Fakirchand Damodardas Agrawal, Ahmedabad V. The Dy.CIT, Circle-1(2), Ahmedabad

ITA 370/AHD/2022

AI Insights

The case involves Fakirchand D. Agrawal, the appellant, contesting an order from the National Faceless Appeal Centre (NFAC), which upheld an addition of Rs. 75,00,000 to the assessee's income for the Assessment Year 2012-13. This addition was initially made by the Deputy Commissioner of Income Tax (DCIT), Circle-1(2), Ahmedabad, under sections 143(3) and 263 of the Income Tax Act, 1961, due to insufficient proof of sales affected by 18 persons to whom the commission was paid. The CIT(A) under NFAC did not consider the additional evidence and submissions provided by the assessee, leading to the Tribunal's decision to remand the case for a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125397 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-06-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 21-09-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 40(a)(ia); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./ I. T. A. No . 370/Ahd/20 22 ( नधा रण वष / A ss es sment Year : 2012-13) Fak ir ch a nd D am o da rd a s A g ra w a l B - 10 3 , An mo l R e s i den c y- I V, N r . B SN L Te le ph one Exc ha ng e , G ho d a C a m p, A h me da ba d - 3 8 0 0 0 4 बनाम/ Vs . T h e De p ut y C om m i ss i o ne r o f In co m e T ax C ir c l e 1 ( 2 ) , A h m e da b ad थायी लेखा सं./जीआइआर सं./P A N/ G I R N o . : A D E P A 0 7 6 9 M (अपीलाथ /Appellant) . . ( यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri Vipul Khandhar, AR यथ क ओर से/Respondent by : Shri Atul Pandey, Sr. D.R. स ु नवाई क तार ख / D a t e o f H e a r i ng 05/06/2023 घोषणा क तार ख /D a t e o f P ro n o u nc e me n t 09/06/2023 O R D E R PER Ms. MADHUMITA ROY - JM: The instant appeal filed by the assessee is directed against the order dated 08.08.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 27.12.2017 passed by the DCIT, Circle- 1(2), Ahmedabad under section 143(3) r.w.s. 263 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2012-13. ITA No. 370/Ahd/2022 (Fakirchand D. Agrawal vs. DCIT) A.Y.– 2012-13 - 2 - 2. The addition of Rs.75,00,000/- on account of commission payments to persons covered under Section 40(a)(ia) of the Act is subject matter before us. 3. The brief facts leading to the case is this that the assessee paid commission of Rs.75,00,000/- to 18 persons on sale of certain products. The assessee credited the amount on 31.03.2012 and deducted tax on such payment. In the absence of any specific proof regarding sales affected by such persons, the same was added to the total income of the assessee. Relevant to mention that the said order was passed under Section 263 r.w.s. 143(3) of the Act on 27.12.2017 by the Ld. A.O. 4. In appeal, the matter was ultimately decided by CIT(A) under NFAC, Delhi on 08.08.2022 in the absence of any compliance made by the assessee despite notices issued providing opportunity under Faceless Scheme Appeal, 2021 notified on 28.12.2021 to make additional submission, if any. 5. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. In fact, it is the case of the assessee that before the First Appellate Authority, the assessee submitted additional evidences under Section 46A of the Act and remand report were directed to be submitted by the Ld. CIT(A). In that view of the matter, the assessee’s submission is this that the order impugned has been passed without considering the additional evidence so submitted by the assessee and the reply filed by the assessee against the remand report furnished by the Ld. AO. In fact, the assessee further replied to the remand report so submitted by the Ld. AO as it was, in turn, furnished to the assessee ITA No. 370/Ahd/2022 (Fakirchand D. Agrawal vs. DCIT) A.Y.– 2012-13 - 3 - for his comment. Initially, the representative of the Department could not reply on this aspect. However, as per the direction passed by us on 1 st June, 2023, report/comment dated 02.06.2023 by the Ld. CIT-DR ‘C’ Bench has been furnished today at the time of hearing of the matter. 6. We have perused the entire set of documents submitted by Ld. DR, wherefrom, it appears that on 02.08.2019, the assessee submitted certain additional evidences with a request to admit the same by the Ld. CIT(A) for the ends of justice under Section 46A of the Act. Upon receiving those additional evidences, a remand report has been sought for from the Ld. AO and on 01.10.2019, the Ld. AO prepared the remand report and submitted the same before the Ld. CIT(A)-10, Ahmedabad. Further that, the assessee submitted its written submission on 18.09.2020 against the said remand report so furnished to the assessee by the Ld. CIT(A) for its comment. The Ld. DR submitted all the details of the proceeding as mentioned hereinabove before us with all his fairness. Upon perusal of these documents, it appears that the submission made by the assessee that the order impugned passed by the Ld. CIT(A) under NFAC has been made without considering the additional evidence and the submission made by the assessee and also the reply to the remand report submitted by the assessee before the Ld. CIT(A) seems to be reasonable. Thus, under these present facts and circumstances of the case, in our considered opinion, the principle of natural justice should have been observed in its true sense by the Ld. CIT(A). Thus, we remand the issue to the file of the Ld. CIT(A) with a direction upon him to provide another opportunity of being heard to the assessee in order to prevent the miscarriage of justice. The Ld. CIT(A), NFAC is further directed to pass a reasoned order ITA No. 370/Ahd/2022 (Fakirchand D. Agrawal vs. DCIT) A.Y.– 2012-13 - 4 - after considering the objection filed against the remand report by the Ld. AO and the reply thereto filed by the assessee, the additional evidences on record or any other additional evidence which assessee may choose to file at the time of hearing of the appeal strictly in accordance with law. 7. In the result, assessee’s appeal is allowed for statistical purposes. This Order pronounced on 09/06/2023 Sd/- Sd/- (ANNAPURNA GUPTA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 09/06/2023 True Copy S. K. SINHA आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं%धत आयकर आय ु 'त / Concerned CIT 4. आयकर आय ु 'त(अपील) / The CIT(A)- 5. *वभागीय -त-न%ध, आयकर अपील य अ%धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड3 फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad