2021 (5) TMI 829 - AT - Income Tax

Revision u/s 263 - addition u/s. 40(a)(ia) being the payment made u/s. 194C without deducting tax on it - Assessee submitted that instead of giving one more opportunity, the Ld. CIT(Appeals) has dismissed the appeal of the assessee, though knowing that submissions were misplaced therein. - HELD THAT - It is correct, the submissions made before the Ld. CIT(Appeals) by the assessee were not relevant to the assessment order passed u/s. 143(3) of the Act. That nonetheless, the Ld. CIT(Appeals) should have given one more opportunity to the assessee to file the correct submissions. Therefore, we are of the considered view, in the interest of justice, one more opportunity should be given to the assessee so that they can represent their case on merits by filing correct submissions before the Ld. CIT(Appeals). In view thereof, we set aside the order of the Ld. CIT(Appeals) and remand the matter back to his file for fresh adjudication as per law complying with the principles of natural justice. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues: Delay in filing appeal, Disallowance of tax deduction, Misplacement of submissions

Delay in filing appeal:
The appeal involved a delay of 75 days, for which the assessee filed a condonation petition explaining the reasons. The Tribunal noted that the delay was not due to the direct conduct of the assessee and was not intentional. The Delay was condoned after considering the explanations provided, and the case was heard on merits.

Disallowance of tax deduction:
The assessee, engaged in the business of sugar and liquor manufacturing, had its income assessed with an addition of ?8,00,60,988 under section 40(a)(ia) for non-deduction of tax on payments made under section 194C. The assessee contended that submissions made before the CIT(Appeals) were actually meant for another appeal related to an order under section 263. The CIT(Appeals) confirmed the disallowance citing irrelevant submissions. The Tribunal observed that the CIT(Appeals) should have given the assessee another chance to provide correct submissions, setting aside the order for fresh adjudication.

Misplacement of submissions:
The Ld. Counsel for the assessee argued that the submissions made before the CIT(Appeals) were misplaced and not relevant to the assessment order passed under section 143(3) of the Act. The Tribunal agreed that the submissions were incorrect but opined that the CIT(Appeals) should have allowed the assessee to rectify the error by providing another opportunity. Consequently, the order was remanded back to the CIT(Appeals) for fresh adjudication in compliance with the principles of natural justice.

In conclusion, the appeal was allowed for statistical purposes, and the matter was remanded back to the CIT(Appeals) for reevaluation based on correct submissions. The Tribunal emphasized the importance of providing the assessee with a fair opportunity to present their case effectively.