ITO, WD-2(3), SILIGURI, Siliguri V. M/s S. D. Enterprise, Siliguri

ITA 373/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1463 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 08-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T VARKEY JUDIC IA L M EMBER
• Assessee Lawyers: RAJENDRA PRASAD RESPONDE
• Keywords: Additional evidence; Tax effect
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI ABY.T VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 373 / KOL / 2015 ASSESSMENT YEAR :2011-12 INCOME TAX OFFICER, WARD-2(3), AAYAKAR BHWAWAN, PARIBAHAN NAGAR, MATIGARA, SILIGURI PIN-734010 V/S . M/S S.D. ENTERPRISE, NAZRUL SARANI, ASHRAMPARA, SILIGURI, [ PAN NO.ABFFS 6229 P ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI RAJENDRA PRASAD, ADDL. CIT-DR /BY RESPONDENT SHRI SUNIL SURANA, FCA /DATE OF HEARING 03-08-2017 !' /DATE OF PRONOUNCEMENT 15-09-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI DATE D 16.01.2015. ASSESSMENT WAS FRAMED BY ITO WARD-2(3), SILIGURI U/ S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HER ORDER DATED 30.03.2014 FOR ASSESSMENT YEAR 2011-12. GROUNDS RAI SED BY REVENUE PER ITS APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN ADMITTING FRESH EVIDENCE AT THE APP ELLATE STAGE, IN THE FORM OF CERTIFICATE U/S. 197 IN RESPECT OF M/S ADECCO FLEXI ONE WORK FORCE SOLUTION, WITHOUT INFORMING THE AO, AS IS REQUIRED AS PER THE PROVISIONS OF RULE 46A(3) OF THE INCOME TAX RULES, 1962. ITA NO.373/KOL/2015 A.Y. 2011-12 ITO WD-2(3) SLG. VS. M/S S.D. ENTEPRISE, PAGE 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE ORDER OF THE LD. CIT(A) IS BAD IN LAW INASMUCH AS THE DIRECTIONS ISS UED TO THE ASSESSING OFFICER TO MAKE FURTHER VERIFICATIONS IS IN EXCESS OF THE POWERS GRANTED U/S. 251(1) ID THE IT ACT, 1961, AS HAS ALSO BEEN POINTE D OUT IN THE DECISION OF THE JURISDICTIONAL ITAT IN ITA NO.994(KOL) OF 2009 , IN THE CASE OF VISURA TRADING & INVESTMENT (I) LT. KOLKATA VS. ITO, WARD-9(2) KOL KATA, WHICH STATES- THERE IS NO DISPUTE TO THE FACT THAT AS PER SEC. 2 51(1) OF THE ACT, THE LD. CIT(A) HAS NO POWER TO SET ASIDE ANY MATTER TO THE FILE OF THE LD. AO FOR FRESH VERIFICATION AND ADJUDICATION. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER THE GROUNDS OF APPEAL, IF ANY. SHRI RAJENDRA PRASAD, LD. DEPARTMENTAL REPRESENTATI VE REPRESENTED ON BEHALF OF REVENUE AND SHRI SUNIL SURANA, LD. AUTHOR IZED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE. 2. AT THE OUTSET, LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE SUBMITTED THAT THE REVENUE HAS RAISED ONLY TWO ISSUES AS DETA ILED UNDER:- I) LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF ADDITIONAL EVIDENCE WHICH ARE ADMITTED IN CONTRAVENTION TO THE PROVISION OF RULE 46A(3) OF THE INCOME TAX RULE S, 1962. II) LD. CIT(A) ERRED IN SETTING ASIDE THE ORDER OF AO FOR FRESH VERIFICATION THOUGH LD. CIT(A) HAD NO POWER UNDER THE PROVISION OF SECTION 251(1) OF THE ACT 3. LD. AR FURTHER SUBMITTED THAT THE ADDITION WAS MADE BY AO DUE TO NON- DEDUCTION OF TAX DEDUCTED AT SOURCE (TDS) ON THE PA YMENT OF 5,69,672/- ONLY TO M/S ADECCO FLEXIONE WORK FORCE SOLUTION (AF WFS FOR SHORT). THE SAME WAS DELETED BY LD. CIT(A) ON THE GROUND THAT T HERE WAS CERTIFICATE ISSUED U/S 197 OF THE ACT FOR NON-DEDUCTION OF TDS. FOR THIS AMOUNT OF DELETION REVENUE HAS FILED AN APPEAL BEFORE US. 4. THE LD. AR FURTHER SUBMITTED THAT TAX EFFECT OF THIS ADDITION IS BELOW THE PRESCRIBED LIMIT AS PER CIRCULAR NO. 21 OF 2015 ISS UED BY CBDT DATED 10.12.2015. SIMILARLY FOR THE OTHER ADDITION, THE LD. AR FURTHE R SUBMITTED THAT THE ADDITION WAS MADE BY THE AO ON ACCOUNT OF CESSATION OF LIABI LITY SHOWN BY THE ITA NO.373/KOL/2015 A.Y. 2011-12 ITO WD-2(3) SLG. VS. M/S S.D. ENTEPRISE, PAGE 3 ASSESSEE FOR RS.9,22,936/- IN RESPECT OF THREE PART IES AS DISCUSSED IN ASSESSMENT ORDER. THEREFORE, THE ADDITION WAS MADE BY THE AO FOR THE ABOVE TWO MATTERS. AGAINST THE ABOVE ADDITIONS THE ASSESSEE FILED APPE AL TO LD. CIT(A) WHO DELETED THE FIRST ADDITION AND FOR 2 ND ADDITION, HE HAS RESTORED BACK THE MATTER TO AO FOR FRESH ADJUDICATION AFTER NECESSARY VERIFI CATION. ACCORDINGLY THE LD. AR SUBMITTED THAT THERE IS NO TAX EFFECT ARISING FROM THE ORDER OF LD. CIT(A) IN RESPECT OF THE DELETION OF 2 ND ADDITION MADE BY THE AO. AS SUCH IT WAS SUBMITTED BY THE LD. AR THAT ON THE BASIS OF ABOVE GROUNDS OF APPEAL AND IN VIEW OF CIRCULAR NO. 21 OF 2015 DATED 10.12.2015 ISSUED BY CBDT THE APPEAL FILED BY REVENUE IS NOT MAINTAINABL E. ON THE CONTRARY, LD. DR SUBMITTED THAT THE ADDITION MADE BY THE AO IN GROUND NO.2 WAS NOT ACTUALLY DELETED BY LD. CIT(A) BUT REM ITTED BACK TO THE FILE OF AO FOR FRESH VERIFICATION. THEREFORE, AS SUCH, IT CANN OT BE CONCLUDED THAT THERE IS NO TAX LIABILITY ARISING OUT OF GROUND NO.2. THE LD . DR VEHEMENTLY SUPPORTED THE ORDER OF AO. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET, WE WER E CONVINCED WITH THE ARGUMENT PLACED BY LD. AR THAT THE APPEAL FILED BY REVENUE IS NOT MAINTAINABLE DUE TO LOW TAX EFFECT AND ACCORDINGLY WE WERE OF THE CONSIDERED OPINION TO DISMISS THE APPEAL OF REVENUE DUE TO TAX EFFECT. BUT AFTER PERUSAL OF MATERIALS AVAILABLE ON RECORD WE FIND FORCE IN THE ARGUMENT OF LD. DR WHICH STATES THAT IT CANNOT BE CONCLUDED THAT THERE IS NO TAX LIABILITY ARISING OUT OF GROUND NO.2. IT IS BECAUSE THE LD. C IT(A) HAS NOT DELETED THE ADDITION MADE BY THE AO BUT DIRECTED THE AO TO DELE TE THE SAME AFTER NECESSARY VERIFICATION. AS SUCH WITHOUT THE VERIFIC ATION OF THE AO IT CANNOT BE ASSUMED THAT THE ADDITION HAS BEEN DELETED BY THE L D. CIT(A). THUS, IN TOTALITY THE TAX EFFECT EXCEEDS MORE THAN RS. 10 LACS. THERE FORE, WE ARE OF THE VIEW THAT IT IS NOT HIT THE IMPUGNED CIRCULAR OF CBDT NO . 21 OF 2015. AS WE FIND THE ITA NO.373/KOL/2015 A.Y. 2011-12 ITO WD-2(3) SLG. VS. M/S S.D. ENTEPRISE, PAGE 4 OTHER ADDITION MADE BY THE AO HAD ALREADY BEEN REST ORED BY LD. CIT(A) TO THE FILE OF AO, WE ARE ALSO INCLINE TO RESTORE THE FIRS T ADDITION TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. AS BOTH THE ISSUES RAISED BY REVENUE ARE RESTORED BACK TO THE FILE OF AO FOR FRE SH ADJUDICATION IN ACCORDANCE WITH LAW. HENCE, BOTH THE GROUNDS OF REV ENUES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF REVENUE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 15 /09/2017 SD/- SD/- (ABY. T. VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP #$%&- 15 / 09 /201 7 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD, 2(3), AAYAKA BHAWAN, PARIBAHAN NAGAR, MATIGARA SILIGURI, PIN 734010 2. /RESPONDENT-M/S S.D/. ENTERPRISE, NAZRUL SARANI, AS HRAMPARA, SILIGURI 3.%.%/ 0 / CONCERNED CIT 4. 0- / CIT (A) 5.34566/ , / , / DR, ITAT, KOLKATA 6.589:; / GUARD FILE. BY ORDER/ $, /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO / ,