Case Law Details
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.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
By way of present appeal, the assessee-appellant has challenged order dated 20.09.2024, passed by Learned CIT(A), NFAC, Delhi, relating to the assessment year 2012-13.
Vide impugned order, u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), Learned CIT(A) has dismissed the appeal filed by the assessee, while observing that the appellant, during the appeal proceedings, remained non compliant, and further that he was constrained to be in agreement with the findings recorded by the Assessing officer, as regards addition of Rs. 7,49,610/- made while resorting to provisions of Section 40A(3) of the Act.
2. The assessment order was passed on 17.12.2019 u/s 147 r.w.s. 143(3) of the Act, on the ground that the assessee had failed to comply with the statutory provisions of section 40A(3) of the Act, and as such ,the payments made by the assessee company to transporter, to the tune of Rs. 7,49,610/- were disallowable.
3. Arguments heard. File perused.
4. Admittedly, assessment order came to be passed, while making addition of Rs. 7,49,610/-, to the returned income of Rs. 2,76,31,880/-, relating to the assessment year 2012-13.
The Assessing Officer took into consideration 14 cash payments, as available from the cash book furnished by the assessee, and relating to transport. He found that various payments made in case of transporter were found to have exceeded the limit prescribed as per Section 40A(3) of the Act i.e. the limit of Rs. 35,000/-. Said 14 payments find mentioned in para 3 of the assessment order. Same are not being reproduced, as we find that the impugned order passed by Learned CIT(A), NFAC has not been passed on merits, or after discussing the claim of the appellant.
5. DR for the Department has pointed out that several notices were issued by NFAC to the appellant, but there was no response from his side. At the same time, Learned DR has not objected to remitting of the appeal to Learned CIT(A) for decision afresh.
6. File reveals that 4 notices were issued by NFAC to the assessee-appellant i.e. on 29.12.2020, 11.02.2022, 9.07.2024 and 25.07.2024. The appellant remained non-compliant as regards notice dated 29.12.2020 and 25.07.2024. As regards other two notices, on his behalf adjournment was sought.
7. It is true that the assessee did not participate in the proceedings in reply to notice dated 29.12.2020 issued for 13.01.2021 and notice dated 25.07.2024 issued for 30.07.2024, but at the same time, prayer has been submitted that another opportunity be afforded to the appellant to participate in the appeal proceedings before Learned CIT(A), NFAC.
Having regard to the issue involved, we deem it a fit case to remit the matter to Learned CIT(A), NFAC for decision afresh, after providing an opportunity to the assessee-appellant of being heard. Keeping in view the attitude of the appellant, in being non responsive to the two notices dated 29.12.2020 and 25.07.2024 we deem it just to burden the appellant with costs of Rs. 2000/-. Accordingly, we direct the appellant to deposit costs in “Prime Minister’s National Relief Fund” and produce the receipt before Learned CIT(A) before commencement of the proceedings by way of remand.
Result
8. So as to provide another opportunity to the assessee-appellant in the appellate proceeding before the Learned CIT(A), NFAC, this appeal is disposed of for statistical purposes, and the matter is remitted to Learned CIT(A) for decision afresh. The assessee-appellant to participate in the proceedings before Ld. CIT(A) as and when directed to do so.
File be consigned to the record room after the needful is done by the office.
Order pronounced in the open court on 06/02/2025.
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