GE INDIA INDUSTRIAL PRIVATE LIMITED,NEW DELHI vs. ACIT, (OSD), NEW DELHI

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:

The assessee contested the disallowance made under Section under Section 40(a)(i) of the Act before the first appellate authority.

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 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 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 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 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.