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2025 Supreme(Online)(ITAT) 1451
INCOME TAX APPELLATE TRIBUNAL (PANAJI BENCH)
SHRI PAVAN KUMAR GADALE, SHRI G. D. PADMAHSHALI, JJ
PARKKOT MARITIMA AGENCIES PRIVATE LIMITED VASCO – Appellant
Versus
DEPUTY COMMISSIONER OF INCOME TAX CIRCLE - 1 MARGAO – Respondent
ITA 169/PAN/2023
Mr S V Shivrama Iyer, Capt. Pradeep Arya
The court emphasized the right of an assessee to reconcile discrepancies in reported income and allowed for remand to provide further opportunities for evidence submission.
Headnote:(A) Income-tax Act, 1961 - Sections 143(1), 143(3), 147, and 199 - Assessment proceedings - The assessee's appeal against the order of assessment, which included an addition based on discrepancies in reported income, was examined. The court noted the failure of the assessee to reconcile income discrepancies with third-party confirmations, leading to the addition of ₹1,61,18,565/- to taxable income. (Paras 2, 4, 6)
(B) Remand - The court found merit in the assessee's request for an opportunity to provide evidence to reconcile discrepancies, thus remanding the matter back to the National Faceless Appeal Centre for de-novo adjudication. (Paras 7, 8)
Facts of the case:
The assessee, engaged in stevedoring business, filed a return of income declaring ₹16,69,57,250/-, which was later assessed at ₹16,83,24,088/-. The case was reopened due to discrepancies between figures reported in Form No 26AS and the Audited Financial Statement. The assessee failed to substantiate its claims during the assessment process.
Findings of Court:
The court acknowledged the assessee's failure to reconcile discrepancies but allowed for a remand to provide further opportunities for evidence submission.
Issues: The primary issue was whether the addition to income based on discrepancies reported in Form No 26AS was justified and if the assessee should be granted another opportunity to reconcile these discrepancies.
Ratio Decidendi: The court emphasized the importance of allowing the assessee to present necessary evidential material and reconciliation statements, setting aside the impugned order for a fresh adjudication.
Result: Appeal partly allowed for statistical purposes.
ORDER
PER G. D. PADMAHSHALI, AM;
The assessee is in appeal against DIN & Order No. ITBA/NFAC/S/250/2023-24/1055088420(1) dt. 11/08/2023 passed u/s 250 of the Income-tax Act, 1961 [in short ‘the Act’] by the National Faceless Appeal Centre, Delhi [in short ‘Ld. CIT(A)/NFAC’] which in turn arisen out of order of regular assessment dt. 16/03/2015 framed u/s 143(3) r.w.s 147 of the Act by the Dy. Commissioner of Income Tax, Circle-1, Margao, Goa [in short ‘Ld. AO’].
2. After hearing rival contentions of both the parties; subject to the rule 18 of Income Tax Appellate Rules, 1963 [in short ‘ITAT-Rules’] we have examined the material placed on record and we observed that; the assessee company for the year under consideration was engaged in Stevedoring business, which filed its return of income [in short ‘ITR’] declaring total income of ₹16,69,57,250/-. The said ITR in first place was processed summarily u/s 143(1) of the Act and later selected for scrutiny assessment. The consequential assessment thereupon was completed u/s 143(3) of the Act determining total income in variation to income returned to ₹16,83,24,088/-. The said regular assessment remained unchallenged by the assessee in appeal. Subsequently, upon the receipt of information the case of the assessee for the year under consideration by service of notice u/s 148 of the Act was reopened after obtaining prior approval from the competent authority. On account of effective failure on the part of the assessee to explain the difference of turnover/income reported in the AFS vis-à-vis ITR with that of turnover/income reported in Form No 26AS, the Ld. AO added the difference of ₹1,61,18,565/- and taxed the same as the income of the assessee while culminating assessment u/s 143(3) r.w.s. 147 of the Act vide order dt. 16/03/2015.
3. Aggrieved assessee carried the matter in first appeal but remained unsuccessful. Further aggrieved, the assessee came in present appeal on as many as four argumentative grounds. Dispensing the reproduction thereof it is noted that, the substantive issue raised in effective grounds pressed into service hinges around addition made on the basis of figures reported in Form No 26AS over the figures reported in Audited Financial Statement [in short ‘AFS’] r.w. return of income filed by the assessee company. The first ground being general calling no adjudication. Fourth ground relating to interest u/s 234B & 243D being premature at this stage not pressed for. The legal ground raised in appeal memo is endorsed as not pressed, therefore adjudication thereof is dispensed with. This leaves us with ground No 3 which assailed the addition on merits.
4. We note that, for the year under consideration the assessee had business transaction with three counter parties namely; (a) MSPL Ltd, (b) MSPL Ltd EOU-I unit & EOU-II unit, and (c) Dena Bank. The collective figures of income/payment reported by these counter parties as reflected in Form No. 26AS where higher than the income figures/transactions entered in the books of accounts by the appellant which eventually travelled to AFS. It is also an admitted fact that, the appellant while filing its ITR in the course of re-assessment proceeding have taken full credit of TDS as appearing therein although the corresponding figure of income/receipt however remained out of its consideration for the purpose of taxation. Though the appellant effectively failed to reconcile the discrepancies of income or transactions with the evidential material when notified to it by the tax authorities below, however during the course of hearing was successful in showcasing that the failure on its part to rectify the notified discrepancy was solitarily attributable to non-cooperation of third party in confirming the ledger account balances.
5. We are mindful to the fact that, in any case, an assessee by virtue of provisions of section 199 is entitled to claim credit of all such TDS deducted by a payer of income in accordance with the provisions of cha
