Delay in filing appeals condoned due to illness; expenses disallowance remanded for fresh adjudication.

The ITAT Guwahati condoned the delay in filing appeals by the assessee due to illness, allowing the appeals for hearing. Regarding the disallowance of expenses under section 154, the ITAT held that the assessee was not given a proper opportunity to be heard by the AO and CIT(A), remanding the matter back to the AO for fresh adjudication. The lack of proper opportunity before the authorities led to the appeals being allowed for statistical purposes.

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Issues:
1. Delay in filing appeals before ITAT Guwahati.
2. Disallowance of expenses by AO under section 154 of the Income-tax Act, 1961.
3. Lack of proper opportunity of being heard before AO and CIT(A).

Delay in filing appeals:
The appeals were filed with a delay of 190 days and 221 days respectively. The assessee cited serious illness and prolonged treatment as reasons for the delay. The ITAT noted the reasonable cause for the delay and decided to condone it, allowing the appeals for hearing.

Disallowance of expenses under section 154:
The AO passed an order under section 154 of the Income-tax Act, 1961, for failure to deduct tax at source for remuneration paid to directors of the assessee company. The AO only issued one notice and made the disallowance without hearing the assessee. The CIT(A) dismissed the appeal ex parte without considering the grounds raised by the assessee. The ITAT, referring to a Supreme Court judgment, held that if the assessee did not receive a proper opportunity before the AO, the matter should be remanded back to the AO for fresh adjudication after affording a reasonable opportunity of being heard to the assessee.

Lack of proper opportunity of being heard:
The AO fixed a hearing but the assessee did not appear, leading to the ex parte order. The ITAT found that the assessee did not receive a proper opportunity before the AO, and the CIT(A) passed an ex parte order. Citing the Tin Box Company case, the ITAT set aside the orders of the CIT(A) and directed the matter to be restored back to the AO for fresh adjudication after providing a reasonable opportunity of being heard to the assessee. Consequently, both appeals of the assessee were allowed for statistical purposes.

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