2021 (4) TMI 1033

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....lthough that exercise had been carried out by CIT(A) as mandated under the Act? Preface: 4. This is an appeal directed against the order of the Tribunal dated 23.07.2018 passed in ITA No.5756/Del/2013 concerning the assessment year [in short 'AY'] 2007-2008. 5. Pithily put, the assessee is aggrieved by the impugned order passed by the Tribunal, for the reason, that the Tribunal has remanded the matter to the AO to verify the details of the claims placed by the assessee before the CIT(A) and allow the same, subject to satisfaction. The direction of remand issued by the Tribunal is accompanied with a further direction that, before the AO reaches any conclusion, he shall give the assessee an opportunity hearing and only thereafter, decide the issue, as per the facts obtaining in the case and, in accordance with the law. Backdrop: 6. Before we proceed further, what is required to be noticed is the following broad facts: 6.1 The assessee claims that he is engaged in the business of manufacturing and assembling tractors and tractor components. 6.2 On 30.10.2007, the assessee filed the return qua AY 2007-2008 wherein it declared its taxable income as Rs. 147,83,25,740/-.....

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....s of the case, as it was the CIT(A) who had called for the information concerning the fresh claims made by the assessee, and therefore, the question of giving an opportunity to the AO did not arise 7.3. In other words, the contention was that Rule 46A of the Income Tax Rules, 1962 [in short 'the Rules'] had no applicability in the instant case. In sum, the argument was that it was not the assessee who had produced the additional evidence in support of its claim but it was the CIT(A) who had directed the production of material, and therefore, the procedure prescribed under Rule 46A of the Rules was not required to be adhered to. This apart, Mr. Sethi also relied upon sub-rule 4 of Rule 46A to contend that the said sub-rule is an exception to the procedure prescribed under sub-rules 1 to 3 of the said rule and that the said sub-rule empowered the CIT(A), to direct production of evidence, i.e., documents and witnesses, etc., for disposal of the appeal. 7.4. In support of his submission that the provision of Section 250(4) of the Act is distinct from the provisions contained in sub-rules 1 to 3 of Rule 46A of the Rules, Mr. Sethi placed reliance on the judgment of the Bombay....

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....y the assessee could be entertained, and in this context, relied upon the judgments of various Courts and Tribunals. (vi) The CIT(A) thereafter, examined the evidence placed on record by the assessee concerning both the claims, i.e., deductions claimed under Section 80JJAA of the Act and for prior period expenses. The discussion concerning these two claims are set out in paragraphs 6.7.2 and 6.7.3 of the CIT(A)'s order. (vi) The Tribunal via the impugned order, while sustaining the view taken by the CIT(A) that a fresh claim could be entertained by it, has remanded the matter to the AO, as indicated above, for a fresh verification in respect of both the claims. 10. Given the foregoing, what is required to be noticed is that under Section 80JJAA of the Act, the assessee claimed a deduction amounting to Rs. 1,07,33,164/- while in respect of the prior period claim, the assessee claimed a deduction amounting to Rs. 51,21,024/-. The CIT(A), however, allowed the deduction qua prior period expenses, only to the extent of Rs. 25,40,305/-. The remaining amount was disallowed largely on the ground that expenses had been incurred to the extent of Rs. 24,78,391/- witho....

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.... before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. 8.2 In this case, the assessee had the option to submit revise return incorporating it's claimed by 31.3.2009. Therefore, its claim submitted vide letter dated 14.12.2009 is not tenable. Moreover, in view of the decision of Supreme Court in the case of Goetze (India) Ltd. 284 ITR 323, no claim can be entertained by the Assessing Officer without having revised return filed by the assessee. 8.3 Moreover, the assessee has also not substantiated with documentary evidence that it is eligible for deduction under section 80JJAA and liability of Rs. 51,21,024/- was incurred in this assessment year. Thus, on merit also the claim of the assessee fails. 8.4 In view of the above discussion, claim made by the assessee for deduction under section 80JJAA and prior period expenses is rejected. The assessee has also not been able to substantiate the claim of prior period expenditure. Therefore, claim of prior period expenditure is also fails on merit." 11.2. On the other hand, the CIT(A), as noticed above, after entertaining ....

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....which were added back to the taxable income in that year. A copy of the statement of income for assessment year 2008-09 was furnished before me in this regard, which shows that the contention of the appellant is correct. Out of the aforesaid amount of Rs. 75,45,049/-, the appellant had made [the] impugned claim of Rs. 51 ,21,024/- in the current year by holding that the same pertained to the current year. On careful examination of the details furnished by the appellant, I find that majority of the expenses embedded in the amount of Rs. 26,42,633/- were in the nature of travel expenses, etc which were based on the claim in respect of current year made by the employees in subsequent years. Since the appellant was not in receipt of the vouchers raised by the employees at the time of filling of return of income, while the same pertained to the current year, the claim of Rs. 4,92,825/- in respect of the same, is accordingly allowed. However, certain bills such as bill for car MP3Player dated 30.06.2007 of Rs. 3,600/-, cost of mobile phone purchased on 16.08.2007 of Rs.l2,000/- and an amount of Rs. 75,274/- in respect of cost consumption claimed by various clients of the appellant by rai....

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....wever, instead of examining this aspect of the matter, observed, and in our view, incorrectly, that because an opportunity was not given to the AO to examine the material, therefore, the matter needed to be remanded to the AO for a fresh verification. 15. In our view, unless the Tribunal would have reached to a conclusion and expressed its clear view, in that respect, as to what was wrong or missing in the examination made by the CIT(A), a remand was not called for. We agree with Mr. Seth's contention that the CIT(A) in the exercise of its powers under Section 250(4) of the Act was entitled to seek production of documents and/or material to satisfy himself as to whether or not the deductions claimed were sustainable/viable in law. This was, however, a case where the details were placed before the AO, who declined to entertain the claims only on the ground that they did not form part of assessee's original return and that the assessee had not made a course correction by filing a revised return. 15.1. This view was based, as noticed above, on the judgment of the Supreme Court rendered in Goetze (India) Ltd. (Supra). The CIT(A), squarely, dealt with this and concluded, t....