Rakesh Constructions , Anantapuramu V. ITO, Ward-2, Anantapur

ITA 246/Hyd/2023

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Rakesh Constructions, a civil contractor firm, appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, which upheld the disallowance of Mavatoor and Paver Labour payments under section 40(a)(ia) of the Income Tax Act, and denied the set-off of brought forward business loss. The primary contention was the non-acceptance of the carry forward loss from the assessment year 2005-06 and the disallowance of certain labor payments during reassessment for the year 2007-08. The Tribunal noted procedural lapses in the notification process of the hearings and the assessee's lack of awareness due to technological unfamiliarity with the ITBA portal, leading to the decision to remand the case back to the CIT(A) for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133379 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-06-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 147; 40(a)(ia)

Judgement Text

आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “SMC”, HYDERABAD BEFORE SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA No. 246/Hyd/2023 (निर्धारण वर्ा / Assessment Year: 2007-08) Rakesh Constructions, Anantapur [PAN No. AACFR1669Q] Vs. Income Tax Officer, Ward-2, Anantapur अपीलधर्थी / Appellant प्रत्‍यर्थी / Respondent निर्धाररती द्वधरध/Assessee by: Shri R. Mohan Kumar, AR रधजस्‍व द्वधरध/Revenue by: Shri T. Venkanna, DR सुिवधई की तधरीख/Date of hearing: 08/06/2023 घोर्णध की तधरीख/Pronouncement on: 22/06/2023 आदेश / ORDER Aggrieved by the order dated 22/02/2023 passed by the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Rakesh Constructions (“the assessee”) for the assessment year 2007-08, assessee preferred this appeal. 2. Brief facts of the case are that, assessee is a firm, a civil contractor. For the assessment year 2007-08, it filed its return of income on 31/10/20017 declaring total income at Rs. 25,463/-. Subsequently, the assessment was reopened under section 147 of the Act and the same was taken up for scrutiny. During the course of re-assessment, learned Assessing Officer did not accept the carry forward of loss of assessment year 2005-06 on the ground that the return of income was filed after the due date. Learned Assessing Officer also did not accept the Mavatoor Labour consists of 70 or more persons and each time the payment amount ITA No. 246/Hyd/2023 Page 2 of 4 does not exacted Rs. 20,000/- and at the same time each labourer aggregate payment does not exceed not exceed Rs. 50,000/- p.a. Learned Assessing Officer completed the assessment by adding carry forward loss amount of Rs. 1,83,850/- and Mavatoor Labour & Paver Labour amounting to Rs. 10,93,610/- and assessed the tax liability at Rs. 6,02,050/-. 3. Aggrieved, assessee preferred appeal before the learned CIT(A). Considering the submission made by the assessee, learned CIT(A) sustained the order of the learned Assessing Officer and dismissed the appeal of assessee by stating that the return of income was not filed within the due date. 4. Assessee, therefore, preferred appeal before the Tribunal, stating that the learned CIT(A) erred in upholding the disallowance of Mavatoor labour and Paver Labour payment under section 40(a)(ia) of the Act and also for not getting benefit of set-off of brought forward business loss. 5. At the outset, it is submitted by the learned AR that initially this appeal was disposed of by the Bench of the Tribunal by order dated 22/01/2020 setting aside the impugned order and directing the learned CIT(A) to hear the appeal before him afresh and to take a view after hearing the assessee. Subsequently, the learned CIT(A) disposed-of the appeal but the assessee has not been aware of the proceedings before the learned CIT(A). As could be seen from the impugned order, the notices of hearing were not served on the assessee directly, but it was uploaded to ITBA portal on the registered e-mail ID of the assessee. 6. According to the learned AR, the assessee never knew the issuance of the notices, since the Managing Partner of the assessee is not aware as to how to navigate the ITBA porta, but only depending upon ITP. He further submitted that the assessee did not receive any e-mail from NFAC regarding the posting of the case for hearing, but came to know about the disposal of the appeal when he approached the qualified tax professional ITA No. 246/Hyd/2023 Page 3 of 4 at Hyderabad, who verified the ITBA portal. Learned AR, therefore, submits that because of this ignorance of technology on the part of the assessee, the assessee could not participate in the first appellate proceedings. He submitted that this is the reason for delay in filing the appeal. Learned AR further submitted that the details of the payment made to the labourers and according to him, the provisions under section 40(a)(ia) of the Act are not applicable to the facts of the case. 7. Learned DR submits that ITBA portal is made for the purpose of integrating the process under the Act and it is for the assessee to verify the date of hearing from the same. 8. Having considered the submissions made by either side carefully, I am of the considered opinion that it is a fit case to set aside the impugned order and to restore the appeal to the file of the learned CIT(A) for considering the details now submitted by the assessee in respect of the payment to the labourers. Learned CIT(A) may take a call to serve the summons by e-mail also. Since the assessee now acquainted with the operation of ITBA portal, no specific mode of service of notice need be emphasized. This is the last opportunity to the assessee and assessee is directed to co-operate with the disposal of appeal on merits. Grounds are accordingly treated as allowed for statistical purposes. 9. In the result, appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on this the 22 nd day of June, 2023. Sd/- (K. NARASIMHA CHARY) JUDICIAL MEMBER Hyderabad, Dated: 22/06/2023 TNMM ITA No. 246/Hyd/2023 Page 4 of 4 Copy forwarded to: 1. Rakesh Constructions, D.No. 6-5-707, Srinagar Colony, Upstairs, Near Satya Sai Water Tank, Anantapur. 2. Income Tax Officer, Ward-2, Anantapur. 3. DR, ITAT, Hyderabad. 4. GUARD FILE. TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD