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Facts
The assessee's appeal was dismissed ex-parte by the CIT(A) for not furnishing submissions. The assessee had raised grounds related to disallowance of unpaid DMFT and restriction of TCS claim.
Held
The Tribunal restored the matter to the AO for fresh adjudication, noting that the CIT(A) passed an ex-parte order. The assessee was directed to present submissions and cooperate with the proceedings.
Key Issues
Whether the CIT(A) was justified in passing an ex-parte order without considering the merits and whether the disallowance of DMFT is covered under Section 43B of the Act.
Sections Cited
43B, 154, 43
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A’’ JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihyla-@ITA. No. 337/JPR/2025
fu/kZkfjrh dh vksjls@Assesseeby : Shri R.K. Bhatra, CA jktLo dh vksjls@Revenue by :Shri Rajesh Ojha, CIT-DR Mrs. Anita Rinesh, JCIT-DR, a lquokbZ dh rkjh[k@Date of Hearing : 22/04/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 06/05/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
This appeal filed by the assessee is directed against order of the learned National Faceless Appeal Centre, Delhi[ for short CIT(A)] dated 28- 01-2025for the assessment year 2018-19 wherein the assessee has raised the following grounds of appeal; ‘’1. That on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in passing impugned appellate order on ex-
2 ITA 337/JPR/2025 MATESWARI ROYALTIES VS ITO, WARD 1, SIKAR parte basis without considering the submissions made, evidences submitted and additional ground of appeal raised before him before passing of the said order on 28 01. 2025 and may kindly be set aside
2. That without prejudice to the ground No (1) above on the facts and in the circumstances of the case, the learned CIT(A) is wrong, unjust and has erred in law in confirming disallowance of unpaid DMFT, Sirohi of Rs 1,51,80,996 u/s 43B (a) of the IT Act, 1961 in as much as the amount payable for DMFT is not tax duty, cess or fees within meaning of said section 43B(a) warranting any disallowance and consequent addition to the declared income
3. That without prejudice to the ground No (1) above on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in not considering additional ground of appeal raised before him by the appellant against action of CPC in restricting claim of TCS to Rs. 99,35,444/- as against claim of Rs. 1,04,12,110/- made by the appellant on the basis of credit available in the Form 26AS 2.1 Apropos grounds of appeal, it is noticed that the ld. CIT(A) has passed an ex-parte order by dismissing the appeal of the assessee as the assessee had not furnished the submissions/explanation or documents in support of his grounds of appeal in spite of various notices issued to the assessee and thus the ld.CIT(A) observed that assessee has nothing to submit in the appeal filed before the ld. CIT(A). The finding as made in the order of the ld CIT(A) reads as under:- ‘’6. Decision:- 6.1 to 6.5… 6.6 Their Lordships of Hon'ble Supreme Court in the case of CIT vs. B. Bhattachargee& Another (118 ITR 461 at page 477-78) held that the appeal does not mean, mere filing of the memo of appeal but effectively pursuing the same.
3 ITA 337/JPR/2025 MATESWARI ROYALTIES VS ITO, WARD 1, SIKAR
6.7 As evident from above facts the appellant has failed to submit any submission during the course of appeal proceedings, even after availing many opportunities. However, it will be fair to decide the case on the facts available on record and merit of the case. 6.8 It is seen that while processing the return of income in the case of the appellant, the CPC has made the disallowance of DMFT Sirohi of Rs. 1,51,80,996/-, however, the appellant pointed out that the same is not covered as per the provisions of section 43B of the Act. The appellant filed various rectification and the CPC has passed rectification orders u/s. 154 on the various dates. However, no changes have been made by the CPC while passing the rectification orders. 6.9 Now, the NFAC has issued various hearing notices to the appellant to furnish the submissions in support of grounds of appeal
. However, the appellant did not make any submissions to substantiate its claims. The onus was on the appellant to prove its claims, which appellant failed to do so. Hence, I do not find any reason to interfere in the order passed by the CPC. Accordingly, the grounds of appeal raised by the appellant are dismissed.
7. In the result, the appeal of the appellant is dismissed.’’ 2.2 During the course of hearing, the ld. AR of the assessee prayed to restore the matter to the file of the AO for afresh adjudication against the rectification order dated 18-02-2022 passed by the AO and submitted that AO is not justified in law in making disallowance of DMFT Sirohi of Rs.1,51,80,996/- whereas the same is not covered under the provisions of Section 43B of the Act. 2.3 On the other hand, the ld.DR supported the order of the ld. CIT(A)
4 ITA 337/JPR/2025 MATESWARI ROYALTIES VS ITO, WARD 1, SIKAR 2.4 We have heard both the parties and perused the materials available on record. It is noted that the ld. CIT(A) has passed an ex-parte order by dismissing the appeal of the assessee for the reason that the assessee had not advanced any submissions to substantiate its claim and thus he did not find any reason to interfere in the order passed by the CPC. The Bench in view of the submissions of the ld. AR of the assessee feels to restore the matter to the file of the ld. AO for afresh adjudication to the issue of disallowance of DMFT Sirohi of Rs.1,51,80,996/- whether the same is covered as per the provisions of Section 43 of the Act or not. The ld. AR of the assessee is directed to advance the submissions as to moot issue raised( supra) before the AO and cooperate in set aside proceedings before him. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before him. Thus, the appeal of the assessee is allowed for statistical purposes. 2.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any 5 ITA 337/JPR/2025 MATESWARI ROYALTIES VS ITO, WARD 1, SIKAR reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 06 / 05/2025.
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