INTRA ACCESSORIES,MORADABAD vs. ITO, WARD 2(1), MORADABAD

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ITA 1623/DEL/2023Status: DisposedITAT Delhi03 November 2023AY 2016-17Bench: me that during the online assessment proceedings, it was not able to upload the required documents due to some technical problems. In view of the submission given by the appellant and also in the interest in natural justice, one more opportunity is required to be given to the appellant.3 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee deserved one more opportunity to present its case properly. Therefore, the issue was remitted back to the AO for fresh adjudication after providing the assessee an opportunity of being heard.

What were the facts?

The Assessing Officer (AO) disallowed 25% of the total commission paid by the assessee to Indian Oil Corporation, adding it to the total income. The CIT(A) initially directed the AO to verify the claim, but later upheld the assessment order without such verification.

What were the issues?

Whether the CIT(A) erred in confirming the addition without ensuring the AO acted upon the directions to verify the expenditure claim, and whether the disallowance was arbitrary without rejecting the books of accounts.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI

For Appellant: Shri Mohammed Ammar, CA, Shri Tariq Nafees, Advocate

For Respondent: Shri Baldev Singh Negi, Sr. DR

Hearing: 31.10.2023

PER SHAMIM YAHYA, ACCOUNTANT MEMBER :

This appeal filed by the assessee is directed against the order of ld.

CIT (Appeals)/National Faceless Appeal Centre (NFAC) dated 28.03.2023 for the Assessment Year 2016-17.

Grounds of appeal taken by the assessee read as under :-

“1. The Ld. CIT (A), NFAC has failed to appraise the fact that Ld. CIT(A), Moradabad had issued directions to the AO to verify the claim of expenditure made by the appellant which were not acted upon by him till date. Hence, affirmation of original assessment order by the Ld. CIT(A), NFAC is a nullity in the eyes of law.

2 /Del./2023 2. That the Ld. CIT(A), NFAC has erred on facts and under the law in confirming the addition of Rs.7,98,521.00 to the total income of the appellant because; (i) The Ld. CIT(A) has failed to appraise the fact that the AO, without rejecting the books of accounts of the appellant firm, arbitrarily disallowed a sum of Rs.798521.00 i.e. 25% of the total sales commission of Rs.3194086.00 paid to Indian Oil Corporation. (ii) The Ld. CIT (A) has failed to appraise the fact that the entire commission amount of Rs. 3194086 paid to IOC was paid through account payee cheques/RTGS after deduction of tax at source.”

Brief facts of the case are that assessment order in this case was passed under section 144 of the Income-tax Act, 1961 (for short 'the Act') and 25% of total commission on sale expenses was disallowed and added at Rs.7,98,521/-. Upon assessee’s appeal, ld. CIT (A) noted that assessee has not submitted the necessary details. Hence, ld. CIT (A) provided one more opportunity vide letter dated 14.06.2019 which is as under :-

“ In this case, the assessment order was passed u/s 144 on 06.11.2018. The AO disallowed 25% of the total commission on sales amounting to Rs.31,94,086/- claimed by the appellant. The appellant has submitted before me that during the online assessment proceedings, it was not able to upload the required documents due to some technical problems. In view of the submission given by the appellant and also in the interest in natural justice, one more opportunity is required to be given to the appellant. Therefore, you are directed to verify the necessary documents after giving proper opportunity of being heard to the appellant and submit a factual report on this issue. Your report should be submitted on or before 21.06.2019”

Thereafter, no communication was received and the ld. CIT (A) proceeded to uphold the assessment order.

Against this order, assessee is in appeal before us. We have heard both the parties and perused the records. remit the issue to the file of AO. AO shall pass an order after giving the assessee an opportunity of being heard.

In the result, this appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 2nd day of October, 2023.

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