GAYATRI RATNA JOINTVENTURE,HYDERABAD vs. INCOME TAX OFFICER, WARD-6(3), HYDERABAD

Brief facts of the case are that the assessee, an AOP, engaged in the business of construction of link canal, filed its return of income for the AY.2015-16 on 16-09-2015, admitting ‘NIL’ income. Thereafter, the case was selected for limited scrutiny through CASS and the assessment was completed u/s.143(3) of the Act, accepting the income returned by the assessee. Thereafter, the AO issued a notice u/s.154 of the Act on the ground that the assessee had claimed the refund of entire TDS of Rs.89,20,488/-, which included the TDS of Rs.85,26,487/- on mobilization advance of Rs.42,63,24,380/- and TDS of Rs.3,94,000/- on contract receipts of Rs.1,97,00,000/-, which is in violation of provisions of Section 199 of the Act r.w.r. 37BA(3) of Income Tax Rules, 1962. Thus, according to the AO, there is a mistake apparent from record, which needs rectification. However, since the assessee did not appear before the AO inspite of service of notices by e- mail. The AO passed the order u/s.154 of the Act, raising the demand in respect of the erroneous refund granted to the assessee.

Aggrieved, the assessee filed an appeal before the CIT(A), but did not appear before him and only filed written submissions on the basis of which, the CIT(A) confirmed the order of AO u/s.154 of the Act.

The assessee is now in second appeal before the Tribunal, raising the following Grounds:

1. The CIT(A) ought to have held that there was no mistake apparent from record to invoke section 154 as the issue involved is debatable and department failed in similar case before ITAT, Hyderabad Bench in 1313/Hyd/15, dated 12.05.2017, in case of M/s.Vijaya Bhavani Vs. DCIT. 2. CIT(Appeals) erred in upholding action of AO in not giving credit to TDS of Rs.89,20,488/-

The case is taken up for hearing on 26-08-2020 through video conferencing and both the parties were heard.

We find that the case of the assessee before the CIT(A) was that the contract was cancelled and the assessee had returned the mobilization advance to the Government. However, the CIT(A) has confirmed the order of the AO on the ground that the assessee has not filed any evidence that the mobilization advance has been returned. Further, with regard to the second issue also, the CIT(A) held that the assessee had not filed any evidence in respect of its claim.

Ld.Counsel for the assessee therefore prayed that the issue may be set aside to the file of AO so that the assessee will be able to file all the details and make proper representation before the AO in support of its claim.

Ld.DR had no objection to the same.

Taking the same into consideration, we deem it fit and proper to remand the issue to the file of AO with a direction to consider the issue Denovo, after giving a fair opportunity of hearing to the assessee.

In the result, the appeal of assessee is treated as allowed for statistical purposes.