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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI A.MOHAN ALANKAMONY & SHRI. G. PAVAN KUMAR
आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:
The appeal filed by the Revenue is directed against order of the Commissioner of Income-tax (Appeals)-1, Chennai in 15, dt 29.12.2015 for the assessment year 2011-2012 passed u/s.144 and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).
ITA No.664/Mds/2016. :- 2 -:
The Revenue has raised the following grounds:-
‘’2.1 The learned CIT(A) erred in holding that the submission made by the assessee have not been controverted by the AO regarding the non- compliance to statutory notices thereby allowing the appeal of the assessee on this ground.
2.2 The learned CIT(A) ought to have appreciated the fact that the assessee had not furnished the details called for by the Assessing Officer till the date of completion of scrutiny assessment.
3.1 The learned CIT(A) erred in directing th-e Assessing Officer to delete the addition made due to mismatch of 26AS with P&L Account.
3.2 The learned CIT(A) failed to afford an opportunity to the Assessinq Officer to examine the details of reconciliation between Form 26AS and P&L Account produced by the assessee before him which was not produced before the Assessing Officer at the time of scrutiny proceedings.
3.2 The learned CIT(A) failed to neither give an opportunity to the Assessing Officer to examine the details nor called for a remand report, thereby violating the provisions of Rule 46A of the I.T. Rules 1962’’.
The Brief facts of the case is that the assessee company is engaged in the business of execution of civil engineering contracts and filed return of income on 29.02.2012 for the assessment year 2010-2011 admitting a loss of �1,14,89,329/- and the return was processed u/s.143(1) of the Act. Subsequently, case was selected for scrutiny and notice u/s.143(2) of the Act was issued and assessee was provided opportunity for filing details and Assessing Officer made a finding that the case was not represented on behalf of the assessee company and ITA No.664/Mds/2016. :- 3 -:
completed assessment based on notice u/s.139C of the Act dated 10.08.2012 for furnishing of reconciliation statement of gross receipts as per 26AS and income admitted in the profit and loss account. The ld. Assessing Officer found difference in comparison with TDS certificate /26AS in comparison with profit and loss account and made an addition under three heads of income, Interest �3,86,040/-, Commission �42,18,426/- and labour charges �29,56,674/- as there was no clarification was submitted inspite of issuance of notice u/s.142(1) of the Act, the ld. Assessing Officer made best judgment u/s.144 of the Act and assessed loss of �39,28,189/- vide order dated 28.03.2014. Aggrieved by the order, the assessee filed an appeal before Commissioner of Income Tax (Appeals).
In the appellate proceedings, the ld. Authorised Representative alleged that the ld. Assessing Officer assessment u/s.144 of the Act is bad in law and also mismatch of 26AS and profit and loss account are duly supported with clarification. The ld. Commissioner of Income Tax (Appeals) based on the grounds and arguments of the ld. Authorised Representative on the issue of completion of assessment u/s.144 of the Act observed the provisions of Sec. 144 of the Act. The assessee has filed details on 29.08.2012 in response to notice u/s.142(1) of the Act and also produced soft copies of Books of Account for the year ending 31.03.2011 vide acknowledgment dated 27.01.2014. The assessee was requested for ITA No.664/Mds/2016. :- 4 -:
the first time to submit reconciliation statement. The ld. Commissioner of Income Tax (Appeals) based on the assessment records and compliance of the statutory notice by the assessee considered the assessment cannot be completed u/s.144 of the Act and allowed the ground. In respect of second ground of mismatch of amount on comparison of 26AS and profit and loss account, the ld. Commissioner of Income Tax (Appeals) considered the findings of the Assessing Officer and submissions on addition of �75,61,144/-. The ld. Authorised Representative submitted that the assessee’s main activity is undertaking, executing, demolishing contract and demonstrated the clarification by way of tabular column in respect of disputed issue and the ld. Commissioner of Income Tax (Appeals) on perusal of the tabular column of contract receipts, commission received and rental income was satisfied with the reasons put forth by the assessee and directed the Assessing Officer to delete the addition and allowed the appeal of the assessee. Aggrieved by the Commissioner of Income Tax (Appeals) order, the Revenue has assailed an appeal before Tribunal.
Before us, the ld. Departmental Representative reiterated the grounds and submitted that the Commissioner of Income Tax (Appeals) has erred in considering the submissions of the assessee which the assessee has not filed before Assessing Officer in the assessment
ITA No.664/Mds/2016. :- 5 -: proceedings even before completion of assessment. The ld. Commissioner of Income Tax (Appeals) has not offered opportunity to Assessing Officer to verify and examine the reconciliation statement and no information was called by way of remand report and there is violation of Rule 46A and prayed for allowing the appeal.
At the time of hearing, none appeared on behalf of the assessee. We proceed to dispose the case on merits after hearing the ld. Departmental Representative. The only contention of the ld. Departmental Representative being that ld. Commissioner of Income Tax (Appeals) has erred in directing the Assessing Officer in deleting the addition and also not called for any remand report from the Assessing Officer. On perusal of the assessment order, the assessee has filed details and certain information has been called by the ld. Assessing Officer by issuing notice u/s.139C of the Act and there is no findings about reconciliation of statement or evidence of reconciliation filed in the course of assessment.
In the appellate proceedings, the ld. Commissioner of Income Tax (Appeals) has considered the reconciliation statement and having satisfied with it allowed the appeal of the assessee. The fact remains that the ld. Assessing Officer was not provided opportunity to verify the reconciliation statement of 26AS and profit and loss account produced in the appellate proceedings. Therefore, considering the apparent facts, we are of the ITA No.664/Mds/2016. :- 6 -: opinion that the Assessing Officer should be provided opportunity under provisions of Rule 46A as evidence was filed for the first time before the Commissioner of Income Tax (Appeals). Therefore, we remit the disputed issue to the file of the Assessing Officer to verify the reconciliation statement and satisfy with genuineness and provide opportunity of hearing to the assessee before passing the order.
In the result, the appeal of the Revenue in is allowed for statistical purpose.
Order pronounced on Tuesday, the 31st day of May, 2016 at Chennai.