SOBRANSINGH TAHRASRIH PARIHAR,AHMEDABAD V. THE ITO, WARD-7(2)(1), AHMEDABAD

ITA 1704/AHD/2025

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The case involves Sobransingh Tahrasrih Parihar, the assessee, who appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which had dismissed his appeal regarding the disallowance of a commission expense of Rs. 56,73,250 for the Assessment Year 2020-21. The Income Tax Officer had disallowed the expense due to non-compliance in providing necessary agreements and responses during the scrutiny assessment. The CIT(A) dismissed the appeal ex-parte as the assessee failed to comply with multiple notices, attributed to his health issues. The Tribunal found that despite the assessee's health issues, the business continued and compliance could have been made by other means, thus imposing a cost on the assessee but allowing a re-hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783539 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Appeal Filed On: 04-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARESH KARTIK LAXMANBHAI
• Assessee Lawyers: KUSHAL FOFARIA
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Business expenditure; Principle of natural justice
• Section: 143(3); 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.1704/Ahd/2025 Assessment Year: 2020-21 Sobransingh Tahrasrih Parihar 1422, Pashuvanath Township, Nr. Shivaji Chowk, Naroda, Ahmedabad – 382346. (Gujarat) [PAN – AUKPP1502C] Vs. Income Tax Officer, Ward 7(2)1, Ahmedabad (Appellant) (Respondent) Assessee by Shri Kushal Fofaria, AR Revenue by Shri Saresh Kartik Laxmanbhai, SR-DR Date of Hearing 03.11.2025 Date of Pronouncement 04.11.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 11.07.2025 for the Assessment Year (A.Y.) 2020-21 in the proceeding under Section 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2020-21 on 13.01.2021 declaring income of Rs.5,06,268/-. The case was selected for scrutiny to examine the Printed from counselvise.com ITA No.1704/Ahd/2025 (Assessment Year: 2020-21) Sobransingh T Parihar vs. ITO Page 2 of 5 business expenses. In the course of assessment proceeding, complete compliance was not made by the assessee in respect of commission expense of Rs.56,73,250/- as claimed. The Assessing Officer found that the assessee had not made any agreement for payment of commission, which was explained to be for execution of works contract. The AO had made enquiry u/s 133(6) of the Act but none of the parties except one had responded to the notices. Further, the one person who had responded had not disclosed receipt of any commission from the assessee. Therefore, the AO had disallowed the entire commission expense of Rs.56,73,250/-. The assessment was completed under Section 143(3) r.w.s 144B of the Act on 19.09.2022 at total income of Rs.61,79,518/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: - “1. The Ld. CIT(A) has erred in law and on facts of the case in deciding the appeal ex-parte resulting in violation of principles of natural justice. 2. The Ld. CIT(A) has erred in law and on facts of the case in dismissing the appeal without independently adjudicating the merits of the case resulting in violation of Section 250(6) of the Act. 3. The Ld. CIT(A) has erred in law and on facts of the case in confirming disallowance of commission expenditure of Rs.56,73,250/- u/s. 37 of the Act. Printed from counselvise.com ITA No.1704/Ahd/2025 (Assessment Year: 2020-21) Sobransingh T Parihar vs. ITO Page 3 of 5 4. The Ld. AO has erred in law and on facts of the case in disallowing commission expenditure of Rs.56,73,250/- alternatively u/s.40(a)(ia) of the Act. 5. Both the lower authorities have passed the orders without properly appreciating the facts and law in its proper perspective. 6. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in levying interest u/s. 234A/B/C/D of the Act. 7. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Ld. AO in initiating penalty proceedings u/s. 270A of the Act. 8. The Appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 5. Shri Kushal Fofaria, Ld. AR of the assessee, submitted that the Ld. CIT(A) had dismissed the appeal of the assessee for the reason that no compliance could be made before him. He submitted that the assesse was suffering from various health ailments, as a result he couldn’t comply to the notices of Ld. CIT(A). Copy of medical reports in support of health condition of the assessee has been brought on record. The Ld. AR, therefore, requested that another opportunity may be provided to the assessee to explain the matter by setting aside the matter to the file of the Ld. CIT(A). 6. Per contra, Shri Saresh Kartik Laxmanbhai, Ld. SR-DR, supported the order of the lower authorities. He, however, had no objection, if another opportunity was provided to the assessee to explain the matter. 7. We have considered the rival submissions. It is true that the matter was decided by the Ld. CIT(A) ex-parte and the addition made by the AO was not adjudicated on merits. It is found that the Ld. CIT(A) had allowed Printed from counselvise.com ITA No.1704/Ahd/2025 (Assessment Year: 2020-21) Sobransingh T Parihar vs. ITO Page 4 of 5 four opportunities to the assessee but no compliance was made by the assessee on any of the dates. As regards the explanation of the assessee for non-compliance, it is not the case that the business of the assessee had stopped due to his ill health. The assessee was engaged in business of providing various secret solutions viz. access control system, intrusion detection system, video and audio surveillance system, barrier gates, fence bollards & lighting etc. and was supported by adequate manpower in his business. The compliance before the Ld. CIT(A) could have been made by the accountant or the counsel of the assessee. We, therefore, don’t find the explanation of the assessee for non-compliance before the Ld. CIT(A) as reasonable. Therefore, we deem it appropriate to impose a cost of Rs.5,000/- on the assessee which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order. Subject to the payment of cost, the Ld. CIT(A) is directed to allow another opportunity of being heard to the assessee. The assessee is also directed to make compliance before the Ld. CIT(A) in the course of set aside proceeding and respond to his notices and directions. The assessee will be free to file additional evidences in support of the grounds taken before the Ld. CIT(A). The Ld. CIT(A) too be free to call for a remand report from the Assessing Officer on the additional evidences filed by the assessee. In the assessee doesn’t make compliance in the set-aside proceeding, the Ld. CIT(A) will have liberty to decide the matter on merits on the basis of the materials available on record. Printed from counselvise.com ITA No.1704/Ahd/2025 (Assessment Year: 2020-21) Sobransingh T Parihar vs. ITO Page 5 of 5 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 4th November, 2025. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 4th November, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "