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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
This appeal by assessee is directed against the order dated 20.10.2023 of the Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi for A.Y.2021-22.The assessee has raised following grounds of appeal:
“1 The Ld. AO was not justified in passing the order, which is bad-in-law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled.
ITANo.527/Ind/2023 Radha Sharan Goswami 2 The Ld. CIT(A) was not justified in confirming the order, which is bad-in-law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled. 3 The Ld. CIT(A) was not justified in confirming the addition of Rs 5,48,154 /- as Income from other sources out of total addition of Rs.94,76,461.”
At the time of hearing Ld. AR of the assessee has submitted that the assessee challenged the addition/adjustment made by the CPC while processing return u/s 143(1) of the Act before the CIT(A). During the pendency of the appeal before the CIT(A) the assessee also filed an application u/s 154 of the Act for rectification of the order and CPC vide order dated 23.01.2023 allowed the application of the assessee u/s 154 and therefore, the grievance of the assessee was redressed while passing rectification order u/s 154 of the Act. Ld. AR has submitted that the assessee then filed an application dated 10.10.2023 for withdrawal of the appeal filed before the CIT(A) against the order u/s 143(1) however, the CIT(A) without considering application of the assessee as well as without considering order passed u/s 154 of the Act has partly confirmed the addition/adjustment made by the CPC u/s 143(1) of the Act. He has referred to the application for withdrawal of appeal placed at page no.1 & 2 of the paper book as well as rectification order passed by the CPC u/s 154 placed at page no.3 to 7 of the paper book. Thus, Ld. AR has submitted that the addition/adjustments confirmed by the CIT(A) are liable to be deleted in view of the rectification order u/s 154 of the Act.
ITANo.527/Ind/2023 Radha Sharan Goswami 3. On the other hand, ld. DR has submitted that it appears that these facts were not brought to the notice of the CIT(A) before the impugned order was passed. He has relied upon impugned order of the CIT(A).
We have considered rival submissions as well as relevant material on record. The assesse filed the appeal before the CIT(A) against the order dated 04.08.2022 passed u/s 143(1) of the Act by the CPC whereby an addition of Rs. 1,16,92,539/- was made in the hands of the assessee towards inconsistency in the amount mentioned in the return of income and tax audit report. The assessee also filed an application u/s 154 of the Act on 11.01.2023 for rectification of the order passed u/s 143(1) of the Act. The CPC vide order dated 23.01.2023 allowed the application for rectification u/s 154. Thereafter the assessee filed application for withdrawal of appeal on 10.10.2023 which is placed at page no.1 & 2 of the paper book. The acknowledgement of the said application filed in the e- proceedings reflects the date of application however, the CIT(A) has partly confirmed the order of the CPC passed u/s 143(1) while passing the impugned order. The relevant part of the impugned order of the CIT(A) in para 5 to 5.4 is as under:
“5.DECISION: 5.1 Ground no 2,3 and 4 5.1.1 After due verification of ITR and computation of income, it is evident that the say of the assessee is in order for following items
ITANo.527/Ind/2023 Radha Sharan Goswami a. Agriculture Income Income from other sources 9,82,434 b. Interest on savings account Income from other sources 58,148 c. FDR interest Income from other sources 3,04,716 d. LIC Refund Income come from other sources (exempt) 1,20,000 sources e. ICICI Mutual Fund Income from other sources 4,42,440 f. Tower Rent income from other sources 3,08,340 5.1.2 With regards to g. Rent Building and Warehouse Income from House property of Rs 94,76,461, the gross rent of the two let out properties of the appellant are taken into consideration. From the computation of income, its evident that, gross rents of both properties are Rs 19,50,916 and Rs 69,77,485 which sums up at Rs 89,28,401. Hence, the appellant can be granted relief only to the extent of Rs 89, 28, 401 and addition of Rs 5,48,154 is hereby confirmed. Appellant despite giving several opportunities haven't been able to explain this. 5.1.3 In view of above, ground no 2, 3 and 4 filed by the assessee are treated as PARTLY ALLOWED. 5.2 Ground no 5 In this ground the appellant contends that the AO erred in working of tax and interest u/s 234A/B/C/D which needs rectification The AO is directed to verify the appellant's claim relating to working of tax. So far as charging of interest u/s 234A/B/C/D is concerned, this is consequential in nature as charging of interest under sections 234A / 234 * B / 234 * C / 234 * D of the I.T. Act is mandatory and not discretionary as held by the Hon'ble Supreme Court in the case of Anjuman H Ghaswala reported in 252 ITR 1 and also the decision of the Apex Court in the case of CIT vs. Hindustan Bulk Carriers
ITANo.527/Ind/2023 Radha Sharan Goswami reported in 259 ITR 449. Accordingly, this ground of appeal stands PARTLY ALLOWED. Ap 5.3 Ground no 1. Ground no 1 is general in nature and need not be adjudicated upon. 5.4 Ground no 6 in this ground the appellant has craved leave to add or delete all or any of the grounds before or at the time of hearing. No such option was exercised by the appellant during the appellate proceedings, and, as such, this ground of appeal is treated as DISMISSED.” 4.1 It is apparent from the impugned order of the CIT(A) that the CIT(A) has partly upheld the order of the CPC passed u/s 143(1) without considering subsequent order of the CPC passed u/s 154 of the Act as well as the application for withdrawal of appeal filed by the assessee on 10.10.2023. There is no dispute that the CIT(A) can refuse to accept the application of withdrawal because of his power of enhance the assessment however, in the case in hands the CIT(A) has not invoked its power of enhancement as conferred u/s 151(1) of the Act and therefore, the addition/adjustment made by the CPC while processing return of income u/s 143(1) was confirmed by the CIT(A) without considering subsequent order u/s 154 of the Act as well as application of the assessee for withdrawal of the appeal is a serious flaw in the impugned order of the CIT(A). In any case when the CPC has already granted the relief and redressed the grievances of the assessee while passing rectification order u/s 154 of the Act then addition confirmed by the CIT(A) are not sustainable in law. Accordingly in the facts and circumstances of the case as discussed
ITANo.527/Ind/2023 Radha Sharan Goswami above the impugned order of the CIT(A) is set aside and the order passed by the CPC u/s 154 of the Act stand restored.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 21.05.2024.