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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH, VICE- & SHRI G.MANJUNATHA
PER G.MANJUNATHA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-7, Chennai dated 27.09.2018 and it pertains to assessment year 2011-12.
The assessee has raised the following grounds of appeal:-
1. The order of the Commissioner of Income Tax (Appeals) - 7, Chennai dated 27.09.2018 in I.T.A.No.110/CIT(A)-7/2014-15 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case.
2. The CIT (Appeals) erred in dismissing the appeal by passing exparte appellate order without assigning proper reasons and justification and ought to have appreciated that any order passed in violation of principles of natural justice should be reckoned as nullity in law.
3. The CIT (Appeals) failed to appreciate that having not served the notice(s) of hearing at the correct address and having not cross verified with jurisdictional Assessing Officer on the change of address, the decision to pass exparte order was wholly unjustified and bad in law.
4. The CIT (Appeals) erred in sustaining the addition of Rs.19,22,434/- being the estimated disallowance at 15% of employee cost in the computation of taxable total income without assigning proper reasons and justification. 5 . The CIT(Appeals) failed to appreciate that the misreading of facts resulting in wrong analysis of the employee cost with reference to such costs reported for the three assessment years including the assessment year under consideration would vitiate the decision in relation thereto.
6. The CIT(Appeals) failed to appreciate that the detailed notes filed before the Assessing Officer on 17.01.2014 incorporating the correct facts was completely overlooked and brushed aside in rendering decision in para 7 of the impugned order.
7. The CIT(Appeals) erred in sustaining the addition of ` 90,300/- representing payments made to Airlines for want of further evidence on the application of section 69C of the Act without assigning proper reasons and justification.
8. The CIT(Appeals) failed to appreciate that the expenses incurred were duly accounted as well as spent wholly and exclusively for the purpose of business, deductible u/s 37(1) of the Act, thereby vitiating the related findings in para 7 of the impugned order.”
Brief facts of the case are that the assessee company is engaged in the business of freight forwarding and clearing services filed its return of income for the assessment year 2011-12 on 30th September, 2011 declaring loss of ` 86,76,971/-. The case has been selected for scrutiny and during the course of assessment proceedings, the Assessing Officer has disallowed salary expenditure of `19,22,434/- on ad-hoc basis on the ground that the assessee has failed to file sufficient material to justify the claim of salary expenditure. The Assessing Officer has also disallowed cash payment of ` 90,300/- on the ground that the assessee did not produce necessary supporting bills and vouchers. The assessee carried the matter in appeal before the learned CIT(A). Before the learned CIT(A), the assessee has neither appeared nor filed any evidences to justify its case, which is evident from the fact that despite three dates of hearing was given to the assessee, but notices got returned unserved. Therefore, the learned CIT(A) left with no option has disposed of the appeal filed by the assessee and confirmed the additions made by the Assessing Officer towards disallowance of salary expenditure and cash payment made to airlines under section 69C of the Act. Aggrieved by the order of the learned CIT(A), the assessee is in appeal before us.
We have heard the counsels for both sides and perused the materials available on record. We find that the learned CIT(A) has disposed off the appeal filed by the assessee ex-parte for non- prosecution as the assessee neither appeared nor filed any details to justify its case. No doubt, it is the obligation of the person who files appeal, go before the authorities, when the appeal is called for hearing to justify its case. In case, the assessee did not choose to appear before the authorities, then the appellate authority left with no option but to dispose off, the appeal, but said appeal needs to be disposed off on merits on the basis of materials available on record. In this case, on perusal of the order of the learned CIT(A), we find that the learned CIT(A) has disposed off the appeal for non-appearance without discussing the issues involved in the appeal on merits. Therefore, we are of the considered opinion that the issue needs to go back to the file of the learned CIT(A) to give one more opportunity to the assessee to file necessary evidence in support of its case. Hence, we set aside the impugned order and remit the matter back to the file of learned CIT(A) and direct him to reconsider the issues after providing adequate opportunity of hearing to the assessee. Needless to say, the assessee shall appear before the CIT(A) without seeking any adjournment unless or otherwise warrants.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 29th October, 2020