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Facts
The assessee, Sampratik News Service Pvt. Limited, filed its return for AY 2020-21 disclosing income of Rs.10,27,120/-. The Assessing Officer made an addition of Rs.8,00,694/- under Section 36(1)(ii) related to bonus/commission paid to an employee, assessing total income at Rs.19,02,230/-. The CIT(Appeals) dismissed the assessee's appeal ex-parte as no submissions were filed despite multiple opportunities.
Held
The ITAT remitted the matter back to the CIT(Appeals) for fresh consideration, directing the CIT(Appeals) to provide another opportunity of hearing to the assessee. The assessee was cautioned to promptly co-operate with the proceedings.
Key Issues
Whether the CIT(Appeals) was justified in dismissing the appeal ex-parte without considering the merits and whether the assessee should be granted another opportunity to present its case regarding the addition under Section 36(1)(ii).
Sections Cited
139(1), 36(1)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Appearances by: Shri Somnath Ghosh, Advocate, appeared on behalf of the assessee Shri Somnath Das Biswas, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: January 21, 2025 Date of pronouncing the order: February 26, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Addl./JCIT(Appeals)-8, Mumbai dated 28th February, 2024 passed for Assessment Year 2020-21.
(A.Y. 2020-2021) Sampratik News Service Pvt. Limited 2. Brief facts of the case are that the assessee is a Private Limited Company, which was incorporated on 05.05.2004 with the main objects of carrying on business of printing and distributing newspapers. The appellant filed its return of income under section 139(1) of the Income Tax Act, 1961 on 01.02.2021 disclosing a total income of Rs.10,27,120/- for the assessment year under consideration. While framing the intimation, the ld. Assessing officer found in serial no. 20(a) of the Audit Report that the auditor has reported a sum of Rs.8,00,694/- in respect of ‘any sum paid to an employee as bonus or commission for services rendered, where such sum was otherwise payable to him as profits or dividend under section 36(1)(ii) and accordingly addition of such sum by way of adjustment was conceived by the ld. Assessing Officer. Thereafter ld. Assessing Officer framed an assessment order dated 18.12.2021 assessing the total income of Rs.19,02,230/-.
On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) has given several opportunities to the assesese to substantiate its claim, but the appellant did not file the written submissions and did not represent the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeal ex-parte on 28th February, 2024.
On being aggrieved, the assessee preferred an appeal before the ITAT.
At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) did not consider the case on merit, rather he just upheld the order passed by the ld. Assessing Officer. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer as confirmed by the ld. CIT(Appeals).
At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.19,02,230/- as unexplained. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
I have heard the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide 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. CIT(Appeals) failing (A.Y. 2020-2021) Sampratik News Service Pvt. Limited which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee 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 26/02/2025.