2021 (3) TMI 835 - AT - Income Tax

Rectification u/s 254 - disallowing on account of interest paid - disallowing a sum on account of interest paid on delayed deposit of TDS - HELD THAT - There is an apparent mistake in the order of the Ld. CIT(A) as he has adjudicated the grounds of appeal not at all related to the grounds raised by the assessee in Form No. 35. Another aspect is that in the Form of Verification , the appellant s name is Rupen Patel whereas the Ld. CIT(A) has mentioned Parwinder Kaur as the appellant as per signature. This is a clear case where the 1st para of the impugned order relates to the present assessee. The subsequent paras relate to some other assessee. The issues decided on merit by the Ld. CIT(A) relate to some other assessee. Because of this unfortunate situation, we set aside the order of the Ld. CIT(A) and restore the matter to him to pass a de novo order, after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the Ld. CIT(A) on the date of hearing. Appeal is allowed for statistical purposes.

Summary

Issues:
- Disallowance of interest expenditure claimed by the assessee.
- Allegation of non-compliance by the assessee before the Ld. CIT(A).
- Adjudication of grounds of appeal not related to the present assessee.
- Mistake in the order of the Ld. CIT(A) regarding the appellant's name.

Analysis:
1. Disallowance of Interest Expenditure:
- The assessee claimed interest expenditure of &8377; 6,86,58,949/- in its return. The AO disallowed this amount, stating that the interest was wrongly claimed as the assessee did not charge interest on loans given to subsidiaries. The AO held that the interest was not incurred exclusively for the assessee's business, leading to the disallowance.

2. Allegation of Non-Compliance:
- The Ld. DR contended that the assessee did not comply with the proceedings before the Ld. CIT(A). However, the counsel for the assessee argued that the grounds of appeal decided by the Ld. CIT(A) were possibly related to a different assessee, indicating a misunderstanding or mix-up in the proceedings.

3. Adjudication of Unrelated Grounds:
- The Ld. CIT(A) in the order observed discrepancies in signatures and adjudicated grounds not raised by the present assessee. The grounds decided on merit were found to pertain to a different assessee, leading to confusion and incorrect adjudication. The Tribunal set aside the order and directed a fresh hearing after rectifying the errors.

4. Mistake in Appellant's Name:
- An evident mistake was noted in the Ld. CIT(A)'s order regarding the appellant's name, creating further confusion in the proceedings. The discrepancy in names between the Form filed by the assessee and the name mentioned in the order highlighted the need for a thorough review and correction of the records.

This detailed analysis of the judgment highlights the issues of disallowance of interest expenditure, alleged non-compliance, adjudication of unrelated grounds, and mistakes in the appellant's name. The Tribunal's decision to set aside the order and provide a fresh hearing emphasizes the importance of procedural correctness and fair adjudication in tax matters.