Siddhartha Nautiyal ORDER
Siddhartha Nautiyal, Member (J)
1. This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals), Ahmedabad-5 in Appeal no. CIT(A)-5/ITO. Wd. 5(2)(1)/10708/2017-18, in proceeding u/s. 143(3) vide order dated 10/08/2018 passed for the assessment year 2015-16.
2. The assessee has taken the following grounds of appeal:-
"1. The order passed by the Ld. CIT(A) is against the law, equity and justice.
2. The Ld.CIT(A) has erred in law & facts in upholding disallowance of commission of Rs. 6,36,492/- made by Ld. A.O.
3. The Ld.CIT(A) has erred in law & facts in upholding disallowance of purchases of Rs. 1,40,767/- made by Ld. A.O. invoking Sec. 40A (2)(b) of the Act.
4. The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal."
3. The assessee has also taken the following additional Grounds of Appeal:
"(1) The order passed by Ld AO is bad, illegal and without jurisdiction as the Ld AO has made additions which were not covered under scope of Limited Scrutiny assessment."
4. At the outset, we observe that the appeal is time-barred by 101 days. The counsel for the assessee submitted that the reason for delay in filing appeal was due to a communication gap between the CA of the assessee representing the matter before Ld. CIT(Appeals) and M/s. Chajjed and Co. who were to argue the case before ITAT. The assessee also filed an affidavit in support of the above contention that the delay in filing of appeal was caused due to mistake on the part of the CA of the assessee. The Vishakhapatnam ITAT in the case of Smt. Samanthapudi Lavanya v. ACIT MANU/IV/0027/2021 : [2021] 127 taxmann.com 188 (Visakhapatnam - Trib.) held that where assessee was under bona fide impression that its appeal had been filed by accountant, but came to know fact of not having filed appeal when there was pressure from department for payment of demand, delay of 492 days in filing appeal was to be condoned, in the interests of justice. Accordingly, looking into the facts of the instant case, and the period of delay under consideration, in the interests of justice, we are hereby condoning the delay in filing the appeal. The Ld. Departmental Representative has also not objected to condonation of delay in filing of appeal by the assessee.
4.1. The counsel for the assessee submitted that the before going into the merits of the case, he would like to press for the additional ground of appeal which goes into the root to the matter. The counsel for the assessee submitted that a perusal of the notice issued by the AO u/s. 143(2) of the Act dated 28-07-2016 shows that the case was opened for "limited scrutiny" for examination of the following issues:
i) interest expenses
ii) payment to related persons mismatch
4.2. However, the assessment order was passed on a totally different basis as compared to the reasons enumerated in the notice issued under section 143(2) of the Act, without converting the case into "full scrutiny". The counsel for the assessee drew our attention to the assessment order and submitted that the first addition was made on account of disallowance of interest under section 14A of the Act, whereas in the notice referred to above, there was no mention of the same. Further, so far as addition under section 40A(2)(b) is concerned, the AO did not make any addition on account of mismatch under section 40A(2)(b) of the Act, but the addition was made on the ground that the commission payment incurred by the assessee is "bogus" and therefore, addition/disallowance was made under section 37 of the Act, amounting to ` 6,36,492/-. Accordingly, the counsel for the assessee submitted that the AO, during the course of........