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Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI SANJAY GARG & SHRI ASHWANI TANEJA
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 26.02.2014 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10.
The assessee has taken the following grounds of appeal: “1) The Ld. CIT(A) erred in confirming disallowance of 10% of the total expenditure of Rs. 56,56,100/- i.e. Rs. 5,65,610/- incurred in labour charges and site expenses.
2) The Ld. CIT(A) has erred in confirming disallowance of Rs. 29,253/- i.e. 10% of the expenses on adhoc basis u/s 37(1) of the I.T. Act, 1961.
3) The Ld. CIT(A) has wrongly confirmed excess disallowance of Rs. 1,92,370/-.
4) The Ld. CIT(A) erred in passing the ex-parte order without refusing the letter of adjournment filed by the assessee representative.
5) The Learned Assessing Officer has erred in charging interest u/s 234B and 234C of the Income Tax Act, 1961.
6) The Learned Assessing Officer has erred in invoking and initiating the provisions of Section 271(1)(c ) of The Income Tax Act, 1961.
7) The assessee craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.”
2. At the outset, the Ld. A.R. of the assessee has stated that the order of the Ld. CIT(A) is an ex-parte order. He has submitted that the assessee is an illiterate person and is not familiar to income tax proceedings. It has been the first year when the assessee’s case has been selected into scrutiny assessment. The assessee had filed the appeal before the Ld. CIT(A) within the limitation period. However, due to certain reasons, the assessee could not file the required details before the Ld. CIT(A) and sought adjournment for furnishing the same. However, the Ld. CIT(A) rejected the adjournment application and decided the matter on merits without giving proper opportunity to the assessee to present its case. The Ld. A.R., while inviting our attention to ground No.2 of the appeal has submitted that the disallowance of Rs.1,92,370/- has been made in excess by the Assessing Officer (hereinafter referred to as the AO). He has further invited our attention to page 10 which is the copy of the profit & loss account for the relevant year wherein the total site expenses have been claimed at Rs.1,73,505/-. However, the AO, while making the disallowance, has noted the total site expenses at Rs.20,97,200/-. He has further stated that the AO wrongly made the disallowance on adhoc basis at 10%.
The Ld. CIT(A) without going into these details has passed an ex-parte order.
Under such circumstances, we feel that the matter needs reconsideration at the level of the Ld. CIT(A). We, therefore, set aside the impugned order and restore the matter back to the Ld. CIT(A) for deciding the appeal of the assessee on merits afresh after giving the assessee a proper opportunity to present his case. Needless to say, the Ld. CIT(A), if so deems fit, may call for a remand report from the AO in respect of the excess/wrong disallowance of expenses, if any, as discussed above. The assessee is also directed to promptly file the necessary details and evidences before the Ld. CIT(A) upon which he wants to rely upon.
With the above observations, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 23.11.2015.