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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI B.R. BASKARAN & SHRI SANDEEP SINGH KARHAIL
The present appeal has been filed by the assessee challenging the impugned order dated 31/08/2022, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], which in turn arose from the intimation dated 22/12/2021 issued under section 143(1) of the Act, for the assessment year 2020–21.
In this appeal, the assessee has raised the following grounds:–
Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022 “1 That on the facts and circumstances of the case and in law, Ld. Commissioner of Income Tax (Appeals) ["CIT (A)"] has erred in dismissing the appeal without giving any opportunity of personal hearing, disregarding the multiple requests made the by the Appellant for the same in the submissions made before the Ld. CIT(A).
2. That on the facts and circumstances of the case and in law, Ld. CIT (A) has erred in dismissing the appeal on the ground that intimation asund wh.143(1)(a) is found to be correct on facts and in law without appreciating the fact the expenses are already disallowed by the Appellant in its Return of Income and any further disallowance will lead to double disallowance of expenses for the year under consideration.
That on the facts and circumstances of the case and in law, the Intimation Order passed by the Ld. Asst. Director of Income- tax, CPC Bengaluru (Ld. AO) under section 143(1) of the Income Tax Act, 1961 (the Act) assessing the total loss of the Appellant at INR 1,78.05,83.995/- as against the returned loss of INR 1,78,87,56,549/- is bad in law and thus, liable to be quashed.
That on the facts and circumstances of the case and in law, the Ld. AD has erred in disallowing an amount of INR 81.53,860/- on account of inconsistency in Expenditure of capital nature under section 3711) of the Act claimed in return in schedule OI of the income Tax Return and as per Tax audit report as below:
Particulars Amounts in INR Amount in Income Tax Return 54,61,195 Amount mentioned in Form Annexure 3CD 1,36,15,055 Adjustment made to total income 81,53,860
41 The Ld. AO has erred in disallowing the amount of INR 81,53,860/- after disregarding the explanations provided by the Appellant and without appreciating the fact that the said expenditure has been duly considered by the Appellant in the income-tax Return filed by the Appellant for the year under consideration. The lid AO has erred in disallowing the amount of INR 81,53,860/-, disregarding the response filed by the Appellant that the total amount disallowed on Capital Account in Tax return filed by the Company is the net amount which comprises of: Particulars Amounts in INR Unrealsed Foreign exchange fluctuation loss on capital account (as also shown in 1,36,15,055 Tax Audit Report in Form 3CD) ADD: Other capital expenditure debited to 31,25,453 Statement of Profit and loss LESS: Realsed Foreign exchange (1,12,79,313) fluctuation loss on capital account Net disallowance on capital account under 54,61,195 Page | 2
Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022 section 37(1) of the Act Whereas the Tax Audit report only states the Gross Unrealized Foreign exchange fluctuation loss on capital account of INR 1.36,15.055. Hence, there is no variation.
5. That on the facts and circumstances of the case and in law, the Ld. AO has erred in disallowing an amount of INR 18,694/- on account of inconsistency in Expenditure by way of penalty or fine for violation of any law for the time being in force; claimed in the Tax return in schedule Ol and the amount stated in the Tax audit report, as below: Particulars Amount (INR) Amount in Income Tax Return 0 Amount mentioned in Form Annexure 3CD 18,694 Adjustment made to total income 18,694 5.1 The Ld. AD has erred in disallowing the amount of INR 18,694/- after disregarding the explanations provided by the Appellant and without appreciating the fact that the said expenditure has been duly considered by the Appellant in the income-tax Return filed under Part A, Ol, point 8 e. Hence, there is no variation. That the above grounds of appeal are mutually exclusive and without prejudice to each other. That the Appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before or at the time of hearing of this appeal. Any consequential relief to which the Appellant may be entitled under low in pursuance of the oforesaid grounds of appeal, or otherwise may be granted.”
3. The brief facts of the case are: The assessee is a company incorporated on 18/08/2017 and is a joint venture between Voltas Ltd and Ardutch BV for selling household appliances under a new brand „Voltas Beko’. The assessee is formed with the objective to carry out the business of manufacturing, purchasing, importing, marketing, sale, distribution, and after-sales servicing of consumer durable products and domestic appliances, all related spare parts and consumables, and other White Good products. For the year under consideration, the assessee filed its return of income on 13/02/2021 declaring a business loss of Rs.178,87,56,549, and claimed a tax refund of Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022 Rs.32,42,880. The return filed by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as section 142(1) of the Act were issued and served on the assessee. While the scrutiny proceedings for the year under consideration were going on, the assessee received an intimation issued under section 143(1) of the Act proposing to make disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return. The assessee submitted its response stating that all the amounts disclosed in Form 3CD have been duly considered while filing the tax return for the year under consideration. However, vide intimation dated 22/12/2021 issued under section 143(1) of the Act, inter-alia, a sum of Rs.81,53,860 was disallowed. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee. Being aggrieved, the assessee is in appeal before us.
4. During the hearing, the learned Authorised Representative (“learned AR”) at the outset submitted that the learned CIT(A) did not consider the detailed submissions filed by the assessee in respect of disallowance made vide intimation issued under section 143(1) of the Act. The learned AR also submitted that the learned CIT(A) did not grant the opportunity of personal hearing, despite the assessee specifically requesting for same.
On the other hand, the learned Departmental Representative submitted that as per the Faceless Appeal Scheme, 2021, if the Appellant request for a personal hearing/to make his oral submissions or present his case, the concerned CIT(A) allows the request, communicating the date and time of hearing to the Appellant. Page | 4
Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022
We have considered the submissions of both sides and perused the material available on record. From the paper book filed by the assessee, we find that the learned CIT(A) vide notice dated 19/05/2022 and 19/07/2022 directed the assessee to furnish ground-wise written submissions along with the supporting documentary evidence. While responding to both the notices, the assessee, vide its submissions dated 26/05/2022 and 26/07/2022, apart from making its ground-wise submissions as sought by the learned CIT(A), made a specific request for a grant of opportunity for personal hearing.
We find that the Faceless Appeal Scheme, 2021, formulated by the Central Government in the exercise of powers conferred by sub-section (6B) and sub-section (6C) of section 250 of the Act, provides that the Appellant or his authorised representative may request for personal hearing so as to make his oral submission or present his case and the concerned Commissioner (Appeals) shall allow such request and communicate the date and time of hearing to the Appellant through the National Faceless Appeal Centre. The relevant clause of the Faceless Appeal Scheme, 2021, in this regard, reads as under:- “12. No personal appearance in the Centres or Units.–– (1) A person shall not be required to appear either personally or through authorised representative in connection with any proceedings under this Scheme before the income-tax authority at the National Faceless Appeal Centre or appeal unit set up under this Scheme. (2) The appellant or his authorised representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the Commissioner (Appeals), through the National Faceless Appeal Centre, under this Scheme. (3) The concerned Commissioner (Appeals) shall allow the request for personal hearing and communicate the date and time of hearing to the appellant through the National Faceless Appeal Centre.
Voltbek Home Appliances Pvt. Ltd. ITA no.2795/Mum./2022
(4) Such hearing shall be conducted through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board. (5) Any examination or recording of the statement of the appellant or any other person shall be conducted by Commissioner (Appeals) under this Scheme, exclusively through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible, in accordance with the procedure laid down by the Board. (6) The Board shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary, so as to ensure that the appellant, or his authorised representative, or any other person is not denied the benefit of this Scheme merely on the ground that such appellant or his authorised representative, or any other person does not have access to video conferencing or video telephony at his end.”
It is evident from the record that the assessee though made the request to the learned CIT(A) for grant of opportunity for personal hearing through the National Faceless Appeal Centre, however, the same was not granted to the assessee. Therefore, in view of the above, we deem it appropriate to restore the appeal to the file of the learned CIT(A) for de novo adjudication after granting the opportunity to the assessee for personal hearing as per the Faceless Appeal Scheme, 2021. The assessee can make a fresh request in this regard as per the aforesaid clause (12) of the Faceless Appeal Scheme, 2021. With the above directions, the impugned order passed by the learned CIT(A) is set aside. Accordingly, the grounds raised
by the assessee are allowed for statistical purposes.
9. In the result, appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 27/04/2023