Contour Automotive Products Limited, Chandigarh V. ACIT, Circle -1(1), Chandigarh

ITA 58/CHANDI/2023

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The case involves Contour Automotive Products Ltd., the appellant, contesting the order of the Commissioner of Income Tax (Appeals) NFAC, Delhi, which adjusted the outstanding demand from previous assessment years against the refund due for the assessment year 2020-21. The appellant argued that the demands for 2018-19 and 2019-20 had been resolved in their favor, and thus, the adjustment against the 2020-21 refund was unjustified. The Tribunal restored the matter to the AO to verify these claims. Additionally, the appellant contested a disallowance under section 36(1)(va), which was dismissed based on a Supreme Court precedent.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127549 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 30-05-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 12-02-2023
• Other Referred Cases: Checkmate Services P. Ltd. & Ors. Vs. CIT & Ors. (2022) 448 ITR 518 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(1); 250

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “एकल” च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “SMC” CHANDIGARH ी संजय गग , या यक सद य BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ ITA Nos.58/CHD/2023 नधा रण वष / Assessment Year : 2020-21 Contour Automotive Products Ltd., House No. 651, Sector 8-B, Chandigarh. बनाम The ACIT, CPC Bengaluru. थायी लेखा सं./PAN NO: AAACC6780E अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri Jaspal Sharma, Advocate राज व क! ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr.DR स ु नवाई क! तार&ख/Date of Hearing : 31.05.2023 उदघोषणा क! तार&ख/Date of Pronouncement : 01.06.2023 आदेश/ORDER The present appeal has been preferred by the assessee against the order dated 21.10.2022 of the Commissioner of Income Tax (Appeals) NFAC, Delhi [in short ‘CIT(A)’] pertaining to 2020-21 assessment year. The assessee has raised the following grounds of appeal : 1. The impugned order u/s 250 dated 19.01.2023 passed by CIT(A), NFAC, Delhi is opposed to law, facts and circumstances of the case. 2. The order passed u/s 250 of Income Tax Act, 1961 by the CIT(A), NFAC, Delhi is against law and facts on the file in as much as Hon'ble CIT(A) has confirmed the adjustment of outstanding demand plus interest amounting to Rs.3,26,046/- for A.Y.2018-19 and Rs.1,17,380/- for A.Y.2019-20 against the refund due for A.Y.2020-21, wrongly interpreting the issue and assuming that it relates to disallowance u/s 36(1) (va), although the fact is that the appeals for A.Y.2018-19 and A.Y.2019-20 have already been decided in favour of the assessee and only appeal effects to clear the demand were pending. The appeal filed was not for adjudication on disallowance u/s 36(1)(va) but for wrong adjustment of outstanding demand (against which appeals have already been decided in favour of assessee and Department did not go for further litigation) ITA-58/CHD/2023 A.Y. 2020-21 Page 2 of 4 against refund due for A.Y.2020-21. Hence, it is prayed that the order of Hon'ble CIT(A) be set aside and appropriate relief may kindly be granted to the assessee. 3. The order passed, u/s 250 of Income Tax Act, 1961 by the CIT(A), NFAC, Delhi is against law and facts on the file in as much as Hon'ble CIT(A) has confirmed the disallowance made u/s 36(l)(va) vide intimation u/s 143(1) dated 25.11.2021 ignoring the fact that the disallowance so made is not covered in the adjustments which may be made u/s 143(l)(a) of Income Tax Act, 1961. Hence, it is prayed that the order of Hon'ble CIT(A) be set aside and appropriate relief may kindly be granted to the assessee. 2. Ground No. 1 is general in nature. 3. Vide ground No.2, the assessee has agitated the confirmation of adjustment of outstanding demand plus interest for assessment year 2018-19 and assessment year 2019-20 against the refund due for assessment year 2020-21. The ld. counsel in this respect has submitted that so far as the demand raised by the AO in respect of assessment year 2018-19 and 2019-20 was concerned, the assessee had contested the impugned additions before the CIT(A) and the appeals of the assessee against the impugned additions for assessment year 2018-19 and 2019-20 were allowed vide common order dated 11.08.2020. Therefore, there remained no outstanding demand against the assessee. That, however, the AO did not give effect to the appeal order and therefore, the demand was shown outstanding against the assessee. The ld. counsel, therefore has submitted that action of the AO in adjusting the refund due of the assessee against a demand which has already been ceased to exist was not justified. 4. The ld. DR has submitted that the issue may be restored to the file of the AO for verification of the aforesaid facts. ITA-58/CHD/2023 A.Y. 2020-21 Page 3 of 4 5. In view of the above submissions, the matter is restored to the file of the AO on the limited issue that the AO will verify that the demand raised by the department for assessment year 2018-19 and 2019-20 in respect of the additions made to the income of the assessee stood deleted by the CIT(A) and therefore, there was no outstanding demand against the assessee. If the contention of the assessee is found correct, the AO will give effect to the appellate order and process the due refund of the assessee in accordance with law. 6. Vide ground No.3 the assessee has assailed the order of the CIT(A) NFAC in confirming the disallowance made u/s 36(1)(va) vide intimation u/s 143(1) dated 25.11.2021. The ld. Counsel for the assessee has fairly agreed that the issue is squarely covered against the assessee by the decision of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. & Ors. Vs. CIT & Ors. (2022) 448 ITR 518 (SC). Accordingly, this ground of appeal is dismissed. 7. In the result, the appeal of the assessee is treated as partly allowed for statistical purposes. Order pronounced in the Open Court on 01 June, 2023. Sd/- ( संजय गग ) (SANJAY GARG ) ITA-58/CHD/2023 A.Y. 2020-21 Page 4 of 4 या यक सद य/ Judicial Member “Poonam” आदेश क! त,ल-प अ.े-षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु /त/ CIT 4. -वभागीय त न2ध, आयकर अपील&य आ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar