Essar Steel Logestics Limited, Surat V. Dy. CIT Circle 1(1))1), Surat

ITA 695/SRT/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8207 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 25-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJESH BHANWALA
• Keywords: Principle of natural justice; TDS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) .../ I.T.A NO.695/SRT/2018 / ASSESSMENT YEAR: 2014-15 ESSAR STEEL LOGISTICS LIMITED, 27 KM HAZIRA, SURAT ROAD, HAZIRA, SURAT. [PAN: AADCE 3876 A] VS . DY.COMMISSIONER OF INCOME TAX, [CIRCLE- 1(1)(1)], SURAT. / APPELLANT /RESPONDENT /ASSESSEE BY SHRI RAJESH BHANWALA CA /REVENUE BY MS. USHA SHROTE SR.DR / DATE OF HEARING: 24.03.2021 /PRONOUNCEMENT ON: 25.03.2021 /O R D E R PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-1, SURAT, HEREINAFTER REFERRED AS LD.CIT(A) DATED 27.08.2018 FOR THE A.Y.2014-15. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW ON THE SUBJECT, ASSESSING OFFICER HAS ERRED IN MAKING ADDITION OF RS.12,45,026/- U/S. 36(1)(VA) ON ACCOUNT OF EMPLOYEES PF CONTRIBUTION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, ASSESSING OFFICER HAS ERRED IN MAKING ADDITION OF RS.86,75,510/- ON ACCOUNT OF UNDISCLOSED RECEIPT IN CASE OF SHORT CLAIM OF TDS OF RS.1,73,511/-. ESSAR STEEL LOGISTICS LIMITED VS. DCIT, ITA NO.695/SRT/2018 FOR A.Y.2014-15 2 3. IT IS THEREFORE PRAYED THAT ABOVE DISALLOWANCE/ADDITION MADE BY THE ASSESSING OFFICER. 4. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COMPANY ENGAGED IN PROVIDING LOGISTICS SERVICES. THE ASSESSEE FILED ITS RETURN OF INCOME (ROI) FOR ASSESSMENT YEAR 2014-15 ON 02.12.2014 DECLARING INCOME OF RS.9,23,93,280/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT, THE ASSESSING OFFICER (AO) NOTED THAT ASSESSEE MADE DELAYED PAYMENT OF EMPLOYEE CONTRIBUTION TO PROVIDENT FUND (EPF) BEYOND THE DUE DATE. THE AO ISSUED SHOW CAUSE AS TO WHY THE DEDUCTION ON ACCOUNT OF CONTRIBUTIONS OF EPF BE NOT DISALLOWED UNDER SECTION 36(1)(VA) OF THE ACT. THE ASSESSEE EXPLAINED THAT PROVIDENT FUND WAS DEPOSITED BEFORE DUE DATE OF FILING OF RETURN OF INCOME. THE A.O. MADE SUMMERY OF THE DUE DATE OF DEPOSIT OF CONTRIBUTION INCLUDING GRACE PERIOD AND DATE OF CHALLAN IN PARA 3 OF THE ASSESSMENT ORDER. THE EXPLANATION FURNISHED BY ASSESSEE WAS NOT ACCEPTED BY THE AO BY TAKING VIEW THAT JURISDICTIONAL HIGH COURT IN CASE OF GUJARAT STATE ROAD TRANSPORT CORPORATION (41 TAXMANN.COM 100) HELD THAT IF PAYMENT IS MADE AFTER DUE DATE PRESCRIBED IN EMPLOYEE PROVIDENT FUND & MISCELLANEOUS PROVISIONS ACT, SAME IS NOT ALLOWABLE EVEN IF IT IS PAID BEFORE THE ESSAR STEEL LOGISTICS LIMITED VS. DCIT, ITA NO.695/SRT/2018 FOR A.Y.2014-15 3 FILING OF RETURN OF INCOME. THE AO, ON THE BASIS OF AFORESAID OBSERVATION DISALLOWED RS.12,45,026/-. 3. THE AO FURTHER OBSERVED THAT FROM ITS DATA DURING THE YEAR UNDER CONSIDERATION THERE IS A SHORT CLAIM OF TDS CREDIT OF RS.1,73,511/- AGAINST THE TOTAL CREDIT OF RS.308,11,15,938/- AS PER ITS DATA. THE ASSESSEE WAS ASKED TO RECONCILE THE RECEIPT AND THE TDS CREDIT AND ALSO TO EXPLAIN WHETHER THE INCOME RELATING TO SHORT DEDUCTION OF TDS HAS BEEN OFFERED FOR TAXATION. IN RESPONSE TO THE SHOW CAUSE, THE ASSESSEE FILED REPLY DATED 26.12.2016 FOR RECONCILIATION OF THE MISMATCH. ON PERUSAL OF RECONCILIATION, THE AO NOTED THAT THE DATE OF BOOKING OF AMOUNT HAVE SHOWN IN THE MONTH OF JUNE AND JULY 2013 WHEREAS THE TDS LEDGER THE TRANSACTION DATE IS MENTIONED AS JANUARY AND FEBRUARY 2014. THE ASSESSEE WAS FURTHER ASKED TO EXPLAIN THE REASON OF SUCH DISCREPANCIES AND WHY THE INCOME RELATABLE TO SHORT TDS SHOULD NOT BE ADDED TO THE TOTAL INCOME. THE AO NOTED THAT NO EXPLANATION IS FURNISHED BY ASSESSEE. THE AO WORKED OUT THE INCOME RELATABLE TO SHORT TDS OF RS.1,73,511/- AND WORKED OUT DISALLOWANCE OF RS.86,75,510/- [173511 * 100/2]. 4. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF THE AO WAS AFFIRMED. THE ACTION OF AO WAS AFFIRMED BY THE LD. CIT(A) IN AN EX-PARTE ORDER. THE LD. CIT (A) BEFORE PASSING THE IMPUGNED ESSAR STEEL LOGISTICS LIMITED VS. DCIT, ITA NO.695/SRT/2018 FOR A.Y.2014-15 4 ORDER NOTED THAT THE ASSESSEE WAS GIVEN TWO OPPORTUNITIES I.E. ON 20.07.2018 AND 21.07.2018. IT WAS FURTHER NOTED THAT DURING THE APPELLATE PROCEEDINGS, NO DETAILS WERE FURNISHED, THEREFORE, THE LD.CIT(A) DISMISSED THE APPEAL DUE TO NON-PROSECUTION. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD THE SUBMISSION OF THE LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. SENIOR DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. THE LD.AR OF THE ASSESSEE SUBMITS THAT VERY SHORT QUESTIONS ARE INVOLVED IN THE PRESENT APPEAL AND THE SAME CAN BE DISPOSED OF BY THIS TRIBUNAL. THE LD.AR OF THE ASSESSEE SUBMITS HE HAS ALREADY FURNISHED THE STATEMENT OF TDS BEFORE THE TRIBUNAL AND WOULD SUBMIT THAT THE ASSESSEE HAS OFFERED MORE INCOME THAN THE TDS STATEMENT. RATHER THE ASSESSEE IS ENTITLED FOR REFUND OF UNCLAIMED TDS OF RS.1,73,511/-. THE ASSESSEE FILED ITS RETURN OF INCOME ON 02.12.2014, HOWEVER, THIS TDS STATEMENTS WERE UPLOADED ONLY ON 26.12.2014, I.E. AFTER FILING RETURN OF INCOME BY THE ASSESSEE. WHILE HEARING THE APPEAL, WE ARE FIND THE LD. CIT(A) IS NON-SPEAKING ORDER IN EX-PARTE PROCEEDINGS. THIS FACT WAS CONFRONTED WITH LEARNED AR FOR THE ASSESSEE. THE LD. AR FOR THE ASSESSEE STILL INSIST THAT A VERY SHORT QUESTIONS ARE INVOLVED ESSAR STEEL LOGISTICS LIMITED VS. DCIT, ITA NO.695/SRT/2018 FOR A.Y.2014-15 5 IN THE PRESENT APPEAL AND APPEAL MAY BE ADJUDICATED ON THE BASIS OF DOCUMENTARY EVIDENCES FURNISHED BY ASSESSEE AND NO USEFUL PURPOSE WILL SERVE IN SENDING THE APPEAL TO THE LD. CIT(A) AND THAT THE ASSESSEE COMPANY IS UNDER THE PROCESS OF WINDING UP ITS BUSINESS. 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMITS THAT THE ASSESSEE NEITHER FURNISHED EXPLANATION OR DOCUMENTARY EVIDENCES EITHER BEFORE THE AO OR BEFORE THE FIRST APPELLATE AUTHORITY REGARDING SHORT CLAIM OF TDS. THE LD. DR FURTHER SUBMITS THAT THE ISSUE RAISED IN THE GROUND NO.1 IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE DECISION OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION (SUPRA) IT HAS BEEN REFERRED AND RELIED BY THE AO. ON THE BASIS OF AFORESAID SUBMISSIONS THE LEARNED DR FOR THE REVENUE SUPPORTED THE ORDER OF LD. CIT(A). 7. IN THE REJOINDER OF THE SUBMISSION, THE LD.AR AGAIN INSISTED FOR ADJUDICATION OF APPEAL ON MERIT. 8. WE HAVE CONSIDERED THE CONTENTION OF BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AO MADE DISALLOWANCE UNDER SECTION 36(1)(VA) AS THE EMPLOYEE CONTRIBUTION OF EMPLOYEE PROVIDENT FUND WAS MADE AFTER DUE DATE PRESCRIBED IN THE EMPLOYEE PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT. THE AO ALSO RELIED UPON THE ORDER ESSAR STEEL LOGISTICS LIMITED VS. DCIT, ITA NO.695/SRT/2018 FOR A.Y.2014-15 6 OF HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION (SUPRA). ON OTHER ADDITIONS, THE AO AS WELL AS LD. CIT(A) BOTH NOTED THAT THE ASSESSEE HAS NOT FURNISHED RELEVANT INFORMATION. 9. WE HAVE NOTED THAT THE LD.CIT(A) WHILE PASSING THE ORDER HAS NOT PASSED THE ORDER AS PER MANDATE OF SECTION 250(6) OF THE INCOME TAX ACT. SECTION 250(6) MANDATES THAT THE LD. CIT(A) WHILE DECIDING THE APPEAL IS REQUIRED TO PASS ORDER ON POINTS OF DETERMINATION (GROUNDS OF APPEALS), DECISION THEREIN ON AND REASONS FOR SUCH DECISION. CONSIDERING THE FACT THAT THE LD.CIT(A) PASSED THE IMPUGNED ORDER IN EX-PARTE PROCEEDINGS THOUGH TWO OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE. THOUGH, THE LD. AR FOR THE ASSESSEE WHILE MAKING SUBMISSION BEFORE US, HAS NOT EXPLAINED THE REASONS, IF THE ASSESSEE HAS SUFFICIENT CAUSE FOR NON-APPEARANCE BEFORE THE LD.CIT(A). YET, KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE AND THE FACT THAT THE LD.CIT(A) HAS NOT ADJUDICATED THE GROUNDS OF APPEAL ON MERIT AS PER MANDATE OF SECTION 250(6) OF THE I.T. ACT, WE DEEM IT APPROPRIATE TO RESTORE THE MATTER TO THE FILE OF THE LD.CIT(A) TO ADJUDICATE THE ISSUE AFRESH. NEEDLESS TO ORDER THAT BEFORE PASSING THE ORDER THE LD.CIT(A) SHALL GRANT APPROPRIATE OPPORTUNITY OF HEARING AS PER AND PASS THE ORDER IN ACCORDANCE WITH LAW. ESSAR STEEL LOGISTICS LIMITED VS. DCIT, ITA NO.695/SRT/2018 FOR A.Y.2014-15 7 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 25.03.2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- (DR. ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER ( /JUDICIAL MEMBER) / SURAT, DATED : 25 TH MARCH , 2021 /# SGR COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT