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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad
Before: Shri R.K. Panda, Vice- & Shri Laliet Kumar
आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri R.K. Panda, Vice-President AND Shri Laliet Kumar, Judicial Member Assessment Year: 2014-15 Dy. CIT Vs. ICOMM TELE LTD Circle 2(1) Hyderabad Hyderabad PAN:AAECA1326Q (Appellant) (Respondent) Assessee by: Shri S. Rama Rao, Advocate Revenue by: Smt.TH Vijaya Lakshmi, CIT(DR) Date of hearing: 29/11/2023 Date of pronouncement: 12/12/2023 ORDER Per Laliet Kumar, J.M This appeal filed by the assessee is directed against the order dated 03.01.2023 of the learned CIT (A)-NFAC, Delhi, relating to A.Y.2014-15.
At the outset, the learned DR submitted that there is a delay of 48 days in filing of appeal before the Tribunal for the Revenue has filed condonation petition along with an affidavit explaining the reasons for such delay. The learned AR has not opposed the condonation petition. Considering the facts and circumstances and the reasons given by the Revenue, the delay in filing of the appeal is hereby condoned.
ITA 234 of 2023 ICOMM TELE LTD
At the outset, it was submitted by the learned DR that the appeal of the assessee in for the A.Y 2015-16 was decided by the Tribunal vide order dated 28.04.2023. It was submitted that the present appeal of the Revenue should have been heard and decided by the Tribunal along with appeal of the assessee.
3.1 In rebuttal, the learned AR submitted that the Revenue had filed the appeal belatedly only after hearing the appeal on 21.4.2023 therefore, there was no reason to club the appeal of the assessee with the appeal of the Revenue. Further during the course of argument of the appeal of the assessee it was not pointed out by the learned DR that the Revenue is contemplating any appeal against the order passed by the learned CIT (A) NFAC.
3.2 The grounds raised by the Revenue read as under:
1. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition made on sub- contract expenditure of Rs.6,54,16,131/- though the onus to prove the genuineness of the expenses incurred in processing & erection of telecom/electric towers lies on the assessee which it has failed to discharge.
2.The CIT(A) erred in stating that the A0 should not have made disallowance of any expenditure in the absence of any clinching evidence brought on record by the AO against assessee's claim though the Department is not required to lead a clinching evidence to prove that the expense is a bogus.
3. The petitioner craves leave to amend, add or modify any of the above ground or add any other ground, if required at the time of hearing”.
Facts of the case, in brief, are that the assessee is a company and is engaged in the business of manufacturing and ITA 234 of 2023 ICOMM TELE LTD sale of Telecom/Electrical Towers. It filed its return of income for the A.Y 2014-15 on 30.11.2014 admitting current year loss of Rs.23,64,70,514/- under the normal provisions and admitted book loss of Rs.84,58,26,995/- under MAT provisions. The case was selected for scrutiny and notice u/s 143(2) dated 28.8.2015 was issued and served on the assessee to which the AR of the assessee appeared before the Assessing Officer and furnished the requisite details as called for. The Assessing Officer completed the assessment u/s 143(3) on 29.12.2016 wherein he apart from other additions made addition of Rs.1,13,11,663/- on a/c of delayed payment of Employees’ contribution to PF & ESI.
The learned DR drew our attention to para No.6.1 and 6.2 of the order passed by the NFAC which read as under:
ITA 234 of 2023 ICOMM TELE LTD ITA 234 of 2023 ICOMM TELE LTD ITA 234 of 2023 ICOMM TELE LTD ITA 234 of 2023 ICOMM TELE LTD ITA 234 of 2023 ICOMM TELE LTD ITA 234 of 2023 ICOMM TELE LTD ITA 234 of 2023 ICOMM TELE LTD
It was submitted by the learned DR that the CIT (A) NFAC deleted the addition of Rs.6,54,16,131/- without bringing on record the clinching evidence and without exercising his powers vested in him by virtue of section 250 of the I.T. Act. It was submitted that during the assessement proceedings notice u/s 133(6) was issued to 16 sub-contractors out of which only 2 sub-contractors have responded to the summons issued by the Assessing Officer. After examining the record, the Assessing Officer made addition. It was submitted that the assessee failed to produce the record of the sub-contractors to prove the genuineness of the expenditure incurred by them which is relatable to the work of the assessee. It was submitted that the order passed by the learned CIT (A) NFAC is very cryptic, non- speaking and perfunctory order.
Per contra, the learned Counsel for the assessee submitted details were provided. It was submitted that the assessee would provide all the necessary details as may be required by the learned CIT (A) in case the matter is remanded back to the file of the learned CIT (A).
We have heard the rival arguments made by both the parties and perused the orders of the AO and the learned CIT (A). From a perusal of the order of the learned CIT (A) more particularly at para 6.1 and 6.2 reproduced herein above, it is abundantly clear that the learned CIT (A) have failed to exercise his powers vested in him by virtue of section 250 of the I.T. Act which cast a duty on the CIT (A) to make such further inquiries, as he considered fit or direct the Assessing Officer to conduct such inquiries which are necessary for disposal of the appeal. Once the Assessing Officer in the present case had issued notice Page 10 of 12
ITA 234 of 2023 ICOMM TELE LTD u/s 133(6) and in response thereto only 2 sub-contractors have responded, then it is the duty of the learned CIT (A) to conduct further inquiry and bring on record the matter to rebut the presumption and finding of the Assessing Officer.
Furthermore, the primary onus is on the assessee to prove that the expenditure incurred by the sub-contractors were necessary and relatable to the work of the assessee. No evidence has been produced before the Assessing Officer or before the learned CIT (A) therefore, in absence of any material, it is not fair on the part of the learned CIT (A) to delete the addition. In the light of the above discussion, we deem it proper to remand the matter to the file of the learned CIT (A) with a direction to decide the grounds raised before us in accordance with law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to produce the evidence of rendering of service by the sub-contractors to the assessee which are very essential and integral part of the work of the assessee. The learned CIT (A) may call for the remand report in case any evidence is filed by the assessee in remand proceedings.