2018 (2) TMI 2091 - AT - Income Tax

Non adjudicating grounds of appeal - HELD THAT - As submitted by the counsels on both sides it is clearly evident from a reading of the impugned order that the ld CIT(A) has disposed off the assessee s appeal after adjudicating only the additional ground raised and without addressing/adjudicating the grounds at S.Nos. 1 to 4 listed out at page 2-3 of the impugned order. We restore these grounds to the file of the ld CIT(A) for consideration and adjudication after affording the assessee adequate opportunity of being heard in the matter and to file details/submissions which shall be duly considered.

Summary

Issues involved:
Appeal against order of Commissioner of Income-tax (Appeals) -6, Bangalore for assessment year 2012-13; Disallowance under section 40(a)(ia) of the Income-tax Act, 1961 for failure to deduct tax at source under section 194C; Adjudication of grounds of appeal raised by the assessee before the CIT(A)-6, Bangalore; Restoration of grounds 1 to 4 for consideration and adjudication; Partial allowance of the assessee's appeal for statistical purposes.

Analysis of Judgment:

Issue 1: Appeal against CIT(A) Order
The appeal by the assessee was directed against the order of the Commissioner of Income-tax (Appeals) -6, Bangalore for the assessment year 2012-13. The assessment was concluded under section 143(3) of the Income-tax Act, 1961, where the assessee's income was determined due to disallowance under section 40(a)(ia) for failure to deduct tax at source under section 194C. The CIT(A)-6, Bangalore had dismissed the appeal filed by the assessee against the assessment order.

Issue 2: Disallowance under Section 40(a)(ia)
The disallowance under section 40(a)(ia) was made by the Assessing Officer for the failure of the assessee to deduct tax at source on payments made as required by section 194C. The assessee contended that the provisions of section 194C were not applicable as there was no contractual obligation between the assessee (Joint Venture) and its constituents. The assessee argued that it was a special purpose vehicle (SPV) formed for the execution of works contract and that the income and expenses were passed on to the JV partners without any profit element. The CIT(A) confirmed the addition made by the Assessing Officer under section 40(a)(ia) without considering the modus operandi of the assessee.

Issue 3: Adjudication of Grounds of Appeal
The assessee raised multiple grounds of appeal before the CIT(A)-6, Bangalore, including issues related to the application of sections 194C and 40(a)(ia). However, the CIT(A) disposed of the appeal after adjudicating only an additional ground raised by the assessee, without addressing the grounds raised at serial numbers 1 to 4. The Tribunal restored these grounds to the file of the CIT(A) for consideration and adjudication, emphasizing that the assessee should be given an opportunity to be heard.

Issue 4: Restoration of Grounds for Consideration
The Tribunal decided not to adjudicate on the merits of the grounds raised before them, as they had restored the grounds raised by the assessee before the CIT(A) for adjudication. The grounds were sent back to the CIT(A) for proper consideration and decision after affording the assessee an opportunity to present their case.

Issue 5: Partial Allowance of Appeal
The Tribunal partly allowed the assessee's appeal for the assessment year 2012-13 for statistical purposes. The decision was made to restore the grounds raised by the assessee for proper consideration, indicating that the matter needed further examination and adjudication.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by the parties, and the Tribunal's decision to restore the grounds for proper adjudication, ultimately resulting in the partial allowance of the assessee's appeal.