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Income Tax Appellate Tribunal, “SMC”, BENCH KOLKATA
Before: SHRI S. S. GODARA, JM
Appellant by : None Respondent by : Shri Jayanta Khanra, JCIT, Sr. DR सुनवाईक�तार�ख/ Date of Hearing : 23/12/2019 घोषणाक�तार�ख/Date of Pronouncement : 31/12/2019 आदेश / O R D E R This assessee’s appeal for assessment year 2016-17 arises against the Commissioner of Income Tax (A)-14, Kolkata dated 27.02.2019 passed in case no. CIT(A), Kolkata-14/10314/2018-19 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Case called twice. None appears at assessee’s behest. The registry has already sent it an RPAD notice for today’s hearing. It is accordingly produced ex- parte.
The assessee’s sole substantive grievance challenges correctness of both the lower authorities’ action disallowanig partnership remuneration of Rs. 2,25,000/- u/s 40(b)(v) of the Act. The CIT(A)’s detailed discussion to this effect reads as under: “2. Grounds of Appeal: Aggrieved by the said decision in order dated 29.08.2017 the appellant preferred an appeal on the following grounds:
S.A.M. Industries ‘1. For that the Ld. AO erred in disallowing part of the partnership remuneration allowable under the provision of under a1$)(v) of the IT Act, further no such adjustments allowable within the provision of Section 143(7).’ 3. The A/R of the appellant has filed condonation of delay. The appellant had filed appeal on 07.09.2018 against intimation u/s. 143(1) of the Act dated 29.08.2017 at the delay of more than 1 year. The reasons for delay was because the appellant originally appealed against order u/s. 143(1) of the IT Act, 1961 dated 06.12.2016 passed by CPC, Bengluru. The CIT (A) had dismissed the appeal on technical grounds as the appellant has received revised intimation order dated 29.08.2017 and, therefore, appeal against intimation dated 06.12.2016 has become non-est in law. There is merit in the claim of the appellant, for condonation. The CIT (Appeals) order dismissing the appeal was passed on 28.08.2018. The appellant had filed appeal u/s. 246A on 07.09.2018 within the period of 30 days. Therefore, the appeal for condonation is accepted.
4. Ground no. 1 relates to disallowance part of the partnership remuneration allowable under the provision of under 40(b)(v) of the IT Act, further no such adjustments allowable within the provision of Section 143(1).
Decision: I have considered the submission of the appellant and perused the relevant assessment records. This is an appeal against return processed u/s. 143(1) of the Act by CPC, Bengaluru. The CPC, Bengaluru were processing the return u/s. 143(1) of the Act has computed income at Rs. 4,01,768/- as against returned income of Rs.L,76,7681- an addition of Rs.2,25,000/-. No reasons have been given for the enhancement. The appellant has claimed that he has not been intimated and given opportunity to submit his explanation as regards the enhancement. However, the submission of the appellant cannot be accepted as the CPC, Bengaluru diligently sends system generate intimation before making any adjustments. The intimation is sent either in writing or electronic mode. The A/R of the appellant has also not submitted any details of communication made by him with CPC, Bengaluru as regards the said enhancement. Therefore, appeal on this ground is dismissed. This ground of appeal
s falls and thus, is not allowed.”
3. I have given my thoughtful consideration to the Revenue’s arguments strongly supporting the impugned disallowance. It is sufficiently clear from CIT(A)’s above extracted detailed discussion that the assessee has not been heard at all before the impugned disallowance of partner’s remuneration has been made.
S.A.M. Industries He holds that the ‘CPC’ is a very diligent system. The case records do not indicate any opportunity of hearing granted to the assessee either in CPC or by the Assessing Officer. I, therefore, deem it appropriate to restore the assessee’s sole substantive grievance back to the Assessing Officer for afresh adjudication within three effective opportunities of hearing.
The assessee’s appeal is allowed for statistical purposes in above terms.
Order is pronounced in the open court on 31.12.2019.