Andhra Pradesh Tanneries Limited, Vizianagaram V. The Assistant Commissioner of Income Tax, Circle-3(1), Visakhapatnam

ITA 191/VIZ/2020

AI Insights

The case involves Andhra Pradesh Tanneries Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) -1, Visakhapatnam, concerning the Assessment Year 2006-07. The primary issue arose from the addition of Rs.1,63,18,559 to the assessee's income, attributed to the non-production of creditor confirmations. The assessee contended that they were not given adequate opportunity to submit necessary documents during the assessment and appeal processes. The CIT(A) initially dismissed the appeal based on an earlier remand report, which the assessee had not been able to contest due to lack of access and opportunity. The Tribunal found procedural lapses in the handling of the remand reports and the assessee's right to a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135896 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 20-06-2023
• Assessment Year: 2006-2007
• Appeal Filed On: 28-09-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 143(3); 143(2)

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.191/Viz/2020 (ननधधारण वर्ा / Assessment Year : 2006-07) Andhra Pradesh Tanneries Ltd. IDA, Leather Complex Area Nellimarla Vizianagaram [PAN : AABCA4797L] Vs. Asst.Commissioner of Income Tax Circle-3(1) Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri Y.A.Rao, AR प्रत्यधथी की ओर से / Respondent by : Shri O.N.Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 21.06.2023 घोर्णध की तधरीख/Date of Pronouncement : 14.07.2023 O R D E R Per Shri Balakrishnan S, Accountant Member This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [in short, “CIT(A)”]-1, Visakhapatnam in I.T.A. No.0301/2008-09/CIT(A)-1/VSP/2020-21 dated 16.07.2020 for the Assessment Year (A.Y.) 2006-07, arising out of the order passed u/s 143(3) of the Income Tax Act, 1961 (in short “Act) by the Assessing Officer (AO) on 24.12.2008. 2 ITA No.191/Viz/2020, A.Y.2006-07 Andhra Pradesh Tanneries Ltd, Vizianagaram 2. Brief facts of the case are that the assessee is a public limited company, manufacturing finished leather at Vizianagaram, filed it’s return of income, declaring loss of Rs.90,41,928/- for the A.Y.2006-07. The case was selected for scrutiny and a notice u/s 143(2) of the Act was issued and served on the assessee on 12.10.2007. The assessment was completed by the Ld.AO by making addition of Rs.1,63,18,559/- due to the reason that the assessee has failed to produce confirmation letters from creditors in the case of Bambolli Holdings Pvt.Ltd. 3. Aggrieved by the order of the Ld.AO, the assessee filed an appeal before the CIT(A). Before the Ld.CIT(A), the Ld.AR submitted that the assessee has not been given adequate opportunity to submit the confirmations from the creditors. The assessee, however submitted the confirmations before the Ld.CIT(A). The Ld.CIT(A), considering the submissions made before him, forwarded the same to the Ld.AO, calling for remand report. The Ld.AO, without providing any opportunity to the assessee, submitted remand report dated 17.07.2017. Considering the objections raised by the Ld.AR that no opportunity was provided by the Ld.AO, the Ld.CIT(A) vide letter dated 04.01.2019, once again directed the AO to provide opportunity to the assessee and submit a fresh remand report. However, it was alleged by the assessee that the remand report 3 ITA No.191/Viz/2020, A.Y.2006-07 Andhra Pradesh Tanneries Ltd, Vizianagaram dated 28.02.2019 was submitted neither to the assessee for rejoinder nor to the Ld.CIT(A). The Ld.CIT(A) considering the remand report dated 17.07.2017, dismissed the appeal of the assessee. 4. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us. Originally, the assessee had raised 10 grounds of appeal and later revised to 5 grounds of appeal as follows : 1. The learned Commissioner (Appeals) is not justified in dismissing the appeal, without providing a fresh opportunity to hear the appeal, particularly, when the Commissioner(Appeals) has not received remand report sought from the Assessing Officer with reference to Remand order dated 04.01.2019. 2. The authorities below failed to appreciate the actual transactions carried between Appellant and BCL Forgings Ltd through banking channels, which took place int eh acse of the Appellant namely, “The Appellant gave inter-corporate Deposit of 1.25 crores given to BCL Forgings Ltd. on 31/03/2005, which was repaid in instalments by B.C.L.Forgings Ltd. during the financial eyar 2005-06 (A/Y2006-08)” 3. The learned Commissioner (Appeals) erred in passing orders u/s 250, relying on the remand report dated 17/07/2017 received from A.O., which in fact, was not accepted and a fresh report was called vide letter dated 04/01/2022 by the Commissioner (Appeals) and in fact no report was submitted by Assessing Officer to Commissioner (Appeals). 4. The Appellant prays for deletion of addition f Rs.1,27,06,038/- partly sustained by Commissioner (Appeals), when genuineness of transactions were not doubted by the Department. 4 ITA No.191/Viz/2020, A.Y.2006-07 Andhra Pradesh Tanneries Ltd, Vizianagaram 5. For these and other grounds that may eb urged by teh Appellant, at the time of hearing, the Appellant prays for appropriate relief in the interest of justice. 5. The main contention of the Ld.AR is that the Ld.CIT(A) relied on the remand report dated 17.07.2017 and arrived at a conclusion of dismissing the appeal of the assessee. The Ld.AR also contended that the remand report dated 28.02.2019 was submitted to the assessee while it was submitted before Tribunal on 22.02.2022 . The Ld.AR further submitted that this remand report was not at all considered by the Ld.CIT(A), while passing the order dated 16.07.2020. The Ld.AR, therefore, pleaded that one more opportunity may be provided to the assessee and the matter may be remitted back to the Ld.AO. 6. Per contra, the Ld.DR admitted that the remand report was not available before the Ld.CIT(A) as on 16.07.2020. However, the Ld.DR submitted that the Ld.AO has rejected the assessee’s objection, even after considering the submissions / objections made by the assessee. The Ld.DR, therefore, pleaded that since the decision of the Ld.AO remained the same as compared to the remand report dated 17.07.2017, the order of the Ld.CIT(A) may be upheld. 7. We have heard both the sides and perused the material available on record. Admittedly, the remand report dated 04.01.2019 was not available 5 ITA No.191/Viz/2020, A.Y.2006-07 Andhra Pradesh Tanneries Ltd, Vizianagaram before the Ld.CIT(A) or before the assessee as on the date of filing of appeal before us. On a query from the Bench, the Ld.AR admitted that he has raised objections to the remand report dated 28.02.2019, which was provided to the assessee, when the Ld.DR submitted the same before the Tribunal. Even though, the conclusion in both the remand reports of the Ld.AO remains the same, we find that no opportunity was provided by Ld.CIT(A) to the assessee to furnish a rejoinder to the remand report. Therefore, following the principles of natural justice, we are inclined to remit the matter back to the file of the Ld.CIT(A) with a direction to consider the remand report dated 28.02.2019 and reasonable opportunity may be provided to the assessee to furnish rejoinder to the remand report dt.04.01.2019 and decide the case on merits by passing a speaking order. 8. In the result, appeal of the assessee is allowed for stasistical purpose. Order Pronounced in open Court on 14 th July, 2023. Sd/- Sd/- (द ु व्वूरु आर.एल रेड्डी) (एस बालाकृ ष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याधयकसदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Dated :14.07.2023 L.Rama, SPS 6 ITA No.191/Viz/2020, A.Y.2006-07 Andhra Pradesh Tanneries Ltd, Vizianagaram आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Andhra Pradesh Tanneries Ltd., IDA, Leather Complex Area, Nellimarla, Vizianagaram 2. रधजस्व/The Revenue – Asst.Commissioner of Income Tax, Circle-3(1) Visakhapatnam 3. प्रधान आयकर आयुक्त The Principal Commissioner of Income Tax- 1,Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 5.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam