ITO 19(1)(4), MUMBAI V. SHAKEEL M. SHAREEF, MUMBAI

ITA 1564/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79164 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 25-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Condonation of delay
• Section: 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NO. 1564/MUM/2013 ( / ASSESSMENT YEAR: 2003-04) THE INCOME-TAX OFFICER 19(1)-4, ROOM NO. 308, 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI-400 012 / VS. SHAKEEL M. SHAREEF 16-62, NEW LIGHT BLDG., KALINA, SANTACRUZ (E), MUMBAI-400 055 ' ./# ./PAN/GIR NO. AADPS 0699 C ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$ ' ( / APPELLANT BY : SHRI MAURYA PRATAP %&'$ ' ( / RESPONDENT BY : SHRI R. PRASAD RAO )* + ' , / DATE OF HEARING : 22.05.2014 -./ ' , / DATE OF PRONOUNCEMENT : 18.06.2014 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-18, MUMBAI (CIT(A) FOR SH ORT) DATED 20.12.2012, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSES SMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMEN T YEAR (A.Y.) 2003-04 VIDE ORDER DATED 27.03.2006. 2 ITA NO. 1564/MUM/2013 (A.Y. 2003-04) ITO VS. SHAKEEL M. SHAREEF 2. THE ONLY ISSUE ARISING IN THE INSTANT APPEAL IS THE VALIDITY IN LAW OF THE ADMISSION OF ADDITIONAL EVIDENCES BY THE LEARNED CIT(A), BEIN G OSTENSIBLY IN CONTRAVENTION OF RULE 46A OF THE INCOME TAX RULES, 1962 (THE RULES HERE INAFTER). THIS IS THE SECOND GROUND BEFORE THE TRIBUNAL. IN THE FIRST ROUND (IN ITA NO. 6185/MUM/E/2009 DATED 26.8.2011), THE ISSUE BEFORE THE TRIBUNAL WAS THE MAINTAINABILI TY OF THE ASSESSEES APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHICH, BEING FILED BEYON D TIME, HAD BEEN HELD AS INCOMPETENT BY THE SAID AUTHORITY. THE TRIBUNAL FOUND THAT THE ASS ESSEE, AN ILLITERATE PERSON, WAS TOTALLY DEPENDENT ON HIS COUNSEL, WHO HAD MISGUIDED HIM. IT WAS THEREFORE A FIT CASE FOR CONDONATION OF DELAY IN FILING THE APPEAL BEFORE TH E FIRST APPELLATE AUTHORITY; THE DELAY HAVING BEEN REASONABLY EXPLAINED, WAS, ACCORDINGLY, CONDONED, FOLLOWING THE DECISIONS IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI & ORS . [1987] 167 ITR 471(SC) AND IMPROVEMENT TRUST, LUDHIANA VS. UJAGAR SINGH & ORS , DATED 09.6.2010. THE MATTER WAS ACCORDINGLY RESTORED BACK TO THE FILE OF THE LD . CIT(A) FOR A DECISION ON MERITS. IN THE SET ASIDE PROCEEDINGS, THE LD. CIT(A) ADMITTING ADD ITIONAL EVIDENCES SOUGHT TO BE PLACED RELIANCE UPON BY THE ASSESSEE, BEING ESSENTIALLY LO AN AGREEMENTS WITH TWO CREDITORS, FROM WHOM LOANS FOR RS. 15 LAKHS HAD BEEN OBTAINED BY TH E ASSESSEE, AND WHICH WERE TREATED AS UNPROVED AND DEEMED AS UNEXPLAINED INCOME U/S. 6 8 OF THE ACT, A REMAND REPORT WAS SOUGHT FROM THE ASSESSING OFFICER (AO). WHILE ON ME RITS HE FOUND THE LOANS AS GENUINE, HE OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVID ENCES BY THE LD. CIT(A) WITH REFERENCE TO R. 46A(A) OF THE RULES; THE ASSESSEE HAVING BEEN ALLOWED EXTENSIVE OPPORTUNITY BY HIM TO DO SO. THE SAME HAVING BEEN OVERRULED BY THE LD. CIT(A), THE REVENUE IS IN APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE REVENUES GRIEVANCE, GIVING RISE TO THE SOLE ISSUE ARISING IN THE INSTANT APPEAL, IS THE ADMISSION OF ADDITIONAL EVIDENCES BY THE LD. CIT(A) IN CONTRAVEN TION OF RULE 46A(1), WHICH READS AS UNDER :- 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN T HE EVIDENCE PRODUCED BY HIM 3 ITA NO. 1564/MUM/2013 (A.Y. 2003-04) ITO VS. SHAKEEL M. SHAREEF DURING THE COURSE OF PROCEEDINGS BEFORE THE ASSESSI NG OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY : ( A ) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR ( B ) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT C AUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER ; OR ( C ) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT C AUSE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR ( D ) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER AP PEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. AS EXPLAINED IN MANY A CASE, AND TOWARD WHICH WE MA Y REFER BY THE DECISIONS BY THE HON'BLE HIGH COURTS, AS IN THE CASE OF PRABHAVATI S. SHAH V. CIT [1998] 231 ITR 1 (BOM.); CIT VS. RANJIT KUMAR CHOUDHURY [2007] 288 ITR 179 (GAU.); C. UNNIKRISHNAN VS. CIT [1998] 233 ITR 485 (KER.); AND RAM PRASAD SHARMA VS. CIT [1979] 119 ITR 867 (ALL), RULE 46A IS MANDATORY IN ITS APPLICATION. IN FACT, THE LD. CIT(A) OUGHT TO HAVE, INSTEAD OF SUMMARILY DISMISSING THE ASSESSING OFFIC ERS OBJECTION QUA THE ADMISSION OF THE ADDITIONAL EVIDENCES ADDUCED BEFORE HIM, EXPLIC ITLY STATE HIS REASONS FOR NOT CONSIDERING THE SAME AS VALID. IT IS ONLY WHEN SUCH REASON/S INFORM HIS ORDER, THAT THE SAME COULD BE SUBJECT TO REVIEW ON A CHALLENGE TO H IS ORDER BY EITHER PARTY BEFORE HIM. RATHER, NOT DOING SO MAKES HIS ORDER ARBITRARY AND, THUS, UNSUSTAINABLE IN LAW. THOUGH THEREFORE WHILE ORDINARILY THE MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) TO MEET THE OBJECTION/S RAISED BY THE AO, WE DO NOT THINK IT NECESSARY OR EVEN PROPER TO DO SO IN THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE. THIS IS AS THE TRIBUNAL HAD CLEARLY FOUND THAT THE ASSESSEES COUNSEL HAD W ITHHELD ALL THE PAPERS ON ACCOUNT OF HIS DIFFERENCES WITH THE ASSESSEE, AND WHO HAD THEREFOR E WITH GREAT DIFFICULTY; RATHER, THROUGH THE AGENCY OF A COMMON FRIEND, RECONSTRUCTED THE FI LE. IN FACT, WE OBSERVE THAT THERE WAS EVEN A CONFLICT WITH REGARD TO THE RECEIPT OF THE A SSESSMENT ORDER BY THE ASSESSEE - BEING ON 28.3.2006 AND 29.12.2006 AS PER THE ASSESSING OF FICER AND THE ASSESSEE RESPECTIVELY. 4 ITA NO. 1564/MUM/2013 (A.Y. 2003-04) ITO VS. SHAKEEL M. SHAREEF AS SUCH, THE SAME REASONS THAT LED TO THE CONDONATI ON OF THE DELAY OF OVER A YEAR IN PREFERRING AN APPEAL BEFORE THE FIRST APPELLATE AUT HORITY IN THE FIRST ROUND, WOULD, IN OUR VIEW, CONSTITUTE VALID GROUNDS FOR NON-FURNISHING T HE SAID DETAILS AND EVIDENCES BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS, SATISFYING TH E CONDITION OF R.46A(C). THE LD. CIT(A) WAS ACCORDINGLY JUSTIFIED IN ADMITTING THE A DDITIONAL EVIDENCES ADDUCED BEFORE HIM BY THE ASSESSEE. WE, IN SO DECIDING, DERIVE SUP PORT FROM THE VERY SAME DECISIONS, CITED SUPRA BY US WITH REGARD TO THE MANDATORY NATU RE OF R. 46A; IT BEING RATHER UNDER THE CIRCUMSTANCES INCUMBENT ON THE LD. CIT(A)) TO SEEK THE PRODUCTION OF THE RELEVANT EVIDENCES (REFER R.46A(4)). NO INTERFERENCE TO THE IMPUGNED ORDER IS, THEREFORE, CALLED FOR. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 0/ 1 * ' 0 ' 23 ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 18, 2014 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 4+ MUMBAI; 5) DATED : 18.06.2014 *.)../ PRATIMA S., SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. 8*9 : %);< , , ; ? + / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 4+ / ITAT, MUMBAI