The ACIT, Circle-1(1)(1), Vadodara V. Base Metal Chlorinations Pvt. Ltd., Vadodara

MA 41/AHD/2023

AI Insights

The case involves the Income Tax Department (Appellant) and M/s. Base Metal Chlorinations Pvt. Ltd. (Respondent) concerning an appeal related to the assessment year 2013-14. The Department filed a Miscellaneous Application challenging the ITAT's previous decision which excluded a disallowance of Rs. 17,77,659 under section 14A from the computation of income under section 115JB. The ITAT had initially allowed the appeal of the assessee, directing that the addition under section 14A amounting to Rs. 17.77 lakhs should not be considered for the purpose of computation under section 115JB. The Department contended that this issue was not raised before the CIT(A) and thus should not have been adjudicated by the ITAT. However, the ITAT acknowledged that legal grounds can be raised at any stage of the appellate proceedings and recalled their earlier order to re-examine this specific issue.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131362 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-07-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-05-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 16-04-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 14A; 115JB

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Th e ACIT, Circle-1 (1 )(1), Vadodara (Appellant) Vs M/s. Base Metal Chlorinations Pvt. Ltd. PO P etroche mical s Dist. Baroda-39 1346 PAN: AAA CB762 8L (Resp ondent) Asses see b y : Shri M. K. Patel, A. R. Revenue by : Shri B. P. M akw ana, Sr. D. R. Date of hearing : 12-05 -2 023 Date of pronouncement : 28-07 -2 023 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This Miscellaneous Application is arising out of the ITAT order passed in ITA No. 1625/Ahd/2018 vide order dated 08/12/2022 passed for the assessment year 2013-14. M.A. No. 41/Ahd/2023 (In ITA No. 1625/Ahd/2018) Assessment Year 2013-14 M.A. No. 41/Ahd/2023 (in I.T.A No. 1625/Ahd/2018) A.Y. 2013-14 Page No. ACIT vs. M/s. Base Metal Chlorinations P. Ltd. 2 2. The brief facts of the case are that the Department filed M.A. on the ground that the ITAT adjudicated on the issue of disallowance of Rs. 17,77,659/- u/s. 14A of the Act while computing the income u/s. 115JB of the Act, without appreciating the fact that the ground was not raised by the assessee before ld. CIT(A) and thus this issue is not emanating from the order of ld. CIT(A). At the time of hearing, the ld. Departmental Representative submitted that the issue for disallowance u/s. 14A for the purpose of computation u/s. 115JB of the Act was raised for the first time before ITAT. The ITAT allowed the appeal of the assessee and directed that the addition u/s. 14A of the Act amounting to Rs. 17.77 lakhs cannot be considered for the purpose of computation u/s. 115JB of the Act. In response, the counsel for the assessee submitted that this is a legal plea and can be raised at any time during the course of appellate proceedings. Though, the ld. CIT(A) did not specially adjudicate on this issue, however, it is a legal ground and various courts have decided the issue whether disallowance u/s. 14A can be included by computing the tax liability u/s. 115JB of the Act and this issue has been decided in favour of the assessee by various courts. Accordingly, since, admittedly while computing the tax liability u/s. 115JB of the Act, the disallowance made u/s. 14A of the Act amounting to Rs. 17.77 lakhs was added to the income, assessee cannot be precluded from raising this ground for the first time before ITAT. 3. We have heard the rival contentions and perused the material on record. We observe that the ld. Departmental Representative is correct in pointing out that this issue is not emanating from the order passed by ld. CIT(A). While it is a settled principle of law that a legal ground can be M.A. No. 41/Ahd/2023 (in I.T.A No. 1625/Ahd/2018) A.Y. 2013-14 Page No. ACIT vs. M/s. Base Metal Chlorinations P. Ltd. 3 raised by the assessee at any stage of the appellate proceedings, however, looking into the facts of the instant case, we are recalling our order to the extent of the relief afforded to assessee on this ground while adjudicating ground no. 2 of assessee’s appeal. Accordingly, our order passed in ITA 1625/Ahd/2018 is hereby recalled so far as this ground of appeal is concerned and the appeal is fixed for hearing on merits on 23-08-2023. 4. In the result, the MA filed by the Department is hereby allowed. Order pronounced in the open court on 28-07-2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 28/07/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद