M/S MACNEILL ENGINEERING LTD,SOUTH 24 PARGANAS vs. D.C.I.T CIR - 1,KOLKATA, KOLKATA

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ITA 1993/KOL/2013Status: DisposedITAT Kolkata16 September 2016AY 2006-074 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the impugned order and remitted the case back to the CIT(A) for fresh adjudication. The assessee was directed to cooperate and file evidence, with liberty to do so.

What were the facts?

The assessee filed its fringe benefits return, but the Assessing Officer (AO) reopened the assessment due to escapement of taxable fringe benefits. The assessee failed to provide explanations or compliance to notices issued by the AO and the Commissioner of Income Tax (Appeals).

What were the issues?

Whether the assessment made to the best of judgment was valid without proper notice, and whether the addition on account of taxable fringe benefits was justified without sufficient evidence from the assessee.

Which sections of the Income-tax Act were involved?

Section 144,Section 115WE,Section 115WG,Section 115WH,Section 142(1),Section 115WF

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH,

Before: Shri P.M.Jagtap & Shri S.S.Viswanethra Ravi

This appeal by the Assessee is directed against the order dated 28-03-2013 of the Commissioner of Income Tax(Appeals),XXIV, Kolkata for the assessment year 2006-07.

2. In this appeal, the Assessee has raised the following effective grounds:-

1.

For that the ld. Assessing Authority did not issue any notice U/s. 144 for show cause for best of his judgment during the assessment proceedings. Hence, the assessment U/s. 144 is barred by law.

2.

For that Calculation of the Taxable Fringe Benefit of Rs.14,45,127/- be deleted. M/s. Macneill Engineering Ltd 1

3.

Brief facts of the case are that the assessee is a company dealing in the manufacture of forklift, material handling equipments and engineering goods and filed its return of fringe benefits for the AY under consideration on 18-12-06 declaring value of fringe benefits of Rs.8,85,940/-. It was processed u/s. 115WE(1) and as per return, assessee is liable to pay FBT of Rs.2,98,207/- but at the time of processing of fringe benefits was taken at Rs. Nil. Since there is escapement of taxable fringe benefits, assessment was reopened u/s. 115WG by issuing notice u/s. 115WH by recording reasons for re-opening the case. In response to such notice, the AR of the assessee appeared on 26.08.09 and requested time to file written submission, but, did not file.

4.

Thereafter, a notice u/s. 142(1) was issued wherein an explanation sought why travelling expenditure of Rs.72,25,638/- should not be considered for the purpose of FBT as the same as not been shown in the return. The notice was handed over to the AR, but no compliance was received for the Assessee, thereby, the assessment was completed u/s.115WF to the best of AO’s judgment at Rs.23,31,067/-.

5.

In first appeal before the CIT-A, the Assessee could not produce any explanation in support of grounds of appeal and the CIT-A confirmed the addition of the AO.The observation of which is as under:- M/s. Macneill Engineering Ltd 2

“2.1 I have carefully considered the observation of the Assessing Officer in the assessment order. I have carefully considered the facts of the case and also perused the order passed u/s. 115WF/115WG. During the course of appellate proceedings, the appellant assessee has not furnished any explanation in support of the ground of appeal. Considering the facts of the case, I am of the view that the assessing officer has correctly added back the amount of rs.14,45,127/- on account of taxable Fringe Benefit is confirmed. This ground of appeal is dismissed. “

6. At the outset, it is noticed that the Assessee could not produce any material evidence that requires in support of the impugned addition. It is also noticed that the authorities below has afforded opportunities to the Assessee, but, the assessee could not avail the same in its favour in prosecuting its case before the authorities below. The Ld.AR prayed that one more opportunity may be accorded finally to the Assessee and sought to remand the case to the file of CIT-A. The Ld. DR relied on the order of CIT-A. In view of the discussion of the above and taking into consideration the submissions of the Ld.AR and in the interest of Justice, we set aside the impugned order dt:28- 03-2013 and remit the case to the file of CIT-A for fresh adjudication by affording an opportunity to the Assessee. We also direct the Assessee to cooperate with the proceedings without seeking any further adjournments and we also give liberty to Assessee to file evidence, if any, in support of the impugned matter. Thus, the appeal of the Assessee is allowed for statistical purposes. M/s. Macneill Engineering Ltd 3

7.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order Pronounced in the Open Court on 16th September, 2016.

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