Nusrat Banka, New Delhi V. ITO, Ward- 61(5), New Delhi

ITA 1299/DEL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6340 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 18-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; TDS
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER ITA NO.1299/DEL/2019 ASSESSMENT YEAR: 2010-11 DR. NUSRAT BANKA C/O. SH. AMAR MITTAL D-815, 3 RD FLOOR, RATAN MANI, NEW FRIENDS COLONY, NEW DELHI-110065 PAN NO.ALYPB4979L VS INCOME TAX OFFICER WARD 61 (5) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. NEM SINGH, ADVOCATE RESPONDENT BY SHRI S. L. ANURAGI, SR. DR DATE OF HEARING: 01/08/2019 DATE OF PRONOUNCEMENT: /08/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 19.12.2018 OF THE CIT(A)-20, NEW DELHI RELATING TO A. Y. 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND IS A MEDICAL PRACTITIONER. FROM THE SYSTEM OF DEPARTMENT IT WAS NOTICED THAT THE ASSESSEE HAS NOT FILED HER RETURN OF INCOME FOR THE A. Y.2010-11. INFORMATION WAS RECEIVED THROUGH NMS VIA ITD SYSTEM THAT ASSESSEE DURING THE IMPUGNED PAGE | 2 ASSESSMENT YEAR HAS EARNED FEE FOR PROFESSIONAL / T ECHNICAL SERVICES U/S.194 J TO THE TUNE OF RS.18,41,551/-. THE ASSESSING OFFICER, THEREFORE, INITIATED PROCEEDINGS U/S. 147 OF THE ACT AND ISSUED NOTICE U/S.148. THEREAFTER, THE ASSESSING O FFICER ISSUED STATUTORY NOTICES U/S. 143 (2) AND 142 (1). HOWEVE R, THERE WAS NO PROPER COMPLIANCE FROM THE SIDE OF THE ASSESSEE. T HE ASSESSING OFFICER, THEREFORE, COMPLETED THE ASSESSMENT U/S.14 7/144 OF THE IT ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.18,41,550/-. 3. IN APPEAL THE LD. CIT(A) UPHELD THE ACTION OF TH E ASSESSING OFFICER IN DETERMINING THE INCOME OF RS.18,41,550/- . SHE, HOWEVER, DIRECTED THE ASSESSING OFFICER TO GIVE CRE DIT OF THE TDS. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL :- 1(A). THAT ON FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) IS NOT JUSTIFIED AND CORRECT IN REJECTING THE GROUND TAKEN BY THE APPELLANT THAT THE AO HAS ERRED IN LAW AND ON FACTS IN ASSUMI NG JURISDICTION U/S 147 WITHOUT ANY LEGAL AND VALID MANDATORY SERVI CE OF NOTICE U/S 148 OF THE ACT, THEREFORE THE ORDER PASSED U/S 147/ 144 OF THE ACT IS ARBITRARY, VOID-AB-INITIO, AGAINST THE PRINCIPLES O F NATURAL JUSTICE HENCE LIABLE TO BE QUASHED. (B). THAT THE LD. CIT(A) IS NOT JUSTIFIED AND CORRE CT IN OBSERVING THAT THE NOTICE U/S 148 WAS ISSUED AND SENT BY SPEED POST NOT RECEIVED BACK BY POSTAL DEPARTMENT HENCE THE NATURAL PRESUMPTION THAT IT WA S SERVED IGNORING THE FACT THAT NEITHER THE APPELLANT NOR AN Y RELATIVE WAS LIVING AT THE PREMISE WHERE NOTICES WERE ADDRESSED AND EVE N SUBSEQUENT NOTICE DATED 30.06.2017 RECEIVED BACK WITH NO POSTA L REMARK BY THE AO. 2(A). THAT THE LD CIT(A) HAS ERRED IN LAW AND ON FA CTS IN CONFIRMING THE ACTION OF THE AO, TREATING THE WHOLE PROFESSIONAL RECEIPTS OF RS. 18,41,551/- AS INCOME OF THE ASSESS EE UNDER BEST PAGE | 3 JUDGMENT ASSESSMENT WITHOUT APPRECIATING THE FACT THAT THE RECEIPTS WERE FROM MEDICAL PROFESSION AND LAW PERMITS AN EQU IVALENT TO 50% AD-HOC EXPENSES OF GROSS RECEIPTS AS AN ALLOWABLE E XPENDITURE IN THE CASE OF PROFESSIONAL. (B) THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS NOT JUSTIFIED AND CORRECT IN REJECTING THE ADDITIONAL E VIDENCE FILED UNDER RULE 46A WITHOUT APPRECIATING THE FACT THE APPELLAN T WAS PREVENTED FROM SUFFICIENT CAUSE FOR NOT FILING THE SAME BEFOR E THE AO AS NO SERVICE OF NOTICE WAS MADE TO THE APPELLANT AND THE ORDER WAS EX- PARTE. (C) .THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS NOT JUSTIFIED AND CORRECT IN OBSERVING THAT THERE IS NO SCOPE FOR ALLOWANCE OF ANY EXPENDITURE IGNORING THE DETAILED DOCUMENTS FILED IN SUPPORT OF CLAIM AND THE FACT THAT POWERS OF THE CIT(A) CO-TER MINUS WITH THAT OF ASSESSING AUTHORITIES. (D) THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD AO HAS ERRED IN OBSERVING THAT THE ASSESSEE IS DELIBERATELY/ INT ENTIONALLY AVOIDING THE TAX LIABILITY WITHOUT ANY FURTHER INQUIRY AND APPRE CIATING THE FACT THAT THE TAX WAS DEDUCTED AT SOURCE BY THE PAYER OF THE RECE IPTS AND DEPOSITED TO THE GOVERNMENT ACCOUNT HENCE MERE NON-FURNISHING OF RETURN CANNOT BY ANY STRETCH OF IMAGINATION LEAD TO CONCLUSION OF ES CAPEMENT OF INCOME. 4. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS U/S 271(1)(C), U/ S 271B AND U/S 271F OF THE ACT. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR VERY OR ALTER ANY OF THE GROUNDS OF APPEAL STATED HEREIN ABOVE EI THER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS FREQUENTLY TRAVELLING DUE TO THE ILLNESS OF HER FATHER AS HE WAS SUFFERING FROM CANCER FOR WHICH THE RETURN OF INCOM E COULD NOT BE FILED. FURTHER THE VARIOUS DOCUMENTS FILED BEFORE T HE CIT(A) WERE NOT ACCEPTED BY HER BEING ADDITIONAL EVIDENCES. IN ANY CASE THE PAGE | 4 ENTIRE PROFESSIONAL RECEIPT COULD NOT HAVE BEEN BRO UGHT TO TAX WITHOUT ALLOWING ANY EXPENDITURE WHICH HAS BEEN INC URRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF PROFESSION. HE SUBMITTED THAT IN THE INTEREST OF JUSTICE THE MATTER MAY BE RESTOR ED TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH AF TER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE LD. DR ON THE OTHER HAND STRONGLY OPPOSED TH E ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSES SEE. HE SUBMITTED THAT DESPITE AMPLE OPPORTUNITIES GRANTED BY THE ASSESSING OFFICER THERE WAS NO COMPLIANCE FROM THE SIDE OF THE ASSESSEE. REFERRING TO THE ORDER OF THE CIT(A) HE SUBMITTED THAT SHE HAS REJECTED THE SUBMISSION OF THE ASSESSEE THA T 50% OF THE PROFESSIONAL RECEIPTS SHOULD HAVE BEEN CHARGED TO T AX AS PER PROVISION OF SECTION 44ADA. WHILE REJECTING THE ABO VE SUBMISSION SHE HAD GIVEN REASON THAT THE PROVISION OF SECTION 44ADA CAN ONLY BE ALLOWED TO A PERSON WHO HAS CLAIMED THE SAM E IN RETURN OF INCOME OF FILED. SINCE THE ASSESSEE IN THE INST ANT CASE HAS NEITHER FILED ORIGINAL RETURN NOR FILED ANY RETURN IN RESPONSE TO NOTICE U/S. 148, THEREFORE, THE ORDER OF THE CIT(A) SHOULD BE UPHELD. 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IT IS AN ADM ITTED FACT THAT ALTHOUGH THE ASSESSEE HAD EARNED SUBSTANTIAL PROFES SIONAL INCOME, HOWEVER, SHE HAS NEITHER FILED THE ORIGINAL RETURN OF INCOME NOR FILED THE RETURN OF INCOME IN RESPONSE T O NOTICE U/S.148. IT IS THE EXPLANATION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE WAS FREQUENTLY TRAVELLING AND WAS OUT OF INDIA PAGE | 5 FOR A SUBSTANTIAL PERIOD OF TIME DURING THE FINANCI AL YEAR 2010-11 AND SINCE HER FATHER SUFFERING FROM CANCER, SHE WAS NOT IN A POSITION TO DEVOTE TIME FOR FILING OF RETURN OF INC OME. IT IS ALSO THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE VARIOUS DOCUMENTS FILED BEFORE THE CIT(A) WERE NOT CONSIDER ED BY HER BEING ADDITIONAL EVIDENCES. CONSIDERING THE TOTALIT Y OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE I DEEM IT P ROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GRANT ONE FINAL OPPORTUNITY TO THE ASSESSEE TO SUBS TANTIATE HER CASE AND DECIDE THE ISSUE AS PER FACT AND LAW. THE ASSESSEE IS ALSO HEREBY DIRECTED TO APPEAR BEFORE THE ASSESSING OFFICER AND SUBSTANTIATE HER CASE BY FILING THE REQUISITE DOCUM ENTS / DETAILS FAILING WHICH THE ASSESSING OFFICER IS AT LIBERTY T O PASS APPROPRIATE ORDER AS PER LAW. I HOLD AND DIRECT AC CORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STAT ISTICAL PURPOSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 05.08.2019. SD/- (R.K PANDA) ACCOUNTANT MEMBER *NEHA* DATE:- 05.08.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASS ISTANT REGISTRAR ITAT NEW DELHI PAGE | 6 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 05.08.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER