M/s NCC- VEE (JV), Lucknow V. Income Tax Officer-1(5), Lucknow

ITA 439/LKW/2020

AI Insights

The case involves M/s. NCC-VEE (JV), a joint venture between Nagarjun Constructions Co. Ltd. and Vijay Expressway Engineers, which appealed against the orders of the CIT(A) for the assessment years 2008-09 to 2010-11. The appeals were against the additions made to the income of the JV, which were not reported in their returns but were noted in Form 26AS. The Assessing Officer (AO) rejected the books of account under section 145(3) of the Income-tax Act, 1961, and made additions based on the gross receipts from the National Highway Authority of India. The CIT(A) upheld the AO's decision, leading to the current appeals. The Tribunal found that the assessee was not given a reasonable opportunity of hearing, especially considering the COVID-19 pandemic, and thus remitted the matter back to the CIT(A) for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 112613 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 30-11-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2020
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; TDS; Set aside
• Section: 147; 145(3)

Judgement Text

1 ITA No.439 to 441/LKW/2020 M/s. NCC-VEE-(JV), AYs: 2008-09 to2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, LUCKNOW BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA Nos.439 to 441/LKW/2020 Assessment Years: 2008-09 to 2010-11 M/s. NCC-VEE (JV) 6/202, Vishal Khand, Gomti Nagar, Lucknow- 226010 (PAN: AAAAN3947N) Vs. Income Tax Officer-1(5), Lucknow. (Appellant) (Respondent) Present for: Appellant by : N o n e Respondent by : Shri S. H. Usmani, CIT (DR) Date of Hearing : 01.12.2022 Date of Pronouncement : 09.01.2023 O R D E R PER BENCH: This is a set of three appeals by the assessee for three different assessment years against three respective orders by CIT(A)-1, Lucknow vide order dated 24.09.2020 against the respective assessment years passed u/s. 143(3)/144 read with section 147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) dated 16.03.2016, 14.12.2016 and 14.12.2017. 2. Grounds raised in all the three appeals are identical except variance in amount of addition. All the three appeals are disposed of by this consolidated order for the sake of convenience and brevity. Grounds 2 ITA No.439 to 441/LKW/2020 M/s. NCC-VEE-(JV), AYs: 2008-09 to2010-11 and facts relating to AY 2008-09 in ITA No. 439/LKW/2020 are taken as lead case, findings of which shall apply mutatis mutandis to the other two assessment years. 2.1. Grounds taken by the assessee in ITA No. 439/LKW/2020 are reproduced as under: “1. Because order adjudicated by Ld. Commissioner of Income Tax (Appeals)-l, Lucknow [hereinafter called Ld. CIT(A)) is against the peculiar facts of the case related law and also against the ground of natural justice, liable to be set-aside. 2. Because the Ld. CIT(A) was erred on facts and law while sustaining addition of Rs. 4,45,28,172/- ignoring the facts, turnover/gross receipts being root of such income has already been considered in the hands of constituents of assessee JV and also duly assessed by Income Tax Authority accordingly. 3. Because the Ld. CIT(A) was erred on facts and law while sustaining the addition of Rs. 4,45,28,172/- erroneously assigning the reason, TDS on such income claimed by Appellant, ignoring the facts TDS on such income claimed by Vijay Infrastructure Ltd. (PAN-AABCV2697Q) and allowed by Income Tax Authority/Appellate Authority in respective year. 4. Because the Ld. CIT(A) was erred on facts and law while adjudicating the appeal without providing sufficient opportunity as required under law as well as guidelines /law established during spread out of Covid-19 pandemic. 5. Because the Ld. CIT(A) was erred on facts and law while passing the ex-parte order without considering merits and peculiar facts of the case which is also against the law of natural justice. 6. Because the Ld. CIT(A) was erred on facts and law while passing the ex-parte order without providing the assessee with a due and proper opportunity of hearing and therefore the impugned order deserves to be set-aside being bad in law. 7. Any other relief which your good self may deem fit. 8. The humble assessee, craves for leave to add/amend any other ground with the prior permission of your honours.” 3. Brief facts of the case are that assessee is a joint venture (JV) formed between Nagarjun Constructions Co. Ltd. (NCCL) and Vijay Expressway Engineers (VEE), Lucknow for execution of civil contracts in the State of Uttar Pradesh. JV came into existence through a Memorandum of Agreement (MOA) signed on 05.12.2005 between the 3 ITA No.439 to 441/LKW/2020 M/s. NCC-VEE-(JV), AYs: 2008-09 to2010-11 said two parties. In the course of assessment proceedings, Ld. AO noted that Form 26AS of the assessee contains the receipts from National Highway Authority of India of Rs.55,56,02,157/- during the relevant assessment year. However, assessee has not shown the gross receipts in its return. Assessee made its submission that NCCL and VEE (JV) is a joint venture formed for execution of civil contracts and as per clause (1) of MOA, the entire works allotted to the JV shall be executed by VEE Ltd., who will be entitled to claim the turnover in respect of the project executed by them and as per clause 6 and 7 of the MOA, VEE Ltd. shall pay 4% of each bill amount. Ld. AO did not agree with the submission made by the assessee and proceeded to compute the income of the assessee by taking 8% of the gross receipts, resulting into an income of Rs.4,45,28,172/- assessable in the hands of the assessee. Before making the assessment and computing its income, ld. AO rejected the books of account of the assessee u/s. 145(3) of the Act since assessee has not taken the impugned gross receipts into account while preparing its books of account. Aggrieved, assessee went in appeal before the Ld. CIT(A). 4. Before the Ld. CIT(A), none appeared nor filed any written submission. Ld. CIT(A) was thus, constrained to decide the appeal on merit on the basis of material available on record. Ld. CIT(A) confirmed the action of the Ld. AO in estimating the total income and dismissed the appeal. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, none represented the assessee and Shri S. H. Usmani, CIT, DR represented the department. 6. From the perusal of ground nos. 1, 4 and 6 (supra), we note that assessee has claimed that reasonable opportunity of hearing has not been granted by the Ld. CIT(A) while disposing the appeal against the 4 ITA No.439 to 441/LKW/2020 M/s. NCC-VEE-(JV), AYs: 2008-09 to2010-11 assessee. With the assistance of Ld. CIT, DR, we have perused the material available on record. We take note of the fact that the order of Ld. CIT(A) is dated 24.09.2020. In the body of the order, Ld. CIT(A) has no where recorded the dates of hearing which were made available to the assessee for making its submission. It is in the common knowledge that during the time when the proceedings were undertaken considering the date of order i.e. 24.09.2020, it was a period where the Pandemic of Covid 19 was in vogue. We also take note of the fact that assessee has made its submission explaining its case, before the Ld. AO which was not accepted as claimed by the assessee. Since the assessee was prevented from making its submission before the Ld. CIT(A) for an effective disposal of the appeal on merits, we, in our considered view hold that in the interest of justice, fair play and good conscience, it is proper to remit the matter back to the file of Ld. CIT(A) for de novo consideration of the matter by providing reasonable opportunity of being heard to the assessee. The assessee is also directed to be diligent in attending the hearings before the Ld. CIT(A) and is at liberty to make all of its submission in support of the claim made in the return. Accordingly, ground nos. 1, 4 and 6 are allowed for statistical purposes. 7. Since the matter has been set aside for do novo adjudication, the other grounds raised by the assessee in the appeals are not adjudicated upon. 7.1. Our observations and findings in ITA No. 439/LKW/2020 (supra) applies mutatis mutandis to the other two appeals in ITA No. 440 & 441/LKW/2020, which are also allowed for statistical purposes. 8. In the result, all the appeals of the assessee are partly allowed for statistical purposes. 5 ITA No.439 to 441/LKW/2020 M/s. NCC-VEE-(JV), AYs: 2008-09 to2010-11 Order pronounced in the open Court on 09 th January, 2023 as per the rules framed under Rule 34(4) of the Income Tax Appellate Tribunal Rules, 1963. Sd/- Sd/- (Mahavir Singh) (Girish Agrawal) Vice President Accountant Member Dated: 09th January, 2023 JD, Sr. P.S. Copy to: 1. The Appellant: 2. The Respondent:. 3. CIT(A)-1, Lucknow 4. CIT , Lucknow 5. DR, ITAT, Lucknow Bench, Lucknow 6. Guard file. //True Copy// By Order Assistant Registrar ITAT, Lucknow Benches, Lucknow