THE INDIA THERMIT CORPORATION LIMITED,NEW DELHI vs. JCIT, SPECIAL RANGE-9, DELHI

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ITA 55/DEL/2023Status: DisposedITAT Delhi11 August 2023AY 2017-184 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(Appeals) does not have the power to set aside issues to the AO as per Section 251 of the Income Tax Act. Therefore, the matters remanded by the CIT(Appeals) to the AO, except for the delay in deposit of employee's contribution, were set aside.

What were the facts?

The assessee's income was determined by the CPC, and subsequent rectification orders were passed. The assessee appealed to the CIT(Appeals)/NFAC, raising issues regarding the validity of the orders and the additions made. The CIT(Appeals)/NFAC remanded the matter to the AO for further verification.

What were the issues?

Whether the CIT(Appeals) has the power to remand or set aside issues to the Assessing Officer. Whether the additions made by the CPC were valid and passed in accordance with principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 251,Section 143(1),Section 154

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Income Tax Appellate Tribunal, DELHI BENCH ‘H’ : NEW DELHI

For Appellant: Shri Vipin Jain, FCA
For Respondent: Shri Amit Katoch, Sr. DR
Hearing: 09.08.2023

PER SHAMIM YAHYA, ACCOUNTANT MEMBER :

This appeal by the assessee is directed against the order of the ld.

CIT(Appeals)/NFAC dated 15.12.2022 pertaining to the assessment year 2017-18.

2. The assessee has taken the following grounds of appeal :-

1.

“1. That the CPC order No. CPC/1718/A6/1882324652 dated 6.3.2019, (copy not provided despite repeated request) and the rectification order dated 21.05.2019 ix]» 154 of the Act, having been passed subsequent to notices dated 30.08.2018 and 27.09.2018, issued u/s 143(2) of the Income Tax Act, 1961, are bad in law in view of the law explained by The Hon'ble Supreme Court of India, in "Commissioner Of ./2023 Income-Tax vs Gujarat Electricity Board, 260 ITR 84 SC", both the orders are liable to be quashed.

2.

That the CPC order No. CPC/1718/A6/1882324652 dated 6.3.2019, and the rectification order dated 21.05.2019 u/s 154 are bad in law, being passed without providing the assessee company any opportunity of being heard and in violation of the Principles of natural justice.

3.

That Rs 73,36,334 added to income are not mistakes apparent from record which could be rectified u/s 154 of the I Tax Act, 1961. Addition made to income is bad in law and is required to be deleted. Exempt income: Dividend on investment Rs.2,52,946 Profit on sale of fixed assets Rs.6,00,590 Share of profit from partnership firm Rs.1,27,077 Interest from AOP Rs.3,29,863 Delay in deposit of Employees contribution on ESI & PF Rs.31,03,780 Gratuity amount Rs.28,91,995 43B Rs. 30,283 Total Rs.73,36,534 4. That Rs 73,36,534 added to income are not also prima facie adjustments that could be added to income u/s 143(1) of the I Tax Act, 1961. Addition made to income is bad in law and is required to be deleted.”

3. In this case, CPC, Bangalore determined the assessee’s income vide order dated 21.05.2019. Assessee appealed before the NFAC and the grounds raised noted by the NFAC are as under :-

“6.1 In the grounds of appeal, the appellant contested that the CPC Bangalore erred in determining the income of the appellant company by making variance aggregating Rs.73,36,334/- in the income declared in the return filed as under :- Exempt Income : Dividend on investment Rs.2,52,946 Profit on sale of fixed assets Rs.6,00,590 Share of profit from partnership firm Rs.1,27,077 (1,26,203 + 874) Interest from AOP Rs.3,29,863 Rs.13,10,476

4. Considering the submissions of the assessee, NFAC remanded the issue to the file of AO to give an opportunity to the assessee and thereafter make the adjustments. The concluding part of the CIT(A)/ NFAC order is as under :-

“7.2 In the written submission with respect to the remaining additions of -Dividend on investment - Rs.2,52,946/-, Profit on sale of fixed assets - Rs.6,00,590/-, Share of profit from partnership firm - Rs.1,27,077/-, Interest from AOP - Rs.3,29,863/-, Gratuity amount - Rs.28,91,995/- and 438 - Rs.30,283/- the appellant stated that CPC Bangalore did not give opportunity to the assessee before making the said adjustments and filed the ledger copies of the relevant accounts. The assessee further stated that it was not given a copy of the intimation u/s.143(1) in spite of specifically asking for the same. Hence, the AO is directed to verify the ITR and relevant details and then decide these adjustments as per the facts and law.”

5.

Against this order, assessee is in appeal before us. We have heard both the parties and perused the records.

6.

At the outset, ld. Counsel of the assessee submitted that he will not be contesting the disallowance on account of delay in deposit of employees contribution towards ESI/PF amounting to Rs.31,03,780/-.

Hence this addition is sustained.

7.

For rest of the additions, ld. Counsel for the assessee submitted that ld. CIT (A) has no power to remand/set aside the matter to the file of AO.

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