MR. ARUN VINOD SUD,MALAD WEST vs. ITO WARD 41(3)(1), MUMBAI, BKC

Brief facts of the case are that the assessee filed original return u/s 139(1) on 28.07.2016 declaring total income at Rs.5,73,730/-. Subsequently, the case of assessee was selected for scrutiny assessment for the reason “Whether deduction claimed on account of business expenses is admissible”. Statutory notices u/s 143(2) and 142(1) were issued and the assessee was requested to furnish necessary information.

During the entire assessment proceedings, the assessee remained absent and had not furnished any submissions nor had he attended the Office of Assessing Officer by self or through any representative. The Ld. AO accordingly, completed the assessment in the manner provided u/s 144 of the Act. It is noted by the Ld. AO that the assessee has earned commission of Rs.85,01,792/- from M/s Appco Marketing India Pvt Ltd.,however, the amount in return was shown at Rs.85,01,022/-. Therefore, Rs.770/- was added to the income of the assessee. Further, the assessee has claimed various expenses against the commission

The Ld. AO, accordingly has disallowed the expenditure by 50% incurred on salary and wages, accounting charges, road trip expenses, office expenses and 30% of business promotion, rent, travelling, electricity expenses. Accordingly, the total disallowance was made for Rs.33,88,517/-.

Being aggrieved with the aforesaid addition/disallowance, assessee preferred an appeal before the Ld. CIT(A). However, the appeal of assessee was partly allowed, the disallowance/addition made by the Ld. AO had beenpartly sustained by Ld. CIT(A). Ld. CIT(A) while passing the order has observed that the assessee during the appellate proceedings had uploaded copy of contract regarding commission received, two contracts of engagement of two persons namely, Md. Kaify and Md. Arif Khan for procuring donations from public, one rental agreement for commercial uses and a submission. The assessee also submitted a copy of assessment order for AY 2018-19, wherein the AO has accepted the returned income of the assessee. However, for the year under consideration, no evidence was submitted by the assessee before the Ld. AO. Also baring a few contracts, no evidence for expenses were submitted in appellate proceedings before the Ld. CIT(A).

Per contra, Ld. Senior DR vehemently supported the orders of Revenue Authorities.

We have considered the rival submissions and perused the material available on record. The appeal of assessee is heard and remanded to the file of Ld. CIT(A) with directions to consider the application of assessee under Rule 46A of the Income Tax Rules, 1962, demonstrating the reasonable cause for not filing the relevant documents earlier. Further, the delay in filing of present appeal is condoned subject to cost of Rs.11,000/- to be deposited in Revenue Department under ‘other head’,within 15 days from the date of this order.

Since the assessee has furnished additional evidences to substantiate his claim for expenses, we, in the interest of justice deem it appropriate to restore this matter to the file of Ld. CIT(A) for giving one more opportunity to the assessee to represent its case for furnishing of all such additional evidences and

Needless to say, the assessee shall be provided with reasonable opportunities of being heard in the set aside appellate proceedings. The assessee is also directed to co-operate and pro-actively assist in the set aside appellate proceedings, failing which the appellate authority would be at liberty to decide the appeal in accordance with the mandate of law.

In result, the appeal of assessee is allowed for statistical purposes in above terms. Order pronounced in the open court on 15-06-2026.