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Facts
The assessee, an LLP, filed its return for AY 2020-21, which was processed under Section 143(1) with an addition. The case was selected for scrutiny, and after certain proceedings and disallowances by the AO, the CIT(A) partly allowed the assessee's appeal. The assessee filed an appeal before the Tribunal with a delay of 345 days, claiming non-receipt of the order.
Held
The Tribunal condoned the delay in filing the appeal, considering the assessee's explanation reasonable and noting that no prejudice would be caused to the revenue. The Tribunal decided to hear the appeal on merits.
Key Issues
Whether the disallowances made by the AO regarding employees' contribution to Provident Fund (Section 36(1)(va)), expenses under Section 43B, and other disallowances under Section 40(a) were justified, and whether the CIT(A) erred in not properly considering the facts and documents.
Sections Cited
143(1), 143(2), 142(1), 143(3), 36(1)(va), 43B, 40(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 18/04/2024 in respect of the A.Y. 2020-21 and raised the following grounds: “
1. That on the facts and on the circumstances of the case, the order dated 18th April, 2024 passed by the NFAC, Delhi, is bad in law, illegal and abinitio void and the same is liable to be cancelled / quashed set aside.
2. That on the facts and on the circumstances of the case, the NFAC, Delhi, erred in not deleting the addition of Rs. 22,218/- made by the AO by wrongly and illegally 36(1)(va) of the Act, in respect of deposit of employees contribution to Provident Fund.
3. That on the facts and on the circumstances of the case, the NFAC, Delhi, erred in confirming the addition of Rs. 26,56,540/- made by the AO under section 43B on a misconception of facts and without proper application of mind to the facts and to the circumstances of the case.
4. That on the facts and on the circumstances of the case, the NFAC, Delhi, erred in giving direction to the AO to allow credit of TDS Rs. 70,41,000/- instead of al lowing the same, himself.
5. That the Appellant craves leave to alter/ amend/ rescind or prefer additional grounds during or before the course of the hearing of the Appeal.”
2. The brief facts of the case are that the assessee is an LLP and filed their return of income on 30/05/2021. The return was processed u/s. 143(1) and an addition of Rs. 32,15,117/- was made. Subsequently, the case was selected for scrutiny under CASS to examine the business receipts on which tax is deducted. The notices u/s. 143(2) and 142(1) were issued on 29/06/2021 and 27/10/2021. The assessee also filed their reply on 01/12/2021 and also enclosed the documents. The AO verified the documents and accepted the return of income determined by the Ld.CPC and assessed the said income u/s. 143(3) of the Act. As against the said order, the assessee preferred an appeal before the Ld.CIT(A). The assessee disputed disallowances made u/s. 36(1)(va), 43B and 40(a) of the Act. The Ld.CIT(A) had partly allowed the appeal filed by the assessee.
As against the said order, the present appeal has been filed before this Tribunal with a delay of 345 days.
The assessee filed an application to condone the said delay in which the assessee submitted that they have not received any mail or order and therefore they have no knowledge about the disposal of the appeal by the Ld.CIT(A) and only when the assessee had met the authorities on 15/05/2025, the assessee came to know about the order passed by the Ld.CIT(A) and thereafter the assessee took steps to file the appeal before this Tribunal and prayed to condone the said delay and decide the appeal on merits. The Ld.DR had not contraverted the said submissions and he submitted that the delay is not a minimal one and prayed not to condone the said delay.
We have considered the application as well as the arguments put forth by both sides and we found that the submissions made by the assessee seems to be reasonable and also we are of the view that nothing prejudice would be caused to the revenue if the delay has been condoned and the appeal has been decided on merits. On the other hand, if we dismiss the appeal on the ground of limitation, prejudice would be caused to the assessee. In such circumstances, we are inclined to condone the said delay and proceeded to decide the appeal on merits.
At the time of hearing, the Ld.AR submitted that they had not received the mails and in fact the notices issued by the AO are prior to the intimation issued by the Ld.CPC and the AO had disallowed the certain expenditures without proper appreciation of the facts on record and also without undertaking any independent verification. The Ld.AR also filed a synopsis and a paper book enclosing the various documents to substantiate their case that the disallowances are unwarranted.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
We have also gone through the synopsis filed by the assessee in which each and every disallowances were explained by the assessee. Unfortunately, the AO had issued notices seeking the details about the business receipts on which tax is deducted for which the assessee had filed their replies and documents. The other disputes are neither intimated by the Ld.CPC as well as by the AO while passing the assessment order on 02/09/2022. Therefore, the assessee was not in a position to file any details with regard to the said disallowances. Even though these facts were argued before the Ld.CIT(A), the Ld.CIT(A) had confirmed the disallowances without considering the issue properly and also without considering the documents.
Considering the said facts and the peculiar circumstances involved in this case, in the interest of justice, we are inclined to remit this issue to the file of the AO for reconsideration of the issues now raised before us along with the issues remitted by the Ld.CIT(A) and thereafter pass a reasoned order based on the materials furnished by the assessee. Before passing the order, we also made it clear that the assessee may be given an opportunity of being heard.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th November, 2025.