Shri Rajat Mehreja, Chandigarh V. ITO, W-3(2), Chandigarh

ITA 1062/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1456 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-04-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 29-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Set aside; FORM 26AS
• Section: 80C; 142(1); 148; 144; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B,CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI R.L NEGI, JUDICIAL MEMBER ./ ITA NO. 1062/CHD/2019 / ASSESSMENT YEAR : 2010-11 SHRI RAJAT MEHREJA, #135, SECTOR 21A, CHANDIGARH THE INCOME TAX OFFICER, WARD-3(2), CHANDIGARH ./PAN NO: AOKPM6016J / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /ASSESSEE BY : SHRI TEJMOHAN SINGH, ADVOCATE / REVENUE BY : SH ASHOK KUMAR, ADDL. CIT % /DATE OF HEARING : 08.04.2021 % / DATE OF PRONOUNCEMENT : .06.2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 24.05.2019 PASSED BY COMMISSIONER OF INCOME T AX (APPEALS)- 1, CHANDIGARH [FOR SHORT THE CIT(A)] FOR THE ASSE SSMENT YEAR 2010- 11, VIDE WHICH, THE LD. CIT(A) HAS DISMISSED THE AP PEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 14 4 R.W.S. 147 OF THE INCOME TAX ACT, 1961 [FOR SHORT THE ACT]. 2. BRIEF FACTS OF THE CASE EMANATING FROM THE RECOR D AND PLEADINGS OF THE PARTIES ARE THAT THE AO ISSUED NOTICE U/S 14 8 OF THE ACT TO THE APPELLANT/ASSESSEE FOR INITIATING PROCEEDINGS U/S 1 47 OF THE ACT ITA NO.1062-CHD-2019- SHRI RAJAT MEHREJA, CHANDIGARH 2 AGAINST HIM ON THE GROUND THAT DURING THE YEAR RELE VANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION HE BEING AN EMP LOYEE OF A BANK RECEIVED SALARY AMOUNTING TO RS. 8,66,126/-, HOWEVE R, DID NOT FILE RETURN OF HIS INCOME. NO RETURN WAS FILED BY THE AS SESSEE IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THEREAFTER THE AO ISSUED NOTICE U/S 142(1) OF THE ACT ON 05.05.2017 AND 15.11.2017. SIN CE NO RESPONSE WAS RECEIVED FROM THE ASSESSEE, AO ISSUED SHOW CAUS E NOTICE ALONG WITH NOTICE U/S 142(1) OF THE ACT, DIRECTING THE AS SESSEE TO SHOW CAUSE ON OR BEFORE 28.11.2017 AS TO WHY THE ASSESSM ENT SHOULD NOT BE COMPLETED U/S 144 OF THE ACT AND THE AMOUNT RECEIVE D SHOULD NOT BE TREATED AS HIS TAXABLE INCOME. THE SAID NOTICES WER E SERVED BY AFFIXING THE COPIES THEREOF. HOWEVER, ON THE SAID D ATE NEITHER ANYBODY ATTENDED NOR ANY APPLICATION FOR ADJOURNMEN T WAS RECEIVED BY THE AO. THE AO IN ORDER TO AFFORD ONE MORE OPPOR TUNITY IN THE INTEREST OF JUSTICE, ADJOURNED THE PROCEEDINGS AND ISSUED LETTER TO THE ASSESSEE TO APPEAR ON THE NEXT DATE FIXED FOR HEARI NG AND FURNISH REPLY IF ANY. SINCE NO RESPONSE WAS RECEIVED, AO DE CIDED TO PROCEED EX-PARTE AND COMPLETED THE ASSESSMENT U/S 144 R.W.S. 147 OF THE ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND DE TERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.8,66,126/-, TREATING T HE AMOUNT RECEIVED BY THE ASSESSEE AS HIS TAXABLE INCOME. ITA NO.1062-CHD-2019- SHRI RAJAT MEHREJA, CHANDIGARH 3 3. AGGRIEVED BY THE EX PARTE ASSESSMENT ORDER PASSED BY THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A). THE LD. CIT(A) AFTER HEARING THE ASSESSEE DISMISSED THE APP EAL AND CONFIRMED THE ACTION OF THE AO. AGAINST THE SAID ORDER, THE A SSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 4. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER B Y RAISING THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING T HE BEST JUDGMENT ASSESSMENT MADE U/S 144 RW 147 OF THE ACT WITHOUT AFFORDING A PROPER OPPORTUNITY OF HEARING WHICH IS AGAINST ''THE PRINCIPALS OF NATURA L JUSTICE AND AS SUCH THE ASSESSMENT FRAMED IS ILLEGA L, ARBITRARY AND UNJUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE REOPENING THE ASSESSMENT BY ISSUANCE OF NOTICE U/S 148 IN AS MUCH AS THERE H AS BEEN NO ESCAPEMENT OF INCOME AND AS SUCH THE ASSESSMENT FRAMED IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 8,66,126/- FOR SALARY RECEIVED FROM OUT OF ALLEGED UNDISCLOSED SOURCES ONLY FOR THE REASON THAT THE ASSESSEE DID NOT FILE AN APPLICATION FOR ADDITIONAL EVIDENCE WHICH IS ARBITRARY AND UNJUSTIFIED. 4. THAT THE SALARY HAS BEEN RECEIVED FROM M/S STANDARD CHARTERED BANK AS IS EVIDENT FROM FORM 26AS WHICH IS PART OF INCOME TAX RECORD ON WHICH THE DUE TAXES HAVE ALSO BEEN DEDUCTED WHICH FACT HAS NOT BEEN VERIFIED BY THE ASSESSING OFFICER SHOWING TOTAL NON - APPLICATION OF MIND WHILE FRAMING BEST JUDGMENT ITA NO.1062-CHD-2019- SHRI RAJAT MEHREJA, CHANDIGARH 4 ASSESSMENT AND UPHOLDING OF THE SAME BY COMMISSIONER OF INCOME TAX (APPEALS) ON TECHNICAL GROUNDS IS ARBITRARY AND UNJUSTIFIED. 5. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) UPHOLDING THE ORDER PASSED UNDER SECTION 144/147 OF THE ACT IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 5. AT THE OUTSET, THE LD. COUNSEL SUBMITTED THE ASSESSEE DOES NOT WANT TO PRESS GROUND NO 1 AND 2 OF THE APPEAL, THER EFORE, THE SAME MAY BE DISMISSED AS NOT PRESSED. IN VIEW OF THE SUB MISSIONS MADE BY THE LD. COUNSEL, WE DISMISS GROUND NO. 1 & 2 OF THE APPEAL AS NOT PRESSED. 6. NOW THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS WRONGLY UPHELD THE ADDITION OF RS. 8,66,126/-MADE B Y THE AO AFTER REJECTING THE ADDITIONAL EVIDENCE PRODUCED DURING A PPELLATE PROCEEDING FOR THE REASON THAT THE ASSESSEE HAS NOT FILED AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULERS (RULES) FOR ADMISSION OF ADDITIONAL EVIDENCE. THE LD. COUNSEL F URTHER SUBMITTED THAT SINCE THE AO HAD PASSED THE ASSESSMENT ORDER U /S 144 R.W.S. 147 OF THE ACT WITHOUT HEARING THE ASSESSEE, THE LD. CI T(A) OUGHT TO HAVE TAKEN INTO CONSIDERATION THE DOCUMENTS PRODUCED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS. THE LD. COUNSEL FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ONLY ENDORSE THE EX-PARTE ASSESSMENT ORDER PASSED BY THE AO WITHOUT POINTING OUT ANY COGENT ITA NO.1062-CHD-2019- SHRI RAJAT MEHREJA, CHANDIGARH 5 REASON FOR NOT CONSIDERING THE DOCUMENTS PLACED ON RECORD DURING THE APPELLATE PROCEEDINGS. THE LD. COUNSEL FURTHER SUBM ITTED THAT AS PER FORM 16, DURING THE PREVIOUS YEAR THE ASSESSEE RECE IVED GROSS SALARY OF RS. 7,84,650/- AND AFTER TAKING BENEFIT U/S 10 O F THE ACT AND DEDUCTION U/S 80C OF THE ACT, TAXABLE INCOME REMAIN ED RS. 6, 41,700/- ON WHICH THE M/S STANDARD CHARTERED BANK D EDUCTED TAX AT SOURCE AMOUNTING TO RS. 82,951/-. SINCE, THE ASSESS EE HAS ALREADY PAID THE TAX THE LD. CIT(A) HAS WRONGLY AFFIRMED TH E ACTION OF THE AO. 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESE NTATIVE SUPPORTING THE ORDER PASSED BY THE LD. CIT(A) SUBMI TTED THAT SINCE THE ASSESSEE DID NOT FILE PROPER APPLICATION UNDER RULE 46, THE LD. CIT(A) HAS RIGHTLY REJECTED THE REQUEST OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN GRIEVANCE OF THE APPELLANT/ASSESSEE IS THAT THE LD. CIT(A) HAS WRONG LY DECLINED TO ADMIT THE ADDITIONAL EVIDENCE WHICH THE ASSESSEE WA NTED TO RELY DURING THE APPELLATE PROCEEDINGS. ADMITTEDLY, IN TH IS CASE, THE AO HAS PASSED THE ASSESSMENT ORDER U/S 144 OF THE ACT AND THE ASSESSEE COULD NEITHER FILE ANY DOCUMENT IN SUPPORT OF HIS CONTENTION NOR ARGUE HIS CASE PERSONALLY OR THROUGH HIS ITA NO.1062-CHD-2019- SHRI RAJAT MEHREJA, CHANDIGARH 6 REPRESENTATIVE. UNDER THESE CIRCUMSTANCES THE ASSES SEE HAD NO OPTION BUT TO ADDUCE ADDITIONAL EVIDENCE AND PLEAD HIS CASE BEFORE THE APPELLATE AUTHORITY. HENCE, THE ASSESSEE REQUES TED THE LD. CIT(A) TO ADMIT THE ADDITIONAL EVIDENCE. UNDER RULE 46A OF THE RULES, THE CIT(A) HAS JURISDICTION TO ALLOW ADDITIO NAL EVIDENCE IN THE FOLLOWING CIRCUMSTANCES: (A) WHERE THE AO HAS REFUSED TO ADMIT EVIDENCE, WHI CH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE AO; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL: OR (D) WHERE THE AO HAS MADE THE ORDER APPEALED AGAINS T WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELL ANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. 9. IN THE PRESENT CASE, SINCE THE ASSESSMENT ORDER HAD BEEN PASSED U/S 144 OF THE ACT, THE ASSESSEE HAD NO OCCA SION TO PLACE ON THE RECORD THE RELEVANT EVIDENCE ESSENTIAL FOR T HE JUST DECISION OF THE CASE. FURTHER, IT IS NOT APPARENT FROM THE A SSESSMENT ORDER THAT THE NOTICES ISSUED/SENT TO THE ASSESSEE WERE S ERVED UPON HIM AND THE DESPITE THE SERVICE OF NOTICES, THE ASSESSE E FAILED TO APPEAR BEFORE THE AO. UNDER THESE CIRCUMSTANCES, TH E ASSESSEE ITA NO.1062-CHD-2019- SHRI RAJAT MEHREJA, CHANDIGARH 7 HAD NO OPTION BUT TO ADDUCE ADDITIONAL EVIDENCE BEF ORE THE LD. CIT(A). HENCE, IN OUR CONSIDERED VIEW, THE LD. CIT( A) OUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDENCE WHICH THE ASS ESSEE INTENDED TO ADDUCE. AS POINTED OUT BY THE LD. COUNSEL THE LD . CIT(A) HAS DECLINED TO ADMIT THE ADDITIONAL EVIDENCE ONLY FOR THE REASON THAT THE ASSESSEE HAS NOT FILED AN APPLICATION UNDER RUL E 46. WE FURTHER NOTICE THAT LD. CIT(A) HAS NOT EVEN DISCUSS ED THE NATURE OF EVIDENCE WHICH THE ASSESSEE INTENDED TO PLACE ON RECORD AND ITS RELEVANCE IN ADJUDICATION OF THE ISSUES RAISED BY T HE APPELLANT. 10. THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS 1987 SCR (2) 3 87 HAS INTER ALIA HELD THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, THE C AUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED. 11. IN VIEW OF THE FACTS OF THE CASE AND THE CIRCUM STANCES UNDER WHICH THE LD. CIT(A) HAS DISMISSED THE APPEAL OF TH E ASSESSEE AND THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE REFERRED ABOVE, WE HOLD THAT THE ACTION OF THE LD. CIT(A) IS NOT SUSTAINABLE IN LAW. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SHOULD GET AN OPPORTUNITY TO PRESENT HIS C ASE BEFORE THE LD. CIT(A) ON THE BASIS OF THE ADDITIONAL EVIDENCE. WE THEREFORE, SET ASIDE THE IMPUGNED ORDER IN THE INTEREST OF JUS TICE AND SEND THE ITA NO.1062-CHD-2019- SHRI RAJAT MEHREJA, CHANDIGARH 8 APPEAL BACK TO THE LD. CIT(A) FOR DECIDING THE ISSU ES AFRESH AFTER TAKING INTO CONSIDERATION THE ADDITIONAL EVIDENCE P RODUCED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS AND FURTH ER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELL ANT/ASSESSEE. ACCORDINGLY, WE DIRECT THE ASSESSEE TO APPEAR BEFOR E THE LD. CIT(A) AND NOT TO SEEK ADJOURNMENTS ON ANY FRIVOLOU S GROUNDS. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH JUNE 2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 30.06.2021 .. ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / / CIT 4. / ( )/ THE CIT(A) 5. - 2 , %2 , 4 / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR