In a recent case, the Income Tax Appellate Tribunal, Bangalore ( ITAT ) has directed the Commissioner of Income-tax (Appeals), CIT(A) to restore and review the Income Tax Appeal filed by the assessee to examine the payment of Rs. 40 lakhs, which the Assessing Officer disallowed under section 37 due to the assessee’s failure to provide adequate documentation.
The assessee M/s. Surya Homes filed an appeal against an order dated 01.08.2024 passed by CIT(A), with relevance to the Assessment Year (AY) 2018-19.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The matter originated from a prior decision by the CIT(A), who dismissed the assessee’s appeal without addressing its merits, despite the assessee’s contention that the actual payment made to Nikhil Deepak Singh was only Rs.15 lakhs, and not Rs.30 lakhs as considered by the AO.
The assessee, made a mistake by paying TDS(Tax Deducted at Source) twice, first at the time of payment to Nikhil Deepak Singh and then again at the time of receipt of the bill, resulting in an incorrect TDS amount of Rs. 30 lakhs being reflected in Form 26Q, instead of the actual payment of Rs. 15 lakhs.
The counsel representing the Appellant ,H.Guruswamy argued that the CIT(A) decided the issue ex-parte without giving further opportunities to the assessee.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The Form 26Q was revised to correct payment.Further requested that the matter be sent back to the AO for verification of the actual payment made to Nikil Deepak Singh and to prove the genuineness of payments made to Himani Rajashekar Naidu.
The Counsel representing the Respondent, Subramanian, argued that the assessee was given proper opportunities by the authorities below, but failed to prove the genuineness of payments with cogent material, and thus the AO rightly disallowed the payment of Rs.40 lakhs under section 37 of the Act.
The two-member bench comprising Laxmi Prasad Sahu (Accountant Member) and Soundararajan K (Judicial Member) reviewed the case and observed that the CIT(A) had failed to provide adequate opportunity to the assessee.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
Recognizing the importance of justice, the tribunal decided to remit the matter back to the CIT(A) for fresh consideration. It directed the CIT(A) to re-evaluate the assessee’s case and address the appeal on its merits after ensuring due process.
As a result, the tribunal allowed the appeal for statistical purposes
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
