The Haryana State Co-operative Supply and Marketing Federation Limited, Panchkula V. DCIT, Circle, Panchkula

ITA 614/CHANDI/2022

AI Insights

The case involves The Haryana State Cooperative Supply and Marketing Federation Ltd., which appealed against the order of the NFAC dismissing their appeal as infructuous for the Assessment Year 2017-18. The NFAC had dismissed the appeal under the belief that the assessee had opted for the VSVS in quantum proceedings. However, the assessee had only opted for the VSVS concerning a penalty dispute, not the quantum assessment. The Tribunal acknowledged this error and directed the NFAC to reconsider the appeal on its merits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128423 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 01-09-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D; Set aside
• Section: 143(3); 250

Judgement Text

आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ,चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “A”, CHANDIGARH BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.614/CHD/2022 Ǔनधा[रणवष[ / Assessment Year :2017-18 The Haryana State Cooperative Supply and Marketing Federation Ltd., HAFED Corporate office, Sector 5, Panchkula, Haryana-134109 बनाम The DCIT, Circle, Panchkula èथायीलेखासं./PAN NO: AAAJH 0022R अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Ǔनधा[ǐरतीकȧओरसे/Assessee by :Sh. Aman Parti, Advocate. राजèवकȧओरसे/ Revenue by : Sh. Vivek Nangia, CIT, DR स ु नवाईकȧतारȣख/Date of Hearing :23.03.2023 उदघोषणाकȧतारȣख/Date of Pronouncement : 06.06.2023 आदेश/Order Per Sudhanshu Srivastava, Judicial Member: This appeal is preferred by the assessee against the order dated 07.07.2022 passed by the National Faceless Appeal Centre, (NFAC), Delhi for Assessment Year 2017-18, wherein, vide the impugned order, the appeal of the assessee has been dismissed as infructuous. 2.0 The brief facts of the case are that the assessee is a Cooperative Society engaged in the business of procurement and sale of food grains in terms of the policy of the Government of Haryana. The assessee also lets out godowns on hire for storage, processing and facilitating the marketing ITA No. 614-Chd-2022 (A.Y. 2017-18) - The Haryana State Coop Supply and Marketing Federation Ltd., Panchkula 2 of commodities. The return of income for the year under consideration was filed, declaring income of Rs.113,97,72,450/-, whereas, the assessment was completed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter called ‘the Act’) at an income of Rs.143,95,51,600/- after making disallowances of Rs.29,97,79,155/- being disallowance of deduction claimed u/s.80P(2)(e) and 80P(2)(d) of the Act. 3.0 Against the quantum addition, the assessee went into appeal before the NFAC. However, the NFAC dismissed the assessee’s appeal as being infructuous by citing the reason that the assessee had opted for ‘Vivad Se Vishwas Scheme’ (in short the ‘VSVS’) and, therefore, no appeal was maintainable. 4.0 Now, the assessee has approached this Tribunal, challenging the summary dismissal by the NFAC by raising the following grounds of appeal: 1. That the Worthy CIT(A) erred in dismissing the quantum appeal filed by the appellant under the erroneous & unfounded belief that the appellant had opted for Vivad Se Vishwas Scheme, 2020 in respect of the above appeal when the appellant had opted for Vivad Se Vishwas Scheme only in respect of the penalty appeal. 2. That the Worthy CIT(A) erred on facts and in law in upholding the order of the Ld. Assessing Officer disallowing deduction u/s 80P(2)(e) amounting to Rs 21,26,10,991/-claimed by the appellant in respect of rent derived from letting out of godowns to Food Corporation of India for the purposes of storage, processing and marketing of commodities and therefore the said order deserves to be set aside. 3. That the Worthy CIT(A) erred on facts and in law in upholding the order of the Ld Assessing Officer disallowing deduction u/s 80P(2)(d) amounting to Rs 8,71,68,164/- based on provisions contained in section ITA No. 614-Chd-2022 (A.Y. 2017-18) - The Haryana State Coop Supply and Marketing Federation Ltd., Panchkula 3 14A r.w. Rule 8D which ultimately had not been applied at all while computing the disallowance. Further, the Worthy CIT(A) erred in law in upholding the order of the Ld Assessing Officer order since the same had been passed in complete violation of the principles of natural justice. 4. That the appellant reserves the right to amend/add any ground/grounds of appeal in addition to aforesaid at the time of hearing or before hearing of the said appeal. 5.0 The ld. Authorized Representative submitted that the NFAC has dismissed the assessee’s appeal under a wrong impression that the assessee had opted for settlement of dispute under the VSVS in the quantum proceedings, whereas, the assessee had only opted for settlement of dispute relating to penalty imposed u/s. 272A(1)(d) of the Act under the VSVS. Our attention was drawn to the declaration made under the VSVS Act placed at pg. 30 of the paper book and also the order of the ld. First Appellate Authority confirming the assessee’s action of having opted for the settlement of penalty dispute under the VSVS and wherein, the assessee’s appeal has been dismissed as infructuous in terms of VSVS Act. 6.0 The ld. AR also submitted that the assessee had never opted for settlement of dispute in the quantum appeal and our attention was also drawn to the e-Proceedings Responses Acknowledgments dated 23.12.2020 and placed at pgs. 5 to 8 of the paper book, wherein, the assessee had filed its submissions in response to the notice issued u/s. 250 of the Act during the first appellate proceedings (quantum). It was prayed that, therefore, the NFAC had dismissed the assessee’s appeal summarily without appreciating that the assessee’s appeal against quantum assessment still survived. ITA No. 614-Chd-2022 (A.Y. 2017-18) - The Haryana State Coop Supply and Marketing Federation Ltd., Panchkula 4 7.0 Per contra, the ld. Sr. DR fairly accepted that the quantum appeal of the assessee before the NFAC needed to be restored. 8.0 We have heard both the parties and have gone through the material placed on record. We are of the considered view that the submissions of the assessee in this regard are factually correct and that the NFAC could not have summarily dismissed the assessee’s appeal in quantum proceedings on the ground that the assessee had opted for settlement of dispute under the VSVS Act. Accordingly, we set aside the order of the NFAC and restore the file to the NFAC with the direction to adjudicate the appeal of the assessee on merits and in accordance with law, after giving proper opportunity to the assessee in this regard. 9. In the final result, the appeal of the assessee stands allowed for statistical purposes. (Order pronounced in the open Court on 06/06/2023) Sd/- Sd/- (VIKRAM SINGH YADAV) (SUDHANSHU SRIVASTAVA) Accountant Member Judicial Member Dated : 06.06.2023 Aks/- ITA No. 614-Chd-2022 (A.Y. 2017-18) - The Haryana State Coop Supply and Marketing Federation Ltd., Panchkula 5 आदेशकȧĤǓतͧलͪपअĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकरआय ु Èत/ CIT 4. आयकरआय ु Èत (अपील)/ The CIT(A) 5. ͪवभागीयĤǓतǓनͬध, आयकरअपीलȣयआͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 6. गाड[फाईल/ Guard File सहायकपंजीकार/ Assistant Registrar