Aggarwal Hotels Pvt Ltd, Delhi V. ACIT, Circle1(1), Delhi

ITA 2756/DEL/2022

AI Insights

Aggarwal Hotels Pvt. Ltd. appealed against the order of the National Faceless Appeal Centre (NFAC) which upheld certain disallowances made during the assessment year 2019-20. The primary issues in the appeal included the disallowance of profit on the sale of a fixed asset, gratuity provision, and employees' contributions to PF & ESI. The CIT(A) had dismissed the initial appeal, leading to the current proceedings before the Income Tax Appellate Tribunal. The Tribunal found procedural lapses in the handling of the appeal by the CIT(A) and restored the matter for a fresh examination, except for the issue related to PF & ESI contributions which was dismissed based on Supreme Court's decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 112608 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 30-05-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 22-11-2022
• Other Referred Cases: Checkmate Services Pvt. Ltd. vs. CIT-1 in Civil Appeal No. 2833 of 2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Earning of tax free income
• Section: 32; 43B; 143(1); 139(1)

Judgement Text

1 ITA No.2756/Del/2022 Aggarwal Hotels Pvt. Ltd. Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH: ‘A’ NEW DELHI ] BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER I.T.A. No. 2756/DEL/2022 (A. Y 2019-20) Aggarwal Hotels Pvt. Ltd. 16/90, Connaught Circus, New Delhi PAN:AADCA9416A ( APPELLANT ) Vs. ACIT Circle 1 C.R. Building, I. P. Estate, New Delhi ( RESPONDENT ) ORDER PER YOGESH KUMAR U.S., JM This appeal is filed by the assessee against the order dated 30/06/2020 passed by the Office of the National Faceless Appeal Centre (‘NFAC’) Delhi for assessment year 2019-20. Assessee by : Shri D. K. Gupta, CA Department by: Shri Kanv Bali, Sr. DR Date of Hearing 31.05.2023 Date of Pronouncement .05.2023 2 ITA No.2756/Del/2022 Aggarwal Hotels Pvt. Ltd. Vs. ACIT 2. The assessee has raised the following grounds of appeal :- “1. That the order of the Ld. Commissioner of Income Tax (Appeals) is against facts and law. 2. That the National Faceless Appeal Centre is not justified in not allowing the deletion of Rs.1,98,201/- being Profit on sale of Fixed Asset as it is not taxable as per the provision of Section 32 of the Income-tax Act, 1961. It has further erred in not considering the claim on merit. 3. That the National Faceless Appeal Centre is not justified in not deleting the adjustment of Rs. 9,04,683/- on account of Gratuity Provision as the same had already been added to the income by the appellant. 4. That the National Faceless Appeal Centre is not justified in not allowing the deleting the adjustment of Rs. 2,35,098/- being employees share of PF & ESI. 5. That the National Faceless Appeal Centre is not justified in disposing of the appeal without giving reasonable opportunity of representation and in not appreciating facts of each ground.” 3. Brief facts of the case are that, the assessee is a Company into Hotel business, filed the return of income for the A.Y 2019-20 declaring loss of Rs. 124,30,516/-. The return was processed and intimation u/s 143(1) of the Act was issued on 30/06/2020. The CPC on 30/06/2020 while processing the return disallowed a sum of Rs. 2,35,098/- on account of failure of the assessee to deposit employees contribution to PF/ESI, which was admittedly not paid on or before the prescribed due dates u/s 36(1) (va), disallowed a sum of Rs. 3 ITA No.2756/Del/2022 Aggarwal Hotels Pvt. Ltd. Vs. ACIT 9,04,683/- u/s 43B and disallowed a sum of Rs. 1,98,201/- as inconsistency in claim of exempt income with the schedules for exempt income. Aggrieved, the Assessee filed this Appeal. As against the order of the ACIT, CPC, Bangalore dated 30/06/2020, the Assessee preferred an Appeal before the CIT(A), the Ld. CIT(A) vide order dated 14/11/2022 dismissed the Appeal filed by the Assessee. Aggrieved by the order of the CIT(A) dated 14/11/2022, the Assessee preferred the present Appeal on the grounds mentioned above. 4. The Ld. Counsel for the Assessee fairly submitted that the Ground No. 3 which is on addition of Rs. 2,35,098/- being Employees Share of PF & ESI paid belatedly but before the due of filing of return of income u/s 139(1) of the Act and the said issue is decided against the Assessee in the case of Checkmate Services Pvt. Ltd. vs. CIT-1 in Civil Appeal No. 2833 of 2016, vide order dated 12/10/2022 by the Hon’ble Supreme Court. Therefore, submitted that the Assessee will not be pressing Ground No. 3 of the Appeal. Thus, the Ground No. 3 of the Appeal is dismissed as not pressed. 5. The Ld. Counsel for the Assessee further submitted that in so far as other two additions which are the subject matter of Ground No. 2 & 4, the CIT(A) has not given proper opportunity of being heard to the assessee and the order of the CIT(A) has been passed in violation of principals of natural justice. 6. The Ld. DR justified the order impugned passed by the CIT(A) and submitted that the opportunity has been provided to the assessee but the 4 ITA No.2756/Del/2022 Aggarwal Hotels Pvt. Ltd. Vs. ACIT Assessee failed to appear before the CIT(A), therefore, sought for dismissal of the Appeal. 7. We have heard the parties, perused the material available on record. The Ld. CIT(A) while dismissing the Appeal on merit has observed as under:- “In spite of providing several hearing opportunities on 15/07/2022, 12/09/2022 & 28/10/2022, he assessee has only sought for adjournment vide letter dated 16/09/2022 and failed to produce the supporting documents substantiating the claim of the Assessee.” 8. From the reading of the above it is found that the Assessee had sought for adjournments vide letter dated 16/09/2022 who has apparently not participated actively before the CIT(A), therefore, the Ld. CIT(A) proceeded to pass the order on merit and dismissed the Appeal. 9. Considering the above facts we deem it fit to restore the matter to the file of the Ld. CIT(A) for de-novo adjudication of the Appeal with a direction to the Assessee to participate in the Appeal proceedings without fail. Accordingly, the issue involved in Ground No. 2 & 4 are restored to the file of the CIT(A) for de- novo verification. Accordingly, Ground No. 5 of the assessee is allowed for statistical purpose. 5 ITA No.2756/Del/2022 Aggarwal Hotels Pvt. Ltd. Vs. ACIT 10. In the result, the Appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open court on : 31/05/2023. Sd/- Sd/- ( ANIL CHATURVEDI ) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 31/05/2023 *R.N, Sr. PS* Copy forwarded to :- 1. Appellant 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI