SURYAKANTH REDDYSHEETYWAR,ADILABAD vs. ITO., WARD-1, NIRMAL

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ITA 1255/HYD/2024Status: DisposedITAT Hyderabad23 January 2025AY 2022-235 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the impugned order passed by the learned CIT(A) did not comply with the requirements of Section 250(6) of the Income Tax Act, 1961, and therefore, could not be sustained. The Tribunal noted that even in the absence of the assessee, the CIT(A) has the power to decide the matter on merits rather than dismissing it in limine. The CIT(A) should have addressed the points for determination and provided cogent reasons for the decision, which was conspicuously absent in the impugned order. Consequently, the Tribunal set aside the impugned order and restored the issue to the file of the learned CIT(A) for a fresh decision. The assessee was directed to cooperate with the CIT(A) without seeking adjournments, and the CIT(A) was instructed to consider the documents filed by the assessee and afford a reasonable opportunity of being heard. The grounds of appeal were treated as allowed for statistical purposes.

What were the facts?

The assessee, Suryakanth Reddysheetywar, filed an appeal against the order dated 18/09/2024 passed by the Addl/Joint Commissioner of Income Tax (Appeals), Faridabad, for Assessment Year 2022-23. The assessee had declared a total income of Rs. 8,18,810/-. The CPC, Bengaluru, denied credit for TDS amounting to Rs. 93,580/- out of a total claim of Rs. 5,96,517/-, stating that the income declared did not match the TDS claimed. The learned CIT(A) dismissed the assessee's appeal ex-parte, citing the assessee's failure to file written submissions or upload responses despite multiple notices. The assessee is aggrieved by this ex-parte order.

What were the issues?

1. Whether the ex-parte order passed by the learned CIT(A) is sustainable in law, considering the assessee's inability to produce an Agency Certificate during the appellate proceedings and the subsequent acquisition of supporting documents? (Mixed question of law and fact, turning on Section 250(6) of the Income Tax Act, 1961). Assessee's contentions: The assessee argued that they operate solely as a commission agent for agriculturists, earning a fixed percentage commission on sales, and TDS under Section 194Q was deducted by purchasers on the entire transaction value. The inability to obtain an Agency Certificate from the Agricultural Market Committee during the appellate proceedings led to the ex-parte dismissal. The assessee has since obtained an Agency Certificate, Market License, and Commission Pattis, and pleads for a remand to the CIT(A) for a fresh hearing. The assessee also contended that the impugned order did not comply with Section 250(6) of the Act. Revenue's contentions: The revenue relied on the orders of the lower authorities, asserting that the onus was on the assessee to prove their status as a commission agent. The revenue submitted that the assessee was a non-filer and did not avail opportunities provided by the authorities. In the absence of documentary evidence, the revenue argued that the lower authorities' orders were in accordance with the law and should not be interfered with.

Which sections of the Income-tax Act were involved?

Section 194Q,Section 143(1),Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “SMC-B”, HYDERABAD

Before: SHRI MANJUNATHA. G & SHRI K.NARASIMHA CHARY

For Respondent: Shri Srikanth Reddy Y, Sr. AR
Hearing: 22/01/2025

आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 18/09/2024 passed by the learned Addl / Joint Commissioner of Income Tax (Appeals), Faridabad (“Ld. CIT(A)”), in the case of Suryakanth Reddysheetywar (“the assessee”), assessee preferred this appeal for the AY 2022-23. 2. Brief facts of the case are that assessee is in the business of commission agency registered with Agricultural Market Commi�ee, Kubeer. Assessee filed his return of income for the AY 2022-23 admi�ng a total income of Rs. 8,18,810/-. In�ma�on U/s. 143(1) of the Income Tax Act, 1961 (“the Act”) was passed in the case of the assessee wherein assessee’s claim for credit of TDS to the extent of Rs. 93,580/- against assessee’s TDS claim of Rs. 5,96,517/- was denied by the CPC, Bengaluru on the ground that the income to the full extent of TDS claimed has not been declared by the assessee in his return of income. Aggrieved assessee preferred an appeal before the learned CIT(A).

3.

Learned CIT(A) dismissed the appeal of assessee ex-parte by holding that during the course of appellate proceedings, assessee neither filed any wri�en submissions nor uploaded any response in spite of issue of no�ces on various occasions. Aggrieved, assessee is in appeal before the Tribunal.

4.

Learned Authorized Representa�ve (“learned AR”) submi�ed before us that the assessee only acts as a commission agent to the sellers/agriculturists who bring their produce to the Agricultural Market Commi�ee for sale and assessee is en�tled to only a fixed percentage of commission on the goods sold. The TDS is being made under sec�on 194Q by the purchasers on the en�re value of purchases made by them from the assessee, who is only a commission agent of seller. He further submi�ed that assessee could not get a le�er from the Agricultural Market Commi�ee ie., Agency Cer�ficate to establish that he is only a commission agent during the appellate proceedings. Because of non- submission of the le�er from the AMC, learned CIT(A) dismissed the assessee’s appeal by passing ex-parte order. Apart from this, learned AR pleaded that the impugned order does not comply with the requirement of law U/s. 250(6) of the Act. However, since the assessee obtained the Agency Cer�ficate, learned AR pleaded to remit the ma�er back to the file of the learned CIT(A) for one more opportunity of being heard.

5.

Learned Departmental Representa�ve (“learned DR”) heavily relied on the orders of the lower authori�es and submi�ed that onus is Page 2 of 5 on the assessee to establish that he is only a commission agent. He further submi�ed that the assessee is a non-filer and he did not avail the opportunity granted by the Authori�es below. However, in the absence of any documentary evidence, the orders passed by the lower authori�es are in accordance with law and need not be interfered with.

6.

We have gone through the record in the light of the submissions made on either side. The only plea of assessee is that he is a commission agent, en�tled only to a commission at a fixed percentage ranging from 1 to 1.5% of the goods sold and therefore, ques�on of admi�ng of en�re sale value as income of the assessee does not arise. The main conten�on of the assessee is that he could not obtain the Agency Cer�ficate during the appellate proceedings due to the reason that the issuance of cer�ficate was under process. Now, the assessee obtained the following documents viz., (i) le�er of confirma�on of Commission Agency Opera�ons (ii) Market License and (iii) Commission Pa�s and hence, the assessee prays for one more opportunity before the learned CIT(A), who passed the ex-parte order.

7.

Requirement of law under sec�on 250 (6) of the Act is that the order of the Commissioner (Appeals) disposing of the appeal shall be in wri�ng and shall state the points for determina�on, the decision thereon and the reason for the decision. Even in the absence of the assessee, it is always open for the learned CIT(A) to deal with the ma�er on merits instead of dismissing the same in limine. In the instant case also, the learned CIT(A) could have adverted to the points for determina�on and decided the same by assigning cogent reasons. Impugned order is conspicuous for its absence.

8.

Having regard to the facts and circumstances of the case, we are of the considered opinion that the impugned orders do not comply with the requirement of Sec�on 250(6) of the Act and cannot be sustained.

9.

With this view of the ma�er, we set aside the impugned order and restore the issue to the file of the learned CIT(A) to decide the issue afresh. We direct the assessee to co-operate with the learned CIT(A) in ge�ng the ma�er disposed of on merits, without seeking any adjournments and the learned CIT(A) to take a fresh look at the ma�er, a�er considering the documents filed by the assessee, as men�oned above and a�er affording a reasonable opportunity of being heard to the assessee. Grounds are accordingly treated as allowed for sta�s�cal purposes.

10.

In the result, appeal of the assessee is treated as allowed for sta�s�cal purposes. Order pronounced in the open court on the 23rd January, 2025.

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