The Delhi bench of the Income Tax Appellate Tribunal (ITAT) allowed relief to the Steel Authority of India by directing to rework disallowance made under Section 14A of the Income Tax Act, 1961 without following directions made by the Commissioner of Income Tax (Appeal).
The Assessee, Steel Authority of India is a company stated to be engaged in the business of manufacturing and sale of steel and steel products. The assessee electronically filed its original return of income for the Assessment year 2010-11 declaring income of Rs.9,58,330.01 lakhs.
Subsequently, the assessee revised the return of income by revising the income to Rs.9,57,228.23 lakhs. The case of the assessee was selected for scrutiny and assessment was framed under Section 143(3) of the Income Tax Act vide order dated 11.03.2013 and the total income was determined at Rs.9,84,952.18 lakhs.
The assessee carried the matter before the Commissioner of Income Tax (Appeals) who allowed the appeal of the assessee and also gave certain directions to the Assessing Officer.
Consequent to the order of the Commissioner of Income Tax (Appeals), Assessing Officer passed an order under Section 250 wherein the total income was computed at Rs.9,60,862.88 lakhs.
The Authorized Representative submitted that this is the third round of litigation in respect of disallowance under Section 14A of the Income Tax Act and the credit for TDS as claimed in the revised return as per the 26AS statement.
It was also submitted that the Commissioner of Income Tax (Appeals) in the order directed the Assessing Officer to re-calculate the disallowance under Section 14A.
It was pointed out that the assessing officer did not deal with the directions of the Commissioner of Income Tax (Appeals) through the submissions filed before the assessing officer during the appeal.
Further, submitted that if the assessing officer does not grant relief as per the direction of appellate authorities then the assessee has the right to appeal any number of times till the income is correctly assessed or tax is correctly determined. Therefore submitted that the assessing officer be directed to work out the disallowance under Section 14A promptly as per the directions of the Commissioner of Income Tax (Appeal) in the first and second round of orders.
In the first round, the Commissioner of Income Tax (Appeal) had directed the assessing officer to work out the disallowance as per the directions contained in the order which was not complied with by the assessing officer.
Further, in the second round, the Commissioner of Income Tax (Appeal) again directed the assessing officer to work out the disallowance under Section 14A as per the directions contained therein but the same was also not complied with by the assessing officer.
The assessing officer did not grant credit to the TDS claimed in the revised return as per the 26AS statement and further there were no discussions in the order passed. When the matter was carried before the Commissioner of Income Tax (Appeal) in the first round, it gave directions to the assessing officer to grant the credit for prepaid taxes and rework the tax and interests due under Section 243B and 234C of the Income Tax Act.
The direction of the Commissioner of Income Tax (Appeal) has not been followed by the assessing officer. The authorized representative, therefore, submitted that the assessing officer be directed to grant the credit of the prepaid taxes and TDS.
The two-bench member consisting of Anil Chaturvedi (Accountant member) and Chandra Mohan Garg (Judicial member) held that despite the directions of the Commissioner of Income Tax (Appeal) to the assessing officer to grant the credit for TDS and prepaid taxes, the AO has not granted the same.
The assessing officer was directed to promptly grant the credit of the prepaid taxes including TDS which is allowable to the assessee in accordance with law at the earliest. Thus, the ground of the assessee is allowed.
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