand, supported the order of the ld. CIT(A) and prayed for dismissal of the appeal. 8. We have heard the rival submissions and perused the material available on record. It is an admitted fact that the ld. CIT(A) disposed of the appeal ex parte for want of prosecution, holding that the assessee had failed to substantiate its grounds of appeal with relevant documents. Before us, the ld. Authorised Representative (AR) submitted that the assessee had not received the notices issued during the appellate proceedings and, therefore, was prevented by sufficient cause from appearing before the CIT(A). It was accordingly pleaded that one more opportunity be granted to the assessee to present its case on merits. The ld. Departmental Representative, on the other hand, relied upon the orders of the lower authorities. 9. Upon consideration of the facts and circumstances of the case, we find that the appellate order has been passed without adjudicating the issues on merits. The record also does not

ITA No 2119/Chny/2026 (AY 2020-21) ALR Constructions Vs DCIT :: 4 :: conclusively establish that the assessee was afforded an effective and reasonable opportunity of being heard. Considering the submissions of the assessee and in the interest of substantial justice, we are of the view that the matter deserves to be restored to the file of the ld.CIT(A) for fresh adjudication. Accordingly, the impugned order of the CIT(A) is set aside, and the matter is remanded to the file of the CIT(A) to decide the appeal de novo, after affording the assessee a reasonable and adequate opportunity of being heard and after considering all submissions and evidences that may be produced in accordance with law. The assessee is also directed to extend full cooperation and diligently participate in the appellate proceedings without seeking unnecessary adjournments. We make it clear that we have not expressed any opinion on the merits of the addition/disallowance, and all issues are left open for adjudication by the CIT(A). 10. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the 06th day of July 2026.

Sd/- Sd/- (प�ावती एस) (मनु कुमार िग�र) (PADMAVATHY S) (MANU KUMAR GIRI) लेखा सद)या/ACCOUNTANT MEMBER �या�यक सद)य/JUDICIAL MEMBER

चे�नई/Chennai, *दनांक/Dated: 06th July, 2026. SNDP, Sr. PS

ITA No 2119/Chny/2026 (AY 2020-21) ALR Constructions Vs DCIT :: 5 :: आदेश क ��त+ल,प अ-े,षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF SANDE Digitally signed by SANDEEP EP KUMAR Date: 2026.07.08 KUMAR 10:03:37 +05'30'