What did the Tribunal hold?

The ITAT found that the CIT(A) dismissed the appeal ex parte without affording sufficient opportunity. To ensure substantial justice, the ITAT set aside the CIT(A)'s order and restored the matter for fresh adjudication.

The assessee's appeal was dismissed ex parte by the CIT(A) for not substantiating its claim. The assessee contended that the CIT(A) did not provide sufficient opportunity and acted arbitrarily in calculating fringe benefits.

What were the issues?

Whether the CIT(A) followed principles of natural justice by providing adequate opportunity to the assessee and whether the calculation of fringe benefits was arbitrary.

Tf Marketing Consultants Pvt… vs Addl. CIT, New Delhi | ITAT Delhi 2015

Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI

For Appellant: Shri Rahul Kampani CA espondent by :, Shri Yatendra Singh Sr. DR

Hearing: 24/07/2015

order : 09/10/2015. O R D E R PER S.V. MEHROTRA, A.M..: This appeal, preferred by the assessee, is directed against the order dated 7-8-2013, passed by the ld. CIT(A)-19, New Delhi in appeal no. 113/2012-13, relating to A.Y. 2009-10. Following grounds have been raised: “a) The order of the learned (IT (A) 19 is against the principles of natural justice as he has not afforded us sufficient opportunity to present our case and as also not taken cognizance of our appearance before him on 11 July 2013. Further the purported speed post receipt dated 23/07/2013 through which the notice for hearing on 01/08/2013 was sent also does not find a place in the onsite records of the postal department on the site www.indiapost.gov.in/tracking.aspx b) The demand of the learned (IT(A) is totally unjustified, illegal and without any basis. He has acted in a highly arbitrary manner whereby he has ignored all the contents and claims made in the return and has solely relied upon his discretion in calculating the value of Fringe Benefits. c) The value of fringe benefit as shown in ITR-V is Rs24839=00(Pg 2 and tax on the same works out to Rs8455=00 which has been duly paid. Further more in the computation of fringe benefits(Pg 13 ) the same figure is furnished by the assessee against which he has deposited Rs.11489=OO as Advance tax thus entitling him to a refund of Rs3030 (page 13 of ITR-6). d) The calculation of value fringe benefit as shown in schedule Fb is Rs190606=OO (Pg.26 ) ,the amount of expenditure, which after applying the relevant slabs the value of fringe benefits works out to Rs.24389=OO.He has totally ignored these figures while calculating the value of fringe benefits and further more when the Income tax return, which is part of the composite return filed, was available with him for verification of the figures of expenditure (ON Pg 8) and calculation of the value of fringe benefits the learned AO should have taken cognizance of the figures on record to arrive at the figure of fringe benefits. e) The learned AO has picked up the figure of fringe benefits from item no. 24A wherein we were required to mention the value of fringe benefits where as we have erroneously mention the value of expenditure. Since in the claiming Part -C of the ITR-6 the figure of Rs24389=00 matches with the schedule FB of the form there is no reason for the learned AO to take the figure other than that mentioned in the claiming part and the Schedule FB annexed there to.”

2. Before us, learned counsel for the assessee at the very outset submitted that the learned CIT(A) has dismissed the assessee’s appeal, ex parte, qua the assessee.

He submitted that the order passed by the learned CIT(A) being non-speaking order and cannot stand in the eye of law.

Ld. DR relied on the order of ld. CIT(A).

I have heard rival submissions and perused the material available on record. The learned CIT(Appeals) has disposed of the assessee’s appeal, ex parte, qua the assessee, observing that assessee did not substantiate its claim. Since assessee was not present, therefore, in order to provide substantial justice to assessee, I consider it appropriate to provide one more opportunity in conformity with the principles of natural justice. The order of ld. CIT(A) is accordingly set aside and the matter is restored back to his file to decide the appeal de novo in accordance with law, of course, after affording reasonable opportunity of being heard to the assessee. I order accordingly.

In the result, assessee’s appeal stands allowed for statistical purposes only. Order pronounced in open court on 09/10/2015.

TF MARKETING CONSULTANTS PVT. LTD.,NEW DELHI vs. ADDL. CIT, NEW DELHI

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