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Judgment
PER KRINWANT SAHAY AM
Appeal in this case has been filed by the assessee against the order dated 03.03.2026 passed by the CIT(A)/NFAC, Delhi for the A.Y. 2023-24. Grounds of appeal are as under :-
“In the facts and circumstances of the case and in law, the Hon'ble Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (CIT(A)-NFAC) erred in:
1.deciding the appeal ex parte in violation of the principles of natural justice and without granting to the appellant a fair, proper and meaningful opportunity for making its submission and/or for hearing through video conferencing and hence, the order passed by CIT(A) is without jurisdiction, bad in law, invalid, illegal, unwarranted of facts, is liable to be quashed or annulled in toto.
Without Prejudice to above
2.confirming the disallowance of GST input tax credit written off of Rs. 9,63,799/-, being not allowed to be claimed as credit as per section 17(5) of the CGST Act, 2017, without appreciating the fact that the same is allowable as expenditure incurred for the purpose and in the course of business under section 37(1) of the Act.
3.confirming the disallowance of interest of Rs. 1,49,733/ paid on delayed payment of GST without appreciating the facts that the same is compensatory in nature and not penalty, and hence allowable as deduction.
4.confirming the addition of Rs. 9,41,999/- on the basis that the said amount is reflected in Form 26AS, without appreciating that the said amount represents advance rent which was offered to tax in the subsequent assessment year and that the appellant had requested withdrawal of the corresponding TDS credit in the year under consideration, thereby eliminating any revenue leakage.
5.confirming the disallowance of Rs. 1,98,872/- under section 40(a)(ia) of the Act on account of alleged non-deduction of tax at source without appreciating the explanation along with the documentary evidence furnished during the assessment proceedings.
6.confirming the disallowance of Rs. 84,37,849/- on the ground that the provisions for expenses created by the appellant represent unascertained or contingent liabilities. The learned CIT(A) failed to appreciate that it is well accepted practice that expenses which have accrued as at year-end, but for which invoices or bills have not yet been received, are to be accounted for on an estimated basis. These include services rendered or obligations incurred but not invoiced by the supplier by the close of the accounting year. Further these provisions are reversed in the subsequent year, and TDS is deducted at the time of actual payment or booking of invoice, in full compliance with Chapter XVIIB of the Act. Hence, such estimated expenses are allowable as business expenditure in the year of accrual, as per the principles of real income theory and matching and therefore are allowable as deduction under the provisions of the Act.
7.granting credit of tax deducted/collected at source of only Rs. 75,52,618/- instead of Rs.2,19,57,605/- claimed by the appellant thereby granting short TDS credit by Rs. 1,44,04,987/-
8.erroneously levying ad-hoc interest and fees amounting to Rs. 7,38,906/-
9.The above grounds of appeal are distinct and separate and without prejudice to each other.
10.It is humbly prayed that the reliefs as prayed for hereinabove and/ or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted.”
At the very outset the Ld. Counsel of the assessee brought it to the notice of the Bench that the order in this case has been passed exparte by the Ld. CIT(A) without providing adequate and reasonable opportunity to the assessee of being heard.
It was further brought to the notice of the Bench that the assessee had not filed any submission before the ld. CIT(A) and therefore, the Ld. CIT(A) has dismissed the appeal exparte without considering any documents/ details of the assessee.
Per contra the ld. DR relied on the order of the Ld. CIT(A).
We have considered the findings given by the Ld. CIT(A) in the appellate order and we have also considered the arguments made by the Ld. Counsel of the assessee as well as by the Ld. DR. We are of this considered view that natural justice demands that before taking any decision for passing an order against any applicant adequate opportunity of being heard should be provided. Therefore, in our considered view the assessee deserves one more opportunity. Accordingly, this case is remanded back to the file of the Ld. CIT(A) for fresh adjudication after giving adequate opportunity to the assessee as required under law. The assessee is also directed to cooperate with the revenue in filing all the details and documents in time to get the case adjudicated at the earliest.
In the result, the appeal filed by the assessee is allowed for statistical purpose.