INDOVATION RENEWABLES LIMITED,HYDERABAD vs. ITO, WARD -16(3), HYDERABAD

Succinctly stated, the assessee company had filed its return of income for AY 2018-19, declaring a loss of Rs.44,42,869/-. Subsequently, the case of the assessee company was selected for scrutiny assessment for verifying, viz., “expenses relating to entities not registered under GST”. Thereafter, notice under section 143(2) of the Act, dated 28/09/2019 was issued by the AO.

Thereafter, the AO vide his order passed under section 143(3) r.w.s 143(3A) & 143(3B) of the Act, dated 08/04/2021 determined the income of the assessee at Rs.16,07,731/- after making two additions/disallowances, viz., (i) disallowance of professional charges: Rs.48,93,400/-; and (ii) disallowance of land lease charges: Rs.11,57,200/-.

The assessee company, aggrieved with the order of the CIT(A), has carried the matter in appeal before the Tribunal which vide its order passed in ITA No.11/Hyd/2024, dated 25/01/2024 condoned the delay involved in the appeal filed by the assessee company before the CIT(A) and set aside the matter to his file for deciding the same on merits. Also, the Tribunal while setting aside the matter had directed the CIT(A) to consider the evidences, if any, filed by the assessee company and examine those documents/evidence that were filed by the assessee company and also the other documents available on record. For the sake of clarity, we deem it apposite to cull out the observations of the Tribunal in ITA No.11/Hyd/2024, dated 25/01/2024, which reads as under:

Thereafter, the CIT(A) giving effect to the aforesaid order of the Tribunal took up the hearing of the appeal in the course of the set-aside proceedings.

The CIT(A) observed that on a perusal of the record that the assessee company had submitted written submissions along with 32 Annexures, viz., confirmation letters, PAN details, bank statements, and ledgers which were not produced before the AO during the scrutiny proceedings. The CIT(A) holding a conviction that the assessee at the stage of filing of the appeal in Form-35 or thereafter had not filed any 5

Apropos the merits of the case, the CIT(A) finding no infirmity in the view taken by the AO upheld the additions/disallowances made by him and dismissed the appeal.

The assessee company, aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record.

Shri R Mohan Kumar, Advocate, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, submitted that as the matter has been set aside by the Tribunal with a direction to the CIT(A) to consider the evidences, if any, filed by the assessee company and examine those documents/evidence which it had filed along with the other documents available on record, the assessee appellant in the course of the set aside proceedings remained under a bona fide belief that in the backdrop of the specific directions of the Tribunal there was no requirement of filing any application under Rule 46A for admission of the additional evidence, i.e., 32 Annexures that were filed in the course of 6 The Ld. AR submitted that the documents filed by the assessee company as additional evidence before the CIT(A), i.e., 32 Annexures comprising of confirmation letters, PAN details, bank statements, ledger accounts etc., goes to the very root of the issues based on which the impugned additions had been made by the AO and assailed by the assessee company, the CIT(A) in all fairness and in the interest of justice be directed to admit the same and re-decide the appeal after affording a reasonable opportunity of being heard to the assessee.

Per contra, Dr. Sachin Kumar, Learned Senior Departmental Representative (for short, “Ld. Sr-DR”) relied upon the orders of the authorities below. It was submitted by him that as the assessee company had failed to file an application under Rule 46A seeking admission of the additional evidence, the CIT(A) had rightly declined to admit the same.

We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties,

Admittedly, it is a matter of fact borne from the record that the Tribunal vide its order passed in ITA No.11/Hyd/2024, dated 25/01/2024 had set-aside the matter to the file of the CIT(A) with a direction to condone the delay and decide the appeal on merits. Also, as observed herein above, the Tribunal had directed the CIT(A) to consider the evidence, if any, filed by the assessee company and examine those documents/evidences along with other documents available on record.

In our view, there is a substance in the Ld. AR’s contention that as the Tribunal while setting aside the matter to the file of the CIT(A) for fresh adjudication, vide its order passed in ITA No.11/Hyd/2024, dated 25/01/2024 had directed him to consider the evidence, if any, filed by the assessee company and examine those documents/evidence and also the other documents available on record, the assessee company remained under bona fide belief that the requirement of filing the supporting application under Rule 46A in the course of the set-aside proceedings was dispensed with. We are of the view that the assessee company because of its aforesaid bonafide belief had failed to file the application under Rule 46A, as a result whereof the CIT(A) had declined to admit the additional evidence that were available on his record, viz., 32 Annexures, confirmation letters, PAN details, bank statements,

Resultantly, the appeal filed by the assessee company is allowed for statistical purposes in terms of our aforesaid observations.

The Principal Commissioner of Income Tax, Hyderabad.

"वभागीय""त"न"ध, आयकरअपील"यअ"धकरण /DR,ITAT, Hyderabad.

The Commissioner of Income Tax 6. गाड"फ़ाईल / Guard file