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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-II’ NEW DELHI
Before: SMT DIVA SINGH
ORDER The present appeal has been filed by the assessee assailing the correctness of the order dated 19.01.2016 of CIT(A)-4, New Delhi pertaining to 2012–13 assessment year on the following grounds:-
1. “That the CIT(Appeals) ought to have decided the appeal on merits instead of dismissing the appeal on account of non-prosecution.
2. That the disallowance of Rs.15,00,000/- being the 50% of the salary paid to Mrs.Kiran Qureshi, Director u/s40A(2)(b) of the IT Act (wrongly mentioned section 40(2)(b) by AO) as made by the AO is arbitrary, unjust and at any rate very excessive.”
2. At the time of hearing, an adjournment was moved on behalf of the Revenue.
However, no one was present in support of the same. The stated reason for adjournment was that the Ld. Sr. DR could not reach Delhi. The adjournment request was opposed by the Ld.AR stating that the point at issue is fully covered in his favour by virtue of the order of the ITAT in assessee’s own case. Considering the material available on record, the adjournment request was rejected and it was considered appropriate to proceed ex-parte qua the Revenue respondent on merit.
The relevant facts of the case are that the assessee in the year under consideration had returned an income of Rs19,58,750/-. The said return was selected for scrutiny under CASS. The AO after issuance of notice u/s 143(2) & 142(1) etc. required the assessee to explain the payment of Rs.30 lacs paid to Smt. Kiran Qureshi. The assessee in the facts of I.T.A .No.-1498/Del/2016 Hind Airlink Pvt.Ltd. vs DCIT
Page 2 of 3 the present case, is engaged in the business of the general sales agent. The assessee submitted that Smt. Qureshi was a highly qualified person and was a promoter-Director of the company thus the payment was claimed to commensurate with her qualifications. However, the AO being of the view that since the assessee could not prove day to day involvement with the business concerns of the assessee by way of any documented evidence, the reasonableness of the payment was held to be not proved. Accordingly 50% of the same was disallowed u/s 40A(2)(b) of the I.T.Act, 1961. The issue travelled in appeal before the CIT(A) who after fixing the case on 08.09.2015 & 12.01.2016 dismissed the appeal holding that the assessee is not serious in pursuing the appeal filed.
Ld.AR at the time of hearing submitted that the point at issue is fully covered in favour of the assessee vide order dated 10.08.2016 in pertaining to 2011-12 AY in the case of the assessee itself. Accordingly, relying upon the same, it was his submission that the issue has been decided in favour of the assessee and he would have no objection if the issue is restored to the CIT(A) for examining the claim of the assessee. However, the grant of adjournment was objected to. Considering the fact that the impugned order is an ex-parte order wherein the relevant facts addressing how the notices were sent to the assessee is not brought out, it is considered appropriate to set aside the impugned order and restore the issue back to the CIT(A) with the direction to take into consideration the order passed by the Co-ordinate Bench stated to be on similar facts and circumstances and pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open court on 19th of December, 2016. Sd/- (DIVA SINGH) JUDICIAL MEMBER *Amit Kumar*
I.T.A .No.-1498/Del/2016 Hind Airlink Pvt.Ltd. vs DCIT