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Facts
The assessee's appeal was filed with a delay of 143 days. The Assessing Officer disallowed provisions claimed by the assessee for ₹.66,28,035/- based on the percentage completion method. The assessee failed to provide documentary evidence to substantiate its claim before the CIT(A).
Held
The Tribunal condoned the delay and admitted the appeal. Considering the assessee's undertaking to cooperate and the interest of justice, the matter was remanded to the Assessing Officer for fresh adjudication, subject to the payment of ₹.25,000/- as costs.
Key Issues
Whether the CIT(A) was justified in confirming additions made by the AO due to the assessee's failure to provide documentary evidence, and whether the matter should be remanded to the AO for fresh consideration.
Sections Cited
250
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Before: Shri S.S. Viswanethra Ravi&
Year: 2018-19 Royal Shelter, Vs. The Deputy Commissioner of No. D-27, 2nd Floor, J.P. Towers, Income Tax, 7th Cross, Thillainagar, Circle 1(1), Trichy 620 018. Trichy. [PAN:AAFFR8455B] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri S. Girish Kumar, Advocate ��थ� की ओर से/Respondent by : Dr. M. Mohan Babu, Addl. CIT सुनवाई की तारीख/ Date of hearing : 09.10.2025 घोषणा की तारीख /Date of Pronouncement : 12.11.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 04.11.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2018-19.
We find that this appeal is filed with a delay of 143 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 11 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the additions made by the Assessing Officer by passing exparte order in the facts and circumstances of the case.
4. We note that the case of the assessee was selected for complete scrutiny to verify the income from real estate business. Against statutory notices, before the Assessing officer, the assessee stated that during the year the firm has adopted percentage completion method to recognize the revenue and produced the calculation of work in progress in respect of various projects undertaken. On verification of calculation of work-in- progress, the Assessing Officer noted that the assessee has claimed provisions amounting to ₹.66,28,035/- as part of the expenses incurred during the relevant year. However, since the assessee is following the percentage completion method on the basis of expenditure incurred and revenue realized, there is no scope of accounting of provisions as part of expenses as no corresponding expenses relating to such provisions have actually been incurred by the assessee, the Assessing Officer disallowed the provision expenses of ₹.66,28,035/- and added to the total income of the assessee. On appeal, since the assessee did not produce any documentary evidence to substantiate its claim and refute findings of the Assessing Officer, despite various opportunities afforded, the ld. CIT(A) dismissed the appeal filed by the assessee.
The ld. AR Shri S. Girish Kumar, Advocate submits that the assessee did not comply with the notices issued by the ld. CIT(A) on account of the fact that the e-mail ID to which the notices sent had become dormant and was not used by the assessee. He drew our attention to page 7 of the paper book and submits that the notice under section 250 of the Act was issued to different e-mail ID. The ld. AR brought on record an affidavit, wherein, the assessee undertakes to provide full and utmost cooperation before the Assessing Officer and prayed that, one more opportunity may be afforded to the assessee to substantiate its claim before the Assessing Officer.
The ld. DR Dr. M. Mohan Babu, Addl. CIT opposed the same and drew our attention to para 5 of the impugned order and argued that the ld. CIT(A) afforded ample opportunities to the assessee, but, it was not availed. He vehemently argued that costs may be imposed in case this Tribunal afford an opportunity by remanding the matter to the file of the Assessing Officer.
Having considered the submissions of the ld. AR and ld. DR, we note that the Assessing Officer disallowed provision claimed by the assessee. We find that there is no assistance from the assessee before the ld. CIT(A) by producing documentary evidence to substantiate its claim and refute the findings of the Assessing Officer. As there is no assistance from the assessee, taking into account the undertaking given by the Managing Director of the assessee company that the assessee is ready to appear and prosecute its case, in the interest of justice, we deem it proper to remand the matter to the file of the Assessing Officer subject to the condition of payment of ₹.25,000/- in favour of the State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the Assessing Officer shall satisfy the payment of cost and decide the issue afresh after considering the written submissions/ documentary evidences as may be filed by the assessee to substantiate its claim. In any case, the assessee fails to appear before the assessing authority, it is open to the Assessing Officer to complete the assessment based on the material available on record and to pass order in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 12th November, 2025 at Chennai.