The Deputy Commissioner of Income Tax, Circle-3(1), , Visakhapatnam V. Swarnandhra Jute Mills Private Limited, Srikakulam

ITA 55/VIZ/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5669 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2022
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 29-03-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Audit objection; Principle of natural justice
• Section: 68

Judgement Text

आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री ऱलऱत क ु मार, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI LALIET KUMAR, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No. 55/Viz/2021(ननधाारण वषा / Assessment Year: 2011-12) The Deputy Commissioner of Income Tax, Circle-3(1), Visakhapatnam. Vs. M/s. Swarnandhara Jute Mills Pvt Ltd., Srikakulam, Andhra Pradesh. PAN: AAICS 7788 J (अऩीऱाथी/ Appellant) (प्रत्यथी/ Respondent) C.O. No.57/Viz/2021 आयकर अऩीऱ सं./ I.T.A. No. 55/Viz/2021(ननधाारण वषा / Assessment Year:2011-12) M/s. Swarnandhara Jute Mills Pvt Ltd., Srikakulam, Andhra Pradesh. PAN: AAICS 7788 J Vs. The Deputy Commissioner of Income Tax, Circle-3(1), Visakhapatnam. (अऩीऱाथी/ Appellant) (प्रत्यथी/ Respondent) ननधााररती की ओर से/ Assessee by : Sri Y. Surya Chandrarao राजस्व की ओर से / Revenue by : Sri SPG Mudaliar, Sr. AR स ु नवाई की तारीख / Date of Hearing : 30/03/2022 घोषणा की तारीख/Date of Pronouncement : 30/03/2022 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : The captioned appeal is filed by the Revenue against the order of the Ld. CIT(A)-3, Visakhapatnam in appeal No.464/2019- 2 20/10663/CIT(A)-3/VSP/2020-21, dated 11/08/2020 passed U/s. 143(3) r.w.s 147 of the Act for the AY 2011-12. 2. The Revenue has raised the following grounds of appeal: 1. The order of the ld. CIT(A) is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in directing the AO to delete the addition made U/s. 68 of the Act of Rs. 49,50,000/-. 3. The Ld. CIT (A) has erred in not providing the opportunity to the Ld. AO to cross examine the additional information produced by the appellant as required by Rule 46A of the IT Rules, 1961. 4. The Ld. CIT(A) has erred in not seeking the remand report from the AO on submission of additional information by the assessee. 5. Besides the merits in the facts and law, it is also submitted that there is an RAP audit objection in this case. For these and other grounds that may be urged at the time of appeal hearing, it is prayed that these disallowances of Rs. 49,50,000/- U/s. 68A of the IT Act made by the AO be restored. The appellant craves leave to add or delete or amend or substantiate any grounds of appeal before and/or at the time of hearing of appeal.” 3. The fundamental ground raised by the Revenue is Ground No.3 and Ground No.4 of the above grounds of appeal. In this regard, the Learned Sr. DR drawn our attention to paras 8 and 8(a) of the Ld. CIT(A)’s order wherein the Ld. CIT had mentioned that there was some typographical error in the balance sheet of M/s. Anisha Estate and Finance Private Limited which have been duly explained by the assessee. It was submitted that there is no material available on record to substantiate that it was a 3 typographical mistake which resulted in tallying the amount of investment as per the balance sheet of M/s. Anisha Estate and Finance Private Limited. It was also the contention of the Ld. Senior DR that if there is a typographical mistake crept in, it is the responsibility of the said party to modify its balance sheet and come up with the correct one. It was also the contention of the Learned Sr. DR that if the Ld. CIT (A) was presuming that it was a typographical mistake, then an opportunity should be granted to the Ld. Assessing Officer and a remand report should have been called for. 4. Per contra, the Ld. AR for the assessee submitted that due process has been followed by the Ld. CIT(A) and there is no error in the order passed by the Ld.CIT(A). Accordingly, it was submitted that the order of the Ld. CIT(A) is required to be upheld. 5. We have heard both the parties and perused the material available on record as well as the orders of the Authorities below. The Ld. CIT (A) in our opinion had decided the issue on the basis of the written submissions and the documents filed by the assessee at the time of hearing of the appeal before the first appellate authority. Based on this, the Ld. CIT(A) had formed an opinion 4 that there was some typographical errors in the balance sheet of M/s. Anisha Estate and Finance Private Limited and it was duly explained by the assessee in their written submissions. In our considered opinion, whenever a quasi-judicial authority is deciding the issue, the authority should provide an opportunity to the assessee as well the Ld. Assessing Officer should also be given an opportunity and call for a remand report or call for the comments of the Ld. AO. Considering the discrepancy shown by the Ld. CIT (A), we are of the opinion that the order passed by the Ld. CIT(A) in not in accordance with the principles of natural justice by not granting an opportunity to the Assessing Officer for explaining whether there was any typographical error in the balance sheet of M/s. Anisha Estate and Finance Private Limited. In the light of the above, we deem it fit to remand the matter to the file of the Ld. CIT(A) for denovo adjudication of the appeal in accordance with the principles of natural justice and after following the Rules framed by the Board in this regard for due adjudication of the appeal. We would like to state that the observations made hereinabove are essential for the adjudication of this appeal only considering the peculiar facts and circumstances of this case. 5 6. In the result, appeal filed by the Revenue is allowed for statistical purposes and Cross Objection filed by the assessee is dismissed. Pronounced in the open Court on the 30 th March, 2022. Sd/- Sd/- (एस बाऱाक ृ ष्णन) (ऱलऱत क ु मार) (S.BALAKRISHNAN) (LALIET KUMAR) ऱेखा सदस्य/ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER Dated : 30.03.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधााररती/ The Assessee– M/s. Swarnandhara Jute Mills Pvt Ltd., Survey No.40, NH-5 Road, Varisam Village, Ranasthalam Mandal, Srikakulam, Andhra Pradesh – 530016. 2. राजस्व/The Revenue –Dy. Commissioner of Income Tax, Circle-3(1), Income Tax Office, Infinity Towers, Shankaramatham Road, Santhipuram, Visakhapatnam, Andhra Pradesh. 3. The Principal Commissioner of Income Tax (Central), Visakhapatnam. 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax (Appeals)-3, Visakhapatnam. 5. ववभागीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशाखाऩटणम/ DR, ITAT, Visakhapatnam 6.गार्ा फ़ाईऱ / Guard file आदेशान ु सार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam