DCIT, New Delhi V. Shri Om Prakash Sangwan, New Delhi

ITA 1441/DEL/2010

• Counselvise Citation: 144120114 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS RENU JAUHRI
• Assessee Lawyers: SIDHARTH JAIN
• Keywords: Unexplained cash credit; Capital asset; Opportunity of being heard; Additional evidence; Non compliance

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T.A.NO.1441/DEL/2010 ASSESSMENT YEAR : 2006-07 DY. COMMISSIONER OF INCOME-TAX, SHRI OM PRAKASH S ANGWAN, CIRCLE 33(1), NEW DELHI. VS. 63, RAMA ROAD, INDUSTRIAL AREA, NEW DELHI. PAN: AAZPS5602F (APPELLANT) (RESPONDENT) APPELLANT BY : MRS. RENU JAUHRI , CIT-DR. RESPONDENT BY : SHRI SIDHARTH JAIN , FCA. O R D E R PER K.D. RANJAN, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 2006 -07 ARISES OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS )-XXVI, NEW DELHI. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED AS UNDER:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND LAW IN DE LETING THE ADDITION OF RS.44,68,121/- MADE BY THE AO ON ACCOUN T OF UNEXPLAINED CASH CREDITS, WITHOUT CONSIDERING THE F ACT THAT NO EXPLANATION WAS FURNISHED FOR SOURCE OF THESE CREDI TS DESPITE OF THE SPECIFIC QUERY RAISED IN THIS REGARD. 2. THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A BY HOLDING THAT THE ASSESSEE WAS UNA WARE OF THE COMPLEXITIES OF TAX LAWS AND, THEREFORE, COULD NOT REPRESENT HIS CASE EFFECTIVELY BEFORE THE AO BY USING THE SER VICES OF A QUALIFIED TAX PRACTITIONER EVEN THOUGH IGNORANCE OF TAX LAWS 2 CANNOT BE A GROUND FOR REPEATED NON COMPLIANCE BY T HE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. 2. THE FIRST ISSUE FOR CONSIDERATION RELATES TO ADM ISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF INCOME-TAX RULES, 1962. FACTS OF THE CASE STATED IN BRIEF ARE THAT THE RETURN OF INCOME WAS F ILED ADMITTING TOTAL INCOME OF RS.5,83,870/-. THE CASE WAS SELECTED FOR SCRUTI NY IN CASS. THE ASSESSING OFFICER ISSUED QUESTIONNAIRE BASED ON AIR REPORT AND AFTER OBTAINING CERTAIN INFORMATION, THE AO MADE ASSESSME NT AT RS.61,26,591/-. 3. BEFORE CIT(A) THE ASSESSEE TOOK ONE OF THE GROUN D THAT THE ASSESSING OFFICER HAD NOT PROVIDED SUFFICIENT OPPORTUNITY TO THE ASSESSEE. NO REGISTERED NOTICE WAS SENT TO THE ASSESSEE WHILE MA KING ADDITIONS. BEFORE THE CIT(A) THE ASSESSEE FILED DETAILED SUBMISSIONS INCLUDING A COPY OF AUDIT REPORT IN FORM NO.10CCB, DETAILS OF SOURCE OF ACCR ETION TO THE CAPITAL INCLUDING RELEVANT BANK PASS BOOK ETC., A COPY OF A UDIT REPORT IN FORM 10CCB FOR CLAIM OF DEDUCTION UNDER SEC. 80-IC. SIN CE THESE EVIDENCES WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE LEARNED CIT(A) CALLED FOR REMAND R EPORT FROM THE AO IN RESPECT OF ADDITIONAL EVIDENCES FILED BY THE ASSESS EE. THE AO VIDE REMAND REPORT DATED 1.10.2009 SUBMITTED THAT ADDITIONAL EV IDENCE UNDER RULE 46A COULD NOT BE ADMITTED AS THE ASSESSEE DID NOT FULFI LL THE CONDITIONS ENUMERATED UNDER RULE 46A. IT WAS ALSO SUBMITTED T HAT SINCE THE ASSESSEE DID NOT FURNISH AUDIT REPORT IN FORM NO.10CCB ALONG WITH RETURN OR TILL THE 3 LAST DATE OF COMPLETION OF ASSESSMENT, THE CLAIM UN DER SEC. 80IC COULD NOT BE ALLOWED. AS REGARDS DISALLOWANCE OF LICENCE FEE IT WAS REPORTED BY THE ASSESSING OFFICER THAT THE SAME LICENCE FEE WAS TRE ATED AS CAPITAL ASSET FOR THE PURPOSE OF DEDUCTION UNDER SEC. 32(1)(II) OF TH E ACT. AS REGARDS UNEXPLAINED CASH CREDITS UNDER SEC.68, THE AO WAS O F THE VIEW THAT IN ABSENCE OF DOCUMENT/EXPLANATION IN SUPPORT OF THE S OURCE, THE AO HAD NO OPTION BUT TO MAKE THE ADDITION. THE LEARNED CIT(A ) AFTER OBTAINING THE COMMENTS OF THE ASSESSEE ON REMAND REPORT ADMITTED THE ADDITIONAL EVIDENCE. THE LEARNED CIT(A) THEREAFTER DECIDED TH E APPEAL AFTER HEARING THE LEARNED AR OF THE ASSESSEE. THE CLAIM OF THE A SSESSEE FOR DEDUCTION UNDER SEC. 80-IC WAS DISMISSED WHEREAS OTHER ADDITI ONS MADE BY THE AO WERE DELETED. 4. BEFORE US THE LEARNED CIT-DR SUBMITTED THAT THE LEARNED CIT(A) HAS NOT GIVEN OPPORTUNITY TO THE ASSESSEE AFTER ADMISSI ON OF ADDITIONAL EVIDENCE. THEREFORE, IN VIEW OF THE LATEST DECISION OF HONBL E DELHI HIGH COURT IN THE CASE OF CIT VS. MANISH BUILD WELL PVT. LTD., 204 TA XMAN 106, THE MATTER SHOULD BE SET ASIDE TO THE FILE OF THE LEARNED CIT( A). SHE HAS FURTHER SUBMITTED THAT THE LEARNED CIT(A) WHILE ALLOWING RE LIEF TO THE ASSESSEE HAS NOT GIVEN ANY FINDING AS TO HOW THE UNEXPLAINED CAS H CREDITS WERE EXPLAINABLE WHEN NO EXPLANATION WAS OFFERED BY THE ASSESSEE BEFORE THE AO. 4 ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE S TRONGLY SUPPORTED THE ORDER OF THE CIT(A) BY STATING THAT NO PURPOSE WILL BE SERVED BY SETTING ASIDE THE ORDER TO THE FILE OF THE CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE ABOUT THE FACT THAT CE RTAIN EVIDENCES FILED BEFORE THE CIT(A) AS ADDITIONAL EVIDENCES WERE NOT FILED B EFORE THE ASSESSING OFFICER. THE LEARNED CIT(A) HAS ADMITTED THE ADDIT IONAL EVIDENCES UNDER RULE 46A. HOWEVER, UNDER RULE 46A(3) THE COMMISSIO NER OF INCOME-TAX (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE AO HAS BEEN ALLOWED A REASONABLE OPP ORTUNITY TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXAMINE THE WITNES S PRODUCED BY THE ASSESSEE OR TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE . SINCE THE LEARNED CIT(A) HAS NOT GIVEN OPPORTUNITY TO THE ASSESSING O FFICER UNDER SUB-RULE (3) OF RULE 46A AFTER ADMISSION OF ADDITIONAL EVIDE NCES AND THE LEARNED CIT(A) HIMSELF HAS ALSO NOT RECORDED ANY FINDING AB OUT THE SOURCE OF UNEXPLAINED CREDITS IN THE BOOKS OF ACCOUNT, IN OUR CONSIDERED OPINION, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE L EARNED CIT(A) WITH THE DIRECTIONS TO PROVIDE THE ASSESSING OFFICER A REASO NABLE OPPORTUNITY OF BEING HEARD. HE WILL REQUIRE THE AO TO CONDUCT ENQUIRY I N THE MATTER WHERE HE 5 WANTS AND WILL PRODUCE HIS REPORT TO THE LEARNED CI T(A) BASED ON ENQUIRIES SO CONDUCTED. NEEDLESS TO SAY THE LEARNED CIT(A) W ILL ALSO PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE THEREAFTER B EFORE DECIDING THE APPEAL. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. 7. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH, 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMBER ACOUNTANT MEMBER DATED: 30 TH MARCH, 2012. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.