On August 4, 2021, the Income Tax Appellate Tribunal, Delhi ‘SMC-1’ Bench, delivered a decision concerning the appeal filed by Alloy Cast Pvt Ltd for the assessment year 2018-19 against the order of the CIT(A)-I, New Delhi. The core of the dispute was centered around the adjustments made by the DCIT, CPC Bangalore, which resulted in an increase in the assessed income of the company from the originally filed amount, incorporating various deductions and disallowances.
The primary issues challenged included disallowances under section 43B for TDS/GST/PF/ESI amounts that were allegedly not deposited on time, as well as a specific disallowance of club expenses. The appeal raised critical questions about the jurisdiction of the adjustments made by the CPC and the procedural correctness of the tax audit report entries, which were claimed to have been mistakenly entered under wrong sections.
The tribunal’s detailed analysis focused on the correctness of the procedural aspects and the factual basis for the disallowances made. After careful consideration, the Tribunal found merit in the appellant’s arguments, particularly highlighting the challenges in the procedural handling of tax audit reports and the timely deposit of statutory dues, which were crucial to the outcome of the case.
The Tribunal’s decision to set aside the order and remand the case back to the CIT(A) for a detailed examination of the factual submissions signifies a critical perspective on adherence to procedural fairness in tax assessments. This case is a testament to the complex nature of tax litigation and underscores the importance of accurate reporting and timely compliance in tax matters.
ITA 1611/DEL/2020: Alloy Cast Pvt Ltd Appeals Against Deductions and Disallowances for FY 2018-19
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