SIP Moulds Private Limited, Nashik, V. Assistant Director of Income Tax, CPC, Bengaluru

ITA 99/PUN/2022

AI Insights

The case involves SIP Moulds Private Limited appealing against the order of the Commissioner of Income Tax (Appeals) - NFAC, which confirmed the disallowance of Rs. 2,24,029 on account of delayed payment of employees' contributions to Provident Fund and Employees State Insurance Corporation. This disallowance was initially made by the Assistant Director of Income Tax, CPC, Bengaluru, under section 154 of the I.T. Act, 1961. The assessee contested that the disallowance was made without proper notice and was not justified, particularly as the relevant provisions invoked (Explanation 5 of section 43B) were applicable from A.Y. 2021-22, not A.Y. 2017-18.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134354 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-11-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 07-02-2022
• Other Referred Cases: Checkmate Services (P.) Ltd. Vs. Commissioner of Income- tax-1
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Set aside
• Section: 154; 43B; 143(1); 139(1)

Judgement Text

आयकर अपीलीय अिधकरण “बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.99/PUN/2022 िनधाᭅरण वषᭅ / Assessment Year : 2017-18 SIP Moulds Private Limited, B-24, MIDC, Ambad, Nashik, Maharashtra – 422010. PAN: AAPCS 0436 E V s The Assistant Director of Income Tax, CPC, Karnataka. Appellant/ Assessee Respondent /Revenue Assessee by Shri Pramod Shingte – AR Revenue by Shri M.G.Jasnani – DR Date of hearing 25/11/2022 Date of pronouncement 15/02/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC],Delhi dated 15.12.2021 emanating from the order under section 154 of the I.T.Act, 1961 for the A.Y.2017-18 passed by Asst. Director of Income Tax ,CPC. The Assessee has raised the following grounds of appeal: “1. On the basis of the facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Appeals) - NFAC is not justified in confirming the disallowance on account of delayed payment of employees contribution to Provident Fund and Employees State Insurance Corporation Fund of Rs. 2,24,029/-, particularly, when the said disallowance was directly made by ITA No.99/PUN/2022 SIP Moulds Private Limited [A] 2 CPC, Bengaluru by invoking the provisions of section 154 of the Act. The CIT(A) is further not justified in confirming the impugned disallowance made u/s. 154 of the Act without giving any notice as contemplated under section 154 of the Act. 2. On the basis of the facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Appeals)- NFAC, is not justified in confirming the disallowance of Rs. 2,24,029/- directly made by CPC, Bengaluru in an order passed u/s. 154 in response to an application filed by the appellant u/s. 154 of the Act in respect of Intimation issued u/s. 143(1) of the Act. The CIT(A) is also not justified in confirming the said disallowance by invoking the provisions of Explanation 5 of section 43B of the Act particularly when the said Explanation is inserted by Finance Act, 2021 w.e.f. from A.Y. 2021-22. 3. The appellant craves for the addition to, deletion, alteration, modification of the above grounds of appeal.” 2. Brief Facts of the case : The assessee had filed return of Income on 07/11/2017. The Dy.Commissioner of Income tax, CPC passed order u/s.143(1) on 09/11/2018. From the order u/s.143(1) of the Act, it is observed that assessee had shown Total Income of Rs.57,37,140/- in the Return of Income , whereas the Total Income as per the Order u/s.143(1) was Rs.1,09,65,980/-.The order u/s.143 (1) contains 20 pages but the assessee had filed copies of only first 6 pages before this Tribunal. Aggrieved by the order u/s.143(1), the assessee filed application for rectification u/s.154. The assessee had not filed copy of the ITA No.99/PUN/2022 SIP Moulds Private Limited [A] 3 impugned Rectification application before this Tribunal. Therefore, it is not possible to understand plea raised by the assessee in the rectification application. The Dy.Commissioner of Income Tax ,CPC passed an Order u/s.154 on 03/06/2020, deciding the Total Income at Rs.1,11,90,010/-. The impugned Order u/s 154 contains 20 pages but the assessee has filed copies of only first 6 pages. Aggrieved by the order u/s.154, the Assessee had filed an appeal before the Commissioner of Income Tax(Appeal). The Commissioner of Income Tax (Appeals) NFAC upheld the order u/s.154. Aggrieved by the order of the Commissioner of Income Tax (Appeals) National faceless Appeal Center, the assessee filed appeal before Income Tax Appellate Tribunal. Submissions of Authorised Representative of the Assessee : 3. The Ld.AR filed written submission. The written submission is reproduced here as under : “1. The return of income for the year under review was filed on 07/11/2017 declaring Total Income at Rs. 57,37,140/- 2. The Summary Assessment u/s. 143(1) of the Act was completed on 09/11/2018 assessing Total Income u/s. 143(1) at Rs. 1,09,55,978/- making solitary disallowances of Rs. 52,28,836/- on account of delayed payment of Maharashtra Value Added Tax (MVAT) for the year under review. Copy of the said Intimation u/s 143(l)(a) is placed at page Nos. 1 to 6 of paper-book 3. In response to the same, the online application for ITA No.99/PUN/2022 SIP Moulds Private Limited [A] 4 rectification of mistake u/s. 154 was filed by the appellant on 29/02/2020 as there was mistake apparent from record as regards the disallowance of MVAT liability of Rs. 52,28,835/- for the reason that the said liability of MVAT was duly paid on or before the extended Due Date for filing of return of Income u/s. 139(1) of the Act. 4. The Order u/s. 154 for the year under consideration, in response to application u/s. 154 is passed by the Assessing Officer on 03/06/2020 assessing Total Income at Rs. 1,11,90.010/- as against the earlier assessed income u/s. 143(1) at Rs. 1.09.65.978/- and also as against the returned income of Rs. 57.37.140/ , thereby meaning that the addition of Rs.2,24,029/- was directly made in an order u/s. 154 which was not made in Intimation u/s.143(1) dated 09/11/2018. 5. In the said Order passed u/s. 154. the Assessing Officer has not only confirmed the disallowance of MVAT liability of Rs. 52,28,836/- but also made further disallowance of Rs. 2,24,029/- on account of delayed payment of employees contribution towards Provident Fund and Employee State Insurance (ESIC) by invoking the provisions of section 36 of the Act.’’ 6. It is undisputed fact that the said disallowance of Rs. 2,24,029/- is DIRECTLY made by the Assessing Officer in the order passed u/s. 154 which was passed in response to the application of the appellant in respect of altogether different issue. Further, the Assessing Officer has neither given opportunity of being heard nor issued any notice in respect of the impugned disallowance, which is mandatory as per provisions of subsection (3) of section 154 of the Act. The relevant portion provisions of sub-section (3) of section 154 are reiterated below 154 (1)... ITA No.99/PUN/2022 SIP Moulds Private Limited [A] 5 (2)... (3) An amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee..., shall not be made under this section unless the authority concerned has given notice to the assessee... of its intention so to do and has allowed the assessee.... A reasonable opportunity of being heard, (emphasis supplied) Therefore, in the present case, the impugned disallowance directly made u/s.154 disregarding the provisions of section 154(3) please be deleted. The CIT (A) has dismissed the relevant ground of appeal No. 3 taken before him without addressing the specific submission of the appellant. Please refer to page Nos. 07 to 16 of paper-book (Copy of submission before CIT(A)) and more specifically page No. 11 of the Paper-book.” Submission of Departmental Representative : 4. The Ld.DR relied on the Order of the Lower authorities. The Ld.DR also relied on the Order of the Hon’ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs. Commissioner of Income- tax-1 (2022) 448 ITR 518 (SC). Findings and Decision : 5. We have heard both the parties and perused the records. It is observed that the assessee had not filed complete copies of Order u/s.143(1) and Order u/s 154. The assessee had also not filed copy of Rectification application which was filed by the assessee before the ITA No.99/PUN/2022 SIP Moulds Private Limited [A] 6 ACIT/DCIT(CPC). It is observed from the assessee’s submission made before the Ld.CIT(A), which is on page number 7 to 16 of the paper book, that the assessee had not submitted copy of the Rectification Application even before the Ld.CIT(A). In the absence of copy of Rectification Application and complete order u/s 154, it is not possible for us to understand the exact plea taken by the assessee. The assessee has raised one ground that the AO had not served notice u/s.154. This ground was also raised by the assessee before the ld.CIT(A). The Ld.CIT(A) had not adjudicated the impugned ground regarding notice. The Ld.CIT(A) has not given any finding regarding the notice u/s.154. On perusal of the Form 35 filed by the assessee before the Commissioner of Income tax (appeals) , the assessee in the coloumn number 12 has mentioned that Additional Evidence has been filed by the assessee. However, in the Order, the ld.CIT(A) has not discussed anything about the additional evidence. 6. In these facts and circumstances of the case, we are of the opinion that in the interest of justice, it is required that all facts need to be on record, which assessee has failed to submit. Therefore, we set aside the order to the Ld.CIT(A) for denovo-adjudication. The Ld.CIT(A) shall give opportunity to the assessee. Assessee shall file all necessary documents before the Ld.CIT(A). Accordingly, the ITA No.99/PUN/2022 SIP Moulds Private Limited [A] 7 grounds of appeal raised by the assessee are allowed for statistical purpose. 7. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 15 th February, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 15 th Feb, 2023/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.