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Income Tax Appellate Tribunal, DELHI BENCH “SMC-2” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-40, Delhi, dated 28.02.2019, pertaining to the assessment year 2015-16. The assessee has raised following grounds of appeal:
1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (A) is bad both in the eye of law and on facts. 2(i) On the facts and circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred both on facts and in law in confirming the adhoc disallowance of 25% addition of expenses of the audited accounts, with-out verifying facts and details submitted to Ld. Commissioner of Income Tax (A) via e mail by the president of the trust, when the POA was out of town and 2 ITA 4239/Del/2019 Sai Milan Vs.ITO could not attend the date of hearing. The additional evidences were not received by Ld. Commissioner of Income Tax (A) from the president of the trust, who also explained that the case of NGO for the A Y 2014-2015 was completed under scrutiny assessment and orders under section 143(3) of the income tax act 1961 for AY 2014-2015 were received with NIL addition or tax liability. ii) That the above said disallowance of 25% of expenses has been confirmed despite the fact that the same has been made on an ad hoc rate of 25% without there being any basis for the same of a NGOL; whose accounts were duly audited. 3 (i) On the facts and circumstances of the case, the Ld. Commissioner of Income Tax (A) has erred both on facts and in law in confirming the disallowance @25% of the total expenditure without pointing out specific expenditure not eligible for deduction is bad in law. Citation : Tripat Kaur, A-29, Friends Colony-East, New Delhi - 110 065 (PAN: AAAPK8020A) (Appellant) Vs. ACIT, CIR. 22(1), NEW DELHI (Respondent) at INCOME TAX APPELLATE TRIBUNAL, New Delhi. (ii) That the 25% disallowance of total expenditure on mere suspicion ignoring the audited books of accounts as certified by the statutory auditor that no expenditure is personal in nature is bad in law.
4. Upon assessee’s appeal, Ld. Commissioner of Income Tax (A) considered the issues and observed that assessee’s counsel was unable to attend the case specifically due to professional assignments he was travelling. However, Ld. Commissioner of Income Tax (A) did not entertain the president of the trust and not considered the request for any additional evidence nor mentioned or even considered the letter of the president submitted via e-mail on the last date of hearing, showing most of the details were filed/submitted before AO and some could have been submitted to satisfy AO for the expenses incurred on charitable activities by the NGO during the Financial Year 2014- 2015 relevant to the Assessment Year 2015-2016. As regards addition on account of disallowance of 25% of total expenses by the Ld. Commissioner of Income Tax (A) confirmed the Assessing Officer’s action saying that the appellant was not interested in filing of any details during the appellate proceedings to avail the opportunity under the principle of natural justice. It is stated, without verifying from the e-mail submissions that no compliances were made during the assessment proceeding as well; which is wrong and denied.
5. Assessing Officer has not brought on record any cogent basis as to why the 25% of total expenditure was to be disallowed. It is not the case that expenditure was considered to be bogus or any shortcoming in the vouchers in this regard was observed by the Revenue. The estimated addition of 25% of total audited accounts expenditure without any basis cannot be sustained. Under the circumstances the case law relied upon by the assessee is as in the case of the ITO vs. Lake Palace Hotels and Motels (P) Ltd. 13 TTJ (JP) 216.
3 ITA 4239/Del/2019 Sai Milan Vs.ITO 6. The appellant craves leave to add, amend or alter any of the grounds of appeal.”
At the time of hearing no one appeared on behalf of the assessee. The notice sent by speed post acknowledgement is received. Therefore, it is presumed that the notice was duly received by the assessee. However, the assessee chose not to appear and file application seeking adjournment. It is seen from the record that various opportunities were given to the assessee but no one appeared on behalf of the assessee on the dates fixed on 6.1.2021, 22.2.2021, 12.5.2021, 19.7.2021, 7.10.2021 and 12.1.2022. Under these facts, the appeal is taken up for hearing in the absence of the assessee and is being decided on the basis of material on record.
Brief facts of the case are that the assessee is a trust, registered u/s 12A of the Income-tax Act, 1961, hereinafter referred to as the “Act” and u/s 80G(vi) of the Act. The case of the assessee was taken up for complete scrutiny on the ground of large profits or gain from business or profession in the case of trust. Before the Assessing authority there was no effective representation on behalf of the assessee trust. Therefore, the Assessing officer made assessment on the basis of material available on record, assessing the income at Rs. 8,43,626/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals).
4 ITA 4239/Del/2019 Sai Milan Vs.ITO 4. Before the learned CIT(Appeals) as well there was no representation despite the opportunity given by the learned CIT(Appeals). Therefore, the learned CIT(Appeals) dismissed the appeal of the assessee. Aggrieved, against this the assessee is in appeal before the Tribunal.
Learned DR submitted that the assessee trust has been thoroughly negligent and did not provide the supporting evidence before the assessing authority.
Moreover, before the learned CIT(Appeals), despite having been given opportunity, no one attended and filed the requisite details. He submitted, therefore, in the absence of requisite details, the learned CIT(Appeals) was justified in dismissing the appeal.
I have heard the rival submissions and perused the material on record. I find that the assessment was passed vide order dated 19.12.2017. During the assessment proceedings one Shri Ram Kumar Gupta, CA/AR of the Trust appeared and filed written submission. It was recorded by the Assessing Officer that the assessee had been non-cooperative and there was no effective representation on behalf of the assessee and due to non-cooperation of assessee assessment for assessment year 2013-14 was also completed u/s 143(3)/144. From the finding of the authorities below it can be inferred that the assessee did not file requisite details as called for except certain details. In the absence of the requisite details, supporting the claim
5 ITA 4239/Del/2019 Sai Milan Vs.ITO of the assessee, I do not see any reason to interfere into the decision of the authorities below. The grounds raised in the appeal are dismissed.
Appeal of the assessee is dismissed.