M/S. ACTION BATTERIES PRIVATE LIMITED,JALANDHAR vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1, JALANDHAR

Per Dr. M. L. Meena, AM:

This appeal has been filed by the by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 10.03.2023 in respect of Assessment Year: 2020-21 arising out of the order

passed u/s 154 by the Assessing Officer.

2 ITA No. 124/Asr/2023 Action Batteries Pvt. Ltd. v. DCIT 2. At the outset, the ld. counsel for the assessee has submitted that the

ld. CIT(A) has adjudicated only the issue of PF & ESI disallowances and

none of the other issues pertaining to the addition made on account of

liability of contingency nature in respect of LC issued by the bank

amounting to Rs.7,66,00,000/- which was never claimed as expenses in

the profit and loss account being not a statutory liability has been sustained

without discussion a word by the ld. CIT(A) in the appellate order is totally

in defiance to the settled judicial norms of the Hon’ble Apex Court. He

further, contended that the assessee has already added back to the

computation of income the amount disputed in respect of PF & ESI, labour

fund etc and the balance amount was deposited as per the due dates, have

also not been considered by the ld. CIT(A). Accordingly, he pleaded that

the impugned order has been passed by the ld. CIT(A) without application

of mind in arbitrary and mechanical manner. He pleaded that the appeal

may be restored back to the ld. CIT(A) to pass a speaking order on merits

of the case after granting adequate opportunity of being heard and

considering the written submission of the assessee.

AR that the ld. CIT(A) failed to adjudicate most of the grounds raised before

3 ITA No. 124/Asr/2023 Action Batteries Pvt. Ltd. v. DCIT him. Thus, he has no objection to the request of the assessee in remitting

the matter back to the ld. CIT(A) for fresh adjudication.

impugned order. Admittedly, the ld. CIT(A) while adjudicating on the issue

of PF & ESI, has lost site of the facts in sustaining the addition of

Rs.19,15,689/- that the amount of disallowances amounting to

Rs.6,02,798/- on account of PF & ESI, Labour Welfare Fund and Punjab

State Development Fund were claimed by the appellant has stood already

added back in the computation of income and the balance amounts was

deposited as per due dates. The ld. AR for the appellant argued that there

was no reason for the ld. CIT(A) to disallow the same by invoking the

provisions of section 36(1) of the Act. It is noted that the ld. CIT(A) has not

discussed a single word on the other grounds raised by the appellant

before him pertaining to the addition made on account of donation, GST,

interest on late payment which stood already added back in the

computation of income and similarly the addition on account of liability of

contingency in nature on account of LC issued by the bank amounting to

Rs.7,66,00,000/-. In our view, such a cryptic order passed by the ld. CIT(A)

in arbitrary and mechanical manner without addressing the effective

4 ITA No. 124/Asr/2023 Action Batteries Pvt. Ltd. v. DCIT grounds of appeal raised before him deserves to be set aside. Accordingly,

we consider it deem fit to remand back the matter to the file of the ld.

CIT(A) to adjudicate the appeal afresh on the grounds raised by the

appellant assessee after considering the material available on record and

may be filed during the course of fresh appellate proceedings. The ld.

CIT(A) is directed to grant sufficient opportunity of being heard to the

appellant assessee. No doubt, the assessee shall co-operate in the fresh

proceedings before the ld. CIT(A). Accordingly, the matter is restored back

to the ld. CIT(A).

purpose.

Order pronounced in the open court on 04.08.2023

Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True Copy By Order