SAMAR BIRI FACTORY,SILIGURI vs. A.O., ASSESSMENT UNIT, BENGALURU

The present appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, (hereinafter the “ld. CIT(A)”) dt. 19/02/2024, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for Assessment Year 2020-21.

Though the assessee has raised various grounds of appeal but the main contention of the assessee is that on account of the death of the key person of the assessee firm, no one could appear before the ld. Assessing Officer and, thereafter when the appeal was filed before the ld. CIT(A), the same was dismissed on account of delay in filing the appeal. It was prayed that since high pitched assessment has been made in the case of assessee by the ld. Assessing Officer and assessee had no opportunity to furnish the details, the issues on merits may be restored to the file of the ld. Assessing Officer for de novo adjudication.

We have heard rival contentions and perused the material placed before us. We notice that the assessee is a partnership firm engaged in manufacturing of biri. Income of Rs.40,21,640/- declared for Assessment Year 2020-21 furnished on 15/02/2021. Case selected for completed scrutiny. The ld. Counsel for the assessee stated that after the notice of scrutiny u/s 143(2) and 142(1) of the Act being served on the assessee firm, key partner of the appellant firm, Shri Samar Saha, who used to look after the tax and accounts matter died on 13/02/2022. In between due to Covid restrictions, no appearance could be made and after the death of the partner again compliance could not be made. We further note that the additions made by the ld. Assessing Officer are firstly unexplained expenditure u/s 69C of the Act for the difference in closing balance of the sundry creditors for the current year and preceding year and secondly disallowance u/s 36(1)(va) of the Act have delay in deposit of employer’s contribution towards PF & ESI.

The ld. Counsel for the assessee has stated that since no financial statement of preceding year and current year were filed, the ld. Assessing Officer has made the addition and had there been any opportunity, the same could have been explained. As far as the disallowance u/s 36(1)(va) of the Act is concerned, he submitted that the alleged sum is on account of employer’s contribution and not employees’ contribution and the same was deposited before the due date of furnishing return of income u/s 139(1) of the Act and, Assessment Year: 2020-21 Samar Biri Factory therefore, disallowance u/s 43B of the Act is uncalled for. We, however, note that due to minor delay in filing the appeal before the ld. CIT(A), the appeal of the assessee has been dismissed and ld. CIT(A) has not made any finding on the merits of the case. Considering the facts of the case, in the interest of justice and being fair to both the parties, we are inclined to restore the matter back to the file of the ld. Assessing Officer for de novo adjudication, in accordance with law. Needless to mention that, the assessee should remain compliant to the notice of hearing and shall not take adjournment and should appear on the very first date of hearing unless otherwise for a bonafide cause and furnish the details in support of its grounds. Ld. Assessing Officer should ensure that the assessee is provided with reasonable opportunity of being heard.