Delhi High Court Grants Assessee An Opportunity To Adduce Evidence On Qualification, Experience, Work Profile Of Employees To Avoid Section 40A(2) Disallowance

The Delhi High Court has granted the assessee an opportunity to adduce appropriate evidence—documentary or otherwise—before the Assessing Officer in order to establish its claim regarding educational qualification, experience, work profile, and in particular the duties discharged by the concerned persons to justify the claim of the appellant or assessee qua payment of salary to the. The Delhi High Court has granted the assessee an opportunity to adduce appropriate evidence—documentary or otherwise—before the Assessing Officer in order to establish its claim regarding educational qualification, experience, work profile, and in particular the duties discharged by the concerned persons to justify the claim of the appellant or assessee qua payment of salary to the persons concerned. The court found that the assessee was not granted a fair opportunity to provide evidence in order to prove its justification for the payment of salaries to the persons. The court held that all that the AO did was ask the assessee to justify the salaries paid and, without seeking relevant evidence, simply rejected the claim.