Hemraj Choudhari, CHENNAI V. ACIT, CHENNAI

ITA 1311/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8108 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 11-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: LAKSHMICHAND NAHATA
• Keywords: Principle of natural justice; Additional evidence
• Section: 80G; 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.1311/MDS/2016 / ASSESSMENT YEAR : 2011-12 SHRI HEMRAJ CHOUDHARI, HEMS INDIA, 46, TNHB COMPLEX, LUX CHURCH ROAD, MYLAPORE, CHENNAI 600 004. [PAN : AACPC 4721 A] V. THE ASSTT. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 1, CHENNAI 34. ( /APPELLANT) ( !' /RESPONDENT) # / APPELLANT BY : SHRI LAKSHMICHAND NAHATA, CA !' # /RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT # /DATE OF HEARING : 11.01.2017 # /DATE OF PRONOUNCEMENT : 30.01.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI DAT ED 03.03.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2011-12. 2.0 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL AND CHALLENGED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS): :- 2-: ITA NO.1311/MDS/2016 1) THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) IS CONTRARY TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE AND IS OPPOSED TO THE PRINCIPLES OF EQUITY, NATURAL JUSTICE AND FAIR PLAY. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE CONSIDERED THAT THE APPELLANT HAS PROVIDED ALL THE NECESSARY P ROOF TO ESTABLISH THAT HE HAS GENUINELY GIVEN THE PAYMENT TO THE SOCIETY AND IT I S PRACTICALLY NOT POSSIBLE TO TRAVEL WITH THE MONEY GIVEN. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE CONSIDERED THAT THE ADDITIONAL EVIDENCE OF LETTER TO THE BANK TO CONFIRM THAT HIS PAYMENT HAS REACHED THE SOCIETY BANK. THE BANK HAS ONLY WR ITTEN THAT THIS ACCOUNT IS UNDER INVESTIGATION BY EOW, CID, WEST BENGAL. BUT I T IS NOT CLEAR ABOUT WHAT IS THE CRIME FOR WHICH SUCH INVESTIGATION IS ON? 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE CONSIDERED THAT BY ACKNOWLEDGING THE SOCIETY AS REAL, HE HAS T O ALLOW THE DEDUCTION UNLESS HE CLEARLY ESTABLISHES THE MISCREANTS TO THE APPELL ANT OR THAT MONEY CAME BACK TO THE APPELLANT BEYOND THE DOUBT. 5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT NOT TO HAVE CONSIDERED THE REMAND REPORT WHICH MERELY JOINS THE LINK TILL A CONVENIENT POINT AND THERE AFTER WITHOUT ESTABLISHING IT TILL THE AP PELLANT, MERELY STATES THAT DUE TO PAUCITY OF TIME, THE DETAILS OF SAME COULD NOT BE CALLED FOR. [PARA 1 LINE 11 OF PAGE 6 OF CIT [A] ORDER] 6) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE CONSIDERED THAT THE SOCIETY AND PRESIDENT OF THE SOCIETY HAS S OME INTERNAL PROBLEMS AND THEY HAVE BLAMED OFFICIALS OF BANK AND OTHERS BUT N ONE IS DIRECTED AGAINST THE APPELLANT. IT IS UNFORTUNATE THAT APPELLANT HAS DE ALT WITH SUCH WRONG SOCIETY. 7) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE CONSIDERED THAT FIVE SUCH DONATIONS WERE MADE DURING THE YEAR AND THE INTENTION OF THE ASSESSEE IS BENEVOLENT ONLY. ONLY WHEN FACT IS PERC EIVED WITH PRE-CONCEIVED NOTION, THAT IT GIVES ABSURD RESULTS. 8) THE APPELLANT OBJECTS TO THE LEVY OF INTEREST U/S.2 34 A,B,C. 3.0 ALL THE GROUNDS OF APPEAL ARE RELATED TO THE DISAL LOWANCE OF WEIGHTED DEDUCTION CLAIMED BY THE ASSESSEE UNDER SE CTION 35(1)(II) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSEE HAS MADE THE DONATION OF RS.15.00 LAKHS TO SOCIETY FOR WELF ARE OF THE HANDICAPPED PERSONS, DURGAPUR (HEREINAFTER REFERRED TO AS SOC IETY), ALONG WITH OTHER DONATIONS MADE TO THE VARIOUS CHARITABLE INSTITUTIO NS AND CLAIMED DEDUCTION UNDER SECTION 80G AND SECTION 35(1)(II) O F THE ACT. THE AMOUNT OF DEDUCTION CLAIMED BY THE ASSESSEE TOWARDS THE DONATION OF RS.15.00 LAKHS UNDER SECTION 35(1)(II) RELATING TO SOCIETY FOR WELFARE OF HANDICAPPED PERSONS WAS RS.26,25,000/- AT THE RATE OF 175% OF THE DONATION. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER CALLED FOR THE INFORMATION AND ALSO RECORDE D STATEMENT UNDER :- 3-: ITA NO.1311/MDS/2016 SECTION 131 OF THE ACT FROM THE ASSESSEE. IN THE S TATEMENT RECORDED UNDER SECTION 131 OF THE ACT, THE ASSESSEE COULD NO T FURNISH THE DETAILS EXCEPT STATING THAT THE DONATION WAS PAID BY CHEQUE AND THE PAYMENT WAS MADE BY HIS ELDER BROTHER WHO WAS NO MORE. THE ASSESSING OFFICER HAS CALLED FOR CONFIRMATION FROM THE PRESIDENT OF T HE SOCIETY AND THE RECIPIENT HAS DENIED THE RECEIPT OF DONATION VIDE L ETTER DATED 08.10.2013. WHEN THIS INFORMATION WAS CONFRONTED WITH THE ASSES SEE, THE ASSESSEE COULD NOT OFFER SATISFACTORY EXPLANATION TO THE ASS ESSING OFFICER. THEREFORE, THE ASSESSING OFFICER TREATED THE DONATI ON AS NON-GENUINE TRANSACTION AND DISALLOWED THE SAME. 4.0 AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, T HE ASSESSEE WENT ON APPEAL BEFORE THE CIT (APPEALS) AND THE LD.CIT ( APPEALS) REMANDED THE MATTER BACK TO THE ASSESSING OFFICER. IN THE RE MAND REPORT, THE ASSESSING OFFICER STATED THAT IT WAS INFORMED BY TH E DDIT, INVESTIGATION WING, CHENNAI, THAT ALONG WITH THE ASSESSEE MANY OT HERS HAVE BEEN ENGAGED IN FRAUDULENT TRANSACTIONS USING FORGED DOC UMENTS IN THE NAME OF THE SOCIETY AND USING THE BANK ACCOUNT, FOR WHIC H SOCIETY FOR WELFARE OF THE HANDICAPPED PERSONS HAS NO CONNECTION. IT WAS ALSO INFORMED BY THE PRESIDENT OF THE SOCIETY THAT THE FRAUD IS MANA GED WITH THE COLLUSION OF THE OFFICIALS BELONGING TO AXIS BANK LTD. OF PRI NCE ANWAR SHAH ROAD BRANCH, KOLKATA. ON PERUSAL OF THE BANK STATEMENT, IT REVEALS THAT THE DEPOSIT AMOUNT IN THE NAME OF THE SOCIETY FOR WELFA RE OF HANDICAPPED PERSONS WAS UTILIZED BY M/S.JP FOUNDATIONS. AS PER THE REPORT OF THE :- 4-: ITA NO.1311/MDS/2016 ASSESSING OFFICER, THE TRANSACTION OF RS.15.00 LAKH S DONATION TO THE SOCIETY FOR WELFARE OF HANDICAPPED PERSONS HAS TRAN SFERRED TO THE JP FOUNDATIONS AND IT WAS CONCLUDED BY THE ASSESSING O FFICER THAT THE TRANSACTION WAS A BOGUS TRANSACTION. 5.0 THE LD. CIT (APPEALS), BASED ON THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER AND AS PER THE INFORMATION RE CEIVED FROM THE PRESIDENT OF THE SOCIETY, HELD THAT THE TRANSACTION IS A FRAUDULENT TRANSACTION WHICH WAS UNDER INVESTIGATED BY THE EOW , CID, WEST BENGAL. THESE FACTS WERE CONFRONTED WITH THE ASSESSEE AND T HE ASSESSEE COULD NOT OFFER ANY FACTUAL EVIDENCE BEFORE THE CIT(A) OR THE AO. THE LD. CIT(APPEALS), ACCORDINGLY, CONFIRMED THE ORDER OF T HE ASSESSING OFFICER. 6.0 APPEARING FOR THE ASSESSEE, THE LD. AR ARGUED THAT THE TRANSACTION OF DONATION TO THE SOCIETY FOR WELFARE OF HANDICAPP ED PERSONS WAS HANDLED BY HIS ELDER BROTHER WHO WAS NO MORE. THE ASSESSEE WAS NOT AWARE OF THE TRANSACTIONS. THEREFORE, HE COULD NOT SUBMIT THE INFORMATION REQUESTED BY THE ASSESSING OFFICER AS WELL AS THE L D. CIT (APPEALS). THOUGH, THE ASSESSEE HAS WRITTEN LETTER TO THE PRES IDENT OF THE SOCIETY, HE COULD NOT RECEIVE REPLY FROM THE SOCIETY. FURTHER THE LD. AR SUBMITTED THAT THE AMOUNT WAS GIVEN BY CROSSED CHEQUE IN THE NAME OF THE SOCIETY AND THE ASSESSEE WAS NOT AWARE OF THE DEVELOPMENT O F FRAUDULENT ACTION IN THE NAME OF JK FOUNDATIONS OR NON-REACHING OF TH E DONATIONS TO THE SOCIETY GENUINELY. THEREFORE, HE REQUESTED ONE MO RE OPPORTUNITY TO :- 5-: ITA NO.1311/MDS/2016 REMIT THE CASE BEFORE THE CIT (APPEALS) AS A FINAL CHANCE TO PROVE THE GENUINENESS OF THE DONATION. 7.0 ON THE OTHER HAND, THE LD. DR VEHEMENTLY OPPOSED T O REMIT BACK THE MATTER TO THE FILE OF THE CIT (APPEALS) AND ARG UED THAT IT IS A FIT CASE FOR CONFIRMING THE ADDITION. 8.0 WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL PLACED ON RECORD. THE ASSESSING OFFICER HAS MADE ALL POSSIBLE EFFORT S AND CONCLUDED THAT THE TRANSACTION WAS A BOGUS TRANSACTION AND TH E ASSESSING OFFICER ALSO HAS MADE A CASH TRIAL AND FOUND THAT THE DONAT ION HAS REACHED TO M/S. JP FOUNDATIONS INSTEAD OF CREDITING IT IN SOCI ETY FOR WELFARE OF HANDICAPPED PERSONS. THE FINDING OF THE INVESTIGAT ION WAS CONFRONTED BY THE CIT (APPEALS) AS WELL AS THE ASSESSING OFFICER WITH THE ASSESSEE. HOWEVER, THE LD. AR CLAIMED BEFORE US THAT THE TRAN SACTION WAS HANDLED BY HIS ELDER BROTHER WHO WAS NO MORE AND HE WAS NOT AWARE OF THE TRANSACTIONS. THEREFORE, THE AR REQUESTED FOR GIVI NG ONE MORE OPPORTUNITY TO MAKE EFFORT TO FURNISH THE NECESSARY EVIDENCE AND REQUESTED TO REMIT BACK THE MATTER TO THE FILE OF T HE LD. CIT (APPEALS). SINCE, IT WAS STATED BY THE ASSESSEE THAT THE MATTE R WAS HANDLED BY HIS ELDER BROTHER WHO PASSED AWAY SUBSEQUENTLY, WE HOLD THAT AN OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PROVE HIS CASE B EFORE THE LD.CIT (APPEALS) IN THE INTEREST OF JUSTICE. ACCORDINGLY, THE ORDERS OF THE :- 6-: ITA NO.1311/MDS/2016 LD.CIT(A) IS SET-ASIDE AND ISSUE IS REMITTED BACK TO THE FILE OF THE CIT( A) WITH DIRECTIONS TO ALLOW FRESH EVIDENCE, IF ANY, AN D DECIDE THE MATTER AFRESH ON MERITS. 10.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2017 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . . ) (D.S.SUNDER SINGH) /ACCOUNTANT MEMBER /CHENNAI, /DATED: 30 TH JANUARY, 2017. TLN !' #$!% /COPY TO: 1. #'&'( /APPELLANT 4. ) /CIT 2. * '( /RESPONDENT 5. !+,& -. /DR 3. ) ( #'& ) /CIT(A) 6. 1 2 /GF