AHMEDNAGAR AUTO AND ENGINEERING ASSOCIATION,AHMEDNAGAR vs. ITO, WARD 1, , AHMEDNAGAR

Despite service of notice, none appeared on behalf of the assessee at the time of hearing nor any application for adjournment has been filed by the assessee. Therefore, this appeal is being decided on the basis of material available on record and after hearing the Ld. DR.

Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the various additions made by the Assessing Officer and thereby determining the total income of the assessee at Rs.3,35,44,438/- as against Nil returned income.

Facts of the case, in brief, are that the assessee is a non-profit association formed under MSE – CDP Programme to facilitate MSME located in Ahmednagar. It filed its return of income on 29.10.2018 declaring Nil income. The case of the assessee was selected for complete scrutiny assessment under the E-assessment Scheme, 2019 on the following issues: “S.No. Issues Business Expenses” i.

The return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) determining the total income at Nil. Since the case was selected for scrutiny, notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee. However, despite number of opportunities granted, the assessee did not file any reply for which the Assessing Officer completed the assessment u/s 144 of the Act and made various additions totaling to Rs.3,35,44,438/- on account of the following:

Before the Ld. CIT(A) / NFAC, the assessee filed certain additional evidences in terms of rule 46A and it was explained that these documents could not be produced before the Assessing Officer due to personal exigencies. The Ld. CIT(A) / NFAC examined the said Rule and found that no such circumstances exist in the case of the assessee. Since the Assessing Officer passed the order u/s 144 of the Act on 11.05.2021 after giving reasonable opportunity of being heard to the assessee and since the assessee was not prevented by any sufficient cause, he rejected the additional evidences filed before him and dismissed the appeal filed by the assessee on the ground that the additions made by the Assessing Officer in the assessment order remained un-proved.

Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds:

We have heard the Ld. DR and perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. A perusal of the order of the Ld. CIT(A) / NFAC shows that he did not accept the additional evidences filed before him by the assessee on the ground that the assessee could not explain before him that it was prevented by any sufficient cause for which those evidences could not be filed before him. A perusal of the assessment order shows that most of the notices were issued by the Assessing Officer during the prevailing Covid period and therefore that itself in our opinion is a sufficient ground on the part of the assessee for not appearing before the Assessing Officer and to file the requisite details. Since the various additional evidences filed before the Ld. CIT(A) / NFAC go to the root of the matter and the assessment proceedings were completed during the then prevailing Covid period, therefore, the Ld. CIT(A) / NFAC in our opinion, should have accepted the additional evidences filed before him and decided the issue as per the fact and law. However, he has failed to do so. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to admit the additional evidences filed before him and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions, if any, before the Ld. CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.