M/S. TATA PROJECTS LTD, MUMBAI V. DCIT-15(3)(1), MUMBAI

CO 37/MUM/2023

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals) which had deleted certain additions made under section 143(1) of the Income-tax Act, 1961, concerning the assessee, M/s Tata Projects Limited. The primary issues in dispute were the disallowance of Rs.8,11,99,543 under section 43B and Rs.2,61,64,956 concerning employees' contributions to provident fund/superannuation fund under section 36(1)(v). The Tribunal found that the CIT(A)'s decision was without basis as the adjustments made under section 143(1) were not questioned in the subsequent assessment order under section 143(3). Therefore, the Tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123433 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: E
• Next Hearing Date: 24-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 24-04-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BISWANANTH DAS
• Keywords: Business income; TDS; Set aside
• Section: 154; 43B; 143(3); 14A; 80G; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 463/MUM/2023 Assessment Year: 2017-18 The Dy. CIT-15(3)(1), Room No. 460, 4 th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. Vs. M/s Tata Projects Limited, Floor, 2, 3, and 4 One Boulevard, Lake Boulevard Street Hiranandani Business Park, Powai, Mumbai-400076. PAN No. AAACT 4119 L Appellant Respondent CO No. 37/MUM/2023 (Arising out of ITA No. 463/MUM/2023) Assessment Year: 2017-18 M/s Tata Projects Limited, Floor, 2, 3, and 4 One Boulevard, Lake Boulevard Street Hiranandani Business Park, Powai, Mumbai-400076. Vs. The Dy. CIT-15(3)(1), Room No. 460, 4 th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN No. AAACT 4119 L Appellant Respondent Assessee by : Mr. Rajan Vora Revenue by : Mr. Biswananth Das, CIT-DR Date of Hearing : 25/05/2023 Date of pronouncement : 31/05/2023 Page | 2 M/s Tata Projects Ltd. ITA No. 463 and CO No. 37/Mum/2023 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue and cross objection by the assessee are directed against order dated 22.12.2022 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, arising from order u/s 143(1) of the Act passed by the Central Processing Centre (CPC), Bangalore. The grounds raised by the Revenue are reproduced as under: 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.8,11,99,543/- under section 43B of the Act without appreciating the facts of case and provisions of law. 2. Whether on the facts and in the circumstances of the case and in law, respect of employees’ contribution to provident fund/ superannuation fund etc. under section 36(1)(v) of the Act. Without appreciating the facts of the case and provisions of law. 2. The ground raised in the cross objection by the assessee are reproduced as under: On the facts and in the circumstances of the case, the Ld. Assessing Officer has : General Objection to Department’s Appeal 1. Erred in objecting the order of Ld. CIT(A) deleting the various additions/disallowances made in the intimation issued under section 143(1) of the Income-tax Act, 1961 (“The Act”) without appreciating the facts of the case and Page | 3 M/s Tata Projects Ltd. ITA No. 463 and CO No. 37/Mum/2023 submissions made, thereby further contesting the various issues before the Hon’ble Tribunal by filing an appeal. Disallowance made under section 43B of the Act of Rs.8,11,99,543/- 2. On the facts and in the circumstances of the case and in law, the assessee prays that in the case disallowance is held to be made under section 43B of the Act as prayed for by the Department in ground No. 1 of their appeal, then the Assessing Officer be directed to allow deduction under section 43B of the Act in respect of the said disallowance in AY 2018-19, being the year in which the payment is made by the appellant as reported in the tax audit report of AY 2018-19. 3. Briefly stated, facts of the case are that the assessee company filed its return of income on 30.11.2017 declaring total income at Rs.169,88,81,208/- under the normal provisions of the Act. Subsequently, in the intimation order passed by the CPC u/s 143(1) of the Act, following adjustments were made to the returned income: a. Taxing share of profit from AOP amounting to Rs.17,87,87,308/- which was claimed as exempt under section 86 of the Act. b. Disallowing sales tax payable overseas and building and other construction welfare cess payable of Rs.8,03,18,859/- and Rs.8,80,684/- respectively under section 43B of the Act. c. Not allowing deduction of 2,61,64,956/- in respect of employees contribution to provident fund/superannuation fund etc. under section 36(1)(v) of the Act. d. Short granting of TDS credit amounting to Rs.5,93,91,829/-. e. Not allowing credit of Dividend Distribution tax paid amounting to Rs.3,64,67,086/-. Page | 4 M/s Tata Projects Ltd. ITA No. 463 and CO No. 37/Mum/2023 3.1 Thereafter, the case of the assessee was selected for scrutiny assessment and in the assessment order passed u/s 143(3) of the Act dated 26.12.2019, the Assessing Officer made various additions to the income assessed under intimation u/s 143(1) dated 30.03.2019. On further appeal by the assessee against the intimation u/s 143(1) of the Act, the assessee in respect of issue of share of profit from the Association of Persons (AOP) amounting to Rs.17,87,87,308/- submitted that relief was already granted by the Assessing Officer in the assessment order u/s 143(3) of the Act and therefore said ground was not pressed. However, in respect of other issues, the Ld. CIT(A) held that the adjustment made u/s 143(1) of the Act became redundant in view of order passed by the Assessing Officer u/s 143(3) of the Act on 26.12.2019. The relevant finding of the Ld. CIT(A) is reproduced as under: “5.5. After duly considering the submission of the appellant, especially the details mentioned in the order u/s 143(3) dated 26.12.2019 passed by the DCIT circle 15(3)(1) Mumbai for the AY 2017-18 and the details mentioned in the order u/s 154 r.w.s. 143(3) dated 21.11.2022 passed by the ACIT Circle 15(3)(1), Mumbai, it is hereby held that the order u/s 143(1) dated 30.03.2019 passed by the DCIT CPC & this appeal filed against the order u/s 143(1) dated 30.03.2019 have become redundant. However, for the record purpose after duly considering the submission of the appellant especially the details mentioned in the order u/s 143(3) dated 26.12.2019 passed by the DCIT Circle 15(3)(1), Mumbai for the AY 2017-18 it is hereby held that the addition made of Rs.28,61,51,810/- in the order u/s 143(1) dated 30.03.2019 have become redundant and the same is hereby deleted.” Page | 5 M/s Tata Projects Ltd. ITA No. 463 and CO No. 37/Mum/2023 4. We have heard rival submission of the parties on the issue in disputed and perused the relevant material on record. Before us, the Ld. Departmental Representative (DR) submitted that the Assessing Officer in the assessment order u/s 143(3) of the Act dated 26.12.2019, has not given any finding on the two issues firstly, on the issue of section 43B amounting to Rs.8,99,543and, secondly, on the issue of employee’s contribution to ESI/PF amounting to Rs.26,61,956/- and therefore, finding of the Ld. CIT(A) is without any basis.Thus, the order of the Ld. CIT(A) needs to be set aside and matter be restored back for deciding afresh. 4.1 We find that in the intimation u/s 143(1) of the Act, the CPC had adjusted the disallowance u/s 43B of the Act amounting to Rs.8,11,99,543/- and employee’s contribution to Provident Fund/superannuation fund amounting to Rs.2,61,64,956/-. Before us, the assessee has also filed a copy of the assessment order dated 26.12.2019 passed u/s 143(3) of the Act. On perusal of the same, we find that the Assessing Officer has computed the total income after making addition/disallowance to the total income computed u/s 143(1) of the Act. The relevant computation of the total income available on page 28 of the assessment order is reproduced as under: Computation of total Income: 1. Total Income as per 143(1) 1,98,50,33,015 Add: Addition on account of undisclosed interest (as para No. 4 under the head business income) 21,04,14,000 Page | 6 M/s Tata Projects Ltd. ITA No. 463 and CO No. 37/Mum/2023 Disallowance on account of u/s 14A r.w.r. 8D (as per para 5 under the head Business Income) 9,15,150 Disallowance on account of Contractual provisions (as per Para No. 6 under the head Business Income) 7,97,20,012 Disallowance of deduction u/s 80G (as per para No. 7) 1,15,00,000 30,25,49,162 Less: Share of Profit of AOP (as per para No. 8.2) 17,87,87,308 Total income assessed 210,87,94,869 Tax @ 30% on 210,61,96,644 63,18,58,993 Tax payable at special rate (15%) on 25,98,225 2,89,733 4.2 Thus it is evident that the adjustment u/s 43B and employee’s contribution has not been questioned in the assessment order u/s 143(3) of the Act. The finding of the Ld. CIT(A) in the impugned order is thus without any basis and complete ignorance of record. Since, the Ld. CIT(A) has not adjudicated the objections of the assessee against adjustment for disallowance u/s 43B of the Act and employee’s contribution to ESI/PF etc, which were made by the Assessing Officer u/s 143(1)(a) of the Act. Therefore, we feel it appropriate to set aside the order of the Ld. CIT(A) on the issue in dispute and restore the matter back to the file for deciding afresh after considering the submission of the assessee. The grounds of the appeal of the Revenue are accordingly allowed for statistical purposes. 5. Since, the grounds raised in the cross objections of the assessee are connected with the grounds raised by the Revenue in its appeal, therefore, same also stands allowed for statistical purposes and no separate finding is required. Page | 7 M/s Tata Projects Ltd. ITA No. 463 and CO No. 37/Mum/2023 6. In the result, the appeal of the Revenue and the cross objections of the assessee are allowed for statistical purposes. Order pronounced in the open Court on 31/05/2023. Sd/- Sd/- (KAVITHA RAJAGOPAL) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 31/05/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai