ITO ward-2(2), Ghaziabad V. Rajeev Gupta, Ghaziabad

CO 110/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4434 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-05-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 12-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68; 11; 15; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER I.T.A. No.1835/DEL/2019 Assessment Year 2015-16 Rajeev Gupta, B-9, Surya Nagar, Ghaziabad. v. ITO, Ward-2(2), Ghaziabad. TAN/PAN: AHIPG7473L (Appellant) (Respondent) CO No.110/DEL/2019 (Arising out of ITA No.1835/DEL/2019 Assessment Year 2015-16 ITO, Ward-2(2), Ghaziabad. v. Rajeev Gupta, B-9, Surya Nagar, Ghaziabad. TAN/PAN: AHIPG7473L (Appellant) (Respondent) Appellant by: Shri P.C. Yadav, Adv. Shri S.K. Srivastav, IRS, Ms. Manjubala Yadav, Adv. Shri Prince Kumar, Adv. Ms. Surbhi Srivastav, Ad. Respondent by: Shri Vivek Gurnani, Proxy Counsel for Shri Zoheb Hossain, Senior counsel for the Revenue. Date of hearing: 13 04 2022 Date of pronouncement: 09 05 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap peal h as b een filed at th e in s tan ce o f th e Assessee an d th e Cro ss Ob ject io n at th e in s tan ce o f th e Rev en u e I.T.A. No.1835/Del/2019 & CO No.110/Del/2019 2 ag ain st th e o rd er of th e Co mmi ssio n e r o f In co me Tax (Ap p eals)-I, No id a [‘CIT(A)’ i n sh o rt], d a ted 2 8 .0 9 .2 01 8 arisin g fro m THE assess men t o rd er d ated 2 9 .1 2 .20 17 p assed by th e Assessin g Officer (AO) u n d er Sect io n 1 4 3(3 ) of th e In co me Tax Act, 1 9 6 1 (th e Act) co n cern in g AY 20 1 5-1 6 . 2 . Wh en th e mat ter was cal led fo r h ea rin g , ld . co u nsel fo r th e assesse e su b mit te d th at th e Assessin g Offi cer h as in tera l ia emb ark ed u p on add itio n s u n d er Sectio n 6 8 r.w. Sectio n 1 1 5 BBE o f th e Act a mo u n tin g to Rs.4 7 ,4 8 ,7 9 5/- in g ro ss in fr ing emen t o f p rin cip les o f n atu r al ju st ice . It was su b mit ted th at th e Assessin g Officer h as a lleg ed Lo n g Term C ap ita l Ga in earn e d by th e assesse e to b e n o n g enu in e an d in th e n atu re o f p rearran g ed acco mmo d at io n entry liab l e to b e tax ed u nd er Section 68 r.w. Sect io n 1 1 5 BBE o f th e Ac t main l y o n th e b asis o f cert ain sta te men ts o f th e al leg ed en try o p erato rs. Th e co p ies o f th e sta te men ts were c o n fro n ted to th e assesse e o n 1 5 .1 2.2 0 1 7 . The assesse e rep l ied th ereto in o b jec ti o n v id e su b miss io n s d ated 2 6 .1 2 .20 1 7 and d en ied an y relat io n o r tran sact io n with th ese en try o p erato rs an d u rg ed fo r cro ss-ex amin atio n o f th e s ta te men t o f th e d ep o n en t. Th e o b ject io n o f th e asses see was h o wev er disp o sed o f ag ain st th e asses see wi th o u t an y fu rth er o p p o rtu n ity an d th e assess men t o rd er was p assed u nd er Sectio n 1 4 3 (3) v id e o rd er d ated 2 9 .1 2 .20 1 7 . It was th u s su b mitt ed th at Assessin g Officer h as u n ilater al ly rejec te d th e req u est o f th e assesse e with o u t an y p ro p er o p po rtu n ity mad e av ail ab le to th e as sessee . It was su b mi t ted th a t th e asses see h as b een d en ied with its v a lu ab le r ig ht o f cro ss- ex amin at io n o f th ese d ep o n en ts. It was su b mi tted that t h e rig h t o f h earin g is th e fu n d amen ta l face t o f p rin cip les o f nat u ral ju s tic e wh ich h as b een clearly v io lat ed in th e p resen t case. Ld . co u n sel I.T.A. No.1835/Del/2019 & CO No.110/Del/2019 3 acco rd in g ly su b mitted th at th e ad d i t io n s mad e is req u ired to b e d elet ed o r altern at iv ely th e mat ter b e remit ted b ack to th e file o f th e Assessin g Offi cer fo r fra min g th e assess men t o rd er in co n fo rmi ty with th e p rin cip l es o f n at u ral ju s tic e. 3 . Ld . DR fo r th e Re v en u e, o n th e o ther h an d , su b mitt ed th at th e st at emen ts o f t h e witn esses in q u est io n were d uly pro v id ed to th e asses see . It was n ex t su b mi tt ed th at th e rig h t o f cro ss- ex amin at io n is n o t ab so lu te an d th u s n o t av ai la b le in a l l circu ms tan ce s. Su ch rig h t wil l h av e to b e ap p lied de p en d in g on th e fac ts an d c irc u mstan c es o f th e case an d can n o t b e p u t in to a straig h t jack e t. I t was th u s co n ten d ed th at n o p rejud ic e is , in fa ct , cau sed to th e a ssessee wh en th e sta te men t was ad mi tt ed ly p ro v id ed . 4 . In th e p resen t app eal, th e erstwh il e ld . CIT(A), Sh ri S.K. Sriv astav a wh o is th e au th o r o f th e imp u g n ed first ap p ell at e o rd er also in terv en ed to ch al len g e in th e Cro ss Ob ject io n fi led b y th e Rev en u e an d so ug h t p ermiss io n o f th e Ben ch to d efend h is p erso n al p o sitio n i n th e mat ter. It wa s su b mi tt ed th at th e Rev en u e in th e Cro ss Ob ject io n h as con ten d ed th at th en ld . CIT(A)-I, No id a, (Sh ri S.K. Sriv astav a) was n o t v ested wi th th e j u risd ict io n to p ass th e first ap p ella te o rd er as p er th e Cro ss Ob ject io n s. Su ch o b jectio n o f Rev en u e carries re flec tio n s ag ain st the au th o r o f firs t ap p ella te o rd er p erso n ally . Sh ri Sr iv astav a su b mi t ted t h at in th e p resen t case , th e firs t ap p el la te a u th o rity h as p assed ex-p a rte o rd er d u e to no n co mp lian c e b y th e assesse e an d th e first ap p eal was, in fact , d is mi ssed an d ad ju d ica ted ag ain s t th e assesse e. Th erefo re, to in fe r ma la fid e in th e firs t ap p el lat e o rder an d th e cla i m o f Rev en u e th at firs t ap p el la te au th o rity h as ex ceed ed h is I.T.A. No.1835/Del/2019 & CO No.110/Del/2019 4 ju risd ic tio n is far fe tch ed . It was also su b mi t ted th at th e th en CIT(A) p ro ceed ed to p ass th e o rd er in acco rd an ce wit h law. Mr . Sriv astav a th u s reco rd ed h is o b jecti o n to co un ter th e al leg at io n th at th e o rd er p assed b y th e CIT(A) No id a was with ou t an y ju risd ic tio n al man d ate. 5 . We h av e d isp assio n ately h eard resp ect iv e p arties. Th e assesse e h as in v o ked th e fu n d amen ta l p rin cip les o f n at u ral ju st ic e an d all eg ed th at th e sa me h as n o t b e en fo l lo wed b y th e Assessin g Officer . Need les s to say , th ese p rin cip les are th e b ac k b on e o f a ju d icia l sy ste m an d is an in sep arab l e in g red ien t o f fa irn ess an d reaso n ab len ess. It is co n ten d ed o n beh al f o f th e assess ee th at th e ad d itio n s mad e in th e p resen t c ase to ward s u n exp lain ed cred its u n d er Sectio n 6 8 r.w. Sec tio n 1 1 5 BBE is p ri mar ily on t h e b asis o f o ral ev id en ce o f th ird p arties wh o h av e b een alleg ed as en try o p erato rs. Th e assessee d en ies t o h av e en tered in to an y tran sac tio n s wi th th ese p arti es, a n d th erefo re, co nsid ered it n ecessary to cro ss-ex amin e th e wi tn esses wh o d ep o se b efo re th e In co me Tax Au th o ritie s to th e p reju d ice o f th e a ssessee . A referen ce to th e d ecisio n o f th e Ho n’b le Su preme Cou rt in An d ama n Timb er In d u stries vs. CIT , (2 0 1 5 ) 6 2 ta xma nn .co m 3 (S C ) was mad e to su p p o rt its co n te n tio n . It was th u s con ten d ed th at th e Assessin g Offi cer h as co mmi t ted a serio u s flaw in n o t ab id in g b y th e p rin cip le s o f n atu ral ju st ice wh ich ren d ers th e assess men t o rd er to b e a nu lli ty . It is th e co n ten ti o n o f th e assesse e th a t o p p o rtu n ity to cro ss-ex amin e th e wi tness was sp eci fi cal ly ask ed to th e Assessin g Officer to d is cred it th e tes ti mo n y o f th e witn esses . We als o simu l tan eo u sly n o te th e p lea o f th e Rev en u e th at th e s tat e men t o f th e witn esses wer e p ro v id ed an d d en ial o f cr o ss-ex amin a tio n i n th e c ircu ms tan ces is n o t I.T.A. No.1835/Del/2019 & CO No.110/Del/2019 5 ab so lu te an d d o es n o t co mp ro mise with th e p rin c ip les o f n a tu ral ju sti ce. 6 . Th e seq u en ce o f ev en t n arrated o n b eh alf o f th e as s essee d ep icts th at th e s h o w cau se no tice an d th e stat e ment o f witn ess was serv ed o n th e assesse e at th e fag en d on 1 5 .1 2 .20 17 . Th e rep ly th ereto was fi led b y th e assessee o n 26 .1 2 .2 01 7 wh erein th e all eg at io n o f th e Assessin g Officer th at th e Lo n g Term Cap i ta l Gain earn ed b y th e assessee is an acco mmo d at io n en try was d en ied . Th e o b jec t io n was d isp o sed o f an d th e a ssess men t o rd er was p assed p ro mp t ly th erea fter o n 2 9 .1 2 .2 0 17 . Th ese se q u en ce o f ev en ts sh o w th at reaso n ab le o p p ortu n ity to th e assess e e as to why th e ma tt er can n o t p ro ceed with o u t cro ss-ex amin at io n an d why cro ss-ex amin a tio n is n ecess ary d esp ite it is n o t b ein g ab so lu te, was n o t p ro v id ed to th e assesse e at al l. Su ch ac t ion o f th e Assessin g Offi cer h as resu l ted in so mewh at arb itrarin ess wh il e p assin g th e assess men t o rd er. Un d er th ese circu ms tan ce s, we d eem it ex p ed ien t to rest o re th e mat ter b ac k to th e fi le o f th e Assessin g Officer fo r g ran t i n g p rop er o pp o rtu n ity to th e ass essee wh i le fra min g th e ass ess men t o rd er. 7 . In th e fac tu al b ack d ro p , th e q u estio n as to wh eth er th e c ro ss- ex amin at io n is n ecessary in th e fac ts o f th e cas e sh al l b e ad ju d icat ed b y th e Assessin g Offi cer after g ran ti n g p rop er o p po rtu n ity in th is reg ard to th e asse ssee an d th u s k ep t o p en wh ile remit tin g th e ma tt er b ack to th e fi l e o f th e Asses sin g Offi cer. No ticeab ly , th e CI T(A) h as d isp o sed o f th e first app ea l e x-p a rte an d th u s pro cess of reaso n in g o n merits o n fac tu al asp ects ra ised o n b eh alf o f th e assesse e are n o t d isc ern ib le . Pe rtin en t to resp ect fu lly n o te h ere th e o b serv atio n s o f th e Hon ’b le Su p reme I.T.A. No.1835/Del/2019 & CO No.110/Del/2019 6 Co u rt in th e c ase o f T in b o x Co . v s. CIT 2 4 9 ITR 2 1 6 (2 0 0 1) wh erein th e Ho n ’b le Su p reme Co u rt o b serv ed th at th e asse ssee co u ld h av e p laced ev id en ce b efo re th e First Ap p ellate Au th o rity o r b efo re th e Trib u n al is real ly o f n o co n sequ en ce fo r it is assess men t o rd er t h at co u n ts. Th at t h e assess men t ord er mu st b e mad e after th e ass essee h as b een g i v en a reaso n ab le o p po rtu n ity fo r sett in g o u t h is case. In th e lig h t o f su ch o b serv atio ns, th e o rd er o f th e Firs t Ap p ellat e Au th o rity u n der ch all en g e is se t asid e an d th e mat ter is re mit ted b ack to th e fi le o f th e Assessin g Officer fo r fra min g th e ass ess men t o rd er d en o vo in acco rd an ce with l aw b y o b serv in g th e p rin cip les o f n atu ra l ju sti ce. Co n sequ en tly , th e Cro ss Ob ject io n o f th e Rev en u e is th u s d is mis sed as in fr u ctu o u s. 6 . In th e resu lt, th e ap p eal o f th e a ssessee is a llo we d fo r sta tis ti ca l p u rp o ses wh ereas th e Cro ss Ob ject io n o f th e Rev en u e is d ismissed . Order was pronounced in the open Court on 09/05/2022. Sd/- Sd/- [NARENDER KUMAR CHOUDHRY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09/05/2022 Prabhat