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Facts
The assessee, a partnership firm, had its case reopened u/s 147, leading to the AO disallowing Rs. 23,11,45,100/- expenditure under Section 144 due to non-response. On appeal, the CIT(A) passed an ex-parte order confirming the disallowance but restricted it to Rs. 10,00,000/- without providing any basis. The Revenue appealed against this partial deletion of the addition.
Held
The Tribunal noted that the assessee failed to appear during both assessment and appellate proceedings. Finding that the CIT(A) restricted the disallowance to Rs. 10,00,000/- without any supporting basis, the Tribunal set aside the CIT(A)'s order. The matter was remanded back to the CIT(A) to pass a fresh order after providing proper opportunity to the assessee to be heard.
Key Issues
Whether the CIT(A) was justified in arbitrarily restricting a disallowance of expenditure to Rs. 10,00,000/- without providing any basis, when the assessee failed to furnish evidence, and if the case should be remanded for proper adjudication.
Sections Cited
144, 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the Revenue for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 06.06.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 144 r.w.s 144 of the Income-tax Act,1961 (hereinafter “the Act”) on 23.12.2019.
The case ase was fixed for hearing on 09.10.2024, 05.11.2024, 19.11.2024, 04.12.2024 but none appeared from the side of appellant assessee. When the appeal was called for hearing again on 09.01.2025 , none appeared on behalf of the assessee, we therefore proceed to adjudicate the case accordingly, with the able assistance of Ld. D.R, Shri R. Clement Ramesh Kumar, CIT.
The assessee is a partnership firm and filed its return of income declaring total income of Rs.17,66,150/- on 31.10.2017.
Subsequently the case was reopened u/s. 147 of the Act. The assessee has not responded notices issued by A.O therefore, the A.O has disallowed the entire expenditure of Rs.23,11,45,100/- in the order passed u/s. 144 of the Act. On appeal, the Ld. CIT(A) has issued four notices, but the assessee did not file any response and the Ld. CIT(A) passed ex-parte order confirming the disallowance to the extent of Rs.10,00,000/-. The revenue is in appeal against deleting the addition of Rs 23,11,45,100.
The Ld. Departmental Representative (DR) has argued that the assessee has not furnished any evidence in support of the expenditure and therefore, the A.O has disallowed the expenditure. The Ld DR argued that onus is on the assessee to substantiate expenditure with documentary evidences. The Ld. DR submitted that the Ld. CIT(A) has clearly noted that the assessee has not filed copies of bills neither during assessment proceedings, nor during appellate proceedings still he has deleted the addition of Rs 23,11,45,100/- and restricted it to Rs.10,00,000/- without giving any basis of such adhoc disallowances.
We have perused the materials available on record and find that the orders of Ld. CIT(A) is ex-parte. The Ld CIT(A) has clearly noted that the assessee has not filed copies of bills neither during assessment proceedings, nor during appellate proceedings still has deleted the addition of Rs 23,11,45,100. The Ld. CIT(A) has restricted the disallowances to Rs.10,00,000/-, but has not given any basis of such disallowances. We, therefore set aside the order of Ld CIT(A) and direct him to pass fresh order after providing proper opportunity to assessee. We also direct the assessee to appear before the Ld. CIT(A) on the date of hearing without fail. In view of the above, the appeal filed by the revenue is allowed for statistical purposes.
In the result, the appeal filed by the revenue is allowed for statistical purposes.
Order pronounced on 29th January, 2025.