ANKALAN WEB SOLUTIONS PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), BANGALORE

That on the facts and in the circumstances of the case of the assessee the learned Commissioner Of Income tax Appeals, NFAC Page 2 of 5

That on the facts and in the circumstances of the case of the assessee the learned Commissioner Of Income tax Appeals, Delhi was not justified in confirming the additons of Rs.2,98,94,580.00. 4. The assessee craves leave to add, alter amend or withdraw any ground of appeal on or before the time of hearing.”

The brief facts of the case are that the case of the assessee company was selected for limited scrutiny assessment under the e-assessment scheme, 2019, on the only issue of “Investment in intangible assets”. Thereafter, notices under section 142(1) of the Act was issued. During the course of assessment proceedings, assessee submitted that the addition of intangible assets for the Assessment Year 2018-19 is the salary paid to the employees for the creation of content for online exams. Thereafter, the AO asked to submit list of employees along with their details such as designation, salary paid, etc., along with documentary evidence to substantiate the additions made under intangible assets. Assessee was also asked to submit basis and methodology of valuation of intangible assets. Further as the assessee neither submitted its reply in response to notices issued nor in response to show cause notice, the AO in absence of any explanation and documentary evidences substantiating the additions made to intangible assets amounting to Rs.2,98,94,577/- added under section 69B r.w.s. 115BBE of the Act as unexplained investment in assessee’s books of accounts.

Aggrieved by the Assessment completed under section 143(3) of the Act dated 05.03.2021, the assessee preferred an appeal before the CIT(A)/NFAC.

The CIT(A)/NFAC vide Order dated 10.06.2024 dismissed the appeal on the ground that the assessee neither during the assessment proceedings nor Page 3 of 5

Aggrieved by the Order of CIT(A) dated 10.06.2024, assessee has filed the present appeal before the Tribunal. The assessee has also filed a paper book comprising 211 pages enclosing therein copies of written submission, copy of acknowledgement of reply filed before the NFAC, written submission filed before ld. CIT(A), Application for acceptance of additional grounds filed before ld. CIT(A), Application under Rule 46A for acceptance of additional evidence, copy of ITR for AY 2018-19 & 2017-18, copy of the Financial statement for FY 2017-18 & 2016-17, Details of addition to tangible asset, PF return for verification of salary paid along with the separate bunch consisting of computation sheets, Assessment Order, notice of demand, Order of CIT(A) / NFAC, acknowledgment copy of Form 35 along with Form 35 before us on 28.08.2024. 6. Before us, the learned AR of the assessee vehemently submitted that the assessee had submitted the written submission along with the application for acceptance of additional grounds as well as application under Rule 46A for acceptance of additional evidence but ld. CIT(A)NFAC erred in dismissing the appeal on the ground that the assessee neither during the assessment proceedings nor during the appellate proceedings has submitted any details.

Learned DR on the other hand vehemently supported the Order of the authorities below and submitted that the methodology adopted for the valuation of intangible assets was never produced before the authorities below and accordingly the appeal may be dismissed. Page 4 of 5

We have heard the rival submissions and perused the material available on record. On going through the paper book filed before us, we find that during the course of Appellate proceedings, the assessee has filed the written submission before ld. CIT(A), Application for acceptance of additional grounds as well as Application under Rule 46A for acceptance of additional evidence but the same is not considered while disposing the Appeal. On going through the Order of the AO, we find that assessee could not represent its case before the AO. Further, the AR of the assessee also submitted that the issue before the CIT(A) is not at all considered on merits. Therefore, we are of the opinion that in the interest of justice and fair play, as well as at the request of the learned AR of the assessee, one more opportunity may be granted to the assessee company to substantiate its claim and accordingly we remit the entire issue in dispute back to the file of AO for fresh consideration in accordance with law. Needless to say reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to co-operate with the proceedings before the AO and file the relevant submissions / evidences / documents / information which would be essential and required by the AO for the proper adjudication of the case. We clarify that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly.

In the result, appeal filed by the assessee is allowed for statistical purposes.

Appellant 2. Respondent 3. Pr.CIT 4.CIT(A) 5. DR, ITAT, Bangalore.