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Facts
The assessee company issued shares at a premium. The Assessing Officer (AO) added the entire share premium to the income as the assessee did not provide a valuation report during the assessment proceedings. The Commissioner of Income Tax (Appeals) dismissed the appeal, not considering the valuation report submitted during appellate proceedings due to a procedural lapse. The assessee also claimed TDS credit, which was not allowed by the AO.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal solely on a procedural ground and for not considering the valuation report. It was also held that the denial of TDS credit was against the principles of natural justice. The Tribunal set aside the order and restored the matter to the CIT(A) for a de novo decision, ensuring a reasonable opportunity for both parties.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without considering the valuation report, and whether the denial of TDS credit was legal.
Sections Cited
56(2)(viib) of the Income Tax Act, 1961, 250 of the Income Tax Act, 1961, 143(3) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, CUTTACK BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
order
: May 26th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 15.01.2025,
In Ground No.2, it is observed that the assessee has agitated that the Ld. CIT(A) is not justified to simply dismiss the appeal without accepting the valuation report submitted during the appellate proceedings, merely due to procedural mistake of not making an application for consideration of the same as additional evidence for admission. In Ground No. 3, it is submitted that when the entire audited balance sheet along with the details of allotment of shares as per the Companies Act, 1956 have been filed during the assessment proceedings which could justify the amount as share premium, both the Assessing Authority and the Ld. CIT(A) were not justified in making addition and confirming the same respectively, simply because the valuation report could not be filed due to a reasonable cause, which is against the principles of natural justice. The assessee has also referred to the CBDT circular No.14(XL-35) of 1955 dated 11.4.1955 mentioning the intention of the legislature to provide reasonable justice. The TDS deduction of Rs.1,79,55,137/- has also not been allowed as a credit by the Ld. Assessing Officer while calculating the tax payable in the order, which is illegal and against the principle of natural justice. The Ld. Sr. THE LD. DR, however, argued that the order of the Ld. CIT(A) may be confirmed.
We have considered the submissions made. The Bench was of the view that the Ld. CIT(A) had brushed aside the additional evidence in the form of valuation report submitted by the assessee, which goes to the root of the matter and has not commented upon the same. Therefore, in the interest of justice, the order of the Ld. CIT(A) is set aside and the matter is restored to his file to pass an order de novo after