The India Thermit Corporation Limited, New Delhi V. JCIT, Special Range-9, Delhi

ITA 55/DEL/2023

AI Insights

The case involves The India Termit Corporation Limited appealing against the order of the CIT (A)/NFAC concerning the assessment year 2017-18. The primary contention was regarding the additions made to the income of the assessee, which included various exempt incomes and other adjustments totaling Rs. 73,36,534. The assessee argued that these additions were made without proper opportunity to be heard, violating the principles of natural justice. The CIT (A) had remanded the matter to the AO for verification and re-assessment, which the Tribunal found to be beyond the powers of the CIT (A) under section 251 of the Income-tax Act, 1961.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113996 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 08-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 05-01-2023
• Other Referred Cases: Commissioner Of Income-Tax vs Gujarat Electricity Board, 260 ITR 84 SC
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Set aside
• Section: 143(1); 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘H’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.55/Del./2023 (ASSESSMENT YEAR : 2017-18) The India Termit Corporation Limited, vs. JCIT, Spl. Range 9, Unit No.212, 2 nd Floor, Delhi. World Mark 2, Aerocity, New Delhi – 110 037. (PAN : AAACT7462Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Vipin Jain, FCA REVENUE BY : Shri Amit Katoch, Sr. DR Date of Hearing : 09.08.2023 Date of Order : 11.08.2023 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld. CIT(Appeals)/NFAC dated 15.12.2022 pertaining to the assessment year 2017-18. 2. The assessee has taken the following grounds of appeal :- “1. That the CPC order No. CPC/1718/A6/1882324652 dated 6.3.2019, (copy not provided despite repeated request) and the rectification order dated 21.05.2019 ix]» 154 of the Act, having been passed subsequent to notices dated 30.08.2018 and 27.09.2018, issued u/s 143(2) of the Income Tax Act, 1961, are bad in law in view of the law explained by The Hon'ble Supreme Court of India, in "Commissioner Of ITA No.55/Del./2023 2 Income-Tax vs Gujarat Electricity Board, 260 ITR 84 SC", both the orders are liable to be quashed. 2. That the CPC order No. CPC/1718/A6/1882324652 dated 6.3.2019, and the rectification order dated 21.05.2019 u/s 154 are bad in law, being passed without providing the assessee company any opportunity of being heard and in violation of the Principles of natural justice. 3. That Rs 73,36,334 added to income are not mistakes apparent from record which could be rectified u/s 154 of the I Tax Act, 1961. Addition made to income is bad in law and is required to be deleted. Exempt income: Dividend on investment Rs.2,52,946 Profit on sale of fixed assets Rs.6,00,590 Share of profit from partnership firm Rs.1,27,077 Interest from AOP Rs.3,29,863 Delay in deposit of Employees contribution on ESI & PF Rs.31,03,780 Gratuity amount Rs.28,91,995 43B Rs. 30,283 Total Rs.73,36,534 4. That Rs 73,36,534 added to income are not also prima facie adjustments that could be added to income u/s 143(1) of the I Tax Act, 1961. Addition made to income is bad in law and is required to be deleted.” 3. In this case, CPC, Bangalore determined the assessee’s income vide order dated 21.05.2019. Assessee appealed before the NFAC and the grounds raised noted by the NFAC are as under :- “6.1 In the grounds of appeal, the appellant contested that the CPC Bangalore erred in determining the income of the appellant company by making variance aggregating Rs.73,36,334/- in the income declared in the return filed as under :- Exempt Income : Dividend on investment Rs.2,52,946 Profit on sale of fixed assets Rs.6,00,590 Share of profit from partnership firm Rs.1,27,077 (1,26,203 + 874) Interest from AOP Rs.3,29,863 Rs.13,10,476 ITA No.55/Del./2023 3 Delay in deposit of employee Contribution on ESI & PF Rs.31,03,780 Gratuity amount Rs.28,91,995 43B Rs. 30,283 Total Rs.73,36,534” 4. Considering the submissions of the assessee, NFAC remanded the issue to the file of AO to give an opportunity to the assessee and thereafter make the adjustments. The concluding part of the CIT(A)/ NFAC order is as under :- “7.2 In the written submission with respect to the remaining additions of -Dividend on investment - Rs.2,52,946/-, Profit on sale of fixed assets - Rs.6,00,590/-, Share of profit from partnership firm - Rs.1,27,077/-, Interest from AOP - Rs.3,29,863/-, Gratuity amount - Rs.28,91,995/- and 438 - Rs.30,283/- the appellant stated that CPC Bangalore did not give opportunity to the assessee before making the said adjustments and filed the ledger copies of the relevant accounts. The assessee further stated that it was not given a copy of the intimation u/s.143(1) in spite of specifically asking for the same. Hence, the AO is directed to verify the ITR and relevant details and then decide these adjustments as per the facts and law.” 5. Against this order, assessee is in appeal before us. We have heard both the parties and perused the records. 6. At the outset, ld. Counsel of the assessee submitted that he will not be contesting the disallowance on account of delay in deposit of employees contribution towards ESI/PF amounting to Rs.31,03,780/-. Hence this addition is sustained. 7. For rest of the additions, ld. Counsel for the assessee submitted that ld. CIT (A) has no power to remand/set aside the matter to the file of AO. ITA No.55/Del./2023 4 Hence, he submitted that this order of the ld. CIT (A) setting aside the issues to the file of AO is not sustainable. 8. Per contra, ld. DR for the Revenue relied upon the orders of the authorities below. 9. Upon careful consideration, we note that section 251 of the Income-tax Act, 1961 (for short 'the Act') does not give any power to the ld. CIT (A) to set aside the issue to the AO. Hence, the pleading of the ld. CIT (A) is cogent and accordingly we hold that the matters remanded by ld. CIT (A) to the file of AO except the issue on account of delay in deposit of employee’s contribution on PF/ESI be set aside. 10. In the result, this appeal of the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on this 11 th day of August, 2022. Sd/- sd/- (ASTHA CHANDRA) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 11 th day of August, 2022 TS Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT (A) 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.