Shri Manish Chopra, Gurgaon V. ITO, Gurgaon

ITA 1112/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4193 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 02-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Assessment record
• Section: 142(1); 133(6)

Judgement Text

1 ITA NO. 1112/DEL/2016 IN THE INCOME TAX APPELLA TE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI G. D. AGRAWAL, PRESIDE NT AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 1112/DEL/2 016 (A.Y 2011-12) MANISH CHOPRA D-170, SUSHANT LOK PHASE-1 GURGAON AAAPC1111A (APPELLANT) VS ITO WARD-1(1) GURGAON (RESPONDENT) APPELLANT BY SHRI SANDEEP KUMAR, CA RESPONDENT BY SH. ARUN KUMAR YADAV, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 21/12/2015 PASSED BY CIT (A)-2, GURGAON FOR ASSESSMENT YEAR 20 11-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. LOWER AUTHORITIES HAVE ERRED IN PASSING/CONFIRM ING ORDERS WHICH ARE BASED ON HYPOTHETICAL GROUNDS, ARE BAD IN LAW, ARE AGAINST PROVISION OF INCOME TAX ACT AND ARE AGAINST LAW OF NATURAL JUSTI CE. 2. THE LOWER AUTHORITIES HAVE GROSSLY ERRED IN MAKI NG/CONFIRMING ADDITIONS OF RS.14,70,308/- (AMOUNT AS DETERMINED BY A.O AFTER A PPEAL EFFECT) ON DATE OF HEARING 04.12.2017 DATE OF PRONOUNCEMENT 05.01.2018 2 ITA NO. 1112/DEL/2016 ACCOUNT OF UNEXPLAINABLE AMOUNT APPEARING IN AS-26 OF APPELLATE ACCOUNT THE ADDITION IS BAD IN LAW AND IS NOT BASED UPON TH E FACTS AND CIRCUMSTANCES AND SUBMISSIONS MAKE BY THE ASSESSEE, IS AGAINST LAW OF NATURAL JUSTICE AND IS ALSO AGAINST THE PROVISION O F INCOME TAX ACT.. 3. RETURN DECLARING INCOME OF RS.1,41,940/- WAS FILED ON 29/09/2011 BY THE ASSESSEE AND NOTICE U/S 143(2) WAS ISSUED ON 20/09/ 2012. NOTICE U/S 142(1) WAS ISSUED ON 1/11/2013 AND 15/11/2014. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER NOTED THAT AS PER FORM 26-AS OF THE ASSESSEE, THE ASSESSEE RECEIVED TOTAL AMOUNT OF RS.98,14,690/- UNDER DIFFERENT HEADS ON WHICH TDS WAS DEDUCTED. THE ASS ESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THESE RECEIPT S WHICH WERE APPEARING IN FORM 26-AS. THE ASSESSEE FILED AFFIDAVIT DECLARING THAT THE RECEIPTS APPEARING IN FORM 26-AS DID NOT BELONG TO HIM. THE ASSESSEE ALSO FILED A FEW CONFIRMATIONS FROM THE DEDUCTORS IN RESPECT TO WHOM RECEIPTS WERE APPEARING IN HIS 26-AS FORM. THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) TO THE DEDUCTORS TO VERIFY THE FACTS OF THE CASE. IN SOME OF THE CASES, REPLIES WERE RECEIVED CONFIRMING THAT THE PAN OF TH E ASSESSEE INADVERTENTLY MENTIONED IN THEIR TDS RETURN. HOWEVER, IN SOME OF THE CASES NO REPLY WAS RECEIVED. THE ASSESSING OFFICER ACCORDINGLY HELD TH AT THE AMOUNT OF RS.92,09,197/- PERTAINING TO THE PERSONS FROM WHOM NO REPLY WAS RECEIVED BUT FROM WHOM RECEIPTS WERE SHOWN AS PER ASSESSEES FORM 26-AS WAS INCOME OF THE ASSESSEE AND ADDED THE SAME TO THE TO TAL INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE SAID ASSESSMENT ORDER THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) HELD THAT AS PER THE A.OS REPORT SOME OF THE CASES OF DEDUCTORS WERE CONFIRMED THAT THERE WAS A MISTAKE IN THE TDS RETURN AND NO AMOUNT WAS PAID TO THE ASSESSEE AFTER VERIFYING THE ASSESSMENT RECORDS. THE CIT(A) DELETED THE ADDITIO N FROM 9 PARTIES FROM WHOM NO AMOUNT WAS RECEIVED BY THE ASSESSEE AND REC EIPT SHOWN IN FORM 3 ITA NO. 1112/DEL/2016 26-AS WAS ON ACCOUNT OF ADVERTENT CLERICAL ERROR. THE CIT(A) FURTHER HELD THAT IN THE REMAINING CASES, THE DEDUCTORS HAVE NOT CONFIRMED THE PAYMENTS TO THE ASSESSEE AND THE LETTERS WERE RECEIVED BACK UNSERVED AS WELL AS THERE WAS NO REPLY FROM THE DEDUCTOR. THUS, THERE WAS NO EVIDENCE ON RECORD TO SHOW THAT THE RECEIPTS PERTAINING TO THESE PERSONS WERE NOT RECEIVED BY THE ASSESSEE. THE CIT(A) HELD THAT AS THE ASSESSEE FAI LED TO BRING ON RECORD ANY EVIDENCE TO CONTROVERT THE RECEIPTS SHOWN AS PER FO RM 26-AS PERTAINING TO THESE DEDUCTORS, THE ADDITIONS PERTAINING TO RECEIP TS SHOWN FROM THESE DEDUCTOR WAS ACCORDINGLY CONFIRMED WHICH WAS AMOUNT ING TO RS.14,70,308/- . 4. THE LD. AR SUBMITTED THAT THE ANALYSIS OF FORM A S-26 ALONG WITH THE FORM 26 FOR ASSESSMENT YEAR 2011-12 WHEREIN THE LD. AR P OINTED OUT THAT CERTAIN DEDUCTORS THAT REFLECTED IN FORM 26-AS WAS NOT AT A LL KNOWN TO THE ASSESSEE AND AT NO POINT OF TIME THE ASSESSEE RECEIVED ANY A MOUNT FROM THESE PARTIES. SINCE, THE ASSESSING OFFICER HAS NOT RECEIVED BACK NOTICES ISSUED UNDER SECTION 133(6) FROM THESE DEDUCTORS, IT IS ON THE P ART OF ASSESSING OFFICER TO ESTABLISH THAT THE ASSESSEE WAS DEALING WITH THESE DEDUCTORS. THE ASSESSEE TIME AND AGAIN SUBMITTED BEFORE THE ASSESSING OFFIC ER AS WELL AS BEFORE THE CIT(A) THAT THE ASSESSEE DO NOT HAVE ANY DEALING W ITH THESE PARTIES. THE LD. AR ALSO SUBMITTED BANK STATEMENT FOR THE ASSESSMENT YEAR 2011-12 WHEREIN THOSE PAYMENTS WERE NOT REFLECTED WHICH WAS APPEARI NG IN THE FORM 26-AS. 5. THE LD. DR SUBMITTED THE CIT(A) AS WELL AS THE A SSESSING OFFICER HAS RIGHTLY MADE ADDITIONS IN RESPECT OF THE PARTIES WHO HAVE N OT CONFIRMED THE PAYMENT. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT IN THE REMAND REPORT D ATED 8/12/2015, THE RESPECTIVE PARTIES MENTIONED THAT THE ASSESSEE WAS NOT THEIR EMPLOYEE AND WAS NEVER PAID A SALARY. THUS, THERE WAS NO PAYMENT MADE TO THE ASSESSEE DURING THE FINANCIAL YEAR 2010-11. THE CIT(A) AS W ELL AS THE ASSESSING OFFICER IGNORED THE FACT THAT THE ASSESSEE WAS NEVER CARRYI NG ON ANY BUSINESS IN PAST 4 ITA NO. 1112/DEL/2016 OR IN PRESENT. IN-FACT, FORM 26-AS REFLECTING THOS E PARTIES WITH WHOM THE ASSESSEE NEVER DEALT AND THE PARTIES ALSO CONFIRMED THAT THE ASSESSEE NEVER DEALT WITH THEM OR WORKED WITH THEM. THE CIT(A) AS WELL AS THE ASSESSING OFFICER CANNOT MAKE ADDITION SIMPLY ON THE REFLECT ION OF THE FROM 26-AS. THE ASSESSEES BANK STATEMENT FOR THE ASSESSMENT YEAR 2 011-12 WHEREIN THOSE PAYMENTS WERE NOT REFLECTED BUT THOSE PAYMENT WERE APPEARING IN THE FORM 26-AS, IS A CRUCIAL EVIDENCE IN FAVOUR OF THE ASSES SEE WHICH WAS TOTALLY OVERLOOKED BY THE ASSESSING OFFICER AS WELL AS BY T HE CIT(A). THEREFORE, THE ASSESSEE HAS MADE OUT HIS CASE AND THE ORDER OF CIT (A) IS SET ASIDE HEREWITH. IT IS PERTINENT TO NOTE THAT IN THE REMAND REPORT D ATED 8/12/2015 IT IS SUBMITTED THAT THE PARTIES APPEARING IN FORM 26-A S OME HAS STATED THAT THE ASSESSEE WAS NOT THEIR EMPLOYEE AND WAS NEVER PAID A SALARY. THE FORM-26AS REVEALED THAT THE ASSESSEE RECEIVED SALARY FROM MOR E THAN 10 GOVERNMENT ORGANIZATION FOR COMMON PERIOD WHICH IS NOT POSSIBL E FOR A SINGLE PERSON TO WORK FOR SO MANY ORGANIZATIONS AT A SIMILAR TIME AN D AT A DIFFERENT PLACES. THEREFORE, IN THIS PRESENT CASE, THERE IS A PECULIA R CIRCUMSTANCES AND THE SAME HAS NOT BEEN PROPERLY VERIFIED BY THE ASSESSIN G OFFICER. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE M ATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE PARTIES WHO HAVE N OT GIVEN ANY REPLY TO THE NOTICE OF THE INCOME TAX ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH JANUARY , 2018 . SD/- SD/- (G. D. AGRAWAL) (SUCHITRA KAMBLE) PRESIDENT J UDICIAL MEMBER DATED: 05/01/2018 R. NAHEED * 5 ITA NO. 1112/DEL/2016 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 04/12/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 04/12/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 5.01.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 5 .01 .201 8 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NO. 1112/DEL/2016