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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
Assessment Year: 2021-22 Cummins India Ltd., Vs. DCIT, Circle-1(1), Pune. 5th Floor, Survey No.21, Tower- A, Cummins India Office Campus, Balewadi, Pune- 411045. PAN : AAACC7258B Appellant Respondent Assessee by : Shri Ketan Ved Revenue by Shri Amol Khairnar : Date of hearing : 18.11.2024 Date of pronouncement : 12.12.2024 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 13.03.2024 passed by Ld. Addl./JCIT(A)-3, Bengaluru for the assessment year 2021-22.
The appellant has raised the following grounds of appeal :- “Based on the facts and circumstances of the case, Cummins India Limited (hereinafter referred to as “the Company" or "the Appellant") respectfully craves leave to prefer an appeal for the assessment year ("AY" 2021-22 under section 253 of the Income-tax Act, 1961 ("the Act") against the order dated 13 March 2024, passed under section 250 of the Act, by the learned Commissioner of Income Tax, Appeal (ADDL/ JCIT (A) - 3 Bengaluru, (hereinafter referred to as "learned CIT(A)") on the following grounds , which are independent of and without prejudice to each other:
1. Denial of opportunity of being heard to the Appellant: The learned CIT(A) erred in passing the order under section 250 of the Act ignoring the adjournment requested by the Appellant for submitting the details sought in the notice and without providing any opportunity of being heard despite specific request by the Appellant for a virtual hearing through video conferencing. The learned CIT(A), accordingly, erred in concluding the appellate proceedings in contravention to the principles of natural justice since the CIT(A) order was directly passed without granting adequate opportunity of being heard.
2. Erroneously considering the amount of INR 22,06.17.804/- as deemed income under section 41 of the Act of the Appellant: The learned CIT(A) erred in not appreciating the fact that the amount of INR 22,06,17,804/- as disclosed in clause 25 of the Tax Audit Report was already offered to tax by the Appellant in AY 2021-22 and hence there was no requirement to disallow the same again to compute taxable income.
3. Initiation of Penalty Proceedings: The learned AO / CIT(A) erred on the facts and in law in initiating penalty proceedings under section 270A of the Act. The Appellant prays leave to add, alter, vary, omit, amend, substitute, or delete grounds of appeal at any time before or at the time of appeal, so as to enable the Hon'ble Income Tax Appellate Tribunal to decide this appeal in accordance with the law.”
3. Facts of the case, in brief, are that the assessee is a company engaged in the business of designing, manufacturing, distributing and servicing engines, generators and related technologies. The 12.03.2022 declaring total income at Rs.7,30,95,58,953/-. Against the above return of income, an intimation u/s 143(1) of the IT Act was issued by the ADIT, CPC, Bengaluru on 20.10.2022. In the above-said intimation addition to total income was made due to difference in amounts of income tax return and as appearing in tax audit report. In the above referred intimation, the ADIT, CPC, Bengaluru considered amount of INR 22,06,17,804/- as deemed income u/s 41 instead of INR Nil as considered by the assessee. Similarly, the ADIT, CPC, Bengaluru added amount of INR 20,72,47,394/- under the items of additions u/s 28 to 44DA which was not done by the assessee, thereby the Assessing Officer/CPC increased the total income by INR 42,78,65,198/- after making above two adjustments. Apart from above in the said intimation, the ADIT, CPC, Bengaluru granted the credit of taxes deducted at source of INR 43,19,81,611/- instead of INR 43,42,97,282/- as claimed by the assessee in its return of income.
4. Against the above intimation, the assessee company filed appeal before Ld. Addl./JCIT(A)-3, Bengaluru. After considering Ld. Addl./JCIT(A)-3, Bengaluru partly allowed the appeal of the assessee, by deleting the addition of Rs.20,72,47,394/- and also by directing the ADIT, CPC, Bengaluru to verify and allow the TDS credit as claimed by the assessee company after verifying the same. Accordingly, only one addition of Rs.22,06,17,804/- remains, for which the assessee company has filed appeal before this Tribunal.
5. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. Addl./JCIT(A)-3, Bengaluru is not justified to the extent in ignoring the adjournment requests made by the assessee company for submitting the details sought in the notice and without providing any opportunity of virtual hearing to the assessee despite specific request made by the assessee company. Accordingly, it was submitted that Ld. Addl./JCIT(A)- 3, Bengaluru erred in concluding the appellate proceedings in contravention to the principles of natural justice since the order of Ld. Addl./JCIT(A)-3, Bengaluru was directly passed without granting adequate opportunity of hearing to the assessee. Ld. AR further submitted that amount of Rs.22,06,17,804/- as disclosed in 25 of the tax audit report was already offered to tax by the assessee in its income tax return hence there was no requirement to disallow the same again to increase the taxable income. Ld. AR also submitted before the Bench that Ld. Addl./JCIT(A)-3, Bengaluru also erred in directing the Assessing Officer to initiate penalty proceedings u/s 270A of the IT Act for under-reporting of income. During the course of hearing, it was pointed by Ld. AR of the assessee company that an application for admitting additional evidence was filed on 18.09.2024 before the Bench and it was requested to consider the same as it could not be filed before the subordinate authorities. In sum and substance, it is the contention of Ld. AR of the assessee that an income which has already been considered in computation of income while filing the return of income should not be taxed again on the basis of tax audit report.
6. Ld. DR supported the orders passed by the subordinate authorities and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book and additional evidence filed by the assessee. We find that a breakup INR 22,06,17,804/- is also produced before us as an additional evidence which was not furnished before Ld. Addl./JCIT(A)-3, Bengaluru. We find that it is the contention of counsel of the assessee that Ld. Addl./JCIT(A)-3, Bengaluru has ignored the adjournment request made by the assessee and also ignored the specific request made by the assessee company for virtual hearing through video conferencing. Although, we find that no such evidence in support of above contentions have been filed before us. However from a perusal of the order of Ld. Addl./JCIT(A)-3, Bengaluru, we find that the dates of hearing were not mentioned in the preamble of the order. Admittedly, in the date of hearing column; “As per records” has been mentioned, which clearly shows that no proper opportunity was allowed to the assessee to substantiate the grounds of appeal. Accordingly, in the interest of justice, we deem it fit to set-aside the order passed by Ld. Addl./JCIT(A)-3, Bengaluru on limited issue and remand the matter back to him with a direction to decide the issue afresh with regard to addition of Rs.22,06,17,804/- as per fact and law after providing reasonable opportunity of hearing to the assessee so that the assessee can substantiate its claim and produce the relevant documents/ additional evidences in support of its contention that the income has already been considered by the assessee in its return of income. The assessee is also hereby directed to respond to the notices issued by Ld. Addl./JCIT(A)-3, Bengaluru in this regard and produce the supporting documents/additional evidences in support of particular ground of appeal
without taking any adjournment under any pretext, otherwise Ld. Addl./JCIT(A)-3, Bengaluru shall be at liberty to pass appropriate order as per law. Thus, the ground nos.1 and 2 raised by the assessee in this appeal are partly allowed for statistical purposes.
8. With respect to the ground relating to initiation of penalty proceedings u/s 270A of the IT Act, we are of the considered opinion that since the issue with regard to addition of Rs.22,06,17,804/- is already remanded back to the file of Ld. Addl./JCIT(A)-3, Bengaluru for fresh adjudication, therefore this ground becomes infructuous and does not require any adjudication from our side.