METROPOLITAN ENGG. CO-OPT SOCIETY LTD.,NADIA vs. JCIT, RG.NADIA, NADIA

O R D E R

Per Dr. Arjun Lal Saini, AM:

“Thus, it can be seen that labour was engaged through labour contractors which attracted TDS. Similarly, the repair and maintenance was through contract work. The carriage also involved payments where individual transactions exceeding 20,000/- attracting TDS u/s. 194C of the IT Act. 7.2 Accordingly, a show cause notice was issued to the assessee as under: "You have incurred substantial expense under the head labour, repair of machine, dumper and machinery hire charges etc. 1) Please produce the evidence of tax deduction and deposit. Please also produce books of accounts, challans and vouchers relating to it. If you are unable to produce the above evidence, you are required to clarify why the expense claimed should not be disallowed uls.40(a)(ia) of the IT Act. Similarly, you are required to clarify your dealings with other sundry creditors with supporting evidence. 7.3 There has been no compliance to the enhancement notice in the given date or in the subsequent dates. Therefore, the facts as available in the record is taken into consideration. On verification of the profit and loss account in the general section, it is seen that the expenses incurred on the above heads is as under:

Sl.N Head Amount(Rs.) o 1 Carriage 1,14,855.00 2. Labour Charges 52,35,056.00 3. Repair & 2,31,190.00 Maintenance Total : 55,81,101.00

As the above expenditure has been incurred without tax deduction at source the expenditure claimed was required to be disallowed u/s.40(a)(ia) of the IT.Act. Therefore, the expenditure claimed as being disallowed and the income enhanced accordingly. Add: Rs.55,81,101/- 8. In the result, the appeal is dismissed and enhanced.”

1) For that on the facts and in the circumstances of the case the appeal order of the Ld. CIT. (Appeals)- XXXVI, Kolkata was not fair and proper and on the other hand it was made contrary to law, sound and adequate principles. 2) For that on the facts and in the circumstances of the case, Ld. C.IT. (Appeals) was not at all justified in completing the case and passing the order exparte without giving the reasonable opportunity of being heard and he should have considered that the last date of hearing of the case and the show cause notice was a holiday for Muharram and the humble appellant found the office was closed on the date of hearing and no further notice was issued for the sake of natural justice. 3) For that on the facts and in the circumstances of the case, Ld. CIT. (Appeals) was not at all justified in confirming the disallowance & addition of Rs.8,30,757.00 u/s. 40(a)(ia) of the I.T. Act, 1961 . 4) For that on the facts and in the circumstances of the case, Ld. C.IT. (Appeals) was not at all justified in adding back the sum of Rs. 55,81,101.00 without allowing a single opportunity of being heard before deciding the case exparte and prior to making such huge addition the Ld. CIT (Appeals) should have given the reasonable opportunity to the appellant to rebut the contention of the Ld. C.I.T. (Appeals) when there were no such additions made by the Ld. I.T.O.at the assessment stage. 5) For that having regards to the facts of the case the Ld. CIT. (Appeals) should have considered the fact that there was a declared holiday on the date of hearing of the show cause notice and as such he should have issued another notice of hearing of the said show cause notice to the humble appellant prior to making the further addition of Rs. 55,81,101.00 which was prejudicial to the interest of the humble appellant. 6) For that having regards to the facts of the case the Ld. CIT (Appeals) should have allowed deduction of Rs. 50,000.00 u/s. 80P(2)(c)(ii) of the IT. Act 1961. 7) For that both the Ld. C.IT. (Appeals) and the Ld. I.T.O. erred both in points of law and on facts. 8) For that the humble appellant craves leave to take additional grounds and amend grounds at the time of hearing.

5.1 At the time of hearing ld. AR for the assessee has highlighted that the order passed by ld. CIT(A) is without giving an opportunity of being heard to the assessee. The Ld. AR has submitted that the given date in the enhancement-cum-show cause notice was 15.11.2013 and unfortunately as the date of hearing fixed on 15.11.2013 was declared a sad day i.e. ‘Mourning Day’, and the office of the ld. CIT(A) remained closed and as such the assessee could not comply with the show cause notice on 15.11.2013, for which the case was finally decided ex-parte and the assessee was not given any further opportunity of being heard by the ld. CIT(A).

5.2. On the other hand, ld. DR for the revenue has primarily relied on the stand taken by the AO, which we have already noted in our earlier para and the same is not being repeated for the sake of brevity.

5.3. Having heard the rival submissions, perused the material on record, we are of the view that there is merit in the submissions of the assessee, as the proposition canvassed by the ld. AR for the assessee are supported by the facts narrated by him above. The date of hearing fixed by the ld. CIT(A), on 15-11-2013, and on that date the assessee went to attend the office of ld. CIT(A) to file written submission but on 15th November 2013 was declared a holiday, therefore, being official holiday, the office of ld. CIT(A) was closed and the assessee could not file the written submission. However, ld. CIT(A) passed the order without getting