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.

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.

1. The order of the learned CIT(A) is contrary to law, facts and circumstances of the case.

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.

5. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored.

1. The order of the learned CIT(A) is contrary to law, facts and circumstances of the case.

2. The Ld.CIT(A) has erred in allowing the assessee another opportunity to submit details despite the assessee failing to furnish any new material.

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).

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which is subject matter of . 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.

5. Aggrieved, by the action of AO in the original round (dated 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 & 16/Chny/2024 (AY 2017-18) Aircel Cellular Ltd :: 5 :: 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.

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.

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 & 16/Chny/2024 (AY 2017-18) Aircel Cellular Ltd :: 7 :: 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. & 16/Chny/2024 (AY 2017-18) Aircel Cellular Ltd :: 8 ::

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.

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