Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI VIKAS AWASTHY & SHRI GAGAN GOYAL
This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short ‘NFAC’] dated 19.07.2022 under section 250 of the Income Tax Act, 1961 (for short ‘the Act’) for A.Y. 2020-21. The assessee has raised the following grounds of appeal:
“Based on the facts and circumstances of the case, Ernst & Young Merchant Banking Services LLP ("the Appellant"), respectfully craves to prefer an appeal against the Order dated 19th July 2022 passed by the Learned Commissioner of Income-tax (Appeals) NFAC ["CIT(A)"]. Delhi (received by the Appellant on 19th
July 2022) under Section 250 of the Income-tax Act, 1961 ("the Act") on the following grounds which are independent and without prejudice to each other: On the facts and in the circumstances of the case and in law, the Learned Assistant Director of Income Tax, CPC ("AO") and CIT(A) has: General 1. erred in confirming the action of Ld. AO in computing total income of the Appellant at Rs. 23,76,78,649 as against income of Rs. 23,75,07,010 offered to tax by the Appellant in Revised Return of Income for the subject assessment year; Non grant of sufficient opportunity of being heard 2. erred in not issuing show cause notice before issuing Intimation under Section143(1) of the Act and thereby not granting sufficient opportunity of being heard to the Appellant leading to violation of the principles of natural justice; Addition with respect to Employee's Contribution to Provident Fund ("PF") under Section 36(1) (va) of the Act of Rs. 1,71,639 3.erred in upholding addition made by the Ld. AO in respect of Employee's contribution to Provident Fund of Rs. 1.71,639 without appreciating the fact that these dues were paid before the due date of filing the return of income and hence the same are to be allowed as deduction in total income; 4.without prejudice to the above, should have appreciated that out of delayed payment of Rs. 1,71,639 of Employees' contribution to Provident Fund, payment to the extent of Rs. 1,70,795 was made within the same Financial Year and hence the same should be allowed as deduction in the computation of total income; 5.erred in upholding addition made by Ld. AO in respect of Employee's Contribution to Provident Fund on the ground that the provisions of Section 36(1) (va) and 43B of the Act have been amended by Finance Act' 2021 with retrospective effect without appreciating that the amendments are applicable only from AY 2021-22: Short grant of TDS Credit by Rs. 50,73,806 6. erred in not directing the Ld. AO to allow TDS credit of Rs. 4,08,51,036 claimed by the Appellant in its Revised Return of Income as against Rs. 3,57,77,230 allowed in the Intimation under section 143(1) of the Act dated
24. Dec 2021.
Levy of Interest under Section 234B of the Act 7. erred in levying interest under Section 234B of the Act of Rs. 11,08,191 though no such Interest is chargeable as per the Revised Return of Income: Levy of interest under Section 234C of the Act 8. erred in levying interest under Section 234C of the Act of Rs. 5,02,244 instead ofRs. 92,712 computed in the Revised Return of Income: The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing of the appeal, so as to enable the Learned Hon'ble ITAT to decide this appeal according to law.”
Brief facts of the case are that assessee filed its return of income on 08.02.2021 declaring total income of Rs. 23,75,07,010/- and claiming refund of Rs. 17,28,702/-. Subsequently, the assessee filed revised return on 26.03.2021 declaring total income of Rs. 23,75,07,010/- and claiming refund of Rs. 17,43,433/-. Return of the assessee was processed u/s. 143(1) at total income of Rs. 23,76,78,649/- with a demand of Rs. 70,03,174/-. Against this intimation issued u/s. 143(1), assessee preferred an appeal before the Ld. CIT (A). In his order Ld. CIT (A) granted partial relief to the assessee. Being not satisfied with the order of Ld. CIT (A) passed u/s. 250, assessee further preferred this appeal before us with the grounds mentioned above.
We have gone through the contents of intimation issued u/s. 143(1), order of the Ld. CIT (A) passed u/s. 250, dated 19.07.2022 and submissions of the assessee.
Ground Nos. 1 & 2 are at the core of the issue in technical terms. Without giving proper opportunity of being heard to the assessee/ proper notice for adjustment through applying section 143(1)(a), no alteration in the returned figures can be done by CPC, Bangalore. In this appeal we observed that this basic provision of law has not been followed, hence action of CPC, Bangalore in adjusting returned income is null and void and without jurisdiction. This fact is emanating from record produced before us and there is no challenge to this fact by the department also. In view of this Ground Nos. 1 & 2 raised by the assessee is allowed.
Ground Nos. 3, 4 and 5 are interrelated and pertains to disallowance made under section 36(1) (va) r.w.s. 43B. Theses grounds were not pressed by the assessee, still on this issue we have gone through the order of Ld. CIT (A) and submissions of the assessee as the same is affected by our finding at Para 4(supra). Without going into the merits of the grounds, same is allowed in consequence to our finding at Para 4(supra) as CPC, Bangalore can’t make any adjustment in the returned income without following the procedure laid down in section 143(1) and the same has not been followed. In view of this disallowance made by CPC, Bangalore is deleted on violation of procedure laid down in section 143(1) and Ground Nos. 3, 4 and 5 are allowed for statistical purposes.
Ground No. 6 pertains to short grant of T.D.S. by CPC. Assessee claimed T.D.S. Credit of Rs. 4,08,51,036/-, against this CPC in its intimation allowed T.D.S. Claim of Rs. 3,57,77,230/-. On this issue we have gone through the order of Ld. CIT(A) and submissions of the assessee and found that Form No. 26AS generated on 3.12.2021 was Rs. 3,94,31,140/- still Ld. CIT(A) not allowed claim of the assessee at least to the extent of Rs. 3,94,31,140/-. On this we are with the assessee that to the extent amount reflected in Form No. 26AS needs not any reconciliation to be filed by the assessee and claim has to be granted. As far as balance amount of Rs. 14, 19, 896/- (Rs. 4,08,51,036 - Rs. 3,94,31,140) is concerned, we direct the jurisdictional AO to give an opportunity to the assessee to substantiate its claim about Rs.14,19,896/-. If assessee is able to prove that amount under consideration has been deducted and corresponding income has been considered while filing the return of income, claim of the assessee should be allowed despite the fact whether the same has been reflected in Form No. 26AS or not. With this observation this ground of appeal of the assessee is partly allowed for statistical purposes.
Ground No. 7 pertains to Charging of interest u/s. 234B. This ground is consequential in nature and based on the outcome of other substantial grounds adjudicated above, hence no separate adjudication is required. But Jurisdictional AO is directed to recalculate the same keeping in view the finding of this bench on issues decided above. This ground of appeal by assessee is allowed for statistical purposes.
Ground No. 8 pertains to charging of interest u/s. 234C. This ground is not consequential in nature as hold by Ld. CIT (A) in his order. Charging of interest u/s. 234C is limited up to return income declared by the assessee and can’t be disturbed for later developments in the matter. Hence, this ground of appeal of assessee is allowed and AO is directed to charge this interest only on returned income as declared by the assessee amounting to Rs. 92,712/-.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 20th day of March, 2023.