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Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI A.D JAIN & SHRI T.S. KAPOOR
PER: A.D. JAIN, VICE PRESIDENT:
This is assessee’s appeal for Assessment Year 2014-15, taking the following grounds:-
“1. BECAUSE "CIT(A)" was not justified in dismissing the appeal by passing an ex-parte order dated 25.01.2018 without affording due and effective opportune of hearing to the "appellant" and consequently the order passed by him deserves to be set aside and restored back to the file of "CIT(A)" for deciding the appeal afresh after providing due and effective opportunity of being heard to the "appellant". 2. BECAUSE selection of case for scrutiny assessment not being based on independent opinion of the Assessing Officer, the notice dated 10.09.2015 issued under clause (ii) of section 143(2) was not valid with the consequence that the assessment order dated 29.12.2016 as passed in pursuance thereof is liable to be declared as null and void.
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BECAUSE selection of case for scrutiny assessment as per Computer Aided Scrutiny Scheme (CASS) is wholly extraneous to the provisions of law as contained in clause (ii) of sub-section (2) of section 143 of the Act and accordingly the appellant should be treated to have already been assessed on the income shown in the return filed under section 139(1) and consequently the assessment order dated 29.12.2016 is not enforceable in the eyes of law. WITHOUT PREJUDICE ATO THE AFORESAID 4. BECAUSE "CIT(A)" has erred in law and on facts in upholding the disallowance of Rs. 51.00,000/- out of 'directors remuneration' disallowed by the Assessing Officer without recording requisite satisfaction as to the excessiveness and the un-reasonableness as was required for invoking provisions of section 40A(2)(a)/(b)of the Act. 5. BECAUSE "CIT(A)" has erred in law and on facts in up- holding the disallowance of Rs.77,460/-made by the Assessing Officer out of 'employees contribution to EPF & ESI on the ground that the same were deposited by the "appellant" beyond the due date. 6. BECAUSE employees contribution to EPF and ESI had been deposited before the due date of filing of return and consequently, the same were allowable as per various judicial pronouncements, 7. BECAUSE "CIT(A)" has erred in law and on facts in upholding the disallowance of Rs.61,626/- out of 'machine repairs & maintenance expenses' made by the Assessing Officer on the ground that most of the vouchers were self made and most of the payments were made in cash. 8. BECAUSE the expenses claimed under the head 'machine repairs & maintenance expenses' were fully supported by bills and vouchers which were open for verification and consequently, no dis-allowance out of said expenses could have - been validly made. 9. BECAUSE similarly "CIT(A)" was not justified in upholding the disallowance of Rs. 3,572/- out of 'telephone expenses' and Rs. 851/- out of 'vehicle running expenses' on the ground of alleged personal use. 10. BECAUSE hi the case of a corporate entity, as the "appellant" is, no disallowance could have been made for personal user of telephone and vehicle and consequently
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in view of decision of Hon'ble Gujarat High Court in the case of Sayaji Iron and Engg. Co. vs. CIT reported in 253 ITR 749, the disallowance of Rs.3,572/-out of 'telephone expenses' and Rs. 851/- out of 'vehicle running expenses' are not sustainable. 11. BECAUSE "CIT(A)" has erred in law and on facts in upholding the disallowance of Rs. 2,26,980/- on account of security deposit made under protest with the sales tax department as the said amount was neither debited in Profit & Loss account nor claimed as expenses. 12. BECAUSE various disallowances referred in ground no. 4 to 11 are contrary to relevant provisions of law and under complete mis-conception about the eligibility of the same.”
By virtue of the impugned order, the ld. CIT(A) has dismissed the assessee’s appeal for non prosecution, observing that notices dated 21.09.2017, 07.11.2017, 04.12.2017 and 10.01.2018 for compliance on
09/10/2017, 21.11.2017, 12.12.2017 and 17.01.2018 were served on the
address submitted by the assessee in its memo of appeal; that however, no
written submission or paper book had been filed in support of any of the
grounds of appeal taken; and that none had attended on behalf of the
assessee. Such service of notices has, however, been disputed by the
assessee.
We have heard the rival parties and have gone through the material
placed on record. We noted that the ld. CIT(A) has passed the ex-parte
order as according to him, nobody has appeared on the date when the
appeal was fixed for hearing before him. We also noticed from the order of
the CIT(A) that he has summarily decided the appeal of the assessee
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without giving any cogent reason and his order is non speaking order.
Under these circumstances, we feel that one more opportunity should be
given to the assessee as ld. CIT(A) has not decided the appeal on merits.
The provision of section 250 which deals with the procedure in appeal
before the ld. CIT(A), allows a right to an assessee to be heard at the time
of hearing of appeal. Even the natural justice demands that no appeal
should be disposed of without being heard the party or without giving him
the proper and sufficient opportunity. We, therefore, in the interest of justice
and fair play to both the parties, set aside the order of CIT(A) and restore
the appeal to the file of the CIT(A) with the direction that the CIT(A) shall
refix the said appeal and decide the appeal afresh after giving proper and
sufficient opportunity of being heard to the assessee. The assessee is also
directed to be present on the date of hearing fixed by ld. CIT(A) and not to
seek undue adjournment and co-operate with ld. CIT(A) in disposing of the
appeal.
In the result, the appeal of the assessee stands allowed for
statistical purposes.
Order pronounced in the open court on 08/02/2019. Sd/- Sd/- (T.S. Kapoor) (A.D. Jain) Accountant Member Vice President Aks – Dtd. 08/02/2019
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Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File
By order
Assistant Registrar