2021 (4) TMI 106 - AT - Income Tax

Tribunal directs CIT(A) to reconsider order, emphasizes fair hearing

Smt. Ashmi Gupta Versus The DCIT, Centralized Processing Centre, Bengaluru

The Tribunal set aside the ex-parte order of the First Appellate Authority and directed the CIT(A) to pass a speaking order after giving the appellant a ... Order passed u/s. CIT-A u/s 250(6) - non speaking order - Disallowance on account of late payment of ESI and EPF and Labour Welfare Expenses - HELD THAT:- Considering the fact that the order passed by the Appellate Authority ld. AR was an ex-parte order the ld. AR was required to address the reasons for staying non-represented before the said Authority and not availing of the Appellate Forum provided under the Statute. As deemed appropriate to set aside the impugned order back to the file of the CIT(A) with the direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. It is directed that fresh/supporting evidences etc. which the assessee may need to file shall be admitted. The assessee in its own interests is directed to ensure full and proper participation before the said authority. Appeal of the assessee is allowed for statistical purposes. Issues: Appeal against CIT(A) order on disallowances of ESI, PF, and Labour Welfare Fund; Request for additional evidence and grounds; Ex-parte order due to non-receipt of notices.Analysis:1. The appeal was filed against the CIT(A) order dated 08.11.2019 regarding the disallowances of Rs. 3,95,665 for late payment of ESI and EPF, and Rs. 11,575 for Labour Welfare Fund for the assessment year 2018-19.2. The appellant contended that the CIT(A) erred in upholding the disallowances made by the Deputy Commissioner of Income Tax, Centralized Processing Center, Bengaluru, without justification.3. The appellant also argued that the disallowance of Rs. 11,575 for Labour Welfare Fund was incorrect as it had already been added back in the computation of income.4. The appellant requested permission to add, alter, amend, or vary the grounds of appeal and to submit additional evidence if necessary for the proper prosecution of the case.5. During the hearing, the appellant's representative argued that the relief sought in the appeal was legally maintainable.6. The Appellate Authority noted that the order was ex-parte as the appellant did not appear and address the reasons for non-representation despite notices being sent.7. The appellant claimed to have not received any notices for the scheduled hearing dates, leading to non-representation.8. The Senior DR acknowledged the non-receipt of notices and expressed no objection to the matter being remanded for a decision on merit after hearing the appellant.9. Upon reviewing the material on record, it was found that the additions were made based on the return filed by the appellant, declaring an income of Rs. 22,94,785 on 07.10.2018.10. The First Appellate Authority dismissed the appeal ex-parte due to the appellant's failure to comply with notices, provide documentary evidence, or participate in the appellate proceedings.11. Considering the grounds raised and submissions made by both parties, the Tribunal set aside the order and directed the CIT(A) to pass a speaking order after giving the appellant a reasonable opportunity to be heard.12. The Tribunal allowed the admission of fresh or supporting evidence required by the appellant, emphasizing the importance of full participation before the authority.13. The order was pronounced during a virtual hearing on 24th March 2021, and the appeal of the appellant was allowed for statistical purposes.