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Facts
The appellant, a partnership firm engaged in wholesale business, filed its return for AY 2013-14 declaring an income of Rs. 2,87,600. The AO completed the assessment under Section 143(3) at Rs. 39,74,250, adding Rs. 36,81,648 for sundry creditors (disbelieving genuineness) and non-deduction of TDS on freight charges under Section 40A. The CIT(A) summarily dismissed the appeal without considering the appellant's submissions.
Held
The Tribunal condoned a 146-day delay in filing the appeal, noting that the appellant was pursuing alternate legal remedies. It found that the CIT(A)'s order was cryptic, failing to address the appellant's detailed explanations regarding sundry creditors and the non-applicability of TDS on freight charges. Consequently, the matter was remanded back to the CIT(A) for a de novo disposal with a reasonable opportunity of hearing to the appellant.
Key Issues
The main issues concerned the condonation of delay in filing the appeal, the genuineness of sundry creditors added by the AO, the applicability of TDS on freight charges under Section 40A, and the cryptic nature of the CIT(A)'s order.
Sections Cited
143(3), 40A
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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: SHRI INTURI RAMA RAO, AM & SHRI SOUNDARARAJAN K., JM
O R D E R Per: Inturi Rama Rao, AM
This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 30.01.2023 for Assessment Year (AY) 2013-14.
The brief facts of the case are that the appellant is a partnership firm incorporated under the provisions of Partnership Act. It is engaged in wholesale business of sugar, jiggery, maida, etc. The return of income for AY 2013-14 was filed on 28.09.2013 declaring a total income of Rs. 2,87,600/-. Against the said return of income the 2 ITA A No. 613/Coch/2023 Elias & Co. assessment was completed by the Income Tax Officer, Non- corporate Ward-1(1), Kochi (AO) vie order dated 29.03.2016 passed u/s. 143(3) of Income Tax Act, 1961 (hereinafter "the Act") at a total income of Rs. 39,74,250/-. While doing so, the AO made addition of Rs. 36,81,648/- disbelieving the existence of sundry creditors for the alleged failure of the assessee to prove the genuineness of the transactions.
Being aggrieved, an appeal was filed before the CIT(A), explaining the difference of sundry creditors and showing that in the absence of any material on record to prove the genuineness of transactions no addition can be made and also submitted that some of the sundry creditors represent opening balance and, therefore, no addition may be for the year under consideration. However, the CIT(A) had dismissed the appeal without considering the submission made by the appellant.
Being aggrieved, the appellant is in appeal before us in the present appeal.
At the outset I find that there is a delay of 146 days in filing the present appeal. The appellant filed a petition along with an affidavit seeking condonation of delay in filing the appeal, wherein it is stated that delay had occurred due to the reason that the appellant had pursuing alternate remedy by filing Writ Petitions in Hon'ble High Court challenging the order of the CIT(A). Therefore, the delay is not willful or deliberate, hence, it is prayed that the delay in filing
3 ITA A No. 613/Coch/2023 Elias & Co. the appeal may be condoned and the appeal may be admitted for adjudication. On a perusal of the averments made in the condonation petition, it is evident that the appellant is prevented by reasonable cause from filing the appeal. Therefore, we condone the delay and admit the appeal for adjudication.
We have heard the rival contentions and perused the material available on record. On a careful perusal of the assessment order it would reveal that the AO had made addition of Rs. 36,81,648/- being the sundry creditors outstanding as on 31.03.2013 disbelieving the genuineness of the transactions and for the alleged failure of the appellant to file confirmation letters and proof of genuineness of outstanding sundry creditors. The appellant had not deducted TDS from freight charges paid u/s. 40A of the Act. On appeal before the CIT(A) the appellant filed a detailed explanation reconciling the difference between the sundry creditors outstanding and also stated that there was no liability on the part of the assessee to deduct TDS on freight charges in view of the fact that there was no contract between the lorry owners and the appellant. The CIT(A), without dealing with the submissions made on behalf of the appellant had summarily dismissed the appeal without meeting the arguments of the appellant by passing a cryptic order. Thus, the order passed by the CIT(A) cannot be sustained in the eyes of law. Therefore, we remand the matter back to the file of the CIT(A) for de novo disposal in accordance with law after affording reasonable opportunity of hearing to the appellant.
4 ITA A No. 613/Coch/2023 Elias & Co. 7. In the result, the appeal filed by the assessee stands partly allowed.
Order pronounced in the open court on 14th May, 2025.