Deputy Commissioner of Income-tax, Circle - 8, Pune V. Bhimashankar Sahakari Sakhar Karkhana Limited, Pune

ITA 616/PUN/2022

AI Insights

The case involves the Deputy Commissioner of Income Tax, Circle-8, Pune (Appellant) challenging the order of the National Faceless Appeal Centre (NFAC), Delhi, which had earlier provided relief to Bhimashankar Sahakari Sakhar Karkhana Ltd. (Respondent) regarding a disallowance made under section 43B of the Income Tax Act, 1961. The dispute centered on the deductibility of certain expenses claimed by the respondent in the assessment year 2015-16, which were initially disallowed by the Assessing Officer (AO) due to alleged short payment of expenses subject to section 43B. The First Appellate Authority (FAA) had allowed the respondent's appeal, leading to the revenue's current appeal before the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136318 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-12-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 04-08-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 154; 43B; 143(3); 143(1); 250; 143(2); 43

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, पुणे “सी” न्यायपीठ, पुणे में ॥ ITAT-Pune Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE “C” BENCH, PUNE BEFORE HON’BLE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपीलसं. / ITA No. 616/PUN/2022 कर धििाारण वर्ा / Assessment Year :2015-16 Deputy Commissioner of Income Tax Circle-8, Pune. . . . . . . . अपीलाथी / Appellant बिाम / V/s. Bhimashankar Sahakari Sakhar Karkhana Ltd., At Post Pargaon Avsari, Tal.-Ambegaon, Dist.-Pune-412406 PAN : AAAAB0949G . . . . . . .प्रत्यथी / Respondent द्वारा / Appearances Assessee by : Shri Hanumant Dhavle Revenue by : Shri Suhas Kulkarni सुनवाई की तारीख / Date of conclusive Hearing : 27/12/2022 घोषणा की तारीख / Date of Pronouncement : 18/01/2023 आदेश / ORDER PER G. D. PADMAHSHALI, AM; By the present appeal the revenue challenges the order of National Faceless Appeal Centre, Delhi [for short “NFAC”] dt. 06/06/2022 passed u/s 250 of the Income Tax Act, 1961 [for short “the Act”] which in turn dove out of order of rectification passed u/s 154 of the Act, by the Deputy Commissioner of Income Tax, Circle-8, Pune [for short “CPC”] for assessment year [for short “AY”] 2015-16. Bhimashankar Sahakari Sakhar Karkhana Ltd ITA No.616/PUN/2022 PAN: AAAAB0949G ITAT-Pune Page 2 of 5 2. Before we ride onto grounds of appeal, let us state the facts of the case as borne out of case records are; 2.1 The respondent assessee is a registered society and engaged in the business of manufacturing & trading of sugar etc., has for the AY 2015-16 e-filed its return of income [for short “ITR”] declaring income of ₹-6,26,35,513/- on 23/9/2015 which was initially processed summarily u/s 143(1) of the Act accepting the returned income without variation. Subsequently by issue of notice u/s 143(2) of the Act, the case of the assessee society selected for scrutiny under CASS mechanism, wherein after verification of information called for, the assessment u/s 143(3) of the Act by an order dt. 28/12/2017 was culminated accepting returned income without deviation. 3. Subsequently perusing the Tax Audit Report [for short “TAR”] and computation of income, Ld. AO identifying the short payment of expenses which are subjected to provisions of section 43B, invoked the rectification jurisdiction u/s 154 of the Act and by a notice dt. 28/04/2021 called upon the respondent to Bhimashankar Sahakari Sakhar Karkhana Ltd ITA No.616/PUN/2022 PAN: AAAAB0949G ITAT-Pune Page 3 of 5 furnish explanation about the short payment. When the first notice remained unattended, the Ld. AO without further notice to the assessee, disallowed an amount of ₹19,38,687 u/s 43B of the Act, being the difference between an amount reported under item 26(1)(B)(b) of TAR and an amount suo-motto disallowed by the respondent in its computation. 4. Aggrieved by the said disallowance made u/s 43B of the Act, the assessee carried the matter in an appeal before Ld. FAA, wherein the Ld. CIT(A) after considering the TAR and computation of income, allowed the appeal on merits. 5. The Revenue aggrieved by the relief granted and brought up the matter by the present appeal before the Tribunal on the following grounds; “1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in giving relief to assessee on the issue of disallowance u/s. 43B of the Act without verification of the facts that whether the expenses made by the assessee were made on actual basis? 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in law and on facts by Bhimashankar Sahakari Sakhar Karkhana Ltd ITA No.616/PUN/2022 PAN: AAAAB0949G ITAT-Pune Page 4 of 5 directing the AO to allow the relief to the assessee without verification of the facts that whether the expenses claimed are disallowed in earlier years? 3.For these and such other reasons as may be urged at the time of hearing, the order of the CIT(A) may be vacated and that of the Assessing Officer be resorted. 4.The appellant craves, leave to add, amend, alter or delete any of the above grounds of appeal during the course of appellate proceedings before the Hon’ble Tribunal.” 6. During the course of physical hearing, the learned departmental representative [for short “DR”] adverting to page 41 of the paper book, candidly submitted that, the Ld. AO without full reference to figures reported at clause 26(i)(A) & 26(I)(B) of TAR carried out the rectification on the basis of figures reported in clause 26(i)(B)(b) alone and whereas the Ld. FAA holistically considered the figure of TAR and allowed the appeal for statistical purpose but without reference to expenditure charged to Profit & Loss Account, hence for the reasons the matter requested for remand back to the file of AO for a limited purpose of verification of qualifying expense u/s 43 of the Act. Bhimashankar Sahakari Sakhar Karkhana Ltd ITA No.616/PUN/2022 PAN: AAAAB0949G ITAT-Pune Page 5 of 5 7. The learned representative of the assessee [for short “AR”] adverting to adjudication laid by the Ld. NFAC, concurred with the request of department in remanding the matter back to the file of jurisdictional AO with a limited purpose to examine the issue of deductibility of expense reported in clause 26(i)(A) & (B) of TAR in the light of section 43B of the Act, and we order accordingly. 8. Resultantly, the appeal of the appellant revenue is ALLOWED FOR STATISTICAL PURPOSE in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Wednesday 18 th day of January, 2023. -S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 18 th day of January, 2023. आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The NFAC, New Delhi. 4. The CIT Concerned, Pune 5. DR, ITAT, Pune “C” Bench, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order, वररष्ठ दनजी सदिव / Sr. Private Secretary आयकरअपीलीय न्य य दिकरण, पुणे / ITAT, Pune.