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Facts
The assessee, a Private Limited Company, filed its return of income, disclosing employee bonus in Form 3CD, but later claimed it was an inadvertent error as the bonus was customary. The Assessing Officer added the bonus amount of Rs. 2,89,394/- to the assessee's income, citing unsubstantiated cash payments over Rs. 10,000/-. The learned CIT(A) dismissed the assessee's subsequent appeal ex-parte.
Held
The Tribunal observed that the assessee had submitted relevant documents to the ITAT which were allegedly not considered by the lower authorities, and the CIT(A) dismissed the appeal ex-parte without providing a proper opportunity. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer for fresh examination of documents, verification of payment modes, and to pass a speaking order after affording the assessee a fresh opportunity of being heard, with a caution for the assessee to cooperate.
Key Issues
Whether the CIT(A)'s ex-parte dismissal of the appeal without considering the assessee's documents was justified, and whether the Assessing Officer properly verified the nature and mode of bonus payments before making the addition to income.
Sections Cited
143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2018-2019 Tirupati Cold Storage Pvt. Limited,.………Appellant 79, Sambhunath Pandit Street, Bhawanipur, Kolkata-700020 [PAN:AABCT0126C] -Vs.- Income Tax Officer,……………………………..Respondent Ward-7(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Sheo Prakash Bhatter, Director, appeared on behalf of the assessee Shri L.N. Dash, Addl. CIT (D.R.), appeared on behalf of the Revenue Date of concluding the hearing: May 08, 2025 Date of pronouncing the order: July 28, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 27.11.2024 passed for Assessment Year 2018-2019.
(A.Y. 2018-2019) Tirupati Cold Storage Pvt. Limited 2. Facts in brief are that the assessee is a Private Limited Company, which filed its return of income declaring total income at Rs.18,47,460/-. The assessee-Company disclosed an amount of Rs.2,89,394/- in Form 3CD as employees bonus or commission. The case was selected for Limited Scrutiny assessment under the e-assessment scheme, 2019. Statutory notice under section 143(2) was issued and served on the assessee. Thereafter notices under section 142(1) were issued from time to time. In response to the notices, the assessee stated that there was mistake in mentioning this customary bonus of Rs.2,89,394/- in column 20(a) of Tax Audit Report. It should have been zero in said Tax Audit Report. In ITR figure as ‘zero’ was correct in the column as bonus paid was customary bonus and was not payable as profit or dividend. Since bonus paid to employees was customary bonus and not otherwise payable as profit or dividend, the figure of such customary bonus was in advertently mentioned by auditor in the said column. The assessee enclosed a list of employees to whom bonus were paid and bank statement vide his submission dated 22.12.2020. A clarification/show-cause notice was issued to the assessee by the ld. Assessing Officer to explain as to why the payments made above Rs.10,000/- paid in cash as bonus and in response to this, the assessee again submitted the same bank statements which shows payment of Rs.2,89,394/- against ‘Yourself’. This does not substantiate whether the payments were made other than in cash. Not being satisfied, the ld. Assessing Officer added the figure of Rs.2,89,394/- to the total income of the assessee and assessed income at Rs.21,36,854/-.
(A.Y. 2018-2019) Tirupati Cold Storage Pvt. Limited 3. On being aggrieved, the assesese preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) dismissed the appeal of the assessee ex-parte.
On being aggrieved, the assessee preferred an appeal before the Tribunal. At the outset, ld. Counsel for the assessee argued that the assessee filed all the documents, i.e. auditor’s certificate, Banker Certificate, bank statement, bonus sheet, in support of its claim, but ld. Assessing Officer as well as ld. CIT(Appeals) did not consider it and dismissed the appeal. He, therefore, prayed to set aside both the orders of revenue authorities.
On the other hand, it was the submission of the ld. Departmental Representative that during the appellate proceedings, so many opportunities were provided to the assessee to substantiate its claim, but no response was given from the side of assessee-company. Therefore, getting no other alternatives, ld. CIT(Appeals) passed his order ex-parte dismissing the appeal of the assessee.
I have heard both the sides and perused the material available on record. At the time of hearing, a letter was submitted by the Director of the assessee-company before the ITAT in support of its claim. Therefore, considering the above finding of the ld. CIT(Appeals), I am of the view that it is a fit case to set aside the orders passed by the revenue authorities since the assessee has filed relevant documents before the Tribunal. Therefore, I set aside the order passed by the ld. CIT(Appeals) and remit the matter back (A.Y. 2018-2019) Tirupati Cold Storage Pvt. Limited to the file of ld. Assessing Officer to examine the documents as well as the letter written by the Director of the assessee-company before the ITAT regarding the mode of payments and if it is true or not and to pass a detailed speaking order after providing one more opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. Assessing Officer failing which the Ld. Assessing Officer shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in the appeal are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 28/07/2025.