SHRISHTI TECHNOLOGIES,BADDI V. INCOME TAX OFFICER, PARWANOO

ITA 96/CHANDI/2024

AI Insights

The case involves Shrishti Technologies appealing against the order of the Commissioner of Income Tax (Appeals) which had dismissed their appeal for want of prosecution. The original assessment by the AO included disallowances for certain expenses which the Review Unit added back to the income of the assessee. The Tribunal found that the AO had accepted the assessee's calculations but did not follow the proper procedure for the additions made by the Review Unit. The Tribunal also noted that the CIT(A) failed to decide the issues on merit as required under Section 250(6) of the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35617 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: MANOJ KUMAR
• Keywords: TDS
• Section: 250

Judgement Text

"आयकर अपील य अ\u000bधकरण,च\u0010डीगढ़ \u0014यायपीठ, च\u0010डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 96/CHD/2024 \rनधा\u0011रण वष\u0011 / Assessment Year. : 2018-19 Shrishti Technologies, Plot No. 123, EPIP, Phase-1, Jharmajri, Baddi, Solan (HP). Vs The ITO, Parwanoo. \u0016थायी लेखा सं./PAN NO: ABAFS7294P अपीलाथ\u001a/Appellant \u001b\u001cयथ\u001a/Respondent Assessee by : Shri Manoj Kumar,CA Revenue by : Dr. Ranjit Kaur, Addl. CIT Sr.DR Date of Hearing : 17.03.2025 Date of Pronouncement : 18.03.2025 O R D E R HYBRID HEARING PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 01.12.2023 passed for assessment year 2018-19. 2. It emerges out from the record that appeal of the assessee was dismissed by the CIT(A) for want of prosecution instead of deciding it on merit. A perusal of the assessment ITA No.96/CHD/2024 A.Y. 2018-19 2 order would reveal that ld. AO has passed an assessment order without any coherence with the procedure or the detail on the record. The relevant part of the assessment order reads as under : ASSESSMENT ORDER 1. The case was selected for complete scrutiny assessment under the E- assessment Scheme,2019 on the following issues :- 2. On the basis of material available on record, the explanation filed by the assessee on the issue is accepted and hence no addition is made. 3. The assessment of income is done as per computation sheet and sum payable is determined as per demand notice. As per direction of Review Unit, the following other expenses are added back to the assessee's total income . 1. The expenses under head \"Diwali Expenses\" for Rs.76,040/- is not admissible expenses as this expenses is not related to the business of the assessee. Thus, the total expenses towards Diwali Expenses amounting to Rs.760.40/- is disallowed and added back to the income of the assessee. 2. The expenses under head\" Pooja expenses\" for Rs. 1,48,612/- is not admissible expenses as this expenses is not related to the business of the assessee. Thus total expenses towards pooja expenses amounting to Rs 1,48,612/- is disallowed and added back to the income of the assessee. 3. The expenses under Head \"Rent Godown\" for Rs 6,72,000/- is not admissible as the TDS is not deducted as required u/s194l of the Act. Thus, 30% of the total expenses towards godown Rent is disallowed of Rs.2,01 ,600/-and added back to the Income of the assessee. 4. The penalty provision u/s 271C of the act is initiated on the assessee for non-deduction of TDS for expenses under Head Rent Godown u/s 1941 of the Act. Yours faithfully, Additional / Joint I Deputy I Assistant Commissioner of Income Tax income-tax Officer, National e-Assessment Centre, Delhi.” ITA No.96/CHD/2024 A.Y. 2018-19 3 3. A perusal of the above order would reveal that AO after verification of the record accepted the calculations made by the assessee. However, the Review Unit has made certain additions. It is pertinent to note that job of the Review Unit was to review the assessment made by the AO and if any changes are required, then such suggestion is to be remitted back to the AO. The AO thereafter confront the assessee and made the assessment but no such procedure has been followed by the AO while making these adhoc disallowances out of Diwali Expenses, Pooja Expenses & Rent Godown. There is no justification to make these additions. 4. The ld. CIT(A) ought to have perused the details available on the record and thereafter decided these issues on merit as contemplated in sub-section (6) of Section 250 of the Income Tax Act but no such procedure was adhered to. 5. Before us, assessee has submitted the complete details and also apprised as to how these expenses were incurred for the purpose of business and no disallowance ought to have been made. We are of the view that correct procedure has not been followed by the AO while making unnecessary ITA No.96/CHD/2024 A.Y. 2018-19 4 additions to the income of the assessee. Accordingly, we allow this appeal and delete the additions. 6. In the result, appeal of the assessee is allowed. Order pronounced on 18.03.2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश क\u0002 \u0003ितिलिप अ\tेिषत/ Copy of the order forwarded to : 1. अपीलाथ\u000f/ The Appellant 2. \u0003\u0010यथ\u000f/ The Respondent 3. आयकर आयु\u0014/ CIT 4. िवभागीय \u0003ितिनिध, आयकर अपीलीय आिधकरण, च\u0018डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड\u001c फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "