JCIT, NEW DELHI vs. M/S. INDIAN IRON STEEL CO. LTD., NEW DELHI

ITA 3995/DEL/2016Status: DisposedITAT Delhi16 June 2023AY 2004-054 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that while the CIT(A) correctly identified the lack of proper opportunity by the AO, the CIT(A) should have remanded the matter back to the AO instead of summarily deleting the addition. The issue is remitted to the AO for fresh consideration.

What were the facts?

The Assessing Officer (AO) made additions of Rs. 62.43 crore on account of un-reconciled differences in balances with certain parties. The CIT(A) deleted these additions, holding that the assessee was not given a proper opportunity to rebut the findings.

What were the issues?

Whether the CIT(A) was justified in deleting additions without remanding the matter to the AO when the assessee was not afforded a proper opportunity by the AO.

Which sections of the Income-tax Act were involved?

Section 250

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Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Kishanchand Chellaram v. CIT
125 ITR 713 · 1980 · SC
962 citing

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

For Appellant: Shri M.P. Rastogi, Advocate, Shri P.N. Shastry, CA

For Respondent: Shri Anuj Garg, Sr. DR

Hearing: 12.06.2023

Date of Hearing : 12.06.2023 Date of Order : 16.06.2023 ORDER

PER SHAMIM YAHYA, ACCOUNTANT MEMBER :

This appeal filed by the Revenue is directed against the order of ld. CIT (A)-1, Kolkata dated 14.03.2016 for the assessment year 2004-05.

The ground of appeal taken by the Revenue is as under :-

“Whether the Ld. CIT (A) was justified in deleting the addition of Rs.62.43 crore made by the AO on account of un-reconciled difference of income even through the remand report was not called for by him from the AO regarding the issue and also has not given a finding that he has verified and reconciled the difference in income found by the AO.” account of difference in the balance of parties as under :-

(i) Tata Steel Rs.38.52 crores (ii) Aroma Coke Rs. 0.66 crores (iii) Adhunik Corporation Ltd. Rs.23.25 crores Total : Rs.62.43 crores

Upon assessee’s appeal, ld. CIT (A) noted the submissions as under :- “The AOs findings, written submissions and material on record were carefully considered. Its observed from perusal of the A Os finding that the impugned additions/disallowances under these grounds were made on account of alleged discrepancies noticed in a few cases, and based on the ITR's report dated 28.11.2006 that the above mentioned discrepancies remained un-reconciled. The appellant's AR has contended that the alleged report of the inspector and assessment order being both dated 28.11.2006, the same could not be confronted and an opportunity provided to the appellant on the same date, there is also no mention of it being confronted by the AO to the assessee in the assessment order. It was thus argued that proper opportunity was not provided to the appellant on the alleged discrepancies and adverse findings by the AO, which is contrary to principles of natural justice. In this regard, the appellant's AR has placed reliance upon the decision of Hon'ble Supreme Court - in the case of Kishanchand Chellaran 125 ITR 713, wherein it has been held that any information collected by the department cannot be used against the assessee, unless shown/ confronted to the assessee •and an opportunity given to controvert it.”

Thereafter, ld. CIT (A) deleted the addition by observing as under:-

“ After careful consideration of the above contentions, it is found that there is force in the appellant's argument that impugned additions were made by the AO without affording proper opportunity to the appellant to examine and rebut the ./2016 alleged discrepancies under various heads, as admittedly the assessment order was passed on the same date as that of the Inspector's report about the alleged discrepancies. Therefore, the disallowances made by the AO are found to be not justified, being contrary to the principles of natural justice. In view thereof and respectfully following the decision of the hon'ble Supreme Court in Kishanchand Chellaram (supra), the AO is directed to delete the additions of Rs.62.43 crores mentioned in Ground No.2.1 to 2.5. This ground is allowed.”

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

Ld. DR for the Revenue submitted that ld. CIT (A) deleted the addition without providing AO the necessary opportunity and he submitted that powers of the CIT (A) are co-terminus to that of AO and if there was shortcoming in the AO’s enquiry, ld. CIT (A) should have asked for the remand report.

Per contra, ld. Counsel for the assessee submitted that after due analysis of the reconciliation, addition has been deleted. He relied upon the order of the ld. CIT (A).

Upon careful consideration, we note that the ld. CIT (A) has passed an order wherein he has held that addition was made without affording proper opportunity to the assessee. It is abundantly clear that the powers of the CIT (A) are co-terminus to that of AO. Even if there is some issue of non-affording of proper opportunity to the assessee by the AO, ld. CIT(A) should have remanded the matter to the AO. By summarily deleting the addition in a manner as above is totally not proper, hence we ./2016 remit the issue to the AO. AO is directed to consider the issue afresh after giving the assessee proper opportunity of being heard. 9. In the result, this appeal filed by the Revenue is allowed for statistical purposes. Order pronounced in the open court on this day of 16th June, 2023.

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