Stark Infraprojects Pvt. Ltd., Kolkatsa V. PCIT-1, Kolkata

ITA 301/KOL/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5870 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 12-09-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Period of limitation; Assessment record; TDS; Set aside
• Section: 263; 143(3)

Judgement Text

1. ITA No. 301/Kol/2021 AY 2015-16 M/s. Stark Infraprojects P.Ltd IN THE INCOME TAX APPELLATE TRIBUNAL BENCH “A”, KOLKATA Before Shri Manish Borad, Accountant Member and Shri Sonjoy Sarma, Judicial Member आयकर अपील सं.य/ ITA No. 301/Kol/2021 Assessment Year:2015-16 Stark Infra Projects Pvt. Ltd.67/25, Strand Road, Kolkata-700 006. बनाम V/s. PCIT, Kolkata-1, Kolkata PAN: AAUCS1790A अपीलाथ /Appellant .. यथ /Respondent अपीलाथ क ओर से/By Appellant None यथ क ओर से/By Respondent Md. Ghayas Uddin , Addl. CIT, Ld. DR स ु नवाई क तार ख/Date of Hearing 11-07-2022 घोषणा क तार ख/ Date of Pronouncement 19-07-2022 आदेश /O R D E R PER MANISH BORAD, AM. This appeal filed by the assessee pertaining to the A.Y. 2015-16 is directed against the order dt. 12/03/2021 of ld. Principal Commissioner of Income-tax ( in short hereinafter referred to as the ld. PCIT, Kolkata-1 u/s. 263 of the Income-tax Act, 1961 ( hereinafter referred to as ‘the Act’ ). 2. Registry has informed that the appeal is time barred by 121 days. Condonation application has been filed by the assessee. Perusal of the same shows that the delay was on account of COVID-19 2. ITA No. 301/Kol/2021 AY 2015-16 M/s. Stark Infraprojects P.Ltd restrictions. We, therefore, in view of the judgment of The Hon 'ble Supreme Court vide Miscellaneous Application No. 21 of 2022 find that the limitation period in filing appeal between 15.03.2020 till 28.02.2022 has been excluded for calculating the limitation period. Since the period of limitation in the case of the assessee falls during this period, the same deserves to be extended and we, therefore, condone the delay of 121 days and admit the appeal for adjudication. 3. When the case was called for none appeared on behalf of the assessee. Perusal of records show that this appeal has been fixed for hearing on number of occasions from 22.02.2022 and onwards. Notices have been issued including the present notice issued through Registered Post/AD (RPAD), but the same was returned unserved. Under these circumstances, where it looks that the assessee is not interested in pursuing this appeal, we are left with no option except to proceed/adjudicate the appeal on the basis of material available on records and submissions of the Ld. Departmental Representative. 4. The assessee has raised following grounds of appeals for Assessment Year 2015-16: 1. For that the order of the Ld PClT is arbitrary, excessive and bad in law. 2. For that the Ld PClT erred in passing order to set aside the order of AO and directing to pass a fresh assessment order. Proper records and explanation was provided to the AO at the time of assessment and after taking into consideration all the facts and documents assessment order was passed on 29/08/2017. 3. For that the Ld PClT has not given ample opportunity to the assessee before passing set aside order. The order is arbitrary and whimsical. 3. ITA No. 301/Kol/2021 AY 2015-16 M/s. Stark Infraprojects P.Ltd 4. For that the order of the AO may be modified and the assessee may be given such relief as your honour deems fit and proper in the circumstances of the case. 5. For that the assessee craves to leave to add, to alter & to modify any of ground on or before the date of hearing. 5. Brief facts of the case are that the assessee is a private limited company. Income of Rs. 4,23,620/- declared in the return of income filed for the AY 2015-16 on 28-09-2015. Case selected for complete scrutiny and assessment u/s. 143(3) of the Act framed on 29-08-2017 after disallowing on sales promotion expenses at Rs. 22,472/-. 6. Subsequently, ld. PCIT after perusing the assessment records invoked the provisions of section 263 of the Act and issued show cause notice pointing out that credit of tax deducted at source of Rs. 3,08,750/- has been taken against tax payable during the year, but the contract receipts of Rs.1,54,37,380/- on which the said TDS credit has been taken has not been shown in the revenue for the year and is shown as advance contract receipts. The assessee replied to the said show cause notice submitting the details and reconciliation statement, but was unable to satisfy the ld. PCIT, who set aside the assessment order dt. 29-08-2017 directing the ld. AO to frame fresh assessment order. 7. Aggrieved, the assessee is now in appeal before this Tribunal. There is no appearance on behalf of the assessee. Learned Departmental Representative ( in short, the ld. DR) vehemently argued supporting the finding of the ld. PCIT and further referred to Rule 37BA(3)(i) of the I.T Rules, 1962, which provides that credit for 4. ITA No. 301/Kol/2021 AY 2015-16 M/s. Stark Infraprojects P.Ltd tax deducted at source and paid to the Central Govt. shall be given for the assessment year for which such sum is assessable. 8. We have the ld. Departmental Representative and perused the records placed before us. The assessee has challenged the invoking of jurisdiction u/s. 263 of the Act and also challenged the finding of the ld. PCIT holding that the assessment order dt. 29.08.2017 framed u/s. 143(3) of the Act is erroneous and prejudicial to the interest of the revenue. 9. The issue mentioned in the show cause notice u/s. 263 of the Act as appearing in the impugned order is that tax was deducted at source on contract receipt of Rs. 1,54,37,386/- at Rs. 3,08,750/-. As per observations of the ld. PCIT the assessee has not shown said contract receipt as revenue, but claimed the TDS deducted on such sum against tax liability for the assessment year under appeal. 10. From perusal of the assessment order, we find that this issue was very much before the ld. AO and there is a clear observation that there was some difference between the gross receipt as per 26AS shown at Rs.3,72,82,604/- as against turnover shown by the assessee at Rs. 2,18,45,118/-. The claim of the assessee is that since the assessee has received the amount as per 26AS, but the clients have approved the bills only for Rs.2,18,45,118/-, remaining amount i.e. 1,54,37,386/- is lying under the head ‘advance from parties under other current liabilities’. So it is an admitted fact that alleged contract receipt of Rs. 1,54,37,386/- was not part of the revenue for the year, but tax deducted thereon has been claimed in 5. ITA No. 301/Kol/2021 AY 2015-16 M/s. Stark Infraprojects P.Ltd the year. Now at this juncture the ld. AO ought to have applied the provisions of section 199 of the Act, which deals with the credit for tax deducted at source along with Rule 37BA of the I.T Rules, which deals with tax deducted at source for the purpose of section 199. We find that as per I.T Rules 37BA(3)(i) of the Income Tax Rules credit for tax deducted at source and paid to Central Govt. shall be given for the assessment year for which such income is assessable. 11. Now in the instant case the ld. AO ought to have denied the claim of tax deducted at source on advance contract receipts Rs.1,54,37,386/- i.e. TDS of Rs. 3,08,750/- and should have given the liberty to the assessee to claim the said sum in the subsequent year when the assessee shows the contract receipt of Rs. 1,54,37,386/- as its turnover/Gross Revenue. Since the ld. AO has not followed the provisions of the I.T Act/IT Rules while framing the assessment, such assessment is erroneous and prejudicial to the interest of the revenue. 12. We, therefore, under the given facts and circumstances of the case and discussions made hereinabove find no infirmity in the impugned finding of the ld. PCIT setting aside the assessment order dt. 29-08-2017 framed u/s. 143(3) of the Act directing the AO to pass fresh assessment order per as per the observations made in the impugned order. Thus, all the grounds raised by the assessee are dismissed. 6. ITA No. 301/Kol/2021 AY 2015-16 M/s. Stark Infraprojects P.Ltd 13. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 19/7/22 Sd/- Sd/- (SONJOY SARMA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 19 -07-2022 **PP/SPS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1.अपीलाथ /Appellant/Stark Infra Projects Pvt. Ltd.67/25, Strand Road, Kolkata-700 006. 2. यथ /Respondent/PCIT, Kolkata-1, Kolkata 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड फाइल / Guard file. By order/आदेश से, /True Copy/ Assistant Registrar ITAT, Kolkata