Rajesh Nandlal Biyani, Chandrapur V. JC.IT, Chandrapur

ITA 158/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1630 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 18-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Principle of natural justice; Additional evidence; Reasonable cause; Competent authority; Assessment record
• Section: 143(3)

Judgement Text

1 ITA NO. 158/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 158 /NAG/201 3 ASSESSMENT YEAR : 200 9 - 10 . RAJESH NANDLAL BIYANI, JOINT COMMISSIONER OF CHANDRAPUR. VS. INCOME TAX, CHANDRAPUR. PAN AEPUB 9868G APPEL LANT. RESPONDENT. APPELLANT BY : SHRI ABHAY AGRAWAL. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 10 - 08 - 2015 DATE OF PRONOUNCEMENT : 30 TH OCT. , 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - II , NAGPUR DATED 22 ND JANUARY, 2013. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. AO HAS ERRED IN DISALLOWING CLAIM OF RS.54,60,056/ - U/S 80IB(10) OF I.T. ACT AND LD. CIT(APPEALS) HAS FURTHER ERRED IN CONFIRMING THE SAME. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE DISALLOWANCE OF CLAIM OF RS.54,60,05 6/ - U/S 80IB(10) OF I.T. ACT IS UNJUSTIFIED, ARBITRARY AND DESERVES TO BE ALLOWED. 3. THAT ON THE FACTS OF THE CASE THE LD. CIT(APPEALS) HAS ERRED IN NOT CONSIDERING DOCUMENTS PRODUCED BEFORE HIM DURING APPELLATE PROCEEDINGS. THE LD. CIT(APPEALS) HAS WRONGLY TREATED THE DOCUMENTS AS ADDITIONAL EVIDENCE WHEREAS THE SAME WERE ALREADY FILED BEFORE AO DURING ASSESSMENT PROCEEDING. 2 ITA NO. 158/NAG/2013 4. THAT THE DENIAL OF ADJUDICATION OF EVIDENCE AVAILABLE ON ASSESSMENT RECORD WHICH WAS ALSO FURNISHED DURING APPELLATE PROCEEDING BEFORE THE LD. CIT(APPEALS) IS CLEAR CASE OF DENIAL OF NATURAL JUSTICE. THAT ON THE PRINCIPLES OF EQUITY AND NATURAL JUSTICE THE LD. CIT(A)/AO MAY PLEASE BE DIRECTED TO CONSIDER THE SAME. 2. AT THE OUTSET, LEARNED A.R. MR. ABHAY AGRAWAL HAS VEHEMENTLY PRESSED GROUND NOS. 3 AND 4, AS REPRODUCED ABOVE PERTAINING TO THE NON - ADMISSION OF ADDITIONAL EVIDENCES AT THE STAGE OF FIRST APPEAL BEFORE THE LEARNED CIT(APPEALS). IN THIS REGARD HE HAS REFERRED THE RELEVANT OBSERVATION OF THE AO AS PER THE ASSESSMENT ORDER PA SSED U/S 143(3) DATED 21 - 12 - 2011 ACCORDING TO WHICH THE ASSESSEE IN INDIVIDUAL CAPACITY HAS SHOWN INCOME FROM SALE OF FLATS AND CIVIL CONTRACT WORK AS A VENTURE OF M/S BIYANI BUILDERS AND D EVELOPERS, PHASE I. IN RESPECT OF CONSTRUCTION BUSINESS THE ASSES SEE HAD CLAIMED DEDUCTION U/S 80IB(10) OF RS.54,60,056/ - AS AN ELIGIBLE DEDUCTION PERTAININ G TO A HOUSING PROJECT. AS PER THE AO , THE ASSESSEE WAS REQUIRED TO FURNISH THE APPROVAL OF THE PROJECT WHICH WAS REQUIRED TO BE COMPLETED WITHIN FOUR YEARS FROM TH E END OF THE FINANCIAL YEAR IN WHICH THE APPROVAL WAS OBTAINED FROM A LOCAL AUTHORITY AS PER ONE OF THE CONDITIONS PRESCRIBED U/S 80IB(10) OF I.T. ACT. AS PER THE AO DUE TO THE AMENDMENT IN THE SAID SECTION THE OUTER LIMIT FOR COMPLETION OF THE CONSTRUCTI ON WAS APPLICABLE UPTO ASSESSMENT YEAR 2009 - 10 AND THE ASSESSEE HAS NOT PLACED ON RECORD THE RELEVANT EVIDENCES. THE SECOND OBJECTION OF THE AO WAS THAT THE ASSESSEE WAS ONLY A CONTRACT BUILDER AND NOT A DEVELOPER OF HOUSING PROJECT. AFTER NARRATIN G FEW OTHER REASONS AS WELL AS A CBDT CIRCULAR, THE AO HAD REJECTED THE CLAIM OF DEDUCTION U/S 80IB(10) OF I.T. ACT. \ 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY , CERTAIN EVIDENCES WERE FILED. HOWEVER, THE LEARNED CIT(APPEALS) HAS COMMENTED AS UNDER : 3 ITA NO. 158/NAG/2013 THE ABOVE SUBMISSION OF THE APPELLANT WERE PERUSED. IN PARA 3.4 IT IS STATED BY THE APPELLANT THAT VARIOUS DOCUMENTS ARE BEING PRODUCED TO ESTABLISH THE CLAIM OF DEDUCTION U/S 80IB(10). THE APPELLANT HAS MADE REFERENCE TO THE SEVERAL LAYOUTS SANCTIONED BY COLLECTOR, CHANDRAPUR, REVISED LAYOUT PLANS SANCTIONED BY COLLECTOR, CHANDRAPUR AND BUILDING PLANS FOR VARIOUS FLATS SCHEMES AND INDEPENDENT HOUSE SANCTIONED BY COMPETENT AUTHORITY. HOWEVER NO SUCH DOCUMENTS WERE PRODUCED EITHER IN ORIGINAL OR IN XEROX. IT WAS ALSO BROUGHT TO THE NOTICE OF THE APPELLANT THATY VARIOUS OPPORTUNITIES WERE GIVEN TO THE APPELLANT DURING THE COURSE OF ASSESSMENT PRO CEEDINGS AND SINCE THE APPELLANT HAD FAILED TO PRODUCE THE BASIC DETAILS TO ESTABLISH ITS CLAIM FOR DEDUCTION U/S 80IB(10) WHY ADDITIONAL EVIDENCE SHOULD NOW BE ADMITTED SINCE NO REASONABLE CAUSE WAS BEING MADE OUT BY THE APPELLANT IN ITS SUBMISSION. 3.1 ACCORDING TO LEARNED CIT(APPEALS), THE ONLY REASON GIVEN BY THE ASSESSEE FOR NOT PRODUCING ALL THOSE EVIDENCES BEFORE THE AO WAS THAT THE REQUISITE INFORMATION WAS NOT IN HIS POSSESSION AT THAT TIME. THE ASSESSEE HAS PLEADED BEFORE THE LEARNED CIT(APPEALS) THAT THE REQUISITE INFORMATION AS WELL AS THE EVIDENCES WERE AVAILABLE, HENCE IN THE LIGHT OF THE PROVISIONS OF RULE 46A THOSE EVIDENCES SHOULD BE ADMITTED AT THE APPELLATE STAGE. THE LEARNED CIT(APPEALS) HAS EXAMINED THE PROVISIONS OF RULE 46A OF I.T. A C T AND HELD THAT IN HIS OPINION THE ASSESSEE WAS NOT REQUIRED TO GIVE FURTHER CHANCE TO COVER UP HIS OWN LAPSES. THAT REQUEST OF THE ASSESSEE WAS REJECTED BY LEARNED CIT(APPEALS) IN THE FOLLOWING MANNER : THE POSITION IN LAW REGARDING ADMISSION OF ADDITIO NAL OF EVIDENCE IN RELATION TO 46A OF I.T. RULE IS VERY CLEAR. NO PERSON IS ENTITLED TO SEE ADMISSION OF ADDITIONAL EVIDENCE AS A MATTER OF RIGHT. IN FACT OPENING PORTION OF THE RULE IS COUCHED IN NEGATIVE TERMINOLOGY AND PLACES E3MBARGO ON A PERSON FROM S EEKING ADMISSION OF THE ADDITIONAL EVIDENCE, THE ONLY EXCEPTION BEING FULFILMENT OF STIPULATED CONDITION. THEREFORE, THE APPELLATE AUTHORITY IS VESTED WITH THE DISCRETION WHETHER TO ADMIT OR TO REJECT AN APPLICATION FOR PRODUCTION OF ADDITIONAL EVIDENCE A ND FOR THIS PURPOSE THE ONLY TEST WHICH IS RELEVANT IS WHETHER DISCRETION HAS BEEN VALIDLY EXERCISED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. APPLYING THE 4 ITA NO. 158/NAG/2013 AFORESAID TEST TO THE FACTS OF THE CASE, IT IS APPARENT THAT THE ASSESSEE HAS NOT DEMONSTRATED ANY SUFFICIENT CAUSE FOR NOT PRODUCING THE EVIDENCE BEFORE THE ASSESSING OFFICER. THE ASSESSEE TOOK THE ENTIRE MATTER VERY LIGHTLY BY NOT RESPONDING TO ANY OF THE REQUIREMENTS COMMUNICATED BY THE ASSESSING OFFICER. THE BENEFIT UNDER RULE 46A IS NOT AVAILABLE TO THE PERSON WHO IS NEGLIGENT AND NON COOPERATIVE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT NO FURTHER CHANCE OR OPPORTUNITY IS REQUIRED TO BE GIVEN TO THE APPELLANT TO COVER UP ITS OWN LAPSES. ALSO, AS DISCUSSED EARLIER, EVEN IN APPELLATE PROCEEDINGS NO DOCUMENTARY EVIDENCE OF ANY TYPE HAS BEEN PRODUCED BY THE APPELLANT TO ESTABLISH BITS CLAIM U/S 80IB(10). 3.2 SINCE THE A SSESSEES PRAYER THAT ADMISSION OF ADDITIONAL EVIDENCES WERE REJECTED AND CONSEQUENTLY THE CLAIM OF DEDUCT ION U/S 80IB(10) WAS REJECTED, HENCE THE ASSESSEE IS NOW FURTHER IN APPEAL. 4. ON THIS SHORT ISSUE WE HAVE HEARD BOTH THE SIDES. INSTEAD OF HEARING THE MERITS OF THE CASE ON THE ISSUE OF THE CLAIM OF DEDUCTION U/S 80IB(10), THE PARTI E S HAVE URGED THAT IT I S JUSTIFIABLE TO FIRST DECIDE THE QUESTION OF ADMISSION OF CERTAIN EVIDENCES WHICH WERE HAVING THE BEARING ON THE ISSUE OF ALLOWANCE OF DEDUCTION. THE APPELLANT HAS CONTENDED THAT THERE WAS A SUFFICIENT CAUSE DUE TO WHICH CERTAIN EVIDENCES COULD NOT BE FIL ED BEFORE THE AO. IT WAS EXPLAINED THAT THE PREMISES OF THE ASSESSEE W ERE SUBJECTED TO SURVEY ON 25 - 08 - 2011. CERTAIN DOCUMENTS AND THE BOOKS WERE IMPOUNDED. UNDISPUTEDLY THE ASSESSMENT FOR THE ASSESSMENT YEAR 2009 - 10 WAS COMPLETED ON 21 - 12 - 2011. THE ASSES SEE WAS HANDLING THE SURVEY PROCEEDINGS AS WELL AS THE ASSESSMENT PROCEEDINGS DUE TO W HICH SOME OF THE DETAILS COULD NOT BE FURNISHED. IT WAS NOT THE CASE OF THE REVENUE THAT NO DETAILS WERE FURNISHED. BUT THE CORRECT FACTUAL POSITION WAS THAT THE DOCUMEN TS ETC. W ERE FURNISHED TO THE EXTENT POSSIBLE. THE ASSESSEE HAD COOPERATED DURING THE ASSESSMENT PROCEEDINGS. FURTHER IT HAS ALSO BEEN PLEADED THAT THE LEARNED CIT(APPEALS) WAS FULLY EMPOWERED TO ADMIT THE ADDITIONAL EVIDENCES AS PRESCRIBED UNDER RULE 46 A OF I,T. ACT. IT HAS BEEN PLEADED BEFORE 5 ITA NO. 158/NAG/2013 US THAT AN APPELLANT IS NOT ENTITLED TO PRODUCE ANY EVIDENCE BEFORE THE CIT(APPEALS) EXCEPT IN CERTAIN CIRCUMSTANCES AND ONE OF THE ADMITTED FACTUAL POSITION WAS THAT DUE TO THE SURVEY ACTION THE ASSESSEE WAS PREVE NTED BY SUFFICIENT CAUSE FROM PRODUCING CERTAIN DOCUMENTS AND EVIDENCES BEFORE THE AO. OUR ATTENTION HAS ALSO BEEN DRAWN ON SUB - RULE ( 4 ) OF RULE 46A WHICH PRESCRIBES THAT NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF CIT(APPEALS) TO DIRECT THE PRODUCTION OF ANY DOCUMENT ETC. T O ENABLE THE CIT(APPEALS) TO DISPOSE OF THE APPEAL. THE ONLY REQUIREMENT IS THAT THE EVIDENCES WHICH COULD NOT BE PRODUCED AT THE ASSESSMENT STAGE SHOULD BE ALLOWED TO BE EXAMINED BY THE AO (REFER RULE 46A(3) ). ON THIS ISSUE CERTAIN CASE LAWS HAVE BEEN RELIED UPON BEFORE US AS LISTED BELOW : A) CIT VS. KUM. SATYA SETIA (143 ITR 486 (MP HC). B) RAJMOT I INDUSTRIES VS. ITO (1995) 52 ITD 286. C) SMT. PRABHAVATI S. SHAH VS. CIT 231 ITR 1 (BOM). D) CIT VS. GANI BHAI WAHAQB BHAI (1998) 232 ITR 900 (MP). E) SMT. PRABHAVATI S. SHAH VS. CIT 231 ITR 1 (BOM) F) CIT VS. SURETECH HOSPITAL & RESEARCH CENTRE LTD. 293 ITR 53 (BOM). G) DEVKINBANDAN GUPTA HUF VS. JCIT 43 TAXMANN.COM 230 (MUMBAI ITAT) H) ACIT VS. KRAFTS PALACE 58 TAXMANN.COM 24 (AGRA ITAT). 5. ONE MORE CONNECTED ARGUMENT OF THE APPELLANT IS THAT THE REVENUE AUTHORITIES HAVE NOT ACCEPTED FORM 10CCB, A REQUIREMENT TO FURNISH AUDIT REPORT FOR THE PURPOSE OF CLAIM OF DEDUCTION U/S 80IB(10). ON THIS ISSUE THAT THE FORM 10CCB IS A LEGAL REQUIREMENT, HENCE SHOULD BE COMPLIED WITH EVEN WHEN NOT ATTACHED ALONG WITH THE RETURN, THE ASSESSEE HAS PLACED R ELIANCE ON THE FOLLOWING CASE LAWS: A) CIT VS. AKS ALLOYS P. LTD. 205 TAXMAN 11 (MAD HC) B) DCIT VS. B.V. ASWATHAIAH & BROS. 72 TTJ 714 (BANG ITAT) C) N.A.N. WOOLLEN MILLS VS. ACIT 56 ITD 268 (DELHI ITAT). 6 ITA NO. 158/NAG/2013 5.1 FROM THE SIDE OF THE APPELLANT A SEQUE NCE OF EVENTS DESCRIBING THE DATES ON WHICH THE AGRICULTURAL LAND WAS PURCHASED AND THEN CONVERTED INTO NON AGRICULTURAL PURPOSES, PLAN WAS SANCTIONED, PERMISSION OF CONSTRUCTION OBTAINED, RESCHEDULING OF THE LAYOUT, DETAILS OF RESIDENTIAL CONSTRUCTION AN D THE REQUISITE APPROVALS ON DIFFERENT DATES HAVE ALSO BEEN PLACED BEFORE US. BUT THE FACT OF THE MATTER IS THAT FORM 10CCB AND ALL THESE DETAILS FURNISHED AS A SEQUENCE OF EVENTS , WERE NOT BEFORE THE AO. THEREFORE, IN THE INTEREST OF NATURAL JUSTICE AND RESPECTFULLY FOLLOWING THE CASE LAWS AS CITED BEFORE US, WE ARE OF THE CONSIDERED OPINION THAT UNDER THE FITNESS OF CIRCUMSTANCES THE ENTIRE ISSUE OF CLAIM OF DEDUCTION U/S 80IB(10 ) SHOULD GO BACK TO AO FOR DENOVO ADJUDICATION. THE AO IS, THEREFORE, EMPOWERED TO INVESTIGATE THE CORRECTNESS OF THE EVIDENCES AND THEREUPON DECIDE THE ISSUE AFRESH AS PER LAW, NEEDLESS TO SAY, AFTER PROVIDING AN ADEQUATE OPPORTUNITY OF HEARING TO THE ASS ESSEE. SIDE BY SIDE WE ALSO GIVE DIRECTION TO THE ASSESSEE TO PROMPTLY COMPLY WITH THE NOTICE OF HEARING, RATHER SUO MOTO APPEAR BEFORE THE AO WITH ALL THOSE EVIDENCES WITHIN 45 DAYS ON RECEIPT OF T HIS ORDER OF THE TRIBUNAL, SO THAT THE ASSESSMENT CAN BE FINALIZED AT AN EARLY DATE. SINCE THE MATTER HAS BEEN RESTORED BACK TO THE AO, THEREFORE, ALL THE GROUNDS RAISED BY THE ASSESSEE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCT., 2015. SD/ - SD/ - ( SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 30 TH OCT., 2015. 7 ITA NO. 158/NAG/2013 COPY FORWARDED TO : 1. SHRI RAJESH NANDLAL BIYANI, GOKUL DHAM, TADOBA ROAD, TUKUM, CHANDRAPUR - 440001. 2. JCIT , CHANDRAPUR. 3. C.I.T. , CONCERNED 4. CIT(APPEALS) - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR.