British Academy Pvt. Ltd., Chandigarh V. ITO, Chandigarh

ITA 149/CHANDI/2012

• Counselvise Citation: 14921514 RSA 2012
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTA
• Assessee Lawyers: T N SINGLA
• Keywords: Principle of natural justice; Documents seized
• Section: 144; 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.148/CHD/2012 (ASSESSMENT YEAR: 2008-09) BRITISH AIR HOSTESS ACADEMY PVT. LTD., VS. THE IN COME TAX OFFICER, SCO 134-36, 4 TH FLOOR, WARD- 4(3), SECTOR 34-A, CHANDIGARH. CHANDIGARH. PAN: AADCB0950E AND ITA NO.149/CHD/2012 (ASSESSMENT YEAR: 2008-09) BRITISH ACADEMY PVT. LTD., VS. THE INCOME TAX OF FICER, SCO 134-36, 4 TH FLOOR, WARD- 4(3), SECTOR 34-A, CHANDIGARH. CHANDIGARH. PAN: AACCB4985C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T.N.SINGLA DEPARTMENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 21.03.2012 DATE OF PRONOUNCEMENT : 22.03.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THESE TWO APPEALS BY THE DIFFERENT ASSESSEES ARE AG AINST THE SEPARATE ORDER OF CIT(APPEALS), CHANDIGARH DATED 11 .11.2011 AND 06.12.2011 RELATING TO ASSESSMENT YEAR 2008-09 AGAI NST THE ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT T HE ACT). 2. BOTH THE APPEALS INVOLVING SIMILAR ISSUES WERE H EARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER F OR THE SAKE OF 2 CONVENIENCE. HOWEVER, REFERENCE IS BEING MADE TO T HE FACTS IN ITA NO.148/CHD/2012 FOR ADJUDICATING THE ISSUE RAISED I N BOTH THE APPEALS. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER OF LD. CIT(A) IS BAD AND AGAINST FACTS AND LAW. 2. THAT THE LEARNED CIT(A) HAS WRONGLY PASSED ORDER UNDER SECTION 144 FOR NON-SUBMISSION OF BOOKS OF ACCOUNT WHEREAS THE BOOKS WERE PRODUCED BEFORE THE LD. ASSESSING OFFICER AND HE KEPT IT FOR CHECKING F OR ABOUT ONE MONTH. 3. THAT THE LEARNED CIT(A) HAD WRONGLY MADE AN ADDI TION OF RS.6,60,160/- AS ESTIMATED DIFFERENCE IN FEES RECEIPTS DURING THE YEAR AND TREATED THE SAME AS UNRECORDED RECEIPTS IN THE BOOKS OF ACCOUNT. 4. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED AN ADDITION OF RS.14,55,600/- BY DISALLOWING STAFF SAL ARY EXPENSES. 5. THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED AN ADDITION OF RS.1,32,000/- BY DISALLOWING RENT EXPEN SES PAID DURING THE YEAR FOR NON-DEDUCTION OF TDS UNDER SECTION 40(A)(IA). 4. GROUND NO.1 RAISED BY THE ASSESSEE IS GENERAL IN NATURE AND HENCE THE SAME IS DISMISSED. 5. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT TH AT THE ADDITION IN THE CAPTIONED ASSESSMENT YEAR WAS MADE PURSUANT TO THE ASSESSMENT ORDER/S PASSED BY THE ASSESSING OFFICER IN THE ASSE SSMENT YEAR 2007-08 IN THE CASE OF BOTH THE ASSESSEES. THE LEARNED A.R . FOR THE ASSESSEE FURTHER POINTED OUT THAT IDENTICAL ISSUE WAS RAISED BEFORE THE TRIBUNAL AND VIDE ORDER DATED 26.4.2011 THE ISSUE HAD BEEN R EMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME DE NOVO. 3 6. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T THE GROUNDS OF APPEAL IN THE PRESENT CASE ARE NOT SIMILAR TO THE G ROUNDS OF APPEAL RAISED IN ASSESSMENT YEAR 2007-08. THE LEARNED D.R. FOR T HE REVENUE ALSO POINTED OUT THAT THE ASSESSEE HAD RAISED ADDITIONAL GROUNDS OF APPEAL DURING THE YEAR UNDER CONSIDERATION AND IT IS NOT C LEAR AS TO WHETHER THE SAME WERE ADJUDICATED BY THE CIT (APPEALS). 7. THE LEARNED A.R. FOR THE ASSESSEE IN REJOINDER F AIRLY SUBMITTED THAT IF THE MATTER IS BEING SET ASIDE TO THE FILE OF THE ASSESSING OFFICER, THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE NOT PRESSED. OUR ATTENTION WAS DRAWN TO THE GR OUNDS OF APPEAL RAISED IN BOTH THE APPEALS I.E. ASSESSMENT YEARS 2007-08 A ND 2008-09 AND IT WAS POINTED OUT THAT THE GROUNDS OF APPEAL WERE SIMILAR . 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BOTH THE ASSESSEES BEFORE US ARE AGGRIEVED BY THE ORDER OF THE CIT (APPEALS). THE MAIN ISSUE RAISED IN BOTH THE APPEALS IS IN REL ATION TO THE ESTIMATION OF FEE RECEIVED DURING THE YEAR. SURVEY UNDER SECT ION 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSES SEE ON 24.9.2007 AND DURING THE COURSE OF SURVEY CERTAIN INCRIMINATING D OCUMENTS, FEE REGISTERS, ETC. WERE FOUND AND IMPOUNDED RELATING T O ASSESSMENT YEARS 2007-08 AND 2008-09. THE ASSESSEE HAD FAILED TO PR ODUCE COMPLETE BOOKS OF ACCOUNT AND CONSEQUENTLY THE ASSESSMENT RE LATING TO ASSESSMENT YEAR 2007-08 WAS COMPLETED UNDER SECTION 144 OF THE ACT UNDER WHICH THE INCOME IN THE HANDS OF THE ASSESSEE WAS ESTIMAT ED BY THE ASSESSING OFFICER. THE CIT (APPEALS) HAD UPHELD THE ORDER OF THE ASSESSING OFFICER AND CONSEQUENTLY THE APPEALS WERE FILED BEF ORE THE TRIBUNAL BY THE ASSESSEE/S. THE TRIBUNAL HAD DELIBERATED UPON THE FACTUAL ASPECTS OF THE ISSUE VIDE PARA 3 AND AFTER CONSIDERING THE RIV AL CONTENTIONS OF THE 4 LEARNED A.R. FOR THE ASSESSEE AND LEARNED D.R. FOR THE REVENUE HELD AS UNDER: 4. THE LD. AR FOR THE ASSESSEE DREW OUR ATTENTION TO THE VARIOUS COMMUNICATIONS MOVED BEFORE THE ASSESSING OFFICER A ND THE FURNISHING OF THE DETAILS FROM DAY TO DAY. VIDE LETTER DATED 9 .10.2009, IT WAS POINTED OUT THAT MAJORITY OF THE RECORDS WAS SEIZED BY THE REVENUE DEPARTMENT DURING THE SURVEY CONDUCTED AT THE PREMISES OF THE ASSESSEE. IT WAS FURTHER POINTED OUT THAT FURTHER COMPLETE BOOKS OF ACCOUNT IN THE SHAPE OF CASH BOOK, LEDGER, BANK STATEMENT OF COMPANY, BA NK STATEMENT OF DIRECTORS ARE ALREADY SUBMITTED IN YOUR OFFICE, WHI CH ARE LYING IN YOUR CUSTODY FOR YOUR KIND PERUSAL. FURTHER, IT WAS SU BMITTED THAT THE VOUCHERS OF EXPENSES WOULD BE PRODUCED ON 14.10.200 9. VIDE LETTER DATED 14.10.2009, A REFERENCE WAS MADE TO THE STATE MENT RECORDED OF MR. GURMAIL SINGH, EMPLOYEE OF THE ASSESSEE COMPANY WHO IS TEACHING IN THE ACADEMY. IT WAS POINTED OUT THAT THE REGARD ING THE QUERY ABOUT PREPARATION OF BOOKS OF ACCOUNT IN THE YEAR UNDER C ONSIDERATION, THE REPLY OF MR GURMIT SINGH WAS IN CONNECTION WITH THE PRINTING OF BOOKS OF ACCOUNT AND NOT MAINTENANCE OF BOOKS OF ACCOUNT. I T WAS CLAIMED BY THE ASSESSEE THAT REGULAR BOOKS OF ACCOUNT WERE BEING M AINTAINED AND DURING SURVEY THE BOOKS OF ACCOUNT COULD NOT BE PRO DUCED DUE TO VIRUS IN THE COMPUTER, WHERE THE BOOKS OF ACCOUNT WERE MAINT AINED. IN THE SAID LETTER IT WAS FURTHER MENTIONED THAT ALL THE BOOKS OF ACCOUNT WERE IMPOUNDED BY THE ASSESSING OFFICER AND WERE KEPT FO R ABOUT A MONTH AND NO DEFECT WAS POINTED OUT IN THE SAID BOOKS OF ACCO UNT, WHICH WAS RETURNED ON 14.10.2009. THE BILLS AND VOUCHERS OF EXPENSES WERE ALSO CLAIMED TO HAVE BEEN PRODUCED AND AFTER VERIFICATIO N, THE SAME WERE RETURNED TO SHRI GURMAIL SINGH ALONG WITH THE BOOKS OF ACCOUNT EARLIER IMPOUNDED. A REQUEST WAS MADE TO SUPPLY THE COPY O F THE STATEMENT RECORDED OF MR. GURMAIL SINGH. THE ASSESSEE ALSO MO VED A LETTER DATED 17.11.2009 UNDER WHICH IT CLAIMED TO HAVE FURNISHED THE RECONCILIATION OF RECEIPTS DURING THE YEAR AND IN THE SAID LETTER THERE IS A MENTION OF PRODUCTION OF BOOKS OF ACCOUNT. THE PLEA OF THE ASS ESSEE IS THAT DESPITE THE ABOVE SAID EVIDENCE PRODUCED, THE BOOKS OF ACCO UNT WERE SUMMARILY REJECTED BY THE ASSESSING OFFICER. THE DATE WISE S EQUENCE OF EVENTS WAS FURNISHED BEFORE THE CIT(A) WITH REGARD TO THE PROD UCTION OF BOOKS OF ACCOUNT AND OTHER RELATED EVIDENCE / DOCUMENTS FILE D WHICH HAS BEEN BRUSHED ASIDE BY THE CIT(A). 5. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON TH E ORDERS OF THE AUTHORITIES BELOW. WE HAVE HEARD THE RIVAL CONTENT IONS AND PERUSED THE RECORDS. THE ASSESSMENT IN THE CASE WAS COMPLETED BY THE ASSESSING OFFICER AFTER REJECTING THE BOOK RESULTS SHOWN BY T HE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. THE BA SIS FOR REJECTING THE BOOKS OF ACCOUNT WAS THE NON PRODUCTION OF THE SAID BOOKS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO SUPPORTIN G VOUCHERS IN RESPECT THEREOF. FROM THE PERUSAL OF THE COMMUNIC ATION BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER, COPIES OF WHIC H ARE AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAD PRODUCED THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER WHICH AS PER THE ASSES SEE WAS KEPT BY THE ASSESSING OFFICER FOR A PERIOD OF MORE THAN ONE MON TH IN HIS OFFICE. THE ASSESSEE HAS ALSO POINTED OUT THE SAID FACT BEFORE THE CIT(A) AS PER THE WRITTEN SUBMISSIONS FURNISHED BEFORE THE CIT(A) PLA CED AT PAGES 1 & 2 OF THE PAPER BOOK. ANOTHER BASIS FOR REJECTION OF THE BOOKS OF ACCOUNT IN THE PRESENT CASE IS THE STATEMENT OF ONE OF THE DIR ECTOR MR GURMAIL SINGH WHO IN REPLY TO A QUERY RAISED BY THE ASSESSING OFF ICER ADMITTED THAT THE 5 PRINT OUTS OF THE BOOKS OF ACCOUNT WERE TAKEN ON A LATER DATE. ADMITTEDLY, THE BOOKS OF ACCOUNT WERE MAINTAINED ON COMPUTER AN D DURING THE COURSE OF SURVEY, NO PRINT OUTS WERE PRODUCED BEFOR E THE SURVEY TEAM BECAUSE OF THE CLAIM OF THE ASSESSEE THAT THERE WAS A VIRUS IN THE SAID COMPUTER. HOWEVER, THE SAID BOOKS OF ACCOUNT ALON GWITH SUPPORTING VOUCHERS WERE PRODUCED BEFORE THE ASSESSING OFFICER AND AS PER LETTER DATED 17.10.2009 ADDRESSED TO THE ASSESSING OFFICER , THE ASSESSEE CLAIMS THAT THE SAID BOOKS OF ACCOUNT WERE KEPT BY THE ASS ESSING OFFICER FOR MORE THAN ONE MONTH. THE SAID LETTER IS PLACED AT PAGE 6 OF THE PAPER BOOK. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE AUTHORITIES BELOW HAVE FAILED TO LOOK INTO THE RECONCILIATION STATEME NT PREPARED BY THE ASSESSEE EXPLAINING RECEIPTS AS PER THE BOOKS OF AC COUNT AND AS AVAILABLE IN THE IMPOUNDED DOCUMENTS SEIZED DURING THE COURSE OF SURVEY. 6. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF TH E CASE, WE ARE OF THE VIEW THAT UNDER THE PRINCIPLES OF NATURAL JUSTI CE THE ASSESSEE SHOULD BE ALLOWED ANOTHER OPPORTUNITY TO EXPLAIN ITS CASE. THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT ALONGWITH SUPPORTING V OUCHERS AND WE DIRECT THE ASSESSING OFFICER TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN ORDER TO RECONCILE THE D IFFERENCE IN THE RECEIPTS VIS-A-VIS BOOKS OF ACCOUNT AND THE PAPERS IMPOUNDED DURING THE SURVEY. ACCORDINGLY, WE REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO IN ACCORDANCE WITH LAW. 9. THE ASSESSMENT IN THE PRESENT CASE WAS COMPLETED IN LINE WITH THE OBSERVATIONS OF THE ASSESSING OFFICER IN ASSESSMENT YEAR 2007-08 UNDER WHICH THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 144 OF THE ACT AND ESTIMATED THE RECEIPTS IN THE HANDS OF THE ASSESSEE AND CONSEQUENTLY THE INCOME WAS COMPUTED IN THE HANDS O F THE ASSESSEE. THE ADDITION IN THE CAPTIONED ASSESSMENT YEAR WAS AGAIN ALLEGEDLY ON NON- PRODUCTION OF BOOKS OF ACCOUNT ALONGWITH THE SUPPOR TING VOUCHERS. WE FIND THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE AROSE BEFORE THE TRIBUNAL RELATING TO ASSESSMENT YE AR 2007-08 AND FOLLOWING THE PARITY OF REASONING WE DEEM IT FIT, I N VIEW OF THE PRINCIPLES OF NATURAL JUSTICE, TO REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER, IN VIEW OF THE FACT THAT THE ASS ESSEE HAD MAINTAINED THE BOOKS OF ACCOUNT ON COMPUTER AND DURING THE COU RSE OF SURVEY THE PRINTOUTS COULD NOT BE PRODUCED BEFORE THE SURVEY T EAM BECAUSE OF THE CLAIM OF THE ASSESSEE THAT THERE WAS VIRUS IN THE S AID COMPUTER. HOWEVER, DURING THE ASSESSMENT PROCEEDINGS AS NOTED BY THE ASSESSING OFFICER AT PAGE 3, THE ASSESSEE HAD PRODUCED THE BO OKS OF ACCOUNT. WE 6 DIRECT THE ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO COOPERATE AND PRODUCE THE NECESSARY BOO KS OF ACCOUNT ALONGWITH VOUCHERS FOR VERIFICATION. GROUND NOS. 2 AND 3 RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSES. 10. THE ASSESSEE HAS FURTHER RAISED THE GROUNDS OF APPEAL IN RELATION TO DISALLOWANCE OF EXPENSES I.E. STAFF SALARY EXPENSES AND RENT EXPENSES. SIMILAR ISSUES AROSE BEFORE THE TRIBUNAL (SUPRA) IN ASSESSMENT YEAR 2007- 08 AND THE SAID ISSUES VIDE PARA 7 HAVE BEEN REMITT ED BACK TO THE FILE OF THE ASSESSING OFFICER. WE ACCORDINGLY DIRECT THE A SSESSING OFFICER TO DECIDE THE AFORESAID ISSUES DE NOVO AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO. 4 AND 5 RAISED BY THE ASSESSEE ARE THUS ALLOWED FOR STATISTICAL PURPOSES. 11. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS OF APPEAL IN RESPECT OF THE ASSESSMENT ORDER BEING PASSED UNDER SECTION 144 OF THE ACT AND ALSO AGAINST REJECTION OF BOOKS OF ACCOUNT. IN VIE W OF THE ADMISSION OF LEARNED A.R. FOR THE ASSESSEE, BOTH THESE ADDITIONA L GROUNDS OF APPEAL ARE DISMISSED AS THE MATTER IS BEING RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE THE SAME DE NOVO. 12 IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF MARCH, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND MARCH, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 7