2023 (3) TMI 1495 - AT - Income Tax

Delay of 935 days filling cross objections - assessee company explained that the delay was due to the pendency of a rectification application before the AO - assessee contended that after rectification the tax liability would be less than Rs. 50 lakhs which was the threshold for departmental appeals before the ITAT - Validity of assessment proceedings questioned as notice u/s.143(2) was not issued by the Jurisdictional AO within the prescribed time limit - HELD THAT - As is discernible from the record it is the claim of the assessee that it had after framing of the assessment by the A.O vide his order passed u/s.143(3) dated 30.06.2016 filed with him a rectification application dated 28.06.2019. It is stated by the assessee that during pendency of its rectification application before the A.O its appeal was disposed off by the CIT(Appeals). It is further stated by the assessee that its rectification application had not been disposed off by the A.O till date. It is stated by the assessee that after the rectification is carried out the tax effect involved in the present appeal of the revenue would be less than Rs. 50 lac i.e. the threshold limit contemplated in CBDT Circular No.03/2018 dated 11.07.2018 enabling filing of appeals by the department with the Tribunal. As the present cross-objection of the assessee company is not supported by any application seeking condonation of delay involved in filing of the same therefore the same does not merit admission on the said count itself. We thus in terms of our aforesaid observations dismiss the cross-objection filed by the assessee-respondent.In the result cross-objection filed by the assessee is dismissed in terms of our aforesaid observations.

Summary

Issues Involved:
The issues involved in this judgment are related to the validity of assessment proceedings due to a notice not being issued within the prescribed time limit, the discrepancy in the amount of loan raised by the assessee, the treatment of interest expenses claimed, and the delay in filing a cross-objection.

Validity of Assessment Proceedings:
The assessee raised an objection regarding the validity of the assessment proceedings due to the notice u/s.143(2) not being issued within the prescribed time limit. The assessee contended that the entire assessment and subsequent proceedings should be quashed on this ground.

Discrepancy in Loan Amount:
Another issue raised by the assessee was the discrepancy in the amount of net loan raised from M/s Hillview Agencies Private Limited. The assessee argued that the actual net loan raised was Rs.1,06,40,000/-, which was different from the amount added by the Assessing Officer. The assessee claimed that the tax impact on the disputed addition, along with other additions, was below the monetary ceiling specified in Circular No-17 of 2019.

Treatment of Interest Expenses:
The assessee also challenged the addition made u/s 68 by the Assessing Officer, claiming it was contradictory and bad in law. The assessee argued that since the Assessing Officer had accepted the entire interest expenses claimed, the addition made u/s 68 was unjustified.

Delay in Filing Cross-Objection:
The cross-objection filed by the assessee involved a delay of 935 days. The director of the assessee company explained that the delay was due to the pendency of a rectification application before the Assessing Officer. The assessee contended that after rectification, the tax liability would be less than Rs. 50 lakhs, which was the threshold for departmental appeals before the ITAT.

Conclusion:
The Tribunal observed that the cross-objection was not supported by any application seeking condonation of the delay in filing. As a result, the cross-objection filed by the assessee was dismissed. The order was pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963.