Swastik Properties & Developers Vs ITO (ITAT Bangalore)
Appeals restored as CIT(A) cannot dismiss for Non-Prosecution – Opportunity Granted to prove Commission Payments : ITAT Bangalore
Bangalore ITAT has set aside the orders of the NFAC which had dismissed Assessee ’s appeals for non-prosecution & restored the matter to the Assessing Officer for a fresh adjudication on merits.
Swastik Properties & Developers filed its return of income for AY 2018-19 declaring ₹2,63,052/-. The case was selected for scrutiny & the AO passed an order u/s 143(3) on 22.03.2021 making disallowances, notably the Commission expenditure of ₹51,93,324/- (out of total claim of ₹68,87,584/-), where part was allowed & part disallowed despite being of the same nature.
Assessee contended that non-compliance before the AO was due to the COVID-19 situation. Appeals were filed before CIT(A), but were dismissed in limine for non-prosecution, without deciding on merits. Consequent penalty u/s 270A was also confirmed.
There was a delay of 147 days in filing appeal before ITAT, which Assessee explained was due to prolonged illness of its director. Tribunal found this a sufficient cause & condoned the delay. On merits, Tribunal observed that AO had allowed commission for three months but disallowed for nine months based on the same evidence, requiring verification. Since part of the commission was accepted, the disallowance of the balance merely for want of further evidence during COVID-19 needed reconsideration. The disallowance of income tax debited to P&L also required verification to ensure there was no double disallowance, as Assessee might have already added it back in computation.
