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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: SRI SONJOY SARMA & SRI SANJAY AWASTHI
order
: September 12th, 2024 ORDER
Per Sanjay Awasthi, Accountant Member:
In this case there is a delay of 30 days in filing of this appeal, for which the appellant has filed a delay condonation application as under: “The Humble petition of the Abovenamed Petitioner Most Respectfully Sheweth: That the appellate order passed by the C.I.T.(A)-NFAC on 08.03.2024 and received by my office assistant on 08.03.2024 through I.T. Portal, so the statutory date of filing the appeal after 60 days was 07.05.2024. The appeal is to be filed on 06.06.2024 i.e. after 30 days of delay.
I.T.A. No.: 1278/KOL/2024 Assessment Year: 2022-23 The Executor to the Estate of Sukhendu Prasad Choudhury. That Kolkata Metro Rail Corporation Limited has issued a notice for vacant of my chamber at building premises 1A, Raja Subodh Mullick Square, Kolkata-700013 for underground construction of cross passage no. CP -5B connecting East West Metro corridor project from 22.04.2024 to 30.04.2024 and onwards, therefore, I could not do my office work that time. Then my mother suffering from severe Colon problem and admitted in Belle-veu hospital on 7.5.2024 and I was busy with her treatment. Then I was also suffering from acute low back pain, severe Gastroenteritis problems and IBS problems and pulse rate and blood pressure are very high and busy with medical test. The Memorandum, grounds of appeal prepared and duly signed by me today and there is a delay of 30 days which is very negligible and may kindly be condoned. That the prayer of the appellant may kindly be accepted and the delay be condoned for the end of justice.” 1.1. Considering the reasons given in the said condonation petition, the delay is hereby condoned in the interest of substantive justice.
2. In this case, the Assessing Officer, CPC (hereinafter referred to as ld. 'AO') is seen to have issued an intimation order dated 22.03.2023 u/s 143(1) of the Income Tax Act, 1961 (in short the 'Act'), in which TDS claim of Rs. 71,583/- was not granted ostensibly because the same was not found reflected in Form 26AS relevant to AY 2022-23. Aggrieved with this action of ld. AO, this appellant approached the Commissioner of Income Tax (Appeals)- 2, Pune [hereinafter referred to as ld. 'CIT(A)'], who has disposed off this matter as under: “6.3 Having considered the above facts, the issue is sent to the JAO with a direction to verify the same by calling for relevant information from the appellant. In case, the contentions of the appellant are found correct, the JAO is also directed to verify whether the receipts against the TDS so claimed have been offered to tax. The JAO after having carried out the verification and upon his satisfaction regarding the claim of the appellant is directed to allow the credit of TDS amounting to Rs. 71,583/- to the appellant. During verification process, proper opportunities of being heard are to be given to the appellant and if the claim is denied, the JAO is directed to pass speaking order so that the appellant may file appeal, if the same is found desirable.
7. As a result, the present appeal of the Appellant is allowed for statistical purposes.” Page 2 of 7 I.T.A. No.: 1278/KOL/2024 Assessment Year: 2022-23 The Executor to the Estate of Sukhendu Prasad Choudhury. 2.1. The appellant apparently did not succeed in getting the dispute settled and has, therefore, approached the ITAT, with the following grounds of appeal:
1. For that on the facts of the case, the appellate order passed by the Ld. CIT(A) dated 08.03.2024 which is completely arbitrary, unjustified and illegal.
2. For that on the facts of the case, the Ld. C.I.T.(A) has directed to AO to verify whether the receipts against the TDS so claimed have been offered to tax and after having carried out the verification and upon his satisfaction regarding the claim of the appellant is directed to allow the credit of TDS amounting to Rs.71,583/- to the appellant, but it should be fully allowed in accordance with law because the Executor assessee has shown the income and claimed the said TDS amounting to Rs.71,583/- on such income, as such his finding is completely arbitrary, unjustified and illegal.
3. For that on the facts of the case, the assessee’s status is AJP by the probate order of Hon hie Calcutta High Court dated 28.03.2022, but TDS on dividend of Shares and Mutual Fund issued by the companies in favour of deceased person Sukhendu Prasad Choudhury (PAN-ACUPC1526F) who has expired on 08.06.2020 and the said TDS has not claimed by the deceased person because return not filed by the deceased assessee as per Provision of I.T. Act, , therefore, it should be allowed u/s. 199 of the I.T. Act.
4. For that on the facts of the case, that while issuing intimation u/s. 143(1) could not deny TDS claimed by the assessee as the same does not come within the ambit of ‘an incorrect claim apparent from any information in the return’, therefore, the not credited the TDS amount made by the CPC was without jurisdiction, as such his finding is completely arbitrary, unjustified and illegal.
5. For that the charging interest u/s.234B at 8,445/- and u/s. 234C at Rs.790/- which are completely arbitrary, unjustified and illegal.
6. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.”
3. Before us, the ld. Counsel for the assessee took pains to point out the factual position and took us through some documents in a paper book filed by him. He pointed out that the impugned amount of TDS was reflected in the 26AS sheet and vehemently argued that instead of giving directions to ld. AO to verify the receipts before granting of credit of TDS, he should have allowed the claim at his level. 3.1. The ld. D/R relied on the order of ld. CIT(A).
Page 3 of 7 I.T.A. No.: 1278/KOL/2024 Assessment Year: 2022-23 The Executor to the Estate of Sukhendu Prasad Choudhury.
We have carefully considered the orders of authorities below, documents presented before us and also considered the arguments advanced. It is clear that the ld. CIT(A) has exceeded his legal brief in giving such directions to the ld. AO as are seen in para 6.3 of the impugned order (supra), through which the matter has been virtually set aside to ld. AO. To set the legal record straight, some extracts from a Coordinate Bench decision in the case of DCIT vs. The Meghalaya Cooperative Apex Bank Limited in order dated 29.08.2024 deserve to be mentioned: “4.2. We have carefully considered the arguments of the ld. D/R as well as ld. A/R and have also perused the findings of the ld. CIT(A). While it is clear that the Department has not really challenged the case on the merit inherent in the action of the ld. CIT(A), but has raised a legal issue whether the remanding back to the file of the ld. AO in the manner in which it has been done, could be legally tenable or not. For adjudicating on this, the provisions of Section 251(1) of the Act deserve to be recapitulated as under: “251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers— (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit.” 4.3. Special emphasis needs to be placed on the amendment to Section 251(1a) of the Act, vide the Finance Act, 2001 with effect from 01.06.2001, and the same deserves to be highlighted and reproduced as under: “The portion beginning with the words "or he may set aside" and ending with the words "on the basis of such fresh assessment;" omitted by the Finance Act, 2001, w.e.f. 1-6-2001.”
Page 4 of 7 I.T.A. No.: 1278/KOL/2024 Assessment Year: 2022-23 The Executor to the Estate of Sukhendu Prasad Choudhury. 4.4. It is clear from a reading of the Section as it stands now and after comparing it with the language of the section as it stood prior to the amendment, it is clear that the word “set aside” has been deliberately omitted indicating the legislators’ intention to take away such powers from the ld. CIT(A). A look at judicial precedence in this matter supports the view that the interpretation of Section 251(1a) of the Act cannot permit a ld. CIT(A) in using language or giving directions in such a manner that the action is tantamount to setting aside. Thus, the portion extracted (supra) from the ld. CIT(A)’s order makes it clear that instead of a clear-cut quantification of the amounts at his level he has broadly decided the matter in favour of the assessee but has left the nitty-gritty to the assessing officer. It is felt that such action is not permissible after the amendment to the Section 251(1) of the Act (supra). Considerable strength is drawn from the case of Arun Kumar Bose vs. ITO reported in [2023] 458 ITR 32 (Calcutta) wherein the Hon'ble Calcutta High Court has held that the ld. CIT(A) cannot set aside or remand back any matter to the ld. AO. The following extracts from the said order are necessary at this stage: “■ Section 251 deals with the powers of the Commissioner (Appeals). Sub- section (1) states that in disposing of an appeal the Commissioner (Appeals) shall have the powers as enumerated in clauses (a), (aa), (b), (c). Insofar as the case on hand, clause (a) of section 251(1) should be relevant, which states in an appeal against the order of assessment the Commissioner (Appeals) may confirm, reduce, enhance or annul the assessment. On a reading of the Finance Act, 2001 (Circular No. 14 of 2001) the Commissioner of Appeals had no power to remand the matter back to the Assessing Officer for fresh assessment in accordance with the direction given by the Commissioner (Appeals) after making such further enquiry as may be necessary. Though such power was conferred on the Commissioner (Appeals), the said provision stood omitted by the Finance Act, 2001. In the explanatory notes on the provisions relating to direct taxes, the powers of the Commissioner (Appeals) has been dealt with. [Para 3] ■ In the light of the above statutory embargo, the Commissioner could not have remanded the matter back to the Assessing Officer after having decided the case in favour of the assessee in its entirety. [Para 4] ■ The revenue points out that in the findings recorded by the Commissioner (Appeals), the expression 'prima facie' has been used which shows that the Commissioner (Appeals) had wanted a fresh exercise to be done by the Assessing Officer and, therefore, it would have been well open to the Commissioner (Appeals) to call for a remand report and thereafter to enquiry into the matter and proceed to take decision. Therefore, it is the submission that the case should be remanded back to Commissioner (Appeals) to undertake such an exercise. [Para 5]
Page 5 of 7 I.T.A. No.: 1278/KOL/2024 Assessment Year: 2022-23 The Executor to the Estate of Sukhendu Prasad Choudhury. ■ Though in the order passed by the Commissioner (Appeals), the word 'prima facie' has been used, from a cumulative reading of an order passed by the Commissioner (Appeals) it is found that the case has been discussed on merits and thereafter a finding has been recorded that the Assessing Officer was not justified in making the addition and there was a positive direction to delete the addition. If such is the finding, mere use of the word 'prima facie' could not make prima facie view as the Commissioner (Appeals) has discussed the matter elaborately taking into the consideration the factual position. Before the Tribunal, the assessee had specifically raised the ground that the Commissioner (Appeals) exceeded the limits of powers statutorily bestowed as per section 251(1)(a) and grossly erred in law in restoring the case to the Assessing Officer for action in terms of the order dated 23-11-2011 passed by the Commissioner (Appeals). Though, such a specific ground raised by the appellant before the Tribunal and noted by the Tribunal in the impugned order, this aspect has not been dealt with by the Tribunal. Thus, not only the Commissioner (Appeals) committed an error of law by remanding the matter to the Assessing Officer for a fresh consideration after having held in favour of the assessee, the Tribunal also did not deal with the said issue. In the light of the statutory embargo, the order of remand passed by the Commissioner (Appeals) is not tenable in law and consequently, the same is required to be set aside as well as the order passed by the Tribunal. [Para 6] ……….. 4.5. Furthermore, in another case before the Hon'ble Kerala High Court in the case of CIT vs. P. Premkumar reported in [2018] 404 ITR 275 (Kerala) it has been held as under: “The Scope of Appeal & The Powers of Appellate Authority ■ Section 251 spells out the powers of the Commissioner (Appeals). [Para 29] ■ The provision empowers the appellate authority, in an appeal against an order of assessment, to confirm, reduce, enhance, or annul the assessment. Under the amended section 251, the Appellate Commissioner may confirm, reduce, enhance, or annul the assessment, but he could not refer the case back to the Assessing Officer for making a fresh assessment; nor can he direct the Officer to decide in accordance with his directions. [Para 47]”
5. Considering the discussion above and the persuasive value of the judgements of the two High Courts discussed (supra) it is held that the ld. CIT(A) should have quantified the amounts at his level without resorting to any remanding back as has been done in the body of the impugned order. We, accordingly set aside the matter to the file of the ld. CIT(A) to clearly quantify the relief that he intended to give to the assessee and admit any Page 6 of 7 I.T.A. No.: 1278/KOL/2024 Assessment Year: 2022-23 The Executor to the Estate of Sukhendu Prasad Choudhury. fresh evidence, if so required, under Rule 46A of the Rules and thereby pass a speaking order.” 4.1. Clearly the appellant deserves relief in terms of credit for TDS standing in his name, as seen from Form 26AS and it needs to be recorded that the ld. CIT(A) exceeded his legal brief when he gave directions to ld. AO to verify the receipts, etc. The ld. AO is directed accordingly.