JOINT COMMISSIONER OF INCOME TAX (OSD), HYDERABAD vs. MAGNAQUEST TECHNOLOGIES LIMITED, HYDERABAD

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ITA 128/HYD/2021Status: DisposedITAT Hyderabad10 March 2022AY 2017-188 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) did not violate principles of natural justice as a remand report was sought. The bad debts were written off from business receivables recognized as income in earlier years, following the Apex Court's decision in TRF.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting a disallowance of bad debts. The CIT(A) had admitted additional evidence and sought a remand report from the Assessing Officer.

What were the issues?

Whether the CIT(A) erred in admitting additional evidence and deleting the bad debts disallowance without violating natural justice principles.

Which sections of the Income-tax Act were involved?

Section 36(1)(vii),Section 36(2),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

This Revenue’s appeal for AY.2017-18 arises from the CIT(A)-4, Hyderabad’s order dated 17-07-2020 passed in case No.10588 / 19-20 / DCIT,Cir-16(2) / CIT(A)-4 / 20-21, involving proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

It transpires at the outset that this Revenue’s instant appeal suffers from 122 days’ delay. Hon'ble apex court’s recent directions “IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION”, Miscellaneous Application No. 21 of 2022 in Suo Motu Writ Petition(C) No.3 of 2020 has directed exclusion of Covid-19 pandemic outbreak time period from 15-03-2020 to 28-02-2022 from all limitations. The impugned delay stands condoned accordingly.

3.

The Revenue’s sole substantive ground raised before us in the instant appeal challenges correctness of the CIT(A)’s action deleting Section 36(1)(vii) r.w.s.36(2) bad debts disallowance of Rs.7,51,91,659/- thereby admitting additional evidence in violation of rule 46A of the Income Tax Rules during the course of lower appellate proceedings. Both the learned representatives invited our attention to the impugned lower appellate discussion as follows:

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