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Facts
The assessee filed an appeal against an ex-parte order of the CIT(A) which confirmed the addition of commission income. The CIT(A) decided the case ex-parte because the assessee allegedly did not comply with statutory notices.
Held
The Tribunal held that the CIT(A)'s order was passed ex-parte and could not be sustained due to lack of full facts and verification. The matter was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in deciding the appeal ex-parte without affording a proper opportunity of hearing to the assessee.
Sections Cited
143(3), 254
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, B: NEW DELHI
Before: YOGESH KUMAR U.S. & SHRI BRAJESH KUMAR SINGH
This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-27, New Delhi, dated 27.01.2025 [hereinafter referred to as the ‘Ld. CIT(A)’] arising out of the order dated 29.01.2024 order under Section 143(3) r.w.s. 254 of the Income Tax Act, 1961
ITA No.-2478/Del/2025 Anju Sachdeva (hereinafter referred to as ‘the Act’) passed by the DCIT, Central Circle- 18, Delhi, (hereinafter referred to as the ‘Ld. AO’) pertaining to A.Y. 2012-13. 2. The present assessment order in this case was passed to give effect to the directions of the Co-ordinate Bench of the Tribunal in ITA No.- 2993/Del/2017 vide order dated 29.08.2022. The directions of the Tribunal in para no. 15 to 19 of its order are reproduced as under:
“15. If that being so, then how come the assessee has accounted for commission of Rs. 20.12 lakhs when the payer company has shown commission of Rs. 11.08 lakhs in his financial statement. These contradictory facts are emanating from the records. Therefore, it becomes necessary to ascertain true facts and, therefore, we deem It fit to restore the entire issue to the file of the Assessing Officer.
The assessee is directed to demonstrate that the payer company never paid commission of Rs. 48,56,061-00 by bringing cogent material evidence on record.
The Assessing Officer is directed to examine the same and if satisfied with the claim of the assessee, then the Assessing Officer is directed to make addition of Rs. 4,85,606/ being TDS amount on which credit has been taken by the assessee in her return of income.
With these directions, we restore the matter to the file of the Assessing Officer to be decided after affording reasonable and adequate opportunity of being heard to the assessee.
In the result, the appeal of the assessee in is allowed for statistical purposes.”
3. The dispute in this case is that, according to the AO, the assessee had received a sum of Rs. 48,56,061/- as commission income from M/s Laxmi Remote (India) Pvt. Ltd., and had also paid commission of Rs. 20,12,260/-, thus, having a net commission income of Rs. 28,43,801/-. According, to the AO the above 2
ITA No.-2478/Del/2025 Anju Sachdeva commission income of Rs. 48,56,061/- was also reflected in form 26AS of the assessee. However, during the original as well as during the set aside assessment proceedings, the assessee denied having received the said commission income of Rs. 48,56,061/-. In this regard, in response to the show cause notice of the AO, the assessee vide letter dated 14.01.2024 submitted her reply in which the assessee inter alia submitted as under:
“2. That the copy of bank statement relevant to the year under consideration along with the copy of bank statement for the next assessment year also enclosed herewith for your perusal and ready reference stating that the no such amount of commission has received by the assesee.
That the total amount of Commission paid by the company during the year under assessment is amounting to Rs.11,08,708/- and the name of the assesee is not in the corresponding detail of Commission paid which also mentioned in para 2.4 of your notice and copy of the same has also produced with my previous submission along with the copy of Profit & Loss annexure thereto and detail of the Commission paid which is also attached herewith.”
The AO did not accept the above explanation of the assessee and observed that the above document i.e. profits and loss account of M/s Laxmi Remote (India) Pvt. Ltd. showing commission payments of Rs. 11,08,708/-, which did not include the name of the assessee, was not sufficient to establish that the assessee had not received the commission income of Rs. 48,57,061/-. The AO also noted that further the assessee had not clarified the fact that if Laxmi Remote (India) Pvt. Ltd. had paid total commission of Rs. 11,08,708/- then how had the assessee booked commission income of Rs. 20,12,260/-. Accordingly, the AO added a sum of Rs. 3
ITA No.-2478/Del/2025 Anju Sachdeva 28,43,801/- on account of commission received which was also added in the original assessment order u/s 143(3) of the Act, dated 29.01.2015.
Aggrieved with the present assessment order, the assessee filed an appeal before the Ld. CIT(A).
The Ld. CIT(A), even though discussed the case on merits but decided the appeal of the assessee ex-parte on the ground that the despite various opportunities given, the assessee remained non-compliant and did not comply with the statutory notices issued to the assessee during the course of the appellate proceedings. The relevant finding of the Ld. CIT(A) in para no. 5.6 is reproduced as under:
“5.6 It is pertinent to mention here that despite various opportunities provided to the appellant for presenting its case and consequent silence by appellant makes it evident that no such transaction has taken place, appellant remained dormant and have not complied with any of the statutory notices served to her during the course of appellate proceedings. Hence, I have no reason to interfere with a the view taken by the AO. Accordingly, the addition made by the Ld. AO is hereby confirmed and appeal is hereby dismissed.”
Aggrieved with the said order, the assessee filed an appeal before us on the following grounds of appeal:
I. The order is against the facts and law. II. The appellant has not been provided proper opportunity of hearing, which is bad in law and against the principles of natural justice. III. The AO as well as the Ld. CIT(A) erred in not considering the facts and records produced and the material available in their possession.
ITA No.-2478/Del/2025 Anju Sachdeva IV. The Ld. CIT(A) erred in deciding the appeal ex parte without serving notices as per the mode requested by the assessee. V. The Ld. CIT(A) erred in not considering the past conduct and compliance behavior of the assessee before passing an ex-parte order. VI. The Ld. CIT(A) further erred in not considering the adjournment application filed by the assessee. VII. The appellant craves leave to add, amend or alter any ground at the time of hearing.”
At the outset, the Ld. AR submitted that the case was decided ex-parte by the Ld. CIT(A) and the assessee had filed an application for adjournment with reasonable cause which was not considered by the Ld. CIT(A). The Ld. AR further requested that one more opportunity may be given to the assessee to represent the case before the Ld. CIT(A).
The Ld. Sr. DR relied upon the orders of the lower authorities but did not seriously object to the request of the assessee for setting aside the matter to the file of the Ld. CIT(A) for fresh adjudication.
We have heard both the parties and perused the material available on record. The appeal of the assessee was decided ex parte by the Ld. CIT(A). Moreover, the Ld. CIT(A) on merits inter-alia observed that since in form 26 AS, details of mode of payment of commission income and bank account details (if any) in which commission income was transferred, was not mentioned and hence the claim of the assessee could not be verified, wherein, it was claimed by the assessee by furnishing
ITA No.-2478/Del/2025 Anju Sachdeva her bank statement to claim that no such commission income of Rs. 48,56,061/- was received by the assessee. Thus, we observe that one of the ground on which the Ld. CIT(A) decided the appeal against the assessee was that the information and contention of the assessee could not be verified. Therefore, we are of the considered view, that in absence of full facts and verification by the Ld. CIT(A), the order of the Ld. CIT(A) cannot be sustained. Moreover, as noted above, the order of the Ld. CIT(A) was passed ex-parte.
10.1 Therefore, in the interest of justice, we set aside the order of the Ld. CIT(A) and restore the matter to his file for fresh adjudication, after affording due and reasonable opportunity of being heard to the assessee. Further, the assessee will be at liberty to furnish any explanation / evidence in support of her claim before the Ld. CIT(A).
Therefore, the grounds filed by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 03rd NOVEMBER, 2025.