MANGLAM VARDHMAN DEVELOPERS LLP,JAIPUR V. INCOME TAX OFFICER, JAIPUR, JAIPUR

ITA 970/JPR/2024

AI Insights

The case involves M/s. Mangalam Vardhman Developers LLP, the appellant, contesting orders from the Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals) [CIT(A)]. The primary issues revolved around the disallowance of certain deductions claimed by the assessee, specifically interest on TDS payments and brokerage expenses, which were initially allowed during scrutiny but later disallowed under section 154 of the Income Tax Act, 1961. The CIT(A) upheld these disallowances, leading to the current appeal. The tribunal found procedural lapses in the handling of the assessee's adjournment request and remanded the case for a fresh hearing, emphasizing adherence to natural justice.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33666 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 15-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: ANURAG GOYAL
• Keywords: Opportunity of being heard; Principle of natural justice; TDS; Rectification of order
• Section: 250; 154; 40(a)(ia)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, SMC, JAIPUR BEFORE: SHRI SANDEEP GOSAIN, JM & DR MITHA LAL MEENA, AM ITA No. 970/JP/2024 Assessment Year : 2017-18 M/s. Mangalam Vardhman Developers LLP G-1, Western Heights, S-21, Shyam Nagar Jaipur Vs. The ITO Ward 1(3) Jaipur PAN/GIR No.: AAXFM 3034 B Appellant Respondent Assessee by : Shri Anurag Goyal, CA Revenue by: Shri Gautam Singh Choudhary, JCIT-DR Date of Hearing : 03/10/2024 Date of Pronouncement: 29 /10/2024 ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 27-06-2024, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2017-18 raising therein following grounds of appeal. ‘’1. The order of the learned Commissioner of Income Tax (Appeals) under section 250 of Income Tax Act, 1961 is bad in law and against the facts of the case. 2. Learned AO has erred in passing rectification order u/s 154 without considering the reply of the assessee filed on 16.03.2022. The learned CIT(A) has erred in passing order u/s 250 dated 27.06.2024 without 2 ITA NO. 970/JP/2024 M/S. MANGALAM VARDHMAN DEVELOPERS LLP VS ITO, WARD 1(3), JAIPUR considering the adjournment application of the assessee filed on 19.06.2024 seeking adjournment upto 05.07.2024 for filing of submissions. Both the actions of the income tax authorities are against all the principles of natural justice and the circulars of the CBDT, for which both the orders deserves to be quashed. 3. The learned AO has erred in disallowing Rs. 4,81,538/- on account of 'interest on TDS\" claimed by the assessee in Profit and Loss account, in most arbitrary manner. 4. The learned AO has also erred in disallowing Rs 1,39,500 u/s 40(a)(ia) of Income tax Act out of Brokerage Expenses paid by the assessee, in most arbitrary manner. 5. The additions/disallowances made by the AO are not apparent from records and on highly debatable issues, therefore, not covered by provisions of Sec. 154. 6. The learned AO has erred in charging interest under various sections on the above tax liability.’’ 2.1 As per the facts of the present case, the assessee is an LLP and deduction was claimed on the interest payment on TDS and also the assessee had not deducted TDS on brokerage in advertisement and marketing expenses. The scrutiny assessment was completed without any disallowance. Later, the AO issued a 154 Notice and after opportunity of being heard, had disallowed the interest on TDS payment by observing that the payment comes under fines and penalties and interest category which is not an allowable expenses. 2.2 The assessee being aggrieved by intimation passed by virtue of order under section 154 preferred appeal before the ld.CIT(A) but the appeal of the assessee was also dismissed 3 ITA NO. 970/JP/2024 M/S. MANGALAM VARDHMAN DEVELOPERS LLP VS ITO, WARD 1(3), JAIPUR 2.3 Now the assessee has preferred the present appeal before us on the grounds mentioned hereinabove 2.4 After having heard the counsels for both the parties, we noticed that the main arguments of the assessee is that since the year during the course of scrutiny had verified the genuineness and allowability of these expenses, therefore, invocation of section 154 is invalid as there is no mistake apparent from the record. It was also submitted that ld. CIT (A) had erred in passing the impugned order without considering the adjournment application of the assessee filed on 19th June 24 for seeking adjournment up to 5th of July 24 for filing the submissions but ld. CIT(A) without providing an opportunity of hearing had dismissed the appeal of the assessee 2.5 After having gone through the records, we noticed that assessee had filed an application for seeking adjournment but without considering the same ld. CIT(A) has decided the appeal of the assessee and dismissed the same. Be that as it may, we are of the view that the lis between the parties is to be adjudicated on merits and we feel that one more chance may be given to the assessee to contest his appeal on merits before ld. CIT(A). Therefore, considering the principles of natural justice, we restore the matter to the file of ld. CIT(A) for adjudicating the same afresh on merits, needless to say by providing fair opportunity of hearing to the assessee. At the same time, we also direct the assessee that he shall not seek 4 ITA NO. 970/JP/2024 M/S. MANGALAM VARDHMAN DEVELOPERS LLP VS ITO, WARD 1(3), JAIPUR adjournments on unnecessary or frivolous grounds and remain cooperative during the course of proceedings and therefore the appeal of the assessee is allowed for statistical purposes. 2.6 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. 3.0 In the result, the appeal of the assessee is allowed for statistical purposes, with no orders as to cost. Order pronounced as on 29/10/2024, under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- ¼ Mk0 ehBk yky ehuk ½ ¼lanhi xkslkbZ½ (Dr. Mitha Lal Meena) (Sandeep Gosain) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 29 /10/2024 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- M/s. Mangalam Vardhman Developers LLP, Jaipur 2. izR;FkhZ@ The Respondent- The ITO, Ward -1(3), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZ QkbZy@ Guard File (ITA No. 970/JP/2024) vkns'kkuqlkj@ By order, Asstt. Registrar "