The State Trading Corporation of India Ltd., New Delhi V. ACIT, Circle-25(1), New Delhi

ITA 7245/DEL/2019

AI Insights

The case involves The State Trading Corporation of India Ltd., the appellant, contesting an order from the Commissioner of Income Tax (Appeals)-27, which dismissed an additional ground of appeal regarding a deduction of Rs. 105.94 crores. This deduction pertained to excess interest credited in the books of account, which was no longer recoverable following a Supreme Court judgment in the case of Global Steel Holdings Pvt. Ltd. The primary contention was whether the CIT(Appeals) had the jurisdiction to entertain the additional ground of appeal, which was initially omitted in the assessment order but later brought up under section 154 of the Income Tax Act. The Tribunal found that the CIT(Appeals) did have the authority to entertain the additional ground and restored the matter to the Assessing Officer for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113367 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 20-09-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 01-09-2019
• Other Referred Cases: Global Steel Holdings Pvt. Ltd., CIT vs. Jai Parabolic Springs Ltd., Goetze (India) Ltd. vs. CIT, Jute Corporation of India Ltd. vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 154

Judgement Text

I.T.A.No.7245/Del/2019 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER आ.अ.स ं /.I.T.A No.7245/Del/2019 /Assessment Year: 2015-16 The State Trading Corporation of India Ltd., Jawahar Vyapar Bhawan, Tolstoy Marg, New Delhi. ब म Vs. ACIT Circle 25(1), C.R. Building, New Delhi. PAN No. AAACT0102F अ Appellant /Respondent िनधा रतीक ओरसे /Assessee by Shri Kamal Kishan Jaithley, Adv. Shri SM Manzar, Adv. Shri Sudhir Gupta, CA राज वक ओरसे /Revenue by Shri Vivek Verma, CIT DR Shri Sanjay Kumar, Sr. DR स ु नवाईक तारीख/ Date of hearing: 03.02.2023 उ ोषणाक तारीख/Pronouncement on 11.04.2023 आदेश /O R D E R PER C.N. PRASAD, J.M. This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax(Appeals)-27, New Delhi dated 28.06.2019 passed u/s 250/154 of the Income Tax Act, 1961 for the AY 2015-16. 2. The assessee in its appeal raised the following grounds: - 1. “That the order dated 28.06.20'\9 passed by learned CIT (A) - 27 New Delhi is bad in law, wrong on facts and void ab initio. 2. That on the facts and the circumstances of the case and in law the learned CIT (A) erred in dismissing the additional ground of appeal pertaining to the claim of the appellant I.T.A.No.7245/Del/2019 2 for deduction of Rs. 105.94 crores on account of excess interest credited in books of account and offered and brought to tax, consequent to the judgement of the Supreme Court in the case of Global Steel Holdings Pvt. Ltd. 3. That on the facts and the circumstances of the case and in law the learned CIT (A) erred in holding that the claim pertained to an issue not emanating from the assessment order and will be without jurisdiction of the appellant authority, more so when the facts pertaining to the same were part of the record reproduced in impugned appellate order. 4. That on the facts and the circumstances of the case and in law the learned CIT (A) erred in holding that the power to entertain claim for deduction other than by revised return is at the discretion of ITAT and not CIT(A), there by not adjudicating the additional ground for deduction of Rs. 105.94 crores and consequently dismissing the same. 5. The appellant craves leave to add, delete, amend, modify or substitute any ground of appeal at any time before final disposal of the appeal.” 3. The Ld. Counsel for the assessee submits that Ld.CIT(Appeals) disposed off its appeal for the AY 2015-16 by way of order dated 07.03.2019 in which the additional ground was omitted inadvertently to consider. Therefore, the assessee made an application u/s 154 of the Act before the Ld.CIT(Appeals) to decide the additional ground which was omitted by the Ld.CIT(Appeals). Ld. Counsel submits that admitting the 154 application the Ld.CIT(A) by way of order u/s 250/154 of the Act dated 28.06.2019 adjudicated the additional ground of appeal holding that the additional ground of appeal on the new issue is not emanating from the assessment order and, therefore, it is dismissed. The Ld. Counsel submits that the observations of the Ld.CIT(Appeals) that the I.T.A.No.7245/Del/2019 3 additional claims can only be admitted by the ITAT and not by the Ld.CIT(Appeals) is not correct and consequently the observation of the Ld.CIT(A) that the additional ground of appeal is not emanating from the assessment order is not justified. 4. Ld. DR strongly placed reliance on the orders of the authorities below. 5. On hearing both the parties and on going through the records before us, we noticed that the assessee has raised additional grounds of appeal before the Ld.CIT(Appeals) as under: - 1. “That on the facts and in the circumstances of the case and in law, the appellant is entitled to a deduction of Rs.105.94 crore out of his business income on account of excess interest credited in the books of accounts and offered for tax representing the amount now not recoverable as per the judgment of the Supreme Court of the case pertaining to Global Steel Holdings Pvt. Ltd. 2. That the appellant craves leave to add, alter, delete, amend or substitute any ground of appeal at any time, before disposal of appeal.” 6. The Ld.CIT(Appeals) while passing the order dated 07.03.2019 inadvertently omitted to dispose of the said additional ground. Later the assessee moved an application under 154 of the Act for disposal of the additional ground. The Ld.CIT(A) by order dated 28.06.2019 dismissed the additional ground of appeal holding that power to entertain additional claims not made in the return of income is the discretion of the ITAT and not by the CIT(Appeals) by referring to the decision of the I.T.A.No.7245/Del/2019 4 Delhi High Court in the case of CIT vs. Jai Parabolic Springs Ltd., 306 ITR 42. 7. In our view, the above understanding of the Ld.CIT(Appeals) is not correct. Any fresh claim by way of additional ground can be made by the assessee before the appellate authorities including the CIT(Appeals) and it is not only before the ITAT. We observed that the CIT(Appeals) misunderstood the decision of the Delhi High Court in the case of CIT vs. Jai Parabolic Springs Ltd. as in this case the assessee had raised an additional ground before the Tribunal even though there was no claim made in the return of income. The Tribunal considering the decision of the Supreme Court in the case of Goetze (India) Ltd. vs. CIT, 284 ITR 323 admitted the additional grounds of appeal raised by the assessee. 8. We further observed that the Ld.CIT(Appeals) over looked the decision of the Hon’ble Supreme Court in the case of Jute Corporation of India Ltd. vs. CIT, [187 ITR 688] which was referred to by the Hon’ble Delhi High Court in the very same judgment on the powers of the appellate authorities including the Appellate Assistant Commissioner on entertaining an additional ground raised by the assessee, wherein it has been held that the Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. Therefore, we I.T.A.No.7245/Del/2019 5 hold that the CIT(A) has all the powers to entertain the additional ground raised before him. 9. The observation of the Ld.CIT(A) that the powers to entertain additional claim not made in the return of income is discretion of ITAT and not CIT(Appeals) is misplaced. In the additional ground Assessee contended by the assessee that it is entitled for deduction of Rs.105.94 crores out of its business income on account of excess interest credited in the books of account and offered for tax is no now irrecoverable as per the judgment of the Hon’ble Supreme Court pertaining to Global Steel Holdings Pvt. Ltd. We are of the considered view that these contentions of the assessee have to be examined by the Assessing Officer as the said claim was not made before the Assessing Officer nor considered by the Ld.CIT(Appeals) which was raised before him as on additional ground of appeal. Thus, we restore this issue to the file of the Assessing Officer for denovo adjudication in accordance with law after providing adequate opportunity of being heard to the assessee. Grounds raised by the assessee are allowed for the statistical purpose. 10. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 11/04/2023 Sd/- Sd/- (G.S. PANNU) (C.N. PRASAD) PRESIDENT JUDICIAL MEMBER I.T.A.No.7245/Del/2019 6 Dated: 11/04/2023 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi