SH. RAGHUBIR PRASAD GUPTA,FARIDABAD vs. ITO, FARIDABAD

AO called upon the assessee to show cause as to why the aforesaid payment paid to the various parties be not added to his income as per section 40A(ia) of the Act. Assessee filed reply.

Finding the explanation furnished by the assessee not tenable, AO came to the conclusion that since the assessee has failed to deduct the TDS on lorry hire charges amounting to Rs.22,69,083/- as required u/s 194A of the Act, amount of Rs.22,69,083/- claimed as deduction in the income & expenditure account has been disallowed and added to the income of the assessee and assessed the total income at Rs.24,45,000/-.

Assessee carried the matter by challenging the assessment order before the ld. CIT (A) who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

At the very outset, it is brought to our notice by the ld. AR for the assessee that application dated 13.12.2013 moved by the assessee seeking to raise additional grounds before the first appellate authority has been arbitrarily rejected which is necessary for just decision of the case.

Perusal of para 3 of the impugned order apparently goes to prove that the ld. CIT (A) has rejected the application moved by the assessee to raise additional ground by discussing plethora of judgments but without adjudicating the core issue that, “as to whether additional grounds sought to be raised by the assessee are necessary for complete adjudication of the controversy at hand”.

Bare perusal of the additional grounds now sought to be raised by the assessee goes to prove that the additional grounds are apparently legal grounds and without deciding the same core controversy agitated by the assessee before the first appellate authority could not have been adjudicated upon. Unless the appellate authority is not in a position to decide the issue, “as to whether the AO has legally and validly assumed the jurisdiction to reopen the assessment”, the remaining grounds agitated and disposed of by CIT (A) are otherwise secondary in this case. 10. So, without entering into the merits of the case, we are of the considered view that the additional grounds sought to be raised by the assessee before ld. CIT (A) being legal in nature are liable to be allowed and for that purpose, the matter is required to be set aside to restore the same for afresh decision. Consequently, impugned order is set aside and the file is restored to CIT (A) to decide afresh after providing an opportunity of being heard to the assessee. 10. In view of what has been discussed above, the present appeal is hereby allowed for statistical purposes. Order pronounced in open court on this 24th day of August, 2016.