JOINT COMMISSIONER OF INCOME TAX (OSD), NUNGAMBAKKAM CHENNAI vs. AIRCEL CELLULAR LTD, ANNA SALAI, CHENNAI

आदेश / O R D E R

PER ABY T. VARKEY, JM: These are two appeals preferred by the Revenue against the

common order of the Learned Commissioner of Income Tax

(Appeals)/NFAC, (hereinafter in short ‘the Ld.CIT(A)’), Delhi, dated

30.10.2023 for the Assessment Year (hereinafter in short ‘AY’) 2017-18.

Subject matter of ITA No.16/Chny/2024 is the regular/original

assessment order passed u/s.143(3) of the Income Tax Act, 1961

(hereinafter in short ‘the Act’) dated 25.12.2019; and ITA

No.15/Chny/2024 is in respect of AO’s re-assessment order dated

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16.03.2021 passed u/s.147/144B of the Act. We will take up for hearing

both the appeals together and dispose both by passing this common

order.

for AY 2017-18 are as under:

2 The Ld.CIT(A) has erred in allowing the assessee another opportunity to submit details when the Ld.CIT(A) has given a clear finding that the assessee has miserably failed to produce details.

3 The Ld.CIT(A) ought not to have allowed the assessee's plea especially when no new evidence is filed before even CIT(A) which is another way of availing time and opportunity to verify the disallowances which already stand confirmed by the very finding of the Ld.CIT(A).

4 The Ld. CIT(A) has erred in stating the ground to be allowed whereas the same has to be either partly allowed or allowed for statistical purposes since the Ld.CIT(A) has not allowed the ground per se but has directed the AO to verify if the relevant income is offered for taxation and then give due credit for TDS.

for AY 2017-18 are as under:

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business of providing telecommunication services in various telecom

circles of India. For the year under consideration, the assessee electronically filed its original return of income on 30th October, 2017

declaring an income of Rs.1,37,59,62,974/-. The AO issued statutory

notices u/s.143(2)/142(1) of the Act, and the assessee informed the AO

that the Ld.NCLT has appointed (Resolution Professional) (hereinafter in

short ‘RP’) w.e.f. March 19, 2018 and declared "Moratorium" in terms of

Section 14 of the Insolvency and Bankruptcy Code, 2016 (hereinafter in

short ‘IBC’). According to assesse, as per section 14(1)(a) of the IBC

during the moratorium, no suit or continuation of pending suits or

proceedings could be initiated against the corporate debtor including

execution of any judgment, decree or order in any Court of law, Tribunal,

arbitration panel or other authority. However, the AO proceeded against

the assessee and made various adjustments and passed the Assessment

Order dated 25.12.2019 u/s.143(3) of the Act assessing the total income

of Rs.1,43,97,28,956/- in place of returned income of

Rs.1,37,59,62,974/- i.e. AO disallowed expenses of Rs.6,37,65,981/-

ITA Nos.15 & 16/Chny/2024 (AY 2017-18) Aircel Cellular Ltd :: 4 ::

which is subject matter of ITA No.16/Chny/2024. Thereafter, the AO re-

opened the assessment of the assessee by issuing notice u/s.148 of the

Act on 16.03.2021 and made an adjustment of Rs.5,89,33,571/-

assessing the total income at Rs.1,49,86,62,527/- which is subject matter

of ITA No.15/Chny/2024.

25.12.2019) the assessee preferred an appeal before the Ld.CIT(A) who

dismissed all grounds raised by the assessee except Ground Nos.3 & 4 i.e.

Ground Nos.3 & 4 was adjudicated by the Ld.CIT(A) by holding as under:

Ground No.3 is regarding disallowance of expenses of Rs.6,37,65,981/-

In the assessment order the AO has highlighted that the assessee was asked to submit the details of payments, party-wise details and supporting documents for expenses claimed by the appellant. In spite of repeated reminders the assessee failed to do so and a penalty of Rs.10,000/- u/s.272A(1)(d) was levied. The AO was not in a position to verify the veracity and genuinity of the claim of expenses. In absence of supporting documents/copy of TDS challans paid/nature of expenses etc., the said claim of expenses was disallowed and added back to the total income of the assessee. Further, during the course of appellate proceedings also the appellant assessee has failed miserably to submit any details or supporting documents nor any explanation or submission was filed on behalf of appellant, in support of its contention that "expenses disallowed includes amounts in the nature of provisions written back which were disallowed in the year of creation and it is a double disallowance”. Considering the reasoning given for the impugned addition in the assessment order, the same does not call for any interference. Accordingly ground of appeal no. 3 is dismissed.

Further, the appellant submits that the addition by the Ld. A.O. has resulted in double disallowance. The assessing officer is directed to give due opportunity of being heard to the assessee and to call for the details and if submitted verify the same and accordingly give relief. In the result, ground No.3 raised is allowed in terms indicated above.

Ground No.4 is a grievance that credit for the TDS claimed by the appellant has not being given though reflecting in Form 26AS. The assessing officer is directed to verify the same and give credit for the TDS deducted. In doing so, he may give due opportunity to the assessee to reconcile the 26AS with books of accounts and

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if the relevant income has been offered for taxation for the year under consideration, give due credit for the TDS deducted. Thus, ground No 4 raised is allowed in terms Indicated above.

dated 16.03.2021 preferred an appeal before the Ld.CIT(A) who has

dismissed all grounds except two grounds as under:

Ground No.3 is regarding disallowance of ICDS Adjustment.

In the assessment order the AO has highlighted that the assessee was required to make a net upward adjustment of Rs.2,30,12,935/- to its profits during the year in compliance with provisions of ICDS u/s.145(2). The assessee has made no submission to substantiate whether this adjustment was already made to its income in order to comply with the provisions of Income Computation and Disclosure Standards notified u/s.145(2). The appellant in its written submission has stated that the ICDS Adjustment of Rs.2,30,12,935/- has already been made to total income as per the return of income and also in the computation of income. The assessing officer is directed to verify the same and accordingly give relief. Thus, ground No.3 raised is allowed in terms indicated above.

Ground No.5 is regarding not giving full credit for the TDS claimed by the appellant though the corresponding revenue has been offered for taxation for the year under consideration. The assessing officer is directed to verify the same and give credit for the TDS, deducted, if the relevant income has been offered for taxation for the year under consideration. Thus, ground No.5 raised is allowed in terms indicated above.

orders in both appeals on 30.10.2023, the Revenue is before us.

on record. The main grievance of the Revenue in ITA No.16/Chny/2024 is

against the action of the Ld.CIT(A) which was passed pursuant to the

appeal of the assessee against the original assessment order passed on

25.12.2019 u/s.143(3) of the Act, wherein, the Ld.CIT(A) had initially

dismissed the grounds of appeal viz. Ground No.3, but thereafter, asked

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the AO to verify whether the AO’s action of disallowing certain item of

expenditure tantamount to double disallowance; and regarding Ground

No.4, the Ld.CIT(A) directed AO to verify Form 26AS and give TDS credit

to assessee. And finally the Ld.CIT(A) held that “grounds are allowed in

terms indicated above”. These impugned actions of the Ld.CIT(A)

according to Revenue is erroneous, because according to them, the

Ld.CIT(A) while adjudicating grounds of appeal could either (i) allow the

ground or (ii) dismiss the ground or allow the ground for statistical

purposes. However, according to Revenue, the Ld.CIT(A) had adopted

another expression after initially dismissing Ground No.3 and then,

expressed “Ground No.3 is allowed in terms indicated above and directed

the AO to verify whether there is any double disallowances after calling

for details and hearing the assessee” which action is erroneous. Likewise,

regarding Ground No.4 (credit for TDS), the Ld.CIT(A) has directed the

AO to verify Form No.26AS and give credit for the TDS deduction and

while doing so, opportunity to the assessee to reconcile Form No.26AS

with books of accounts of the assessee and if the relevant income is

offered for taxation for the year under consideration, then, to give credit

for TDS deducted and then, used the expression ”Ground No.4 raised in

terms indicated above”, which expression, according to Revenue is

erroneous. The Ld.DR before us submitted that the Ld.CIT(A) being the

First Appellate Authority has not been empowered by law, to set aside the

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issues raised before him for reconsideration of the AO. Therefore,

appeals have been preferred against impugned action of the Ld.CIT(A).

We find force in the Ld.DR’s submissions. However, after going through

the entire facts and circumstances of the case, and all the grounds raised

by the assessee before the Ld.CIT(A), we find that in respect of Ground

No.3, the Ld.CIT(A) taking note of the plea of the assessee that the

disallowance of expenses ordered by the AO to the tune of

Rs.6,37,65,981/- has resulted in double disallowance and therefore,

Ld.CIT(A) directed the AO to give opportunity of being heard to the

assessee and call for details and verify the same and accordingly, gave

such a relief. Since the main grievance of the Revenue is that Ld.AR

could not have set aside the issue back to the AO, but we set aside the

impugned action of the Ld.CIT(A) regarding the verification part of the

order in respect of Ground No.3 (supra) and modify the order to the

extent that the AO after calling for the details of expenditure which they

claim to have been disallowed twice and after they submit the details, the

AO to verify whether there was any double disallowance, then to allow

relief to assessee accordingly. If the assessee’s claim before the

Ld.CIT(A) is correct, then, the AO to make suitable adjustments and give

relief accordingly to the assessee.

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directed the AO to grant credit for TDS, we set aside the action of

Ld.CIT(A) and instead modify the order to the extent that we direct the

AO to verify the claim of the assessee about credit for TDS, which

assessee has claimed that it has not been given though reflected in Form

No.26AS. The AO to verify this issue and give credit for the TDS

deducted and while doing so, he may give opportunity to the assessee to

reconcile Form No.26AS with books of accounts of the assessee and if the

relevant income has been offered for taxation for the year under

consideration, give due credit for TDS deduction. This ground of the

Revenue is allowed for statistical purposes.

order of the AO dated 24.03.2022 u/s.147/144B of the Act, which

resulted in the Ld.CIT(A) passing impugned order on 30.10.2023, the

Revenue is aggrieved by the action of the Ld.CIT(A) directing the AO to

verify the disallowances of Income Computation & Disclosure Standards

(hereinafter in short ‘ICDS’) adjustments and also, the TDS credit claimed

by the assessee. According to the Ld.DR, the Ld.CIT(A) ought not to have

directed the AO to verify the facts at the end of the AO when no

evidences were furnished before him. We find that the Ld.CIT(A) noted

the AO in the assessment order observed that assessee was required to

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make a net upward adjustments of Rs.2,30,12,935/- to its profits during

the year in compliance of the provisions of the ICDS u/s.145(2) of the Act

and since, assessee failed to show that whether this adjustments has

already been made to its income in compliance with the provisions of

ICDS notified u/s.145(2) of the Act, the AO was pleased to disallow

Rs.2,30,12,935/-. On appeal, the plea of the assessee before the

Ld.CIT(A) was that assessee had already made such an adjustment of

Rs.2,30,12,935/- to the total income which is reflected in the return of

income and also in the computation of income. In light of the aforesaid

plea of the assessee, the Ld.CIT(A) directed the AO to verify the facts and

if found to be correct to give relief accordingly. Since main grievance of

the Revenue is that the Ld.CIT(A) does not have the power to set aside

the issue back to the file of the AO for verification, we set aside the

impugned action of the Ld.CIT(A) and restore the issue back to the file of

the AO with a direction that if the assessee has already made (suo moto)

this adjustment to its income in compliance with the provisions of ICDS

notified u/s.145(2) of the Act, then in such an event, relief should be

granted to the assessee. This ground of Revenue appeal is allowed for

statistical purposes.

against the action of the Ld.CIT(A) directing the AO to grant due credit for

ITA Nos.15 & 16/Chny/2024 (AY 2017-18) Aircel Cellular Ltd :: 10 :: the TDS. This is similar to the directions we have addressed (supra), therefore, by following the same, we set aside the impugned order of the Ld.CIT(A) and direct the AO to verify this issue and give credit for TDS deducted and while doing so, he may give opportunity to the assessee to reconcile Form No.26AS with books of accounts of the assessee and if the relevant income has been offered for taxation for the year under consideration, give due credit for the TDS deduction.

Order pronounced on the 05th day of June, 2024, in Chennai.

Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (ABY T. VARKEY) (S.R.RAGHUNATHA) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER चे�ई/Chennai, �दनांक/Dated: 05th June, 2024. TLN, Sr.PS आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु� (अपील)/CIT(A) 4. आयकरआयु�/CIT 5. िवभागीय�ितिनिध/DR 6. गाड�फाईल/GF