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

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ITA 124/ASR/2023Status: DisposedITAT Amritsar04 August 2023AY 2020-214 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) passed a cryptic and mechanical order without addressing the effective grounds of appeal. The matter was therefore remanded back to the CIT(A) for fresh adjudication.

What were the facts?

The assessee appealed an order from the CIT(A) concerning AY 2020-21. The CIT(A) had only adjudicated PF & ESI disallowances and failed to address other significant issues, including a large addition on account of a contingent liability.

What were the issues?

Whether the CIT(A) properly adjudicated all grounds of appeal and passed a speaking order. Whether additions made on account of contingent liabilities and other items were correctly sustained without discussion.

Which sections of the Income-tax Act were involved?

Section 154,Section 36(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE

Hearing: 02.08.2023Pronounced: 04.08.2023

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.

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.

3.

Per contra, the ld. DR failed to rebut the contention raised by the ld. AR that the ld. CIT(A) failed to adjudicate most of the grounds raised before

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.

4.

Having heard both the sides, perused the material on record and the 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

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).

5.

In the result, the appeal filed by the assessee is allowed for statistical purpose.

Order pronounced in the open court on 04.08.2023

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