ITO, WD-2(3), SILIGURI, SILIGURI vs. M/S S. D. ENTERPRISE, SILIGURI

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ITA 373/KOL/2015Status: DisposedITAT Kolkata15 September 2017AY 2011-20124 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the tax effect exceeded the limit for non-maintainability. Since the CIT(A) had restored one addition to the AO for verification, the Tribunal decided to restore the other addition to the AO as well for fresh adjudication.

What were the facts?

The Revenue appealed against the CIT(A)'s order which deleted an addition based on a Section 197 certificate and restored another addition to the AO for fresh verification. The Revenue's grounds of appeal concerned the admission of fresh evidence and the CIT(A)'s power to set aside matters for verification.

What were the issues?

Whether the CIT(A) erred in admitting fresh evidence without informing the AO and whether the CIT(A) exceeded its powers by setting aside the matter for fresh verification.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 197,Section 251(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA

Before: Shri Aby.T Varkey & Shri Waseem Ahmed

आदेश /O R D E R

PER Waseem Ahmed, Accountant Member:-

1.

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), Siliguri dated 16.01.2015. Assessment was framed by ITO Ward-2(3), Siliguri u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide her order dated 30.03.2014 for assessment year 2011-12. Grounds raised by Revenue per its appeal are as under:-

1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in admitting fresh evidence at the appellate stage, in the form of certificate u/s. 197 in respect of M/s Adecco Flexione Work Force Solution, without informing the AO, as is required as per the provisions of Rule 46A(3) of the Income Tax Rules, 1962.

ITA No.373/Kol/2015 A.Y. 2011-12 ITO Wd-2(3) Slg. Vs. M/s S.D. Enteprise, Page 2 2. That on the facts and in the circumstances of the case, the order of the Ld. CIT(A) is bad in law inasmuch as the directions issued to the Assessing Officer to make further verifications is in excess of the powers granted u/s. 251(1) id the IT Act, 1961, as has also been pointed out in the decision of the jurisdictional ITAT in of 2009, in the case of Visura Trading & Investment (I) Lt. Kolkata Vs. ITO, Ward-9(2) Kolkata, which states- ‘There is no dispute to the fact that as per sec. 251(1) of the Act, the ld. CIT(A) has no power to set aside any matter to the file of the ld. AO for fresh verification and adjudication.’ 3. That the appellant craves leave to add, amend or alter the grounds of appeal, if any.”

Shri Rajendra Prasad, Ld. Departmental Representative represented on behalf of Revenue and Shri Sunil Surana, Ld. Authorized Representative appeared on behalf of assessee.

2.

At the outset, Ld. Authorized Representative for assessee submitted that the Revenue has raised only two issues as detailed under:- i) Ld. CIT(A) has deleted the addition made by the Assessing Officer on the basis of additional evidence which are admitted in contravention to the provision of Rule 46A(3) of the Income Tax Rules, 1962. ii) Ld. CIT(A) erred in setting aside the order of AO for fresh verification though Ld. CIT(A) had no power under the provision of Section 251(1) of the Act 3. Ld. AR further submitted that the addition was made by AO due to non- deduction of Tax Deducted at Source (TDS) on the payment of ₹5,69,672/- only to M/s Adecco Flexione Work Force Solution (AFWFS for short). The same was deleted by Ld. CIT(A) on the ground that there was certificate issued u/s 197 of the Act for non-deduction of TDS. For this amount of deletion Revenue has filed an appeal before us.

4.

The ld. AR further submitted that tax effect of this addition is below the prescribed limit as per Circular No. 21 of 2015 issued by CBDT dated 10.12.2015. Similarly for the other addition, the Ld. AR further submitted that the addition was made by the AO on account of cessation of liability shown by the A.Y. 2011-12 ITO Wd-2(3) Slg. Vs. M/s S.D. Enteprise, Page 3 assessee for Rs.9,22,936/- in respect of three parties as discussed in assessment order. Therefore, the addition was made by the AO for the above two matters. Against the above additions the assessee filed appeal to ld. CIT(A) who deleted the first addition and for 2nd addition, he has restored back the matter to AO for fresh adjudication after necessary verification. Accordingly the ld. AR submitted that there is no tax effect arising from the order of ld. CIT(A) in respect of the deletion of 2nd addition made by the AO. As such it was submitted by the ld. AR that on the basis of above grounds of appeal and in view of Circular No. 21 of 2015 dated 10.12.2015 issued by CBDT the appeal filed by Revenue is not maintainable.

On the contrary, Ld. DR submitted that the addition made by the AO in ground No.2 was not actually deleted by Ld. CIT(A) but remitted back to the file of AO for fresh verification. Therefore, as such, it cannot be concluded that there is no tax liability arising out of ground No.2. The ld. DR vehemently supported the order of AO.

5.

We have heard the rival contentions of both the parties and perused the material available on record. At the outset, we were convinced with the argument placed by Ld. AR that the appeal filed by Revenue is not maintainable due to low tax effect and accordingly we were of the considered opinion to dismiss the appeal of Revenue due to tax effect.

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