KEVAL VISION CORPORATION,BOPAL AHMEDABAD vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1), AHMEDABAD

There was a delay of 1327 days in filing of this appeal. The assessee has filed a condonation application along with an affidavit of Shri Keval B Mehta, partner of the assessee firm. It has been explained that

We have considered the request of the assessee. From Form No. 35 it is noticed that the assessee had mentioned his e-mail Id as kevalbmehtab@yahoo.com and an option was exercised that no notice/communication should be sent on the e-mail. When the Department had given an option to the assessee about receiving communication on e-mail and the assessee had opted not to receive any communication on the e-mail, it was the duty of the Department to serve the notices/order physically on the assessee. No evidence has been brought on record that any of the notices or the order of the Ld. CIT(A) was physically served on the assessee. Considering the option exercised by the assessee in Form No. 35 as well as the explanation of the assessee, the delay in filing of the appeal is condoned. We are also guided by the decision of the Hon’ble Jurisdictional High Court in the case of Vareli Textiles Industries Ltd. Vs CIT [284 ITR 234] (Guj.) that a meritorious case should not be thrown out on the ground of limitation.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2017-18 on 27.01.2018 declaring total income of Rs. 4,24,20,410/-. The case was selected for scrutiny under CASS. The assessee is engaged in the business of real estate. In the course of assessment, the AO noticed that the assessee had claimed deduction for freight charges of Rs. 1,46,10,981/-. As per the audit report, the assessee was required to deduct TDS u/s. 194C of the Act on the freight charges paid, which was not done. Therefore, the AO disallowed 30% of the claim u/s. 40(a)(ia) of the Act and accordingly made addition of Rs. 43,83,294/- . Further, VAT of Rs. 2,08,995/- was also not paid before the due date of filing of return, which was also disallowed. The assessment was completed u/s. 143(3) of the Act on 31.12.2019 at total income of Rs.4,70,12,700/-.

Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the learned CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

Shri Sunil Talati, the Ld. AR of the assessee submitted that the Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance could be made before him. He explained that in Form No. 35 the assessee had exercised an option not to receive notice on the e-mail. However, the Ld. CIT(A) had sent all the notices on e-mail id only and the no physical notice was received. He explained that the assessee was not in the habit of checking e-mail id which lead to non-compliance. On merits, the Ld. AR submitted that the assessee had duly deducted the TDS on freight charges wherever applicable and, therefore, the disallowance made u/s. 40(a)(ia) of the Act, was not correct. He requested that the assessee may be allowed another opportunity to furnish evidences by setting aside the matter to the file of the Jurisdictional Assessing Officer.

Per Contra, Ms. Ketaki Desai, the Ld. SR-DR, supported the order of the lower authorities. However, she had no objection if the matter was

We have considered the rival submissions. It is found that the assessee did not make compliance before the AO and no evidence for deduction of TDS on freight charges and payment of outstanding VAT before the due date of filing of return, was brought on record. Before the Ld. CIT(A) also no compliance was made by the assessee. We are not convinced with the explanation of the assessee regarding the non- compliance before the lower authorities. No reason has been given for non-compliance before the AO. The only contention of the assessee is that no physical notice was received from ld. CIT(A). When the assessee had filed appeal before the Ld. CIT(A), nothing prevented it from filing all the relevant evidences in respect of deduction of TDS/payment of outstanding VAT, so that the Ld. CIT(A) could have decided the matters on merits. In the absence of any cogent explanation for the non- compliance, we deem it proper to impose a cost of Rs. 15,000/- on the assessee, which should be paid to Prime Minister National Relief Fund, within a period of fifteen days from the date of receipt of this order. Subject to payment of cost, the matter is set aside to the file of the Jurisdictional AO with a direction to allow another opportunity to the assessee to furnish details in respect of deduction of TDS u/s. 194C of the Act on the freight charges as well as for payment of outstanding VAT before the due date of filing of return. The assessee is also directed to make compliance before the AO in the course of set aside proceeding and bring the evidences on record as called for by the AO. Thereafter, the JAO should re-adjudicate the issues as per law after considering the evidences

In the result, the appeal of the assessee is allowed for statistical purpose.