Banu Modern Rice Mill, CHENNAI V. ITO Non Corporate Ward 13(2), CHENNAI

ITA 2830/CHNY/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3792 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 03-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Condonation of delay; Set aside
• Section: 40A(3); 143(3); 142(1); 143(2)

Judgement Text

आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी जी. मंजुनाथा, लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No. 2830/Chny/2018 िनधाŊरण वषŊ/Assessment Year:2014-15 M/s. Banu Modern Rice Mill, No. 6, Thirunagar 1 st Street, 100 Feet Road, Vadapalani, Chennai 600 026. [PAN:AADFB9233F] Vs. The Income Tax Officer, Non Corporate Ward 13(2), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri S. Sridhar, Advocate ŮȑथŎ की ओर से/Respondent by : Shri AR V Sreenivasan, Addl. CIT सुनवाई की तारीख/ Date of hearing : 19.07.2022 घोषणा की तारीख /Date of Pronouncement : 24.08.2022 आदेश /O R D E R PER V. DURGA RAO,, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 14, Chennai, dated 26.02.2018 relevant to the assessment year 2014-15. Besides challenging confirmation of disallowance made under section 40A(3) of the Income Tax Act, 1961 [“Act” in short], the assessee has also challenged the ex-parte order passed by the ld. CIT(A) by raising specific ground. I.T.A. No.2830/Chny/18 2 2. The appeal filed by the assessee is delayed by 160 days in filing the appeal before the Tribunal. By filing a petition for condonation of delay in the form of an Affidavit explaining detailed reasons for the delay, the ld. Counsel for the assessee has prayed for condoning the delay and admitting the appeal for adjudication. The ld. DR has not seriously object to the submissions of the ld. Counsel. Since the assessee was prevented by reasonable cause for the delay in filing the appeal before the Tribunal, the delay is condoned and admitted the appeal for adjudication. 3. Brief facts of the case are that the assessee has filed its return of income for the assessment year 2014-15 on 29.11.2014 admitting an income of ₹.73,260/-. The case of the assessee has been selected for scrutiny and notices under section 143(2) and section 142(1) of the Act. After considering the details furnished by the assessee, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 31.12.2016 by assessing total income of the assessee at ₹.19,00,02,910/- after disallowing the entire expenditure under section 40A(3) of the Act. On appeal, the ld. CIT(A) confirmed the disallowance made under section 40A(3) of the Act. 4. On being aggrieved, the assessee is in appeal before the Tribunal. By referring to para 3.3.1 of the appellate order, the ld. Counsel for the I.T.A. No.2830/Chny/18 3 assessee has submitted that the assessee was not afforded sufficient opportunity to substantiate its case before the ld. CIT(A) and prayed for reasonable opportunity of being heard to the assessee. 5. On the other hand, the ld. DR supported the orders of the authorities below. 6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In the absence of bills/vouchers, the entire expenditure incurred by the assessee was disallowed under section 40A(3) of the Act. On appeal, the ld. CIT(A) confirmed the disallowance ex-parte. So far as opportunity afforded by the ld. CIT(A), the relevant para 3.3.1 of the appellate order is reproduced as under: “3.3.1 The appeal was posted for hearing on 11.12.2017. The ld. AR of the appellant sought for adjournment and the hearing was adjourned to 04.01.2018. Neither the appellant nor its representative appeared for hearing. No written submission or any evidence in support of the grounds of appeal was filed. A final hearing was posted on 31.01.2018 by the CIT(A)’s notice dated 09.01.2018. None appeared for the final hearing too. Under such circumstances, I am constrained to decide the issues based on the material available on record.” From the above, it is evident that after adjourning the hearing to 04.01.2018, since none appeared, immediately after five days i.e., on 09.01.2018, the ld. CIT(A) issued another notice of hearing by fixing the hearing on 31.01.2018. Since none appeared on the second I.T.A. No.2830/Chny/18 4 adjournment, the ld. CIT(A) simply confirmed the disallowance made by the Assessing Officer under section 40A(3) of the Act. Under the above facts and circumstances, we are of the considered opinion that the assessee should have been given sufficient opportunities of being heard to substantiate its case before the ld. CIT(A). Accordingly, we set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to decide the issue afresh in accordance with law after affording sufficient opportunities of being heard to the assessee. We also direct the assessee to furnish the details as may be required by the ld. CIT(A). 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 24 th August, 2022 in Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 24.08.2022 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.