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Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM
This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 29.11.2022 [here in after (NFAC)] for assessment year 2018-19 which in turn arise from the order dated 13.11.2019 passed under section 143(1) of the Income Tax Act, by the DCIT, CPC.
Sipani woolen Pvt Ltd. 2. The assessee has marched this appeal on the following grounds:-
“1. The ld. CIT(A), Bikaner was wrong in law as well as in facts in upholding an addition of Rs. 2,26,484/- on account of employer and employee contribution for ESI/PF without considering the facts and circumstances of case by completing the assessment u/s 143(1).
The Ld. CIT(A), Bikaner was wrong in law as well as in facts in upholding an addition of Rs. 2,15,561/- in account of depreciation u/s 32(1)(i).
The Ld. CIT(A), Bikaner was erred by charging interest u/s 234A, 234B and 234C of IT. Act.
The appellant reserves right to add, amend or alter any ground of appeal
as and when required.
5. No reasonable opportunity of being heard was afforded.”
3. The fact as culled out from the records is that the disallowance u/s 36(1)(va) of the Act, of Provident Fund Payment and ESI payment amounting to Rs. 2,26,484/- being employees contribution deposited after the due date as stipulated by the Provident Fund Act but before filing of Income Tax Return and disallowance on account of incorrect claim of depreciation u/s 32(1)(i) amounting to Rs. 2,15,561/-. The contention of the assessee is that the same was wrongly added to total income on account of profit on sales of fixed asset in case of company assessee under the intimation issued by the CPC u/s. 143(1) of the Act.
Sipani woolen Pvt Ltd. 4. Being aggrieved by the order issued U/s 143(1) of the IT Act, the assessee preferred an appeal before the ld. CIT(A). The ld.CIT(A) uphold the adjustments made by the AO CPC in the intimation issued u/s. 143(1) of the Act and consequently the appeal of the assessee on both the issue raised was dismissed.
Feeling dissatisfied with the observations of the ld. CIT(A) the assessee is in appeal before this tribunal on the grounds so raised in para 2 above. The ld. AR of the assessee in support of the two adjustment submitted that while issuing the intimation the ld. AO CPC has not correctly appreciated the fact that whether the disallowance is for the employee contribution for ESI/PF or employer and this has impact on the decision. Not only that while disallowing the claim of the depreciation the assessee has claimed the deprecation on property sold but the block depreciation is on the block concepts need to be explained and since the same were not placed on record prayed that on both the issue the matter may be remanded back to the file of the ld.AO.
Sipani woolen Pvt Ltd. 6. The ld DR is heard who has relied on the findings of the lower authorities did not object to the prayer of the assessee as the matter is to be decided on merit by the ld. AO.
We have heard the rival contentions and perused the material placed on record. It is not under dispute that the adjustment is made by the AO CPC in the intimation u/s. 143(1) of the Act. Even before the ld. CIT(A) the submission is evidently not discussed as contended that the disallowance is of employee or employe contribution and looking to the facts of the case in fact depreciation is disallowable or not. Thus, based on these arguments the bench feels that if given a chance the assessee would like to demonstrate the merits of the case. Based on the contentions and on going through the orders of the lower authorities we find force in the arguments advanced by the ld. AR of the assessee and therefore, we are of the considered view that the assessing officer should hear the assessee’s submission on merits after affording proper opportunity of being heard and pass speaking order in the matter and therefore, the matter is set a side to the file of the learned assessing office. At the same time assessee is directed to represent and present all the facts before the assessing officer and Sipani woolen Pvt Ltd. should not ask for the adjournment on frivols grounds. At this stage we remand back the issues raised without commenting upon the merits of the case and the ld. AO is directed to complete the assessment in accordance with the law.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board.