S R B C & CO. LLP, Kolkata V. DCIT, CPC, Bangalore

ITA 236/KOL/2022

AI Insights

The case involves SRBC & Co. LLP, which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the intimation under Section 143(1) of the Income-tax Act, 1961, which adjusted the taxable income of the assessee. The primary issues in the appeal included the computation of total income, non-adjudication of grounds, lack of show cause notice, incorrect taxation of exempt income, double taxation of dividend income, short grant of TDS credit, and incorrect levy of interest under Sections 234B and 234C of the Act. However, the ITAT dismissed the appeal as infructuous due to the merger of the intimation with the assessment order under Section 143(3).

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 112607 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-11-2022
• Assessment Year: misc
• Appeal Filed On: 08-09-2022
• Other Referred Cases: Suo moto Writ Petition (C) No. 3 of 2020
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Earning of tax free income; Revised return; TDS
• Section: 143(3); 234B; 143(1); 22

Judgement Text

1 ITA No.236/Kol/2022 SRBC & Co. LLP, AY: 2017-18. IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA आयकर अपीलीय अधीकरण, ᭠यायपीठ “A” कोलकाता, BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.236/Kol/2022 Assessment Year: 2017-18 SRBC & Co. LLP 3 rd Floor, Block-B, 22 Camac Street, Kolkata- 700016. (PAN:ACHFS9117R) Vs. Deputy Commissioner of Income Tax, CPC, Bangalore (Appellant) (Respondent) Present for: Appellant by : Shri Nikhil Tiwari, FCA Respondent by : Shri Vijay Kumar, Addl. CIT, Sr. DR Date of Hearing : 09.11.2022 Date of Pronouncement : 24.11.2022 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide Order No. ITBA/NFAC/S/250/2021-22/1037401774(1) dated 01.12.2021 passed against the order by the DCIT, CPC, Bangalore u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) dated 04.12.2019. 2. At the outset, we note that appeal of assessee is time barred by 99 days and a condonation petition has been placed on record. The impugned order of Ld. CIT(A) is dated 01.12.2021 and the assessee had 2 ITA No.236/Kol/2022 SRBC & Co. LLP, AY: 2017-18. received the order on the same day itself. The present appeal ought to have been filed by 29.01.2022. It is noted that the period of delay falls during the time of Pandemic of Covid-19 which has been excluded by the Hon’ble Supreme Court in the case of Suo moto Writ Petition (C) No. 3 of 2020 dated 10.01.2022 by which the period from 15.03.2020 to 28.02.2022 has been directed to be excluded for the purpose of limitation. Vide this order a further period of 90 days has been granted for providing the limitation from 01.03.2022. Accordingly, we condone the delay and proceed to adjudicate upon the matter. 3. Grounds raised by the assessee are reproduced as under: “General 1. erred in confirming the action of Ld. AO in computing total income of the Appellant at Rs. 41,55,30,701 as against income of Rs. 41,15,79,882 offered to tax by the Appellant in Revised Return of Income for the subject assessment year; CIT(A) Order is bad in law: 2. erred in not adjudicating on grounds raised before Hon'ble CIT(A) by treating the appeal as infructuous without appreciating the fact that the additions made in the Intimation under Section 143(1) of the Act passed by the Ld. AO against Revised Return of Income has not been dealt with in the Assessment Order passed under Section 143(3) of the Act; Non grant of sufficient opportunity of being heard 3. erred in not issuing show cause notice before issuing Intimation under Section 143(1) of the Act and thereby not granting sufficient opportunity of being heard to the Appellant leading to violation of the principles of natural justice; Wrongly taxing exempt income under Section 115BBDA of the Act: 4. erred in levying tax on dividend income of Rs. 30,27,331 received from investment in units of Mutual-Funds under Section 115BBDA of the Act treating it as income received from domestic company without appreciating the fact that the same is which is exempt u/s 10(35) of the Act; 5. without prejudice to the above, erred in levying tax on dividend income of Rs.19,23,488 once under the head "Income from Profit and Gains of Business or Profession" and also under Section 115BBDA of the Act thereby leading to double taxation of same income; Short grant of TDS credit 3 ITA No.236/Kol/2022 SRBC & Co. LLP, AY: 2017-18. 6. erred in granting TDS credit of Rs. 8,94,70,175 as against TDS credit of Rs.14,74,78,853 as claimed in Revised Return of Income, thereby granting short credit of TDS of Rs. 5,80,08,678; Levy of interest under Section 234B of the Act 7. erred in levying interest under Section 234B of the Act of Rs. 1,76,36,982; Levy of interest under Section 234C of the Act 8. erred in levying interest under Section 234C of the Act of Rs. 26,17,929; The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing of the appeal, so as to enable the Learned Hon'ble ITAT to decide this appeal according to law.” 4. Brief facts of the case are that return was filed on 30.10.2017 reporting total income of Rs.41,15,79,882/- which was processed by the Central Processing Unit (CPC), Bengaluru u/s. 143(1) of the Act at total taxable income of Rs.41,55,30,701/-. In respect of adjustment made in the processing of return u/s. 143(1) of the Act, assessee went in appeal before the Ld. CIT(A). During the pendency of appeal before ld. CIT(A), return of the assessee for the impugned year i.e. AY 2017-18 was selected for scrutiny and the assessment order was passed u/s. 143(3) of the Act dated 24.12.2019. In the assessment order passed u/s. 143(3) of the Act, disallowance has been made in respect of claim of exemption on account of provision for leave encashment amounting to Rs.1,30,53,246/- u/s. 43B(f) of the Act. The said assessment order is placed on record in the paper book at page 100. Assessee is in appeal before the Ld. CIT(A) against the disallowance made in the assessment completed u/s. 143(3) of the Act and is pending for disposal. The issue raised in the said assessment order is not before us in the 4 ITA No.236/Kol/2022 SRBC & Co. LLP, AY: 2017-18. present appeal by the assessee which in effect pertains to the adjustment made and levying tax on dividend income as well as short grant of TDS credit (refer grounds of appeal reproduced supra). 5. From the perusal of the assessment order passed u/s. 143(3) of the Act, we note that Ld. AO has proceeded to compute the assessed income by making an addition to the returned income of the assessee and not the income processed u/s. 143(1) of the Act. However, it is noted that in the said order u/s. 143(3) of the Act, there is no addition made in respect of dividend income received from investment in units of mutual funds u/s. 115BBDA of the Act. We note that since the assessment order u/s. 143(3) of the Act has already been passed in the present case before us, the intimation u/s. 143(1) of the Act against which the assessee is in appeal before us got merged with the aforesaid assessment order. Once the present intimation u/s. 143(1) of the Act having got merged in the assessment order passed u/s. 143(3) of the Act, the cause of action for the present appeal itself has vanquished, rendering the instant appeal as infructuous. While doing so, we would make it very clear that we have not expressed any views in respect of the matter raised in the assessment order passed u/s. 143(3) of the Act for which appeal by the assessee before the Ld. CIT(A) is pending for adjudication. That is a separate proceeding and the outcome of the same may be taken up in separate appellate proceedings under the relevant provisions of the Act at the discretion of the concerning parties. Considering the above 5 ITA No.236/Kol/2022 SRBC & Co. LLP, AY: 2017-18. observation and finding, we dismiss the appeal of the assessee as infructuous. 6. In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 24th November, 2022 Sd/- Sd/- (Sanjay Garg) (Girish Agrawal) Judicial Member Accountant Member Dated: 24 th November, 2022 JD, Sr. P.S. Copy to: 1. The Appellant: 2. The Respondent:. 3. CIT(A), NFAC, Delhi. 4. The Pr. CIT, Kolkata. 5. DR, ITAT, Kolkata Bench, Kolkata //True Copy// By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata