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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI AMIT SHUKLA, HONBLE & SHRI S. RIFAUR RAHMAN, HONBLEShri Nihar Ranjan Samal
O R D E R PER S. RIFAUR RAHMAN (AM)
This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals)-24, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 30.08.2019 for the A.Y.2014-15.
At the outset, we observe that the present appeal is filed by the assessee with a delay of 414 days and assessee has filed affidavit
(A.Y. 2014-15) Pearl Freight Services Pvt. Ltd., submitting that the inordinate delay is because of the fact that the previous counsel Shri S.L. Jain was taking care of the issues relating to the assessee case, was fell ill and due to health issues he could not follow up with filing of the case and assessee was under the impression that the learned counsel is following up the proceedings. It was submitted that learned counsel Shri S.L. Jain is a senior professional and extensively practices before ITAT and now due to his old age he could not able to file this appeal. With the delay of 414 days and prayed that the delay in filing the appeal is because of bonafide omission/oversight on the part of the previously engaged counsel and prays that condonation of the above said delay may be granted and has no intention to jeopardize the interest of the revenue by delay in filing the appeal. Since there is no objection from the revenue side and there is a bonafide reason for the assessee in filing the appeal, we are inclined to condone the delay for the sake of overall justice.
Coming to the facts of the case, assessee has filed its return of income on 11.10.2014 declaring total income of ₹.36,57,450/-. The return was processed u/s. 143(1) of Income-tax Act, 1961 (in short “Act”). Subsequently, the case was selected for scrutiny under CASS and notice
(A.Y. 2014-15) Pearl Freight Services Pvt. Ltd., u/s. 143(2) and 142(1) of the Act were issued and served on the assessee. In response AR of the assessee attended and submitted the information as called for.
Assessee is engaged in the business of cargo handling and supplying manpower services to CFS’s and various clients on JNPT. During the assessment proceedings, Assessing Officer observed from 3CD Report filed by the assessee that assessee has received funds as mentioned in Para No. 5.1 of Assessment Order from its employees to which provisions of section 2(24)(x) apply and they were not deposited to the employee account before the due date. Accordingly, Assessing Officer made an addition of ₹.1,73,45,956 by invoking provisions of section 36(1)(va) of the Act.
Further, he observed that assessee has made investment in House No.43 to the tune of ₹.14 Lakhs as on 31.03.2013. However, as on 31.03.2014, the same investment is shown as NIL. No profit or loss has been shown in respect of House No. 43 in the computation of income for the year under consideration. Accordingly, he considered the amount declared as investment of ₹.14 Lakhs as deemed income of the assessee.
(A.Y. 2014-15) Pearl Freight Services Pvt. Ltd., 6. Further, Assessing Officer observed that assessee has debited petrol and diesel expenses of ₹.1,28,57,416/- and the assessee was asked to submit the supporting documentary evidences to establish that the expenses are wholly and exclusively incurred for the purpose of business. Since no information was furnished from the assessee side, he proceeded to make disallowance @30% of the expenses incurred which comes to ₹.38,57,225/-.
Further, he observed that as per Form 26AS assessee has received sum of ₹.48,07,94,395/- as income on which TDS were deducted and the assessee is claiming credit for the said TDS in the return of income filed for the year under consideration. However, he observed that the aforesaid receipt has not been offered fully by the assessee and when the assessee was asked to submit the reconciliation statement, however, no explanation was received from the assessee side. Accordingly, he added the difference of ₹.11,96,92,994/- as income of the assessee.
Aggrieved assessee preferred an appeal before the CIT(A) and filed the detailed submissions before him. After considering the detailed submissions, Ld.CIT(A) allowed the ground raised by the assessee with regard to Employee Contribution to PF. With regard to other grounds he
(A.Y. 2014-15) Pearl Freight Services Pvt. Ltd., has dismissed the ground relating to investment in house property, denial on carryforward losses, non reconciliation of Form 26AS and with regard to disallowance of petrol expenses he has remitted the issue back to the file of the Assessing Officer.
Aggrieved assessee is in appeal before us raising revised grounds of appeal
as under: - “1. The learned CIT (A) has failed to take note of the detailed & complete documents in support of submissions and explanations (concerning every ground of appeal) filed on 05th April, 2017 before his office which was also the basis of which the case was remanded back to office of AO. Further, the learned ACIT has also not considered the objections to remand report of AO which were filed before his office detailing the grossly erroneous, misleading, factually incorrect content of the remand report which were in complete denial of duly acknowledged submissions placed during remand proceedings. Further, for reasons best known to the office of the CIT(A)-24, although submissions were filed & duly acknowledged by his office against the erroneous remand report, the learned CIT(A) for reasons best known, opportunity of being heard was categorically denied when we made an appearance on the date and the order was passed inferring that no submissions were made, which is unwarranted and bad in law. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in making above the additions and disallowance without giving an adequate opportunity of being heard and by not observing the principles of natural justice, thereby we appeal that the case be remanded back to the file of Ld. CIT(A) for fresh adjudication for avoiding miscarriage of justice in the case.
2. Vide para 5.2.8, the learned CIT(A)-24 has erred in disallowing a wrong amount for ground 5 which relates TDS reconciliation, although original amount of disallowance as per (A.Y. 2014-15) Pearl Freight Services Pvt. Ltd., assessment order amounts Rs. 11,96,92,994/- (i.e difference between declared turnover as per audited financials and gross receipts as per 26AS), the Ld. CIT(A) has disallowed the gross receipts as per 26AS i.e 48,07,94,395/- which is not the correct amount of original disallowance. We have filed rectification u/s 154 on 25-01-2020 to the effect but till date no rectification order is issued to correct the mistake thereby causing a tax impact on the client leading to imposition of illegitimate interest and penalties on a wrong arbitrary amount of addition. Such erroneous addition by mistake or otherwise is untenable and may kindly be directed for correction back to original amount of disallowance i.e 11,96,92,994/- which in itself is subject to fair adjudication upon the case being remanded back to file of CIT(A)-24 for fresh adjudication.
3. The appellant prays & craves to you to allow him to add/delete/modify any/all grounds for appeal before the matter is being heard by you.”
10. At the time of hearing, Ld. AR submitted that Ld.CIT(A) remanded the matter to the file of the Assessing Officer. During remand proceedings, Assessee has filed all the relevant informations which were submitted before the Assessing Officer. However, Ld.CIT(A) held that nothing was submitted by the assessee. Ld.AR submitted that Ld.CIT(A) has not considered the objections to remand report which were filed before appellate authority detailing the grossly erroneous, misleading, factually incorrect content of the remand report which were in complete denial of duly acknowledged submissions placed during remand proceedings. Ld. AR brought to our notice the relevant information filed by the assessee which is placed on Paper Book. Assessee has also (A.Y. 2014-15) Pearl Freight Services Pvt. Ltd., brought to our notice the statement of facts in which assessee had submitted the objections before the Ld.CIT(A). However, Ld.CIT(A) has dismissed the grounds raised by the assessee without considering the above said objections. Ld. AR further submitted that Ld.CIT(A) without giving proper opportunity of being heard to the assessee, he has passed the impugned order and prayed that this issue may be remitted back to the file of the Assessing Officer.
11. On the other hand, Ld.DR submitted that he relies on the findings of the Ld.CIT(A) and still assessee has not filed any report before authorities.
12. Considered the rival submissions and material placed on record, we observe that assessee has filed informations during remand proceedings which assessee has placed on record in the form of Paper Book. After considering the submissions of the assessee, in our view, the assessee placed relevant information before lower authorities and for the sake of justice we remit this issue back to the file of the Ld.CIT(A) to consider the submissions filed by the assessee and pass Appellate Order duly considering the material placed on record by the assessee. It is Needless
(A.Y. 2014-15) Pearl Freight Services Pvt. Ltd., to say that the assessee may be given a proper opportunity of being heard before passing the Appellate Order.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 03rd August, 2022.