MALLIKARJUN GURUSHIDHAPPA GADVI,KOLHAPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOLHAPUR, KOLHAPUR

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ITA 557/PUN/2023Status: HeardITAT Pune26 May 2023AY 2018-193 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the failure to provide an opportunity of being heard before rectification under Section 154 goes to the root of the matter. Therefore, the case was remitted to the NFAC for fresh consideration.

What were the facts?

The assessee's return of income was initially accepted. Subsequently, the CPC rectified the intimation under Section 154, disallowing a sum for non-deduction of TDS. The NFAC confirmed the addition on merits but failed to address the ground regarding the lack of an opportunity of being heard.

What were the issues?

Whether the rectification order passed under Section 154 without providing an opportunity of being heard to the assessee is valid. Whether the addition made on account of non-deduction of TDS is justified on merits.

Which sections of the Income-tax Act were involved?

Section 154,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI INTURI RAMA RAO

For Respondent: Shri Piyush Kumar Singh Yadav
Hearing: 25.05.2023Pronounced: 26.05.2023

ORDER

PER INTURI RAMA RAO, AM:

1.

This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated 10.02.2023 for the assessment year 2018-19.

2.

Briefly, the facts of the case are that the appellant is an individual deriving income under the head “business”. The Return Income for the assessment year 2018-19 was filed on 29.12.2018 disclosing total income of Rs.10,41,120/-. The said return of income was processed u/s 143(1) of the Income Tax Act, 1961 (‘the Act’) by the CPC, Bengaluru vide intimation dated 13.04.2019 accepting the retuned income. Subsequently, the said intimation was rectified by the CPC, Bengaluru vide intimation dated 14.05.2019 u/s 154 of the Act after disallowing a sum of Rs.1,73,870 being 30% of the amount of Rs.5,79,565/- paid to Bhavani Industries without deducting tax at source. 3. Being aggrieved by the rectification order u/s 154, an appeal was filed before the NFAC contending that the CPC had enhanced the returned income by rectifying the original intimation u/s 143(1) without giving an opportunity of being heard to the assessee and also challenged the addition on merits. The NFAC vide impugned order confirmed the action of the CPC, Bengaluru on merits. However, the NFAC had not dealt with the ground of appeal

no.1 raised before him, which reads as under :-

1. The A.O. has erred in passing order u/s 154 enhancing the income of the assessee without giving the assessee an opportunity of being head and hence the order is invalid and should be quashed.”

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