2020 (3) TMI 1140 - AT - Income Tax

Determination of Fringe Benefit Tax on travelling u/s. 115WE(3) - No opportunity to the assessee to produce the relevant supporting evidence to substantiate its claim - violation of principle of natural justice - HELD THAT - Relevant details of the expenses claimed under the head travelling and conveyance were duly furnished by the assessee during the course of appellate proceedings before the CIT(Appeals) to show that the said expenses did not accrue any fringe benefit directly or deemingly to any person. CIT(Appeals) did not accept this claim of the assessee on the ground that any supporting voucher or documentary evidence to support and substantiate the said claim was not produced by the assessee-company. It appears that the CIT(Appeals), however, did not give any opportunity to the assessee to produce the relevant supporting evidence to substantiate its claim and rejected the claim of the assessee without giving such opportunity. There is thus a violation of principle of natural justice by the ld. CIT(Appeals) and keeping in view the same, we consider it fair and just to set aside the impugned order passed by the CIT(Appeals) confirming the additions made by the Assessing Officer to the fringe benefit value and restore the matter to the file of the Assessing Officer for deciding the same afresh after giving an opportunity to the assessee to produce the relevant supporting evidence to support and substantiate its claim that the expenses incurred on travelling and conveyance did not accrue any fringe benefit directly or deemingly to any person. - Appeal of the assessee is treated as allowed for statistical purposes.

Summary

Issues:
1. Determination of Fringe Benefit Tax on travelling expenses.
2. Allocation of travelling expenses to tour & travels and conveyance charges.
3. Ignoring computation sheet of fringe benefit prepared by the company.

Analysis:
1. The appellant, a Company engaged in manufacturing, filed a return disclosing total fringe benefit value. The Assessing Officer noticed discrepancies in the claimed expenses under "travelling and conveyance", leading to an estimation of conveyance and tour/travelling expenses. The AO made additions to the fringe benefit value under "conveyance" and "tour and travelling" heads. The appellant challenged these additions under section 115WE(3) of the Act before the CIT(Appeals).

2. During the appellate proceedings, the appellant furnished details of travelling and conveyance expenses, arguing that these expenses did not result in any fringe benefit. However, the CIT(Appeals) upheld the additions, citing lack of supporting vouchers or evidence. The appellant's appeal to the Tribunal was heard ex-parte due to non-appearance. The Tribunal noted that the CIT(Appeals) did not provide the appellant with an opportunity to produce supporting evidence, leading to a violation of natural justice. Consequently, the Tribunal set aside the CIT(Appeals) order and remanded the matter to the Assessing Officer for fresh consideration with an opportunity for the appellant to present relevant evidence.

3. The Tribunal allowed the appeal for statistical purposes, emphasizing the importance of adhering to principles of natural justice in tax assessments. The judgment highlighted the necessity of providing a fair opportunity for taxpayers to substantiate their claims with supporting evidence. The decision aimed to ensure a just and unbiased assessment process in line with legal principles and procedural fairness.