HUGHES COMMUNICATIONS INDIA PRIVATE LIMITED,NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX , C. R .BUILDING, NEW DELHI
Facts
The assessee filed three appeals concerning assessment years 2018-19, 2019-20, and 2021-22. For AY 2018-19 and 2019-20, there was a significant delay in filing appeals, which the assessee attributed to pending rectification applications u/s 154 before the AO, and the CIT(A) had dismissed these appeals for non-condonation of delay. The issue for these years related to disallowance u/s 43B regarding leave encashment and bonus. For AY 2021-22, the appeal concerned a disallowance u/s 28 for GST collected from customers, which the assessee claimed was paid to the government and not taxable income.
Held
The Tribunal condoned the delay in filing appeals for AY 2018-19 and 2019-20, finding the assessee's reason of awaiting rectification orders bona fide. Consequently, for all three appeals (AY 2018-19, 2019-20, and 2021-22), the matters were set aside to the Assessing Officer for fresh verification and adjudication on merits. All appeals were allowed for statistical purposes.
Key Issues
Whether there was reasonable cause for delay in filing appeals; Whether disallowance u/s 43B for employee benefits was justified; Whether disallowance u/s 28 for GST collected was justified.
Sections Cited
143(1), 154, 43B, 28
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘B’: NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘B’: NEW DELHI
BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER
ITA Nos.2308, 2309 and 2847/DEL/2024 [Assessment Years: 2018-19, 2019-20 & 2021-22]
Hughes Communications Additional Joint Commissioner of India Private Limited, Income Tax(A)-1, Vadodara, 1, Shivji Marg Westend Vs Aayakar Bhawan, Greens, N.H. 08, Gurgaon Racecourse Circle, Road, South West Delhi, Vadodara-390007 Delhi-110037 PAN-AAACH0765L Assessee Revenue
Assessee by Shr. Aryan Gupta, Adv. Revenue by Ms. Banita Dev Naorem, CIT-DR & Shri Rajesh Kumar Dhanesta, Sr. (DR)
Date of Hearing 19.12.2024 Date of Pronouncement 27.12.2024
ORDER PER BRAJESH KUMAR SINGH, AM,
This bunch of three appeals filed by the same assessee are against the
following orders:-
ITA No. Assessment Order of the Ld. CIT(A)/JCIT Order of the AO Year 2308/Del/2024 2018-19 ADDL/JCIT(A)-1, Vadodara in Order u/s 143(1) appeal No. ADDL/JCIT(A)-1 dated VADODARA/10001/2017-18 07.11.2019, CPC, dated 15.03.2024 Bengaluru 2309/Del/2024 2019-20 ADDL/JCIT(A)-1, Vadodara in Order u/s 143(1) appeal No. ADDL/JCIT(A)-1 dated VADODARA/10002/2018-19 27.06.2020, CPC,
ITA Nos.2308, 2309 & 2847/Del/2024
dated 15.03.2024 Bengaluru 2847/Del/2024 2021-22 ADDL/JCIT(Appeals)-1, Order u/s 143(1) Vadodara in appeal No. dated NFAC/2020-21/10184775 30.09.2022, CPC, dated 05.04.2024 Bengaluru
1.1 Since all these appeals have similar issues and therefore the same are
decided by this common order.
ITA No. 2308 and 2309/Del/2024
We note that there is delay of three and half years in filing of the appeal for
AY 2018-19. Similarly, there is a delay of three years in filing of the appeal for
Assessment Year 2019-20. In both the years, it was submitted by the assessee
before the Ld. CIT(A) that after the receipt of the respective intimations u/s 143(1)
of the Act, the assessee had filed rectification applications before the AO and was
in constant follow up with the same and was hopeful of getting a favourable order
from the AO and therefore the appeal was not filed. The same was not accepted by
the Ld. CIT(A) and he held that in absence of specific reasons, it cannot be
presumed that there was reasonable and sufficient cause for delay in filing the
appeal. Therefore, the Ld. CIT(A) dismissed the respective appeals of the assessee
on the ground of the rejection of petition for condonation of delay. Further, the Ld.
CIT(A) held that in absence of submission, merit of the case was not discussed.
During the appellate proceeding before us, the Ld. AR reiterated its
submissions made before the ld. CIT(A) and submitted that the assessee did not
file an appeal because the assessee was hopeful of getting suitable relief in respect
ITA Nos.2308, 2309 & 2847/Del/2024
of the petitions u/s 154 of the Act filed by it as according to him the adjustment in
total income vide respective orders u/s 143(1) were on account of mistakes
apparent from record. However, since, the said rectification petitions were not
adjudicated by the AO and therefore it was constrained to file these appeals. In
light of these facts, the Ld. AR submitted that the delay in filing the respective
appeals may be condoned and the appeals may kindly be decided on merits.
We have considered the rival contentions and perused the materials available
on record. The submission of the assessee has been carefully perused by us and
we found that there was a reasonable cause for the delay in filing of these two
appeals. The submission of the assessee that it was hopeful of getting relief by
filing the respective rectification petition and therefore it did not prefer an appeal
after the receipt of the order u/s 143(1) of the Act is bona fide and reasonable. We
therefore, condone the delay for both the assessment years and decide the appeals
on its merits.
ITA No. 2308/Del/2024
Brief facts of the case:- The sole grievance of the assessee is with respect to
disallowance of Rs.2,62,84,207/- made u/s 43B of the Act on account of leave
encashment and bonus to employees. In this regard, the ld. AR submitted that
these expenses were incurred during the year under consideration and actually
paid before the due date of furnishing of the return of income and therefore it was
an allowable expenditure. In this regard, the ld. AR submitted that the Ld. CIT(A)
did not adjudicate the appeal on merits because he had rejected the condonation 3
ITA Nos.2308, 2309 & 2847/Del/2024
application regarding the delay in filing of the appeal. Therefore, the Ld. AR
submitted that the matter may be set-aside to the file of the AO for necessary
verification of the claim made by the assessee and allow the claim as per law.
In this regard, the Ld. DR did not have any serious objection to the above
request of the assessee.
We have considered the rival submissions and perused the materials
available on record. The issue relates to the verification of the fact as to whether
the amount of Rs.2,62,84,207/- on account of leave encashment and bonus to
employees were incurred during the year under consideration and actually paid
before the due date of furnishing of the return of income and therefore was an
allowable expenditure.As discussed above, we have already condoned the delay in
filing of this appeal. Since, the Ld. CIT(A) did not adjudicate the issue on merits,
we, therefore, set-aside the order of the Ld. CIT(A) and restore the matter to the file
of the AO for necessary verification regarding claim of the assessee and passing
fresh order as per law.
In the result, the appeal of the assessee is allowed for statistical purpose.
ITA No.2309/Del/2024
Grounds of appeal in ITA No.2309/Del/2024areidentical to grounds raised
in ITA No.2308/Del/2024 (except for the difference in the amount) decided by us in earlier part of this order. Therefore, our above decision would apply mutatis-
ITA Nos.2308, 2309 & 2847/Del/2024
mutandis to these grounds of the appeal also. Accordingly, this appeal of the
assessee is also allowedfor statistical purpose.
ITA No.2847/Del/2024
The sole grievance in this appeal is the disallowance made u/s 28 of the Act
amounting to Rs.28,92,49,858/- on account of GST collected from the customers.
The Ld. AR submitted that the amount of Rs.28,92,49,858/- collected as GST from
the customer was paid directly to the Government as indirect taxes and hence not
considered as income of the assessee. It was further submitted that the Ld. CIT(A)
erred in holding that the assessee did not submit the necessary challans
evidencing the aforesaid payment to the Government account. The Ld. AR,
therefore, requested that the matter may be set-aside to the file of the AO for
necessary verification and allowance of the claim as per law.
In this regard, the Ld. DR did not have any serious objection to the above
request of the assessee.
We have considered the rival contentions and perused the material available
on record. The matter needs verification with respect to the claim of the assessee
that the amount of Rs.28,92,49,858/- collected as GST from the customer was
paid directly to the Government as indirect taxes and hence not considered as
income of the assessee. Therefore, the order of the Ld. CIT(A) is set-aside and the
matter is restored to the file of the AO for necessary verification and passing fresh
order as per law. 5
ITA Nos.2308, 2309 & 2847/Del/2024
In the result, the appeal of the assessee is allowed for statistical purpose.
In the result, all the three appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 27th December, 2024
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