DEVELOPMENT EXCELLENCE FOUNDATION, MUMBAI V. ITO (E) I(1), MUMBAI

ITA 1630/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7828 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: MIHIR SHAH
• Keywords: Charitable institution; Opportunity of being heard; Additional evidence
• Section: 143(3); 142(1); 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI D.T. GARASIA (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1630/MUM/2016 ASSESSMENT YEAR: 2011 - 12 M/S DEVELOPMENT EXCELLENCE FOUNDATION 2 ND FLOOR, DUKANWALA ESTATE, ABOVE GENERAL MEDICAL, 47 DR NAIR ROAD, MUMBAI - 400008 VS. ITO(E) - 1(1) ROOM NO. 508, PIRAMAL CHAMBERS, LALBAUG MUMBAI - 400013 PAN NO. AAATD2469E APPELLANT RESPONDENT ASSESSEE BY : MR. NITESH JOSHI & MR. MIHIR SHAH , AR REVENUE BY : MR. RAM TIWARI , DR DATE OF HEARING : 28/12 /2017 DATE OF PRONOUNCEMENT : 29/12/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2011 - 12 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - I , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 144 OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUND RAISED BY THE ASSESSEE I N THIS APPEAL IS AGAINST THE ORDER OF THE LD. CIT(A) CONFIRMING THE TOTAL INCOME OF RS.2,63,26,440/ - MADE BY THE ASSESSING OFFICER (AO) . IT IS ALSO RAISED THAT THE ASSESSEE HAVING BEEN PREVENTED BY SUFFICIENT CAUSE FROM FURNISHING THE ADDITIONAL EVIDENCE D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE M/S DEVELOPMENT EXCELLENCE FOUNDATION ITA NO. 1630/MUM/2016 2 LD. CIT(A) OUGHT TO HAVE ADMITTED THE SAME UNDER RULE 46A OF THE INCOME TAX RULES, 1962. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST AND IT FILED ITS RETURN OF INCOME FOR THE AY 2011 - 12 ON 28.09.2011 ALONG WITH AUDIT REPORT IN FORM NO. 10B DECLARING TOTAL INCOME AT RS. NIL. IT CLAIMED EXEMPTION U/S 11 OF THE ACT. THE AO ISSUED NOTICE U/S 143(2) AND 142(1) DATED 21.09.2012 AND 11.07.2013 ALONG WITH QUESTIONNAIRE TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS THERE WAS NO COMPLIANCE BY THE ASSESSEE ON THE ABOVE DATES, THE AO MADE THE ASSESSMENT U/S 144 DETERMINING THE INCOME AT RS.2,63,26,440/ - 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN A PPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) OBSERVED THAT THE ASSESSEE FAILED TO EXPLAIN THE REASONS FOR NOT COMPLYING WITH THE NOTICE ISSUED BY THE AO . THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE HIM WERE ALSO REJECTED BY THE LD. CIT(A) ON THE RE ASON THAT THE ASSESSEE WAS NOT PREVENTED BY ANY SUFFICIENT CAUSE IN FURNISHING THE SAID DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE AO AND HENCE THE CONDITIONS PROVIDED UNDER RULE 46A WERE NOT FULFILLED. ON THE BASIS OF THE ABOVE REASON S, THE LD. CIT(A) DISMISS ED THE APPEAL FILED BY THE ASSESSEE. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE ASSESSEE WAS NOT GIVEN REASONABLE OPPORTUNITY OF BEING HEARD BY THE AO. IT IS ALSO SUBMITTED THAT THE LD. CIT(A) SHOULD HAVE ADMIT TED THE ADDITIONAL EVIDENCE FILED BEFORE HIM. RELIANCE IS PLACED BY HIM ON THE M/S DEVELOPMENT EXCELLENCE FOUNDATION ITA NO. 1630/MUM/2016 3 JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN SMT. PRABHAVATI S. SHAH V. CIT (1998) 231 ITR 1 (BOM). ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. AS MENTIONED HEREINBEFORE THE AO HAS ISSUED NOTICE U/S 143(2) AND 142(1) DATED 21.09.2012 AND 11.07.2013 TO THE ASSESSEE. THEN HE MADE THE ASSESSMENT U/S 144 STATING THAT THE RE WAS NO COMPLIANCE BY THE ASSESSEE ON THE ABOVE DATES. WE REFER HERE TO PARA 2 OF THE ASSESSMENT ORDER DATED 18.03.2014. THEN WHEN THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) REQUESTING FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A, THE SAME WA S DENIED BY THE LD. CIT(A). LET US NOW REFER TO THE DECISION IN SMT. PRABHAVATI S. SHAH (SUPRA) WHICH READS AS UNDER: ON A PLAIN READING OF RULE 46A OF THE INCOME - TAX RULES, 1962, IT IS CLEAR THAT THE RULE IS INTENDED TO PUT FETTERS ON THE RIGHT OF TH E ASSESSEE TO PRODUCE BEFORE THE APPELLANT ASSISTANT COMMISSIONER ANY EVIDENCE WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF THE PROCEEDINGS BEFORE THE INCOME - TAX OFFICER, EXCEPT IN THE CIRCUMSTANCES SET OUT THER EIN. IT DOES NOT DEAL WITH THE POWERS OF THE APPELLANT ASSISTANT COMMISSIONER TO MAKE FURTHER ENQUIRY OR TO DIRECT THE INCOME TAX OFFICER TO MAKE FURTHER ENQUIRY AND TO REPORT THE RESULT OF THE SAME TO HIM. THIS POSITION HAS BEEN MADE CLEAR BY SUB - RULE (4) OF RULE 46A WHICH SPECIFICALLY PROVIDES THAT THE RESTRICTIONS PLACED ON THE PRODUCTION OF ADDITIONAL EVIDENCE BY THE APPELLANT WOULD NOT AFFECT THE POWERS OF THE APP ELLANT COMMISSIONER TO CALL FOR THE PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF ANY WITNESS TO ENABLE HIM TO DISPOSE OF THE APPEAL. M/S DEVELOPMENT EXCELLENCE FOUNDATION ITA NO. 1630/MUM/2016 4 7. IN THE INSTANT CASE THE LD. CIT(A) HAS NOT CALLED FOR THE PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF ANY WITN ESS TO ENABLE HIM TO DISPOSE OF THE APPEAL. RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO TO MAKE A FRESH ASSESSMENT AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. WE DIRECT THE ASSESSEE TO FILE ALL RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29/12/2017. SD/ - SD/ - ( D.T. GARASIA ) (N.K. PRADHAN) JUDICIA L MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 29/12/2017. RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI