Loading judgment…
Facts
The assessee, JCR Traders, filed an appeal against the order of the CIT(A) for assessment year 2017-18. The appeal was filed with a delay of 93 days, which was condoned. The assessee remained ex-parte before the Tribunal, and the appeal was decided on merits based on available material.
Held
The Tribunal found that the assessee had made cash deposits and incurred expenses without deducting TDS. The Assessing Officer made additions under Sections 69 and 40(a)(ia) of the Act. The CIT(A) dismissed the appeal for want of prosecution. The Tribunal, considering the facts and in the interest of justice, remanded the matter to the Assessing Officer for fresh adjudication.
Key Issues
Whether the additions made under Sections 69 and 40(a)(ia) of the Income Tax Act by the Assessing Officer and confirmed by the CIT(A) are justified, and whether the appeal should be remanded for fresh adjudication.
Sections Cited
69, 40(a)(ia), 143(2), 142(1), 144
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
Year: 2017-18 JCR Traders, Vs. The Deputy Commissioner of 2/117, Thittakudi Road, Income Tax, Keelamathur, Tamil Nadu 621 173. Circle 1(1), Trichy. [PAN:AALFJ6942K] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : None ��थ� की ओर से/Respondent by : Ms. Deeptha, Addl. CIT सुनवाई की तारीख/ Date of hearing : 28.04.2025 घोषणा की तारीख /Date of Pronouncement : 30.04.2025 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 21.08.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2017-18.
We find that this appeal is filed with a delay of 93 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.
We find no representation on behalf of the assessee or any application filed seeking adjournment. The assessee called absent and set exparte. We proceed to decide the appeals on merits after hearing the ld. DR basing on the material available on record.
The assessee raised 3 grounds of appeal, amongst which, the issues emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made under section 69 of the Income Tax Act, 1961 [“Act” in short] as well as confirming the disallowance made under section 40(a)(ia) of the Act.
5. At the outset, we note that the assessee is a firm and filed its return of income on 20.02.2018 declaring taxable income of ₹.11,25,800/-. The case has been selected for complete scrutiny under CASS and the Assessing Officer issued notice under section 143(2) of the Act dated 24.09.2018 and served on the assessee. As there is no response to the above notice, notice under section 142(1) of the Act dated 02.11.2019 was served on the assessee. Since there is no compliance from the assessee, the Assessing Officer issued a show- cause notice dated 26.12.2019 proposing to complete the assessment under section 144 of the Act, but, however, there is no compliance to the above show-cause notice. The Assessing Officer, on examination of the return, noted that the assessee has debited expenses under the heard (i) audit fee of ₹.1,95,000/- and interest & finance charges at ₹.3,71,550/-, but, however, the assessee has not deducted TDS on the above expenses. Accordingly, the Assessing Officer disallowed the above expenses under section 40(a)(ia) of the Act and added to the total income of the assessee. Further, the Assessing Officer noted that the assessee made cash deposits in HDFC bank to the tune of ₹.2,14,94,744/-. Since the assessee failed to furnish any details in response to various notices issued, the Assessing Officer completed the assessment under section 144 of the Act determining total income at ₹.2,31,87,090/-, inter alia, making disallowance under section 40(a)(ia) of the Act as well as addition towards unexplained money under section 69 of the Act. Not satisfied with the assessment order, the assessee preferred an appeal before the ld. CIT(A)/NFAC. The ld. CIT(A) dismissed the appeal of the assessee for want of prosecution.
Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before the Tribunal.
We find that there is no assistance from the assessee before the Assessing Officer and the ld. CIT(A) and the addition involved therein towards disallowance under section 40(a)(ia) of the Act for non- deduction of TDS as well as addition towards unexplained cash deposits under section 69 of the Act. Before the Tribunal, in the grounds of appeal, the assessee has contended that the assessee made cash deposit of ₹.34,83,000/-, which pertains to trading receipts and no part of the amount could be considered under section 69 of the Act. The assessee also contended that the ld. CIT(A) ought to have been restricted the addition made under section 40(a)(ia) of the Act at 30% of such disqualified expenditure. Taking into consideration of the facts and in the interest of justice, we deem it proper to remand the matter to the file of the Assessing Officer for fresh adjudication in accordance with law after making appropriate enquiries and the assessee is also directed to furnish complete details before the Assessing Officer for completing the assessment. 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 30th April, 2025 at Chennai.