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Facts
Assessee, M/s Jinabakul Forge Pvt. Ltd., challenged an assessment order under Section 143(3) for AY 2020-21, which included additions for mismatch in 26AS and unoffered duty drawback. The initial appeal to the National Faceless Appeal Centre (NFAC) was disposed of without effectively adjudicating Ground No. 3, which pertained to the incorrect addition of duty drawback.
Held
The Tribunal found that Ground No. 3 concerning the duty drawback addition was not adjudicated by the NFAC. Citing legal precedents, the Tribunal affirmed its limited jurisdiction to address grounds not first adjudicated by the lower appellate authority. Consequently, the Tribunal set aside the NFAC's order pertaining to this ground and remanded the matter back to the NFAC for fresh adjudication of Ground No. 3.
Key Issues
Whether the Income Tax Appellate Tribunal can adjudicate an appeal ground not effectively decided by the National Faceless Appeal Centre, and if so, what is the appropriate course of action.
Sections Cited
Section 253(1) of the Income-tax Act, 1961, Section 250 of the Income-tax Act, 1961, Section 143(3) of the Income-tax Act, 1961, Section 250(6) of the Income-tax Act, 1961, Rule 8 of ITAT-Rules, 1963, Rule 18 of ITAT-Rules, 1963, Rule 34 of ITAT Rules, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PANAJI BENCH, GOA
Before: HON’BLE SHRI PAVAN KUMAR GADALE & SHRI G. D. PADMAHSHALI
ORDER PER G. D. PADMAHSHALI; This appeal is instituted u/s 253(1) of the Income-tax Act, 1961 [‘the Act’] which challenges DIN & Order No 1067836472(1) dt. 21/08/2024 passed by National Faceless Appeal Centre, Delhi [‘Ld. CIT(A)/NFAC’] u/s 250 of the Act which in turn originated from order of assessment dt. 22/09/2022 passed u/s 143(3) of the Act for the assessment year 2020-21 [‘AY’].
ITAT-Panaji Page 1 of 6
M/s Jinabakul Forge Pvt. Ltd. Vs NFeAC ITA No.: 310/PAN/2024 AY: 2020-21 The primary grievance in present appeal twirls 2. around dismissal of first appeal without adjudicating the specific ground number 3 raised therein thus in contravention of s/s (6) of 250 of the Act.
As we note that, the assessee is an incorporated 3. company engaged in manufacturing activities with domestic & exports sales. The assessee company filed its return of income for the year under consideration on 21/12/20220 declaring total income of ₹18,76,27,060/-. The case of the assessee company was selected for complete scrutiny and the consequential assessment u/s 143(3) of the Act was completed wherein two additions were made viz; (i) one on account of mismatch of income reported in 26AS for sum of ₹3,50,126/- and (ii) addition on ₹18,33,201/- representing duty drawback received but not offered to taxation in the return of income.
ITAT-Panaji Page 2 of 6
M/s Jinabakul Forge Pvt. Ltd. Vs NFeAC ITA No.: 310/PAN/2024 AY: 2020-21 Aggrieved by aforestated assessment the assessee 4. filed an appeal before Ld. NFAC on 22/09/2022, wherein the assessee raised six grounds. However while disposing of the appeal on merits, the ground number 3 raised in appeal memo/Form No 35 remained to be adjudicated effectively. Aggrieved on that score the assessee company came in present appeal.
The multiple grounds raised in the present appeal 5. on a sole & substantive issue since inconsonance with rule 8 of ITAT-Rules, 1963 hence reproducing them in this order deem unfit. However it shall suffice to say that, the solitary grievance of the appellant assessee is directed against ineffective adjudication of ground number 3 raised in Form No 35 filed before the Ld. NFAC. Hence, we have heard rival party’s submissions on former limited issue and subject to ITAT-Panaji Page 3 of 6
M/s Jinabakul Forge Pvt. Ltd. Vs NFeAC ITA No.: 310/PAN/2024 AY: 2020-21 rule 18 of ITAT-Rules, 1963 perused material placed on record and considered facts in the light of settled position of law, which are forewarned to the parties for their rebuttal.
From the rival party’s submission & the perusal 6. of impugned order prima-facie revealed that, the ground relating to incorrect addition of duty drawback of ₹18,33,201/- made by the Ld. AO instead of addition to be made of ₹7,98,912/- for which separate findings were provided in the body of assessment order, was misplaced by the Ld. NFAC while dealing with similar grounds. This inadvertency by the LD. NFAC in our considered view must have crept in owning to multiple & identical grounds raised by the appellant on solitary issue of addition relating to duty drawback. There is much less evidence on records to showcase otherwise.
ITAT-Panaji Page 4 of 6
M/s Jinabakul Forge Pvt. Ltd. Vs NFeAC ITA No.: 310/PAN/2024 AY: 2020-21 The question as to whether the Tribunal can 7. adjudicate such ground which did not pass through the first appellate forum finds negatively answered in the recent decision of Hon’ble Delhi High Court in case of ‘Divine Infracon Pvt Ltd. Vs PCIT’ [2025, 171 taxmann.com 92 (Del)], wherein their Hon’ble Lordship have categorically held that, the ground which is not adjudicated by first appellate authority or the ground not originating from the first appellate order cannot be the subject matter of adjudication in second appeal. The Tribunal therefore duty bound to remit the matter to first appellate authority where ground raised therein did not give rise to rights & liabilities to the rival parties. Following former judicial precedents(supra) the Ld. Co-ordinate bench in ‘Maga Ram Choudhary Vs ITO’ [004/PAN/2025 dt. 20/03/2025] while dealing with similar facts & ITAT-Panaji Page 5 of 6
M/s Jinabakul Forge Pvt. Ltd. Vs NFeAC ITA No.: 310/PAN/2024 AY: 2020-21 circumstances remanded the case back to the file of Ld. NFAC/CIT(A) for adjudicating misplaced ground.
In view therefore, without multiplying the 8. authority on the issue, it is necessary to hold in the present case that, Tribunal has much less jurisdiction to adjudicate ground challenged before it unless it is adjudicated first by the Ld. NFAC/CIT(A). Since the impugned order is suffered by non-adjudication of ground challenged therein. We therefore set-aside the same on this limited score with a bullet direction to adjudicate the ground number 3 raised in Form No 3 a fresh in accordance with law.
The appeal is partly allowed for statistical purpose. In terms of rule 34 of ITAT Rules, 1963 the order pronounced in the open court on date mentioned hereinbefore.