UNITED EDUPRENEUR PRIVATE LIMITED,GANDHINAGAR vs. THE INCOME TAX OFFICER, WARD-1(1), AHMEDABAD

The case of the assessee was selected for complete scrutiny assessment in respect of business expenses. The assessee company is engaged in the business of education-based services and products, tour operator service like planning holidays and tours, fabrics and clothings etc. The assessee filed return of income for Assessment Year 2018-19 on 19.10.2018 declaring total income at Rs.2,31,340/-. The return was processed under Section 143(1) of the Income Tax Act, 1961 on 24.02.2019. Reason for selectin of case for scrutiny assessment was “large commission expense and low net profit”. Accordingly, notice under Section 143(2) of the Act was issued on 23.09.2019 and subsequently notice under Section 142(1) of the Act alongwith relevant questionnaire. The assessee filed details such as Profit and Loss Account, Balance Sheet etc. The Assessing officer observed that the assessee has shown turnover of Rs.1,23,98,240/- on which it has claimed commission expenses of Rs.48,92,450/-. The party-wise details of commission expenses were called for. Since the assessee has not responded notices, the Assessing Officer made addition Rs.9,00,400/- under Section 69C of the Act on account of Commission paid and treated the same as unexplained.

Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The Ld. AR submitted that the CIT(A) passed ex-parte order without giving opportunity to the assessee. The Ld. AR further submitted that since the assessee has not received the notices through e-mail, the matter was heard ex-parte, therefore, the Ld. AR prayed that the matter may be remanded back to the file of the CIT(A) for fresh adjudication on merits.

The Ld. DR relied upon the Assessment Order and the order of the CIT(A).

Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the details given by the assessee before the Assessing Officer was noted in paragraph no.3 of the Assessment Order but, after perusal of the Assessment Order, the Assessing Officer has not taken cognisance of the same. Besides this, the CIT(A) also passed ex-parte order without mentioning whether the notices were served to the assessee or not. Therefore, it will be appropriate to remand back this matter to the file of the CIT(A) for proper adjudication of the issue on merit, after taking cognisance of the evidences filed by the assessee before the Tribunal.

In the result, appeal of the assessee is partly allowed for statistical purpose.