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Facts
The assessee's appeal for AY 2010-11 arose from an ex-parte order of the CIT(A) which confirmed the disallowance of business promotion expenses. The AO had disallowed 80% of these expenses, and subsequent appeals led to remittal and a fresh assessment order disallowing the same percentage.
Held
The Tribunal condoned the delay in filing the appeal. Considering the assessee's submission of non-receipt of notices due to the business closure and an outdated email ID, the Tribunal set aside the CIT(A)'s ex-parte order and remitted the matter back for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte when the assessee claimed non-receipt of notices and sought another opportunity to present its case.
Sections Cited
143(3), 254
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2010-11 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 24.07.2024 in the matter of assessment framed by Assessing Officer [AO] u/s. 143(3) r.w.s 254 of the Income-tax Act, 1961 (hereinafter “the Act”) dated 20.12.2019.
There is a delay of 91 days in filing the appeal by the assessee.
The assessee has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned.
The effective ground of appeal in this appeal of assessee is against the ex-parte dismissal of the appeal and in confirming the disallowance of business promotion expenses amounting to Rs.18,11,72,522/-.
4. The assessee is a partnership firm and had filed its return of income declaring a total income of Rs. 4,05,17,325/-. The A.O in the assessment order passed u/s. 143(3) of the Act, has disallowed business promotion expenses of Rs.18,11,72,522/-. Aggrieved by this, the assessee filed an appeal before the Ld. CIT(A), and the appeal was allowed vide order dated 28.03.2016. The Revenue preferred an appeal against the said order, and the Tribunal vide order dated 26.10.2018 remitted the matter to the file of A.O. The A.O in consequent passed assessment order dated 20.12.2019, again disallowed 80% of the business promotion expenses amounting to Rs.18,11,72,522/-. The assessee filed appeal before the Ld. CIT(A), which was dismissed ex-parte due to non-compliance with the notices issued by the NFAC through email and assessee is in appeal against the ex-parte order passed by the NFAC.
The Ld. Authorized Representative of the assessee (AR) has submitted that the assessee has not received any of the notices issued as the business entity was closed long ago, and the assessee had no access to the address on record. It was further submitted that the notices were sent to the mail ID yogendrarupal@yahoo.com, which was no longer in use, as the person who previously managed the email account had left the organization. The Ld. AR therefore, requested that one more opportunity be granted to the assessee to present evidence and substantiate its claim.
On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. It is observed that the A.O had made disallowance of 80% of the business promotion expenses in the line of disallowances made in the first round of assessment proceedings.
The Ld. CIT(A) had issued six notices to the assessee, but the assessee did not comply any of them. The Ld CIT(A), therefore confirmed the disallowances in the ex–parte order. Considering the explanation offered by the Ld. AR regarding the non-receipt of notices and in the interests of justice, we are of the opinion that the assessee deserves another opportunity to present its case before the Ld. CIT(A). Accordingly, we set aside the order passed by the Ld. CIT(A) and remit the matter back to his file for adjudication afresh after affording due opportunity of being heard to the assessee in accordance with law. The assessee is also directed to cooperate with the proceedings and appear before the Ld. Addl. CIT(A) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 26th May, 2025.