2018 (4) TMI 1609 - AT - Income Tax

Deduction of incentive bonus on account of expenses incurred disallowed - No reasonable opportunity granted while completing or deciding the appeal - Held that - Against the said order assessee preferred first statutory appeal before the CIT(A) and confirmed the order of the AO. 6. We have gone through the relevant record and impugned order. AR moved an application for adjournment. He also mentioned in the said application that his claim is allowable as per the various decisions and CBDT s Circular and assessee has not been properly heard by the CIT(A). Therefore, we set aside the order of the CIT(A) and remit this matter back to the file of the CIT(A) to decide this matter afresh after considering the submission of appellant and having regard to the decision of co-ordinate bench in the case of Nitin T. Bhuptani. Appellant is also directed to co-operate with the CIT(A) for disposal of this appeal.

Summary

Issues involved:
Appeal against Commissioner of Income Tax(Appeals) order for Assessment Year 2010-11; Lack of reasonable opportunity given by CIT(A) during appeal process.

Analysis:
The appeal was filed by the Assessee against the appellate order of the Commissioner of Income Tax(Appeals)-IV, Rajkot, related to the assessment order passed under section 143(3) of the Income Tax Act, 1961, for Assessment Year 2010-11. The main contention raised by the appellant was the lack of a reasonable opportunity provided by the CIT(A) during the appeal process. The appellant, a development officer for LIC of India, received an incentive bonus during the relevant year, out of which a deduction was claimed. The Assessing Officer disallowed the deduction, stating that the incentive bonus did not qualify as allowances or reimbursement of expenses. The AO's decision was upheld by the CIT(A) in the first appeal.

Upon review, the ITAT found that the appellant's claim was justifiable based on various decisions and CBDT's Circular, and noted that the appellant had not been adequately heard by the CIT(A). Consequently, the ITAT set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for a fresh decision, instructing the appellant to cooperate during the process. The ITAT directed the CIT(A) to reconsider the matter in light of the appellant's submissions and the decision of a co-ordinate bench in a related case. Ultimately, the appeal filed by the appellant was allowed by the ITAT. The decision was pronounced in open court on 09/04/2018.