Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI
Before: SHRI G.S. PANNU, PRESIDENET & SHRI SAKTIJIT DEY, VICE-
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘D’ NEW DELHI
BEFORE SHRI G.S. PANNU, PRESIDENET AND SHRI SAKTIJIT DEY, VICE-PRESIDENT
ITA No.147/Del/2023 Assessment Year: 2019-20 GE India Industrial Private Vs. ACIT, (OSD), Ltd., A-18, First Floor, Okhla New Delhi Ind. Area, Phase-2, Okhla Ind. Estates S.o. Tehkhand, South East Delhi, New Delhi PAN :AAACG4901D (Applicant) (Respondent)
Assessee by Shri Sachit Jolly & Ms. Soumya Singh, Advs. Respondent by Shri Sanjay Kumar, Sr. DR
Date of hearing 02.08.2023 Date of pronouncement 10.08.2023
ORDER PER SAKTIJIT DEY, VICE-PRESIDENT:
Captioned appeal filed by the assessee arises from the order
dated 25.11.2022 passed by National Faceless Appeal Centre (NFAC),
Delhi for the assessment year 2019-20.
2 ITA No. 147/Del/2023
Ground nos. 1 and 2 being general grounds, do not require
adjudication.
In ground no.3, the assessee has challenged the disallowance
made of Rs.2,53,29,652 under Section 40(a)(i) of the Income-Tax Act,
1961.
Briefly, the facts are, the assessee, a resident corporate entity,
filed its return of income for the assessment year under dispute on
30.11.2019 declaring income of Rs. 759,53,94,050. The return of
income so filed by the assessee was processed under Section 143(1)
of the Act by the Centralized Processing Centre (CPC), Bangaluru and
an intimation dated 31.03.2021 was issued to the assessee wherein the
total income was determined at Rs.754,11,59,870. The variation in the
total income was due to the following two adjustments:
i) Increase in disallowance under Section 36(1)(va) of the Act ; & Rs.17,905 ii) Increase in disallowance under Section 40(a)(i) of the Act. Rs.2,57,47,922
The assessee contested the disallowance made under Section
under Section 40(a)(i) of the Act before the first appellate authority.
The submission of the assessee before first appellate authority was
3 ITA No. 147/Del/2023
two fold. Firstly, the Centralized Processing Centre (CPC) could not
have made the disallowance under Section 143(1)(a) of the Act, as it is
beyond the scope of the adjustment enumerated in the said provision.
The second contention of the assessee was, it has suo mottu made
disallowance under Section under Section 40(a)(i) of the Act @ 30%,
since, the same rate of disallowance is applicable in respect of
payment made to residents under Section under Section 40(a)(ia) of
the Act. Hence, the non-discrimination clause available under the
relevant tax-treaties with US, China and Germany would get triggered.
Learned Commissioner (Appeals), however, did not find merit in the
submissions of the assessee and upheld the disallowance made at
100% of the expenses.
Before us, learned counsel appearing for the assessee reiterated
the submission made before the first appellate authority. He further
pleaded, before making the adjustment, the CPC has not issued any
prior intimation regarding the adjustment proposed to be made nor
called for any response from the assessee on the issue of adjustment,
as provided under the first and second proviso to section 143(1)(a) of
the Act. He submitted, though, all submissions were made before the
4 ITA No. 147/Del/2023
first appellate authority, however, the appeal proceeding having been
conducted under the faceless scheme, the first appellate authority did
not at all consider the submissions made by the assessee. Thus, he
submitted, the issue can be restored back to the first appellate
authority.
Learned Departmental Representative did not oppose assessee’s
request for restoration of the issue to the first appellate authority.
We have considered rival submissions and perused the material
available on record.
It is the specific contention of learned counsel for the assessee
before us that before making the adjustment and issuing intimation
under Section 143(1)(a) of the Act, the CPC has not complied with the
condition of first and second provisos to section 143(1)(a) of the Act
by issuing any prior intimation to the assessee regarding proposed
adjustment and calling for its response. We find, the first appellate
authority has not examined the aforesaid aspects, may be because, as
submitted by the learned counsel for the assessee, the appeal
proceedings were conducted through faceless mechanism. Therefore,
we are inclined to restore the issue to the file of the first appellate
5 ITA No. 147/Del/2023
authority to examine assessee’s contention regarding non-compliance
with the conditions enshrined in first and second proviso to section
143(1)(a) of the Act. The first appellate authority is also directed to
consider all other submissions of the assessee disputing the
disallowances. Ground is allowed for statistical purposes.
In ground no.4, assessee has challenged the direction of the first
appellate authority to the Assessing Officer to verify whether the
assessee has offered the corresponding income in respect of which it
has claimed credit for TDS amounting to Rs.4,31,143.
Before us, the only submission, made by learned counsel for the
assessee is to the effect that in terms of section 251 of the Act, the first
appellate authority does not have powers to remand the matter back to
the Assessing Officer.
Having considered rival submissions, we do not find any
infirmity in the decision of the first appellate authority as he has
directed the Assessing Officer to verify whether corresponding
income relating to TDS amount of Rs.4,31,143, credit for which it has
been claimed by the assessee, has been offered to tax or not and
thereafter allow the credit. In any case of the matter, the restriction
6 ITA No. 147/Del/2023
imposed under Section 251 of the Act is only in respect of the first
appellate authority. Therefore, we direct the Assessing Officer to
verify whether the assessee has offered the corresponding income in
relation to which it has claimed credit for TDS amount to Rs.4,31,143
and thereafter allow the credit. Needless to mention, assessee must be
given an opportunity of being heard on the issue.
In ground no.5, the assessee has raised the issue of non-grant of
TDS amounting to Rs.5,76,79,710. It is the contention of learned
counsel for the assessee before us that, though, the aforesaid TDS
amount is appearing in Form 26-AS, however, the assessee
inadvertently did not claim in the return of income. Thus, he
submitted, assessee is willing to furnish reconciliation statement
before the Assessing Officer, which can be verified by him and credit
for TDS may be allowed.
Learned Departmental Representative submitted, assessee has
not raised the issue in the grounds of appeal taken before the first
appellate authority. Therefore, being a fresh issue requiring
investigation into facts, the assessee cannot raise it at this stage. He
submitted, if at all, the assessee wanted to raise the issue, he should
7 ITA No. 147/Del/2023
have raised it through an additional ground. In reply, learned counsel
appearing for the assessee submitted that, though, the issue was not
raised in the grounds of appeal, however, in the written submissions
filed before the first appellate authority, the assessee has specifically
raised this issue.
We have considered rival submissions and perused the material
available on record. We find, assessee has raised the issue of non-
grant of TDS credit in the written submissions filed before the first
appellate authority, which was not considered. Therefore, the
objection of learned Departmental Representative on entertaining the
issue is unacceptable. Be that as it may be, it is the case of the assessee
that, though, the TDS amount of Rs.5,76,79,710 is appearing in Form
26AS, however, the assessee has inadvertently not claimed the TDS
credit in the return of income. The learned counsel has further
submitted before us that he is ready to furnish a reconciliation
statement before the Assessing Officer indicating that income
corresponding to the TDS amount has been offered to tax.
In view of the aforesaid, we are inclined to restore the issue to
the Assessing Officer for examining assessee’s claim after verifying
8 ITA No. 147/Del/2023
the TDS credit appearing in Form 26AS and also the reconciliation statement to be filed by the assessee to ascertain whether the corresponding income in relation to the claim of TDS has been offered to tax by the assessee or not. Needless to mention, the Assessing Officer must provide reasonable opportunity of hearing to the assessee. 17. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 10th .08.2023. Sd/- Sd/- ( G.S. PANNU ) (SAKTIJIT DEY) PRESIDENT VICE-PRESIDENT Dated: August, 2023 Mohan Lal Copy forwarded to: 1. Applicant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi