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April 12, 2022

Cost on Assessee for not cooperating during remand proceedings imposed by ITAT

by CA Shivam Jaiswal in Income Tax

Cost on Assessee for not cooperating during remand proceedings imposed by ITAT

Facts and issue of the case

The assessee has filed this appeal challenging the order dated 22.5.2020 passed by Ld. CIT(A), Manguluru and it relates to the assessment year 2007-08.

None appeared on behalf of the  assessee,  even  though  the case was adjourned on an earlier occasion, at the request of the A.R. of the assessee. However, I find that no power of attorney has been filed by the counsel who represented earlier.   Hence, I proceed to dispose of the appeal ex-parte, without presence of the assesse.

Court heard Ld. D.R. and perused the record. The grounds of appeal filed by the assessee relate to the following 3 issues:-

  1. Addition of advance from Directors – Rs.2,77,566/-
  2. Addition of Sundry creditors – Rs.6,57,336/-
  3. Addition of advance received from Director – Rs. 1,00,000/-

Observation of the court

Court heard Ld. D.R. and perused the record. The assessee  is engaged in the business of trading in business. Before formation of the assessee company, the business was carried on by a partnership firm with Dot Network. The business was continued in the partnership firm up to  31.10.2006. From  1.11.2006  onwards, the business of the partnership firm was taken over by the assessee company along with the assets and liabilities.

In respect of all these issues, Court notices that  the  assessee  has filed additional documents before Ld. CIT(A) and hence  the  Ld. CIT(A) called for a remand report from the A.O. However, it appears that the assessee did not respond in the remand proceedings and hence he could not furnish any credible remand report. Accordingly, the Ld. CIT(A) confirmed the additions rejecting the explanations furnished by the assessee before him.

The Ld. D.R. submitted that one  of  the reasons  cited  by  the Ld. CIT(A) is that the documentary evidence furnished by  the assessee was not signed by the concerned parties. Court notices that the assessee has filed a paper book wherein the ledger account of creditors has been signed by the concerned parties. When this was pointed out, the Ld. D.R. submitted that all these issues may be restored to the file of the Ld. CIT(A) for adjudicating  the  issues afresh. He also submitted that the assessee should also be directed to cooperate with the Ld. CIT(A), if remand report is called for by Ld. CIT(A). He also submitted that the assessee should be imposed cost for not cooperating with the A.O. during remand proceedings.


Court heard Ld. D.R. and perused the record. Having regard to the discussions made (supra), in the interest of natural justice, court is of the view that the assessee may be provided with one more opportunity to explain its case before Ld. CIT(A). Since the assessee has not cooperated before the A.O. during remand proceedings, I impose a cost of Rs.1,000/- upon the assessee, which shall be paid to the credit of Income Tax department as “other fees” within 2 months from the date of receipt of this order.

Accordingly, subject to the payment of above said cost, court sets aside the order passed by Ld. CIT(A) and restore all the issues to his file for examining them afresh. Court also direct the assessee to fully cooperate with the Ld. CIT(A) for expeditious disposal of the appeal.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.


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