M/S HYDRO AIR RECTONICS (PCD) LTD, MUMBAI V. DY CIT CC 2 (1), MUMBAI

ITA 264/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4676 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2013-2014
• Appeal Filed On: 09-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Keywords: Depreciation; Opportunity of being heard; Revised return; Set aside
• Section: 142(1); 14A; 251; 143(2); 246A; 48; 144; 11

Judgement Text

ITA NO.264/MUM/2020 A.Y. 2013 - 14 M/S HYDRO AIR TECTONICS (PCD) LTD. VS. DCIT, CC - 2(1) 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI PRAMOD KUMAR (VICE PRESIDENT) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO.264/MUM/2020 (ASSESSMENT YEAR: 2013 - 14) M/S HYDRO AIR TECTONICS (PCD) LIMITED, 301/302, BELAPUR CONCORDE PREMISES CHS, PLOT NO. 66A, SECTOR - 44, BEHIND VIJAYA BANK, CBD, BELAPUR, NAVI MUMBAI 400 614 VS. DCIT, CENTRAL CIRCLE 2(1) 8 TH FLOOR, ROOM NO. 804, OLD CGO BUILDING, PRATISHTHA BHAVAN, M.K. ROAD, MUMBAI 400 020 PAN NO. AAACH9686C (ASSESSEE) (REVENUE) ASSESSEE BY : NONE REVENUE BY : SHRI GURBINDER SINGH, D.R DATE OF HEARING : 21/09/2021 DA TE OF PRONOUNCEMENT : 23 /09/2021 ORDER PER RAVISH SOOD, J.M: THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 48, MUMBAI, DATED 29.10.2019, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O U/S 144 OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 10.02.2016. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER O N THE FOLLOW ING GROUNDS BEFORE US: 1 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) - 48 , MUMBAI ( THE CIT(A) ERRED IN PASSING THE ORDER WITHOUT GIVING PROPER AND ADEQUATE OPPORTUNITY. 2. THE APPELLANT PRAYS THAT APPELLANT SHO ULD BE GIVEN TIME TO RE - PRODUCED ALL THE DOCUMENTS AS REQUIRED BY A O. ITA NO.264/MUM/2020 A.Y. 2013 - 14 M/S HYDRO AIR TECTONICS (PCD) LTD. VS. DCIT, CC - 2(1) 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJECT THE LD. CIT (A) HAS ERRED IN DISALLOWING OF SITE EXPENSES, LOADING AND UNLOADING EXP ENSES ON AN AD HOC BASIS @ 80% AMO UNTING TO RS.8 0,93,430/ - . 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJECT THE LD . CIT(A) HAS ERRED IN DISALLOWANCE U/S36 (1)(VA) R.W.S 2(24)(X) OF RS. 4,69,114 / - FOR AMOUNT PAID FOR SUM RECEIVED FROM EM PLOYEES TOWARDS CONTRIBUTION TO PROVIDENT FUND AND EMPLOYEES STATE INSURANCE SCHEME. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJECT THE LD. CIT (A) HAS ERRED IN DISALLOWANCE OF DEPRECIATIO N ON NEW ASSET PURCHASED OF RS. 709,96,109/ - . 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJECT THE LEARNED CIT (A) HAS ERRED IN DISALLOWANCE OF RS. 53,66,997/ - U/S 14A WHEREAS THE APPELLANT HAS NOT INCURRED ANY EXPENDITURE IN CONNECTION WITH THE INVESTMENT MADE BY IT. 7. ON THE F ACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJECT THE LEARNED CIT (A) HAS ERRED IN DETAIL OF CLAIM OF THE APPELLANT U/S 10(34) IN CONNECTION WITH THE DIVIDEND RECEIPT OF RS. 5000 / - . 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJE CT THE LEARNED CIT( A) HAS ERRED IN DISALLOWANCE OF PENALTY/DAMAGE OF RS . 35,688/ - PAID BY THE APPELLANT FOR THE PURPOSE OF THE BUSINESS OF DIE COMPANY. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE ARID JAW ON THE SUBJECT: THE LEARNED CIT (A) ERR ED IN INITI ATING PENALTY U/S 271 B OF THE INCOME TAX ACT, 1961 WHILE THE APPELLANT HAS GOT ITS ACCOUNTS AUDITED BY A CHARTERED ACCOUNTANT. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND JAW ON THE SUBJECT THE LEARNED CI T (A) ERRED IN INITIATING PENALTY U/S 271(1 )(B) OF THE INCOME TAX ACT, 1961 . 1 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW ON THE SUBJECT THE LEARNED CIT (A) ERR ED IN INITIATING PENALTY U/S 271(1 )(C) OF THE INCOME TAX ACT, 1961. 12. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE GROUND OF APPEAL. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER ANY/ OR AMEND THE FOREGOING GROUNDS OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF ENVIRONMENTAL ENGINEERING AND ALLIED ACTIVITIES HA D E - FILED ITS RETURN OF INCOME FOR A.Y. 2013 - 14 ON 30.09.2013, DECLARING A LOSS OF ( - ) RS.1,09.42,535/ - . THEREAFTER , THE ASSESSEE HAD FILED A REVISED RETURN OF INCOME ON 26.02.2015, DECLARING A LOSS OF ( - ) RS.5,49,02,362/ - . SUBSEQUENTLY, THE CASE OF THE AS SESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(2) OF THE ACT. ITA NO.264/MUM/2020 A.Y. 2013 - 14 M/S HYDRO AIR TECTONICS (PCD) LTD. VS. DCIT, CC - 2(1) 3 3. AS THE ASSESSEE COMPANY HAD FAILED TO COMPLY WITH THE NOTICES WHICH WERE ISSUED BY THE A.O U/S 142(1) OF THE ACT, THEREFORE, THE A.O VIDE HIS ORDER PASSED U/S 144 OF THE ACT, DATED 10.02 .2016 ASSESSED ITS INCOME AT RS.3,00,63,980/ - AFTER MAKING THE FOLLOWING ADDITIONS/DISALLOWANCE S : TOTAL LOSS AS PER REVISED RETURN OF INCOME ( - ) 5,49,02,362 ADD SITE & LOADING AND UNLOADING 80, 93,430 DISALLOWANCE U/SEC. 36(1)(VA) R.W.S 2(24)(X) 4,69,114 DEPRECIATION 7,09,96,109 DISALLOWANCE U/S 14A 53,66,997 DIVIDEND 5,000 PENALTY 35,688 8,49,66,338 TOTAL 3,00,63,976 ROUNDED OFF 3,00,63,980 4. AGGRIEVED, THE ASSESSEE ASSAILED THE ORDER PASSED BY THE A.O U/S 144, DATED 10.02.2016 BEFORE THE CIT(A). HOWEVER, AS THE ASSESSEE FAILED TO APPEAR BEFORE THE CIT(A), THEREFORE, HE BEING OF THE VIEW THAT THE ASSESSEE WAS NOT INTEREST ED IN PROSECUTING ITS APPEAL , DISMISSED THE SA ME. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. AS THE ASSESSEE APPELLANT DESPITE HAVING BEEN INTIMATED ABOUT THE HEARING OF THE APPEAL HAD FAILED TO APPEAR BEFORE US, WE, THEREFORE , AS PER RULE 24 OF THE APPELLATE TRIBUNAL RULES, 1962 ARE CONSTRAINED TO DISPOSE OF F THE SAME AFTER PERUSING THE ORDERS OF THE LOWER AUTHORITIES AND HEARING THE RESPONDENT REVENUE. 6. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOW ER AUTHORITIES. ON BEING CONFRONTED WITH THE FACT THAT THE CIT(A) HAD SUMMARILY DISMISSED THE APPEAL FOR WANT OF PROSECUTION ON THE PART OF THE ASSESSEE AND HAD NOT ADVERT ED TO THE MERITS OF THE CASE, THE LD. D.R FAILED TO REBUT THE SAME. 7. WE HAVE HEARD THE LD. D.R AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. AS IS DISCERNIBLE FROM THE ORDER OF THE CIT(A), WE FIND THAT HE HAD DISMISSED THE ITA NO.264/MUM/2020 A.Y. 2013 - 14 M/S HYDRO AIR TECTONICS (PCD) LTD. VS. DCIT, CC - 2(1) 4 APPEAL FOR NON - PROSECUTION OF THE SAME BY THE ASSESSEE. IN OUR CONSIDERED VIEW, IT WAS NOT OPEN FOR THE CIT( A) TO HAVE SUMMARILY DISMISSED THE APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE SAME BY THE ASSESSEE. RATHER, A PERUSAL OF SEC. 251(1)(A) AND (B), AS WELL AS EXPLANATION TO SEC. 251(2) OF THE ACT REVEALS THAT THE CIT(A) REMAINS UNDER A STATUTORY OBLIGATIO N TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISES FROM THE IMPUGNED ORDER BEFORE HIM. IN OUR CONSIDERED VIEW , A CIT(A) IS NOT VESTED WITH ANY POWER TO SUMMARILY DISMISS AN APPEAL FOR NON - PROSECUTION. OUR AFORESAID VIEW THAT THE CIT(A) IS OBLIGATED TO APPL Y HIS MIND TO ALL THE ISSUES WHICH ARISES FROM THE IMPUGNED ORDER BEFORE HIM IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF COMMISSIONER OF INCOME - TAX (CENTRAL) VS. PREMKUMAR ARJUNDAS LUTHDRA (HUF) (2016) 240 ITR 133 (BOM) , WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT HAD OBSERVED AS UNDER : 8. FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED BEFORE THE CIT(A), THEN IN DISPOSING OF THE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQUIRY THAT HE T HINKS FIT OR DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME TO HIM AS FOUND IN SECTION 250(4) OF THE ACT. FURTHER SECTION 250(6) OF THE ACT OBLIGES THE CIT(A) TO DISPOSE OF AN APPEAL IN WRITING AFTER STATING THE POIN TS FOR DETERMINATION AND THEN RENDER A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CONSIDERATION WITH REASONS IN SUPPORT. SECTION 251(1)(A) AND (B) OF THE ACT PROVIDE THAT WHILE DISPOSING OF APPEAL THE CIT(A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENH ANCE OR ANNUL AN ASSESSMENT AND/OR PENALTY. BESIDES EXPLANATION TO SUBSECTION(2) OF SECTION 251 OF THE ACT ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT(A) WOULD BE ENTITLED TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFOR E HIM IN APPEAL FILED FOR ITS CONSIDERATION, EVEN IF THE ISSUE IS NOT RAISED BY THE APPELLANT IN ITS APPEAL BEFORE THE CIT(A). THUS ONCE AN ASSESSEE FILES AN APPEAL UNDER SECTION 246A OF THE ACT, IT IS NOT OPEN TO HIM AS OF RIGHT TO WITHDRAW OR NOT PRESS T HE APPEAL. IN FACT THE CIT(A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT WITH EFFECT FROM 1ST JUNE, 2001 THE POWER OF THE CIT(A) TO SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND RESTORE IT TO THE ASSESSING OFFICER FOR PASSING A FRESH ORDER S TANDS WITHDRAWN. THEREFORE, IT WOULD BE NOTICED THAT THE POWERS OF THE CIT(A) IS COTERMINOUS WITH THAT OF THE ASSESSING OFFICER I.E. HE CAN DO ALL THAT ASSESSING OFFICER COULD DO. THEREFORE JUST AS IT IS NOT OPEN TO THE ASSESSING OFFICER TO NOT COMPLETE TH E ASSESSMENT BY ALLOWING THE ASSESSEE TO WITHDRAW ITS RETURN OF INCOME, IT IS NOT OPEN TO THE ASSESSEE IN APPEAL TO WITHDRAW AND/OR THE CIT(A) TO DISMISS THE APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE APPEAL BY THE ASSESSEE. THIS IS AMPLY CLEAR FROM THE S ECTION 251(1)(A) AND (B) AND EXPLANATION TO SECTION 251(2) OF THE ACT WHICH REQUIRES THE CIT(A) TO APPLY HIS MIND TO ALL THE ITA NO.264/MUM/2020 A.Y. 2013 - 14 M/S HYDRO AIR TECTONICS (PCD) LTD. VS. DCIT, CC - 2(1) 5 ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFORE HIM WHETHER OR NOT THE SAME HAS BEEN RAISED BY THE APPELLANT BEFORE HIM. ACCORDIN GLY, THE LAW DOES NOT EMPOWER THE CIT(A) TO DISMISS THE APPEAL FOR NON - PROSECUTION AS IS EVIDENT FROM THE PROVISIONS OF THE ACT. WE, THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS ARE NOT PERSUADED TO SUBSCRIBE TO THE MANNER IN WHICH THE ASSESSEES APPEAL HAD BEEN DISMISSED BY THE CIT(A) , AND THUS SET - ASIDE HIS ORDER AND RESTORE THE APPEAL TO HIS FILE WITH A DIRECTION TO DISPOSE OFF THE SAME ON MERITS. NEEDLESS TO SAY, THE CIT(A) SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE I N THE COURSE OF THE DE NOVO APPELLATE PROCEEDINGS. THE GROUND OF APPEAL NO. 1 IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. 8 . AS WE HAVE RESTORED THE APPEAL TO THE FILE OF THE CIT(A), THEREFORE, WE REFRAIN FROM ADVERTING TO THE GROUNDS ON THE BASIS OF WHICH THE IMPUGNED ADDITION MADE BY THE A.O HAD BEEN ASSAILED BEFORE US. THE GROUND S OF APPEAL NO S . 2 TO 11 ARE DISPOSED OFF IN TERMS OF OUR AFORESAID OBSERVATIONS. 9 . THE GROUND OF APPEAL NO. 12 BEING GENERAL IN NATURE IS DISM ISSED. 10 . RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 23 .09.2021 SD/ - SD/ - ( PRAMOD KUMAR ) (RAVISH SOOD) VICE PRESIDENT JUDICIAL MEMBER MUMBAI ; DATED: 23 .09 .2021 * PS: ROHIT ITA NO.264/MUM/2020 A.Y. 2013 - 14 M/S HYDRO AIR TECTONICS (PCD) LTD. VS. DCIT, CC - 2(1) 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI