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Income Tax Appellate Tribunal, “SMC-C” BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI
Date of hearing : 09.09.2020 Date of Pronouncement : 10.09.2020 O R D E R This appeal by the assessee is directed against the order of CIT(Appeals)-3, Bengaluru dated 07.08.2018 relating to assessment year 2012-13.
The assessee has raised the following grounds :-
“1. On the facts, the order of the learned CIT (Appeals) dismissing the grounds raised of additional grounds in addition to the original grounds in pursuance of the directions of the Hon'ble Tribunal is opposed to law and against the principles of natural justice and accordingly the order is liable to be quashed.
2. The learned CIT (Appeals) ought to have appreciated that the Hon'ble Tribunal had directed him to consider the admissibility of the additional grounds and to decide the grounds on merits and in the circumstances the learned CIT (Appeals) ought to have gone into the admissibility of the additional grounds de hors the assessment as made by the AO and ought to have further consider the same on merits to allow the claim of the Appellant.
3. The learned CIT (Appeals) ought to have considered the claim of the Appellant for which materials were brought on record and the claim was fully supported and the required details have already been furnished to the appellate authority and further on account of the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd vs. CIT (1998) 229 ITR 383 (SC), the additional grounds ought to have been allowed and the relief as claimed by the Appellant ought to have been given. 4. Without prejudice, the learned CIT (Appeals) ought to have appreciated that the claim for deduction of ESI and PF payments were made before the AO and the disallowance was already challenged in appeal before the CIT (Appeals) and through the additional grounds there was only increase in quantum of relief sought for and there was no new ground which was not canvassed before the AO was raised by the Appellant. 5. On the facts and circumstances of the submissions made with evidence, the learned CIT (Appeals) ought to have admitted the additional grounds and also allowed the deduction towards payment of ESI/PF within the due date for filing the return and ought to have considered in full and allowed the same. 6. Without prejudice, the disallowance as confirmed by the learned CIT (Appeals) is excessive, unreasonable and ought to be deleted in full. 7. For these and such other grounds that may be urged at the time of hearing, the Appellant prays that the appeal may be allowed.”
The brief facts of the case are that the assessee came up in appeal before this Tribunal on earlier occasion wherein the assessee raised additional grounds in respect of deduction towards employees’ contribution to PF & ESI. This appeal was heard ex parte by the Tribunal and restored the issue of admissibility of additional grounds to the file of CIT(Appeals) for fresh decision and if the same is admitted, to decide it on merits after affording opportunity to the assessee. Consequently, the CIT(Appeals) took up the case in the second round and not admitted the additional ground and dismissed the additional ground as unadmitted. Aggrieved, the assessee is in appeal before me.
The ld. AR for the assessee submitted that the additional ground raised by the assessee before the CIT(Appeals) on the earlier occasion is purely legal in nature and goes to the root of the matter and the same should have been admitted by the CIT(Appeals) in view of the decision of the Hon’ble Supreme Court in the case of NTPC Ltd. v. CIT, 229 ITR 283 (SC) wherein it has been held that the if question of law or grounds are legal in nature, it can be raised at any stage of the proceedings. She submitted that there was no necessity of investigation of any fresh facts to decide the case and the CIT(Appeals) totally miscarried the justice by not admitting the additional ground raised before him.
On the other hand, the ld. DR submitted that first the assessee should claim deduction under a proper section and the claim should be supported by sufficient evidence so as to allow the claim of assessee. In the present case, the mere claim of assessee for benefit of deduction without sufficient evidence cannot be allowed. According to the ld. DR, the claim of assessee was denied for non-compliance of the mandatory requirement of law. He relied on the judgment dated 01.03.2011 of the Hon’ble High Court of Karnataka in the case of BAEHAL Software Ltd. in ITA No.136/2011.
I have heard both the parties and perused the record. In the present case, the assessee has raised additional ground on earlier occasion before this Tribunal. The Tribunal remanded the issue to the file of CIT(Appeals) to consider the admissibility of additional ground. In the second round also, the CIT(Appeals) has not admitted the additional ground holding that there is nothing on record to show how the assessee was prevented by sufficient cause from raising such a claim before the AO. In my opinion, as held by the Hon’ble Supreme Court in the case of NTPC Ltd. (supra) and Jute Corporation of India Ltd., 187 ITR 688 (SC), the appellate authority has the power which the original authority may have in deciding the question before it, subject to the restrictions or limitations, if any, prescribed by the statutory provision. So in the absence of any statutory provision, the appellate authorities are vested with all the plenary powers which an original authority may have in the matter.
Further, in the present case, the assessee placed the necessary evidence before the CIT(Appeals) regarding payment of employees’ contribution to PF & ESI before the due date of filing the return and this evidence should be admitted as additional evidence by the CIT(Appeals) so as to render justice. However, he failed to admit the additional ground on technical reasons which is not proper. Accordingly, in the interest of justice, I admit the additional ground raised by the assessee and direct the AO to examine the additional evidence in accordance with law. If PF & ESI are paid before the due date of filing of return of income, the assessee is entitled to the deduction. With this observation, I remand the issue of allowability of employees’ contribution of ESI & PF to the file of Assessing Officer for fresh consideration.
In the result, the appeal by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 10th day of September, 2020.