Prithvi Steel Rolling Mills Private Limited Vs DCIT (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT) Jaipur addressed an appeal by Prithvi Steel Rolling Mills Private Limited, challenging the Commissioner of Income Tax (Appeals) [CIT(A)]’s order, which had upheld an addition of Rs. 7,49,610 under Section 40A(3) of the Income Tax Act for cash payments exceeding the permissible limit to transporters. The Assessing Officer (AO) had disallowed these payments, citing the assessee’s failure to comply with the statutory limit of Rs. 35,000 for cash transactions. The CIT(A) dismissed the assessee’s appeal due to non-compliance with notices issued during the appellate proceedings.
The ITAT, however, decided to remand the case back to the CIT(A) for a fresh decision, providing the assessee another opportunity to be heard. The tribunal acknowledged the assessee’s non-compliance with two specific notices but recognized the need to address the substantive issue of the Section 40A(3) disallowance on its merits. To ensure the assessee’s future cooperation, the ITAT imposed a cost of Rs. 2,000, directing the assessee to deposit the amount into the “Prime Minister’s National Relief Fund” and provide the receipt to the CIT(A) before the remanded proceedings begin. The ITAT’s decision aims to balance procedural fairness with the assessee’s obligation to participate in appellate proceedings, ensuring that the matter is adjudicated after a proper hearing.
