Mycon Construction Ltd Vs DCIT (ITAT Bangalore)
Books rejected without Defects, Appeal dismissed without Reading – ITAT Restores Justice- Appeal Cannot Be Dismissed Without Considering Written Submissions
Bangalore ITAT has partly allowed the appeal of Mycon Construction Ltd. for AY 2018-19, holding that CIT(A) had acted in violation of principles of natural justice by dismissing assessee’s appeal without considering written submissions duly filed in faceless appellate proceedings. However, Tribunal upheld disallowance of delayed employee contributions to PF & ESIC in line with the Supreme Court ruling in Checkmate Services Pvt. Ltd..
Assessee, engaged in civil & structural contracts, had filed its return declaring income of ₹33.37 lakh. The case was selected for scrutiny due to low profitability & other risk parameters. AO rejected the books of account u/s 145(3), alleging unverifiable expenses & low profit margin, & estimated net profit at 1% of turnover, thereby making additions of over ₹9.11 crore. Further, a disallowance of ₹27.36 lakh was made u/s 36(1)(va) for delayed deposit of PF & ESIC contributions collected from employees.
In appeal, Assessee filed detailed submissions on 28.02.2024 with supporting documents, but CIT(A) ignored these & dismissed the appeal in limine, holding that no submissions were filed. Even a rectification petition highlighting the error was rejected.
