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Facts
The assessee filed an appeal against an order that dismissed their appeal due to non-compliance with notices under Section 250 of the Income Tax Act. The assessee's claims involved adjustments to remuneration and interest paid to partners, with a dispute over an inadmissible amount of Rs. 5,60,294/-.
Held
The Tribunal found that the assessee did not appear before the CIT(A) despite multiple notices and did not submit evidence. The matter was remanded to the Assessing Officer for a fresh decision after providing the assessee a reasonable opportunity to be heard, with the assessee being burdened with costs.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without considering the grounds of appeal due to non-appearance of the assessee, and whether the matter requires remand for fresh adjudication.
Sections Cited
250, 154, 32, 143(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 123/JPR/2025
vkns'k@ORDER Per: Narinder Kumar, Judicial Member This order is to dispose of the appeal filed by the assessee challenging order dated 28.11.2024, passed by Learned CIT(A), NFAC, relating to the assessment year 2021-22.
2. Vide impugned order, Learned CIT(A) has dismissed the appeal filed by the assessee, while taking into consideration that the assessee- appellant did not comply with the notices issued u/s 250 of the Income Tax Badri Narain Nathu Lal, jaipur Act, 1961 (hereinafter referred to as “the Act”), and also did not furnish any evidence. Consequently, addition of Rs. 7,50,500/- made by the CPC, vide order dated 24.02.2023, passed u/s 154 of the Act has been sustained.
3. It may be mentioned here that none has appeared on behalf of the assessee-appellant, despite service of Court notice. Keeping in view adjournments already granted, and non appearance on behalf of the appellant, arguments have been advanced by the Ld. DR for the department.
The assessee has challenged impugned order on the following three grounds:- “1. Ground 1-That the learned Commissioner of Income Tax Appeals has confirmed the addition of interest of Rs. 5,34,054/-1 and dismissed the appeal without taking into consideration that the appellant has submitted detailed facts and grounds and there was no need of filing further submissions.
Ground 3- That the appellant takes leave to add, amend, delete, substitute, incorporate any of the grounds of appeal
before or at the time of hearing of their appeal.
3. Ground 2- That the learned Commissioner of Income Tax Appeals has confirmed the double addition of net profit for Rs.26,240/- and dismissed the appeal without taking into consideration that the appellant has submitted detailed facts and grounds and there was no need of filing further submissions.”
5. As per statement of facts, the claim of the assessee-appellant, as regards the demand raised by the Assessing Officer reads as under:-
Badri Narain Nathu Lal, jaipur “2. The assessee has gone through intimation and found that the demand is raised being inadmissible amount of Rs.5,60,294/- mentioned in form no. 3CD at point no. 21 (c). The amount is consist of the following details: - Remuneration paid Interest paid to to partners partners Amounts debited in Profit & Loss 2,26,396.88 5,34,054.00 Account Amount admissible 2,36,157.00 5,34,054.00 Amount inadmissible 26,240.00 5,34,054.00
The interest is being paid in accordance with clauses of partnership deed and in not exceeding simple interest at twelve percent per annum. Therefore, whole of the interest is admissible 4. In above report in point no. 210 of form 3CD the firm has paid total Interest to partners for Rs. 5,34,054/-. Out of this, Rs. 5,34,054/, is shown as admissible as well as inadmissible (both), which is not possible. Either the amount to be reported as admissible or inadmissible or partly admissible and partly inadmissible. It is clear from above that there is a gross mistake done in Auditor's report in reporting on this point.
On the other hand, assessee's return is based on Income Computation Statement consisting of the following details:- Profit as per Profit & Loss Account 0/- Add: Depreciation debited to Profit & Loss Account 15,262/- Interest paid to Partners 5,34,054/- Remuneration paid to Partners 2,62,396/- 8,11,712/- 8,11,712/- Less: Depreciation u/s 32 as per Depreciation Chart 15,261/- Interest as per Deed 5,34,054/- 5,49,315/- Profit before Remuneration 2,62,397/- Less: Remuneration allowable 2,36,157/- Gross Total Income 26,240/- 6. While processing returns, it was claimed that the assessee has declared the above amount as Nil while amount mentioned in annexure to Form 3CD is Rs.5,60,294/- (Rs.5,34,054 + 26,240/-). Therefore addition of Rs.5,60,294/-is made in declared income of Rs.26,240/- and demand for tax for Rs.1,74,813/- and interest for Rs.40,264/-(total Rs.2,16,080/-) was raised.
Badri Narain Nathu Lal, jaipur 7. The assessee earned net profit of Rs. 2,62,396.88 before allowance of remuneration to working partners. The assessee is entitled deduction of 90% thereof and declare income of remaining 10% which comes to Rs. 26,240/-. But while passing the intimation, even the addition of whole of the amount is made without allowing deduction of income already declared in Income Tax return 8. The assessee has filed application u/s 154 of Income Tax Act on 10.01.2023. An order u/s 154 was served on 24.02.2023. It was found that nothing has been examined from rectification application at the time of passing order u/s 154 and same demand was repeated.”
Record reveals that 5 notices under section 250 of the Act were issued to the assessee-appellant by the office of Learned CIT(A) on 01.04.2023, 12.04.2024, 13.05.2024, 01.07.2024 and 15.07.2024. Final notice came to be issued to the appellant on 28.10.2024. But none appeared for the appellant before Learned CIT(A). In other words, there was no compliance on behalf of the assessee-appellant before the First Appellate Authority 7. Record reveals that on behalf of the appellant a paper book (from page 1 to 39) came to be presented before the Registry. No certificate has been appended to the paper book as to which of the documents has been submitted before this Appellate Tribunal for the first time. In other words, there is no verification appended to the Index to the Paper Book as to which document was before the First Appellate Authority.
Badri Narain Nathu Lal, jaipur The issue involved needs verification of claim of the appellant and the documents submitted on his behalf. Learned DR has no objection to the remitting of the matter to the Assessing Officer for effective adjudication of the issue for the purposes of assessment. Since the matter arose out of intimation u/s 143(1) of the Act, followed by order u/s 154 and no evidence at all was submitted by the assessee before Learned CIT(A), we deem it a fit case to remand the matter to the Assessing Officer for afresh decision, after providing reasonable opportunity to the assessee of being heard. Result 8. In view of the discussion and observations, this appeal is disposed of, for statistical purposes, and while setting aside the impugned order passed by the Learned CIT(A), the matter is referred to the Jurisdictional Assessing Officer for decision afresh, after providing reasonable opportunity to the assessee of being heard, in accordance with law. As noticed above, none appeared for the appellant before Learned CIT(A) despite issuance of 6 notices. In the grounds of appeal or statement of facts submitted here, no explanation has been put forth for non compliance with the said notices by the assessee and its authorized representative before Learned CIT(A). In the given situation, we deem it a fit case to burden the assessee with costs of Rs. 3,000/- only.
Badri Narain Nathu Lal, jaipur Assessee to deposit costs in “Prime Minister’s National Relief Fund” and to submit the receipt before the Jurisdictional Assessing Officer before commencement of the proceedings there. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 25/08/2025.