JBJ TECHNOLOGIES LIMITED, NOIDA V. ACIT,Circle-13(2), New Delhi

ITA 2900/DEL/2022

AI Insights

The case involves JBJ Technologies Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (CIT(A) - NFAC), Delhi, dated 28.09.2021. The appeal arose from a rectification order under Section 154 of the Income Tax Act, 1961, passed by the Assessing Officer (AO) on 13.09.2019 for Assessment Year 2015-16. The AO had disallowed Rs. 16,05,191/- as prior period expenses during the rectification proceedings. The Tribunal considered the delay in filing the appeal due to the serious health issues of a key director of the assessee company and condoned the delay. On merits, the Tribunal found that the issue of prior period expenses was not subject to limited scrutiny and required a detailed factual examination, which was outside the scope of rectification under Section 154.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121569 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-07-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 12-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.2900/DEL/2022 Assessment Year 2015-16 JBJ Technologies Ltd. 350, 351, 352, Udyog Kender-2 Ecotech-3 Greater Noida Uttar Pradesh Vs. Deputy Commissioner of Income Tax, New Delhi. TAN/PAN: AAACJ3218L (Appellant) (Respondent) Appellant by: Shri P.P. Singh, CA Respondent by: Shri Vivek Vardhan, Sr.DR Date of hearing: 25 07 2023 Date of pronouncement: 25 07 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a p ti o n e d a p pe a l h as b e e n fi le d b y t he a ss es se e ag ai n s t t h e or d e r o f t he C o m m i s s i o n e r o f I n c o m e T a x (A pp ea l s) - Nat i o n al F ac e l es s A ppe a l C e nt re ( N F A C) , D el h i (‘ C I T (A ) ’ i n sh or t ) d a t e d 28 . 0 9. 2 0 2 1 a ri si ng fr o m t h e o rd er da te d 1 3. 09 . 20 1 9 p a s se d b y t he A sse s si n g O ff i c e r ( A O ) un de r S e c t i on 1 5 4 o f t h e A c t, 1 9 6 1 ( th e A c t ) c on c e rn i n g A Y 201 5- 1 6. 2. A s pe r t h e g ro un d s o f a p p ea l , t he a ss e ss e e h a s cha l l e n ge d t he a dd i t i o n o f R s. 16, 0 5, 19 1/ - on a c c o u nt o f p ri or p er io d e xp e n se s i n re c ti f ic a t i o n pr oc e e di n gs u n d e r S e ct i o n 154 o f t he A c t. 3. W h e n t h e ma t te r w a s c al l e d for h e ar i n g, t h e l d . c o u n se l f or t h e a ss es se e a t t he o ut se t s ub mi t t ed t ha t t he r e is a d el a y o f 38 1 da y s i n I.T.A. No.2900/Del/2022 2 fi l i n g t he a p pe a l be f or e t he T r ib un a l . Th e l d. c o unse l a dv er t e d t o t he a pp l i ca t i on f il e d f o r c o n d on at i o n o f d e l a y a n d su b mit t e d t ha t i n v i e w o f s e r i o us h e a l t h i s sue s o f t h e k e y di r e c t o r o f t h e a s se ss e e - c o mp a n y, i t w a s n o t i n a p os i t io n t o p re fe r t h e a p pe al in t im e. Th e l d. c o un se l su b mi t t e d t h a t no se r i o u s p r e j u di c e h as c a u se d t o th e R e v e n u e b y suc h d el a y a nd t hu s ur g e d fo r be n i g n c o n si d e r a t i o n o f t he re q u e st fo r c on d o na t i o n o f de l a y . 4. H a vi n g r eg ar d t o t he c o n t en ts o f t he a p p l ic a t i o n a n d t he c ir cu ms t a nc e s na rr at e d i n t h i s r e g a r d, w e fi nd me r it i n t he pl e a o f t he a ss es see f or c o nd o na t i o n o f d e l a y pa rt i c u la r l y w h e r e t h e a p pe al a ri se s fr o m re c t i fi c a t i o n p r oc e ed i n gs , w h e re t he disp u t e hi ng e s a ro u n d m is t a ke o f a p p a r e n t n a t u r e . A c c or d i ng l y, t he de l a y i s c on d o ne d a n d th e m a t t e r i s pr oc e e d e d on m e r i t s . 5. O n me r i ts, t he l d. c o un se l p oi n t e d o u t t h a t t h e a s se s se e fo r A sse s s me nt Y e a r 2 0 1 5 -1 6 w a s s u bj e c t e d t o l i m i t e d scr ut in y a ss es s m e n t un de r S ec t i o n 1 4 3 (3 ) o f t h e A c t o n t h e li m i te d p oi nt o f ‘ mi s ma t ch i n c u st o m d ut y pa y m e n t ’. T he A sse s s in g O ffi c e r w hi le fr a m i ng th e l i m i te d scr ut i n y a ss e ss m e nt o r d e r un d er S e ct i on 14 3( 3 ) o f t h e A ct da t e d 0 6. 11 . 20 1 7, fo u n d n o e rr or o r mi s mat c h i n s uc h pa y m e nt a n d a c c o rd i n g l y a c c ep te d t h e i n c o me r e t u r n ed b y t h e a ss es se e a t R s. 7 7, 4 0 , 970 /- . T he re a ft e r, t h e r e ct i fic at i on p r oc e e d i n g s w er e i n i t i a t e d un de r S e ct i on 1 5 4 o f t h e A c t o n t he g ro u n d t h a t w hi le fr a m i ng t he or ig i n a l a s se s s me nt or de r u n d e r S e c t i o n 1 4 3 (3 ) o f t h e A ct , t h e A ss es s i n g O f fi c e r h a s fa il e d t o m a k e ad di tio ns b y di s a l l o w a n c e o f R s. 16 , 05 , 1 91 / - i n c ur r ed by w ay o f ‘pr io r p er io d e xp e n se s’ . O n be i ng c on fr on t e d to t h e a s se s s ee , th e a ss e s se e c ha ll e n g e d t he re c t i f ic a t i o n p ro ce e di ng s o n t he g r ou n d t ha t t h e i s su e i nv o l v e d i s no t on l y de ba t ab l e b u t al s o , t h i s i s su e w a s n o t s u b j e c t ma t t e r o f a s se ss me n t u n d e r S e c ti on 14 3 (3 ) o f t h e A ct. T h e A sse ss i n g I.T.A. No.2900/Del/2022 3 O ff ic e r h ow e ve r d ec l i n e d t o a g r ee w i t h t he c o nt e n t ion o f t he a ss es se e an d e n h a n c e d t h e a sse ss e d i n co me b y R s. 1 6, 0 5 , 1 91 /- b y pa s si ng o rd e r u nd e r S ec t i o n 1 5 4 o f t h e A ct d a t e d 1 3. 0 9. 2 0 19 . T he l d. c ou n s el t h e re a ft e r re fe rr ed to fi rs t a p pe l l a t e ord er un d e r ch a l l e n ge a nd s ub m i t t e d t ha t t he C I T (A ) a l s o r ei t e r a t e d t he fin di ng s o f t h e A sse s si n g O ffi c e r a n d d e cl i n e d t o i n t e r fe r e w i t ho u t a pp r e c i a ti ng t he fa c ts i n p e r s pe c t i ve . Th e l d. c ou ns e l t h u s ma de t w o fol d s u b m i s si o n s be fo r e th e T r i b u na l . ( i ) Th e or i g i na l a ss e s s me nt f ra m e d w a s l i m it e d in i t s sw e e p a n d s c o p e on a c c o un t o f l i mi t e d sc r ut i n y w he re t h e A sse ss in g O f fi c er w as n ot au th o r i z e d t o e ng a g e i n a n y o t h e r is s u e s o t he r t h a n s pe c i f ie d fo r th e p ur p o se o f li m i t e d sc r ut in y. T h e pr i o r p e r i o d e x p e n se i n q ue st i o n w a s no t s ub j e ct m a tt e r of l i mi t e d sc r ut in y a nd t h e r e fo re , t he re w a s n o e rr o r i n t he ori g i n a l a ss e s s m en t w h ic h w a s so u g h t t o b e r e c t i fi ed u nd e r Se c t i o n 1 5 4 o f t h e A c t . ( i i ) Th e a l lo w a b i li t y o f p ri or p e r i o d e xp en ses i s es s e n ti a l ly a q ue st io n o f fa c t a nd d ep e n d e n t up o n a tt e n d a n t c i rc um s ta n ce s a t t ri bu ta bl e t o e a c h c as e . It i s n ot t h e a b st ra c t ru l e o f l aw t o o ut ri gh t l y r e j e c t t h e pr i or p e r i o d e xp e nse s de ho rs t h e f ac t s o f t he c a s e . T he i ss ue , a t ti m es , i s q ui t e d e b a t a b l e a n d the re f or e , t h e A sse s si ng O ffi c e r ha s no j ur is di c t i on u nd e r S e c t i o n 1 5 4 o f t h e A c t t o re c ti f y a nd m a k e a d di ti o n s on t h is c ou nt . 6. T he l d. D R fo r t h e R e v en ue , on t h e ot he r ha n d , re l i e d up on t he or d e r o f th e C IT (A ) a n d su b mi t te d t h at t he mi s t a ke b e in g o f a p p a r e nt na t ur e in n ot m a k i ng a dj us t m e n t t o w a rd s p ri or p er i od e xp e n se s de c la re d by t h e a sse ss ee h i ms e l f a s re l a t a bl e t o t he p re c e d in g a ss es s m e n t ye a rs, t he ac t i on o f t he R e ve n ue c an no t b e i n t e r f er ed . I.T.A. No.2900/Del/2022 4 7. W e h a v e co ns i d e r e d t h e r iv al s u b m iss i o ns a n d p e ru se d t h e a ss es s m e n t o r d e r a s w e l l a s t h e re ct i fi c a t i o n o r de r a n d a l s o t h e fi r st a pp e l la t e or d e r . 8. W e s t ra i g h t a w a y fi nd m e r i t i n t h e p l e a o f t h e a sse ss e e o n b o t h c ou n t s. F ro m t h e c a se re c or d s, i t i s a p p a r e n t t ha t t he or i g i n a l a ss es s m e n t w h i c h w as s ub je c t m at t e r o f r ec t i fi c at i on w a s l i m i t ed i n i ts m an da t e. T he c a se w a s se l e c te d u n de r l i mi t ed s cr u t i n y sc he me a nd t he re fo r e , t h e A sse s si ng O ff i ce r w a s n ot e n t i t le d t o l o o k i nt o a ny o t h e r a sp e c t o f t he a s se ss m e n t o th er th an s pe cif ie d i s sue s. Th u s, i n t he a bs e nc e o f a ny er r o r i n t he a c t i o n o f th e A sse ss i ng O ff ic e r, t he r e s or t t o S e c ti o n 15 4 co ul d n o t ha v e be e n ta ke n a t t he fi r st p l a ce . S ec o n dl y, th e p l e a on be ha l f o f t h e ass e s se e t h a t al l o w a b il i t y o r ot h e rw i se o f p r io r p er i o d e xp e n se re q u ir es fa ct u a l e xa m i n at i o n a n d t hu s ca nn ot be a c ce pt e d o r r e je c t e d w it h o ut u n de rs ta nd in g t h e un d e r l y i n g f a c t s a n d h en ce s uc h a dj us t m e nt s a r e o u ts i d e t h e a m bi t o f pr o vi si on s o f S e c t i o n 15 4 o f t h e A c t . 9. H e nc e , w e se t a si d e t h e a c ti o n o f t h e CI T (A ) an d di r e c t t h e A sse s si n g O ff ic e r t o re ve r se t he d i s a l l ow a nc e o n acc o u n t o f pr io r pe r i o d ex pe nse s c a r ri e d ou t u n de r S e c t i o n 15 4 o f t he A c t . 10 . I n t h e re s ul t , th e a p p e a l o f th e a s se ss e e i s a ll o w ed . Order dictated and pronounced in the open Court on 25/07/2023 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /07/2023 Prabhat