MAHARASHTRA SMALL SCALE INDUSTRIES DEVELOPMENT CORPORATION LTD,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX-RANGE-2(20(2), MUMBAI

NO LEVY OF INCOME TAX 4.1 In the facts and the circumstances of the case, and in law, no addition of any income was required to be made in the hands of the assessee as the Appellant is a "state" within the meaning of Article 289 (1) of Constitution of India or an agent / an instrumentality of state within the meaning thereof.

Fact in brief is that return of income declaring total income of Rs. 4,70,54,400/- was filed on 30.09.2011. The case was subject to scrutiny assessee and notice u/s 143(2) of the Act was issued on 01.08.2012. During the course of assessment, the assessing officer noticed that gross receipt shown by the assessee exceeded the limit specified u/s 44AB of the Act and the assessee had failed to get its accounts audited by the specified date i.e. 30.09.2011 and submit the report of such audit by that date. The assessee has cited the reasons such as staff shortage etc. to justify the delay in finalizing its accounts. The AO observed that the assessee habitually failed to get its accounts audited on similar reasons for the last many years. Therefore, the assessing officer has made estimated disallowance out of the expenses debited to the P & L A/c of Rs. 475,59,39,691/- @ 1% of such expenses to the amount of Rs. 4,75,59,397/- and added to the total income of the assessee.

The assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assesse on the ground that in spite of issuing various notices, assessee has not made any compliance during the course of appellate proceedings.

We consider that section 250(6) of the Act contemplate that the ld. CIT(A) would determine point in dispute and therefore record reason on such point in support of his conclusion and decide the appeal on merit after considering the material available on record. After considering the plea of the assessee that no compliance could be made before the ld. CIT(A) because of non- operating of e-mail, we consider it appropriate to restore the same to the file of the ld. CIT(A) for deciding afresh on merit after providing adequate opportunity to the assessee. The assessee is also directed to make compliance before the ld. CIT(A) without any failure in the set aside proceedings. Therefore, the appeal of the assessee is allowed for statistical purposes.

During the course of assessment in this case also, the assessing officer noticed that assessee has failed to get its accounts audited by the specified date. The assessing officer disallowed the various expenses to the amount of Rs. 13,34,85,141/- consisting of debit balance written off of Rs. 11,19,873/-, disallowance of provisions of Rs. 2,94,80,259/-, disallowance of expenses incurred for impairment loss on fixed assets of Rs. 38,73,684/-, disallowance of expenses incurred in cash of Rs. 1,19,600/-, disallowance of liability for expenses of Rs. 2,67,347/-, disallowance of expenses incurred for interest on late payment of CST & TDS of Rs. 1,29,630/-, disallowance of expenses for corporate social responsibility of Rs. 5,50,000/-, disallowance of expenses under the head of other expenses of Rs. 1,91,58,187/- and disallowance of expenses u/s 40(a)(ia) of Rs. 21,39,250/-.

In this case also, the assessee has filed the appeal before the ld. CIT(A). However, the ld. CIT(A) has dismissed the appeal of the assessee on the ground that assessee has failed to make compliance to the various notices issued during the course of appellate proceedings for the similar reasons as discussed at para 4 of this order while adjudicating the appeal of the assessee for A.Y. 2011-12 vide ITA No. 1805/Mum/2024. Therefore, applying the finding in the case of the assessee for the as adjudicated above in this order, this appeal of the assessee is also restored to the file of the ld. CIT(A) for deciding afresh on merit after providing mere opportunity to the assessee. This appeal of the assessee is allowed for statistical purposes.

In this case also, the assessee failed to get its accounts audited within the specified period u/s 44AB of the Act. The assessing officer has passed order u/s 143(3) of the Act on 18.03.2021 and made various disallowances i.e. Rs. 1,44,62,364/- being disallowance of loss claimed by the assessee of Rs. 6,94,574/- u/s 40(a)(ia), Rs. 2,17,21,096/- u/s 43B of the Act.

The assessee has filed appeal before the ld. CIT(A). However, the ld. CIT(A) has dismissed the appeal of the assessee as the assessee has not made any compliance to the various notices issued by the ld. CIT(A) during the course of appellate proceedings for the similar reasons as discussed above at para 4 of the order vide ITA No. 1805/Mum/2024. Therefore, applying the finding of ITA 1805/Mum/2024, this case of the assessee is also restored to the file of the ld. CIT(A) for deciding afresh on merit after providing opportunity to the assessee. The assessee is also directed to make compliance before the ld. CIT(A) without any failure. This appeal of the assessee is also allowed for statistical purposes.

The assessing officer has finalized the assessment u/s 143(3) r.w.s. 147 of the Act after making disallowance of Rs. 2,76,77,667/- on account of cessation of liabilities. The ld. CIT(A) has dismissed the appeal of the assessee on the ground that assessee has not made any compliance to the notices issued during the course of appellate proceedings. Similar to the finding given as supra while adjudicating the case of the assessee vide this case is also restored to the file of the ld.

In the result, all the appeals of the assessee are allowed for statistical purposes.