Vinaylal Shankarlal Prajapati, Surat V. Income Tax Officer, Ward 2(3)(4), Surat

ITA 287/SRT/2023

AI Insights

The case involves Vinaylal Shankarlal Prajapati, the appellant, who appealed against the order of the National Faceless Appeal Centre/Commissioner of Income Tax (Appeals) which confirmed an addition ex parte for the Assessment Year 2014-15. The primary contention was the dismissal of the appeal without a fair hearing, despite the assessee's request for adjournment. The assessee argued that the Assessing Officer disallowed a claim of interest expenditure under Section 40(a)(ia) of the Income Tax Act, 1961, for want of TDS, despite having sought a certificate in Form 26A from the concerned NBFCs. The Tribunal found merit in the assessee's arguments regarding the lack of a fair hearing and restored the matter to the CIT(A) for a decision on merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301561 (ITAT-SURAT)
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 25-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 40(a)(ia); 201(1); 194A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 287/Srt/2023 (Assessment Year 2014-15) (Physical hearing) Vinaylal Shankarlal Prajapati, Block No. 26, Plot No. 1, Shyam Raw House, Godadara Road, Parvat Gam, Surat. PAN No. ABCPP 1291 P Vs. I.T.O., Ward-2(3)(4), Surat. Appellant/ assessee Respondent/ revenue Assessee represented by Shri Suresh K. Kabra, CA Department represented by Shri Vinod Kumar, Sr. DR Date of Institution of Appeal 26/04/2023 Date of hearing 25/05/2023 Date of pronouncement 25/05/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned National Faceless Appeal Centre, Delhi (NFAC)/Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 30/03/2023 for the Assessment Year (AY) 2014-15. The assessee has raised following grounds of appeal: “1. The ld. Faceless CIT(A) has erred and was not justified on the facts of the case and in law in confirming the addition ex parte despite the assessee requesting for adjournment on the date of hearing. 2. Prayer 2.1 The ld. Faceless CIT(A) may be kindly directed to hear the appeal and decide accordingly. 2.2 Personal hearing may be granted. 2.3 Any other relief that your honours may deem fir may be granted. 3. The assessee craves leave to add, amend, modify alter or delete any of the grounds at the time of hearing.” ITA No. 287/Srt/2023 Vinaylal Shankarlal Prajapati Vs ITO 2 4. The appellant craves leave to add, amend, alter, vary and/or withdraw any or all the above grounds of appeal.” 2. At the outset of hearing, the learned Authorised Representative (ld. AR) of the assessee submits that the appeal of assessee was dismissed by the ld. CIT(A) in an ex parte order without giving fair and reasonable opportunity of hearing to the assessee. The ld. CIT(A)/NFAC has not passed the order on merit as mandated under Section 250(6) of the Income Tax Act, 1961. The ld. AR of the assessee submits that the Assessing Officer issued notice dated 31/03/2023 for making submission on or before 24/03/203. The assessee requested adjournment up to 8 th April,2023. However, the ld. CIT(A) passed the order on 30/03/2023 by taking a view that despite granting three opportunities, the assessee has not given his submission. The ld. AR of the assessee submits that the assessee sought adjournment for valid reasons for preparing submission. The ld. CIT(A) passed the order without considering the merit of the case. 3. The ld. AR of the assessee submits that the Assessing Officer disallowed the claim of interest expenditure under Section 40(a)(ia) of the Income Tax Act, 1961 (in short, the Act) for want of TDS. The assessee has paid interest to a well reputed Non-Banking Finance Companies (NBSCs). The assessee has made a request to NBFCs for seeking certificate in Form 26A as per Proviso to Section 201(1) of the Act. The ld. AR of the assessee submits that the assessee has good case on merit and likely to succeed if they are given opportunity to contest the case on merit. ITA No. 287/Srt/2023 Vinaylal Shankarlal Prajapati Vs ITO 3 4. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the assessee was given sufficient opportunity by the ld. CIT(A), the assessee has not furnished their written submission. The ld. Sr. DR for the revenue submits that the matter may be restored back to the file of ld. CIT(A)/NFAC for adjudication on merit. 5. I have considered the submissions of both the parties and perused the record carefully. I find that before the ld. CIT(A), the assessee raised a sole issue about the disallowance under Section 40(a)(ia) of the Act for non-deduction of TDS under Section 194A of the Act. The ld. CIT(A) instead of considering the issue on merit, dismissed the appeal on technical ground that the assessee has not furnished any submission. Considering the fact that the ld. CIT(A) passed the ex parte order, despite seeking adjournment, in my view the assessee deserve one more opportunity to contest on merit. Therefore, the issue is restored back to the file of ld. CIT(A) to consider the issue afresh and pass the order on merit. The assessee is also directed to make the timely compliance and not to seek the adjournment without any valid reasons. 6. In the result, this appeal of assessee is allowed for statistical purposes only. Order announced in open court on 25 th May, 2023 at the time of hearing of appeal. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 25/05/2023 *Ranjan ITA No. 287/Srt/2023 Vinaylal Shankarlal Prajapati Vs ITO 4 Copy to: 1. Assessee – 2. Revenue – 3. CIT 4. DR 5. Guard File By order Sr. Private Secretary, ITAT, Surat