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Facts
The assessee company deals in motor vehicles and parts and incurred professional expenses of Rs. 33,97,863/-. The Assessing Officer made an addition to the income by disallowing these expenses as the concerned parties did not respond to notices and the assessee failed to provide supporting documents like confirmations, agreements, and bank statements.
Held
The Tribunal held that the Ld. CIT(A) should have condoned the delay in filing the appeal, especially considering the assessment order was passed during the Covid pandemic period. However, due to the assessee's non-cooperative attitude, a cost was imposed, and the matter was set aside for de-novo consideration.
Key Issues
Whether the delay in filing the appeal before the Ld. CIT(A) should be condoned, and if the additions made by the AO were justified without proper documentation from the assessee.
Sections Cited
133(6), 194J, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2018-19) Landmark Lifestyle Cars Pvt. Ltd. Vs. Deputy Commissioner of Landmark House, Opp. AEC, Nr. Income Tax, Gurudwara, Thaltej Cross Road, Circle-2(1)(1), Sarkhej Highway, Thaltej, Ahmedabad Ahmedabad-380059 [PAN No.AACCL9423D] (Appellant) .. (Respondent) Appellant by : None Respondent by: Shri B.P. Srivastav, Sr. DR 13.01.2025 Date of Hearing Date of Pronouncement 25.02.2025 O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC), Delhi vide order dated 20.09.2024 passed for A.Y. 2018-19.
The assessee has taken the following grounds of appeal:-
1. The Ld. CIT-(A) has erred in law and on facts, while passing order u/s 250 of the Act dated 20.09.2024 for A.Y. 2018-19 forming opinion of delay in filing the appeal cannot be condoned in absence of proper, good and sufficient reasons for delay in the filing the appeal be assessee.
The brief facts of the case are that the assesee company deals in sale of motor Vehicles and motor Parts. The case of the assessee was selected for limited scrutiny to verify the genuineness of large expenses incurred by the Landmark Lifestyle Cars Pvt. Ltd. vs. DCIT Asst.Year –2018-19 - 2– assessee. During the course of assessment, the Assessing Officer observed that the assessee company had shown large expenses as professional payments amounting to Rs. 33,97,863/- under Section 194J of the Act, to two persons (i) Mr. Venkatraman Balaji, to whom professional fee of Rs. 15,00,000/- was paid by the assessee and (ii) M/s. Future Promos & Events Pvt. Ltd., to whom professional fee of Rs. 18,97,863/- was paid by the assessee.
The Assessing Officer issued notices under Section 133(6) of the Act to the above mentioned persons / entities but none of them replied. Further, as per records of the Income Tax Department, both such persons / entities were non-filers of Income Tax Returns. The assessee also did not file “confirmation” of these parties, to whom payments were made under Section 194J of the Act and also did not furnish the copy of work contracts / agreements and bank statements Act, of the above mentioned parties, to verify the genuineness of payments. Accordingly, the Assessing Officer made addition of Rs. 33,97,863/- to the income of the assessee, by disallowing such payments made to these professionals on the grounds that no response by these parties Mr. Venkatraman Balaji and Ms. Future Promos & Events Pvt. Ltd. to the notices under Section 133(6) of the Act was received, such professionals to whom payments were made did not file their return of income, the assessee did not furnish “confirmation” of these parties, the assessee failed to submit copy of the work agreements / work contracts between the assessee and these parties and finally the assessee failed to submit copy of bank accounts of these parties, to establish the genuineness of payments.
Landmark Lifestyle Cars Pvt. Ltd. vs. DCIT Asst.Year –2018-19 - 3– 5. In appeal Ld. CIT(A) observed that there was a delay in filing of appeal of 70 days. Ld. CIT(A) refused to condone the aforesaid delay in filing of the appeal and dismissed the appeal of the assessee, with the following observations:
14. In view of the above discussion of facts and circumstances, I am of the considered opinion that the delay in filing of the appeal cannot be condoned in absence of proper, good and sufficient reasons for delay in filing appeal by the appellant. Further, as stated in Form 35, no evidence with regard to the delay and appellant has failed to submit good and sufficient reasons for filing the appeal belatedly despite opportunity. Hence, in the result, the delay in filing appeal is not condoned. As a result, the Appeal filed by the appellant is Dismissed.
The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A).
Before us, none appeared on behalf of the assessee. We observe that the appeal of the assessee was dismissed by Ld. CIT(A), since he refused to condone the delay of 70 days in filing of appeal before him. However, we observe that the assessment order was passed on 05.03.2021, which was falling within the Covid pandemic period and therefore, looking into the instant facts, in our considered view, the Ld. CIT(A) should have taken a liberal view and should have condoned the delay in filing of appeal by the assessee. However, we also observe that the assessee has remained largely non-compliant before the Revenue Authorities and has not demonstrated a cooperative attitude. However, looking into the quantum of additions made, the assessee is hereby given one more opportunity, in the interest of justice, to furnish the necessary proofs / documents in support of the expenses incurred by the assessee towards professional fees. However, in view of the consistent non-cooperative attitude of the assessee, a cost of Rs. 5,000/- is being imposed on the assessee for the purpose of setting-aside the matter to the file of Ld. CIT(A) for de-novo consideration and the same is directed to be deposited to the Prime Minister’s Relief Fund.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order is pronounced in the Open Court on 25/02/2025