Dr.George J.Neelankavil, CHENNAI V. ACIT, CHENNAI

ITA 1656/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0947 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-01-2013
• Assessment Year: 1999-2000
• Appeal Filed On: 24-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BASHYAM IRS
• Assessee Lawyers: DR GEORGE J NEELA NKAVIL
• Keywords: Reason to believe
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A.NO. 1656/MDS/2012 ASSESSMENT YEAR : 1999-2000 DR. GEORGE J. NEELANKAVIL, T-73, THIRD MAIN ROAD, ANNA NAGAR, CHENNAI 600 040. PAN AADPN2553J VS. THE ASSISTANT COMMISSIONER OF INDIA, BUSINESS CIRCLE-XIII, CHENNAI 600 006. (APPELLANT) (RESPONDENT) APPELLANT BY : DR. GEORGE J. NEELA NKAVIL(ASSESSEE) RESPONDENT BY : SHRI GURU BASHYAM, IRS, JC IT DATE OF HEARING : 22 ND JANUARY, 2013 DATE OF PRONOUNCEMENT : 22 ND JANUARY, 2013 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THIS APPEAL FILED BY THE ASSESSEE RELATES TO THE AS SESSMENT YEAR 1999-2000. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-XII AT CHENNAI DATED 22.9.2005. THE APPEALS FILED BY THE ASSESSEE FOR T HE ASSESSMENT YEARS 1998-99 AND 1999-2000 HAVE BEEN DISPOSED OF B Y THE ITA 1656/12 :- 2 -: COMMISSIONER OF INCOME-TAX(APPEALS) THROUGH A COMMO N ORDER. THE ASSESSMENT IN THE PRESENT CASE WAS COMPLETED UN DER SEC. 143(3) READ WITH SEC.264 OF THE INCOME-TAX ACT, 196 1. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THE PRESEN T APPEAL READ AS BELOW : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS) IN AS MUCH AS SHE HAS HELD AGAINST THE APPELLANT IS OPPOSED TO LAW AND CONTRARY TO THE FAC TS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED I N HOLDING THAT THE ENTIRE AMOUNT OF ` 19,30,307/- WAS ASSESSABLE UNDER THE HEAD SALARY. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE APPRECIATED THAT THE INCOME EARNED WAS PURELY PROFESSIONAL INCOME AND DID NOT HAVE THE CHARACTER OF SALARY. 4. THE COMMISSIONER OF INCOME TAX(APPEALS) OUGHT T O HAVE APPRECIATED THAT THE CONSENT LETTER GIVEN BY T HE APPELLANT WAS ONLY IN REGARD TO CONFIRMATION OF THE AMOUNT RECEIVED FROM M/S. KCP LTD. ITA 1656/12 :- 3 -: 5. THE COMMISSIONER OF INCOME-TAX(APPEALS) OUGHT T O HAVE THEREFORE HELD THAT APPROPRIATE DEDUCTION FOR EXPENSES SHOULD HAVE BEEN ALLOWED. 6. THE APPELLANT SUBMITS THAT IN VIEW OF THE DECIS ION OF THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNA I, IN ASSESSEES OWN CASE VIDE ORDER DATED 20.03.2008 IN I.T.A.NO.16/MDS/2006 FOR A.Y. 1998-99, THIS HONBLE TRIBUNAL MAY BE PLEASED TO DIRECT THE ALLOWANCE OF DEDUCTION OF 60%. 7. THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED I N REJECTING THE APPELLANTS PLEA THAT THE AMOUNTS ACT UALLY REIMBURSED SHOULD HAVE BEEN EXCLUDED IN THE COMPUTATION OF INCOME. 8. THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN NOT ALLOWING THE DEDUC TION OF ` 4 LAKHS PAID TO M/S. CICA. 9. THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN NOT GIVING CREDIT OF E XCESS TDS DEDUCTED AND NOT CREDITED TO APPELLANTS ACCOUN T. ITA 1656/12 :- 4 -: 10. THE APPELLANT CONTESTS ALL THE FINDINGS OF FAC T AND LAW MADE BY THE COMMISSIONER OF INCOME-TAX(APPEALS) AGAINST THE APPELLANT. 3. THERE IS A DELAY OF 2438 DAYS IN FILING THIS APP EAL BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED A CONDONATION PET ITION IN THE FORM OF AN AFFIDAVIT. AS PER THE AVERMENTS MADE BY HIM IN THE AFFIDAVIT, THE ASSESSEE HAD FILED THE APPEAL AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) FOR THE ASS ESSMENT YEAR 1998-99 AND THE TRIBUNAL HAS GIVEN SUBSTANTIAL RELIEF AS PRAYED FOR BY THE ASSESSEE. BUT NO APPEAL WAS FILE D FOR THE IMPUGNED ASSESSMENT YEAR, EVEN THOUGH THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) FOR BOTH THE AS SESSMENT YEARS 1998-99 AND 1999-2000 WAS PASSED THROUGH A CO MMON ORDER. THE ASSESSEE HAS NOT FILED APPEAL FOR THE I MPUGNED ASSESSMENT YEAR FOR THE REASON THAT NO PROPER ADVIC E WAS GIVEN TO HIM BY ANYBODY. WHILE FILING THE APPEAL BEFORE THE TRIBUNAL FOR THE ASSESSMENT YEAR 1998-99, THE ASSESSEE THOUGHT T HAT THIS APPEAL WOULD TAKE CARE FOR BOTH THE ASSESSMENT YEAR S 1998-99 AND 1999-2000, AS THE APPEAL HAS BEEN FILED AGAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX(APPE ALS). ITA 1656/12 :- 5 -: WHEN THE TRIBUNAL DISPOSED OF THE APPEAL FOR THE AS SESSMENT YEAR 1998-99, THE ASSESSEE FURTHER HAD AN IMPRESSIO N THAT THE SAME RELIEF WOULD BE EXTENDED TO THE IMPUGNED ASSES SMENT YEAR AS WELL. APART FROM THE ABOVE MISCONCEPTION, THE A SSESSEE WAS UNDERGOING MEDICAL TREATMENT FOR A LONG PERIOD FOR HIS CARDIAC DISORDER. HE HAS FILED BEFORE US THE DETAILS OF TR EATMENT UNDERGONE BY THE ASSESSEE FOR CARDIAC DISORDER IN S RI RAMACHANDRA MEDICAL CENTRE AT CHENNAI. THE ASSESSE E HAS ALREADY UNDERGONE THE PROCEDURE OF STENTING FOUR TI MES AND HE HAD UNDERGONE FOUR ANGIOGRAMS IN THE COURSE OF INVE STIGATING HIS MEDICAL CASE. 4. WE FIND THAT THE ASSESSEE HAD BEEN UNDER MEDICAL CARE THROUGHOUT THE PERIOD UNDER REFERENCE AND HIS MOVAB ILITY AND EXERTION WERE HIGHLY RESTRICTED BY HIS HOSTILE HEAL TH CONDITION. REGARDING THE OTHER REASONS POINTED OUT BY THE ASSE SSEE IN NOT FILING THE APPEAL FOR THE ASSESSMENT YEAR 1999-2000 , WE FIND SOME AMOUNT OF REASONING IN THEM. PRIMA FACIE, IT IS STRANGE TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT WHEN HE COULD FILE THE APPEAL FOR THE ASSESSMENT YEAR 1998-99 BEFORE THE T RIBUNAL, WHY HE COULD NOT FILE THE APPEAL FOR THE ASSESSMENT YEA R 1999-2000? ITA 1656/12 :- 6 -: BUT THE ASSESSEE COMING FROM A NON-TAX BACKGROUND, THERE IS A REMOTE CHANCE THAT HE MIGHT THINK THAT ONE APPEAL F ILED FOR THE COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX(APPE ALS) MAY BE SUFFICIENT TO TAKE CARE OF BOTH THE ASSESSMENT Y EARS 1998-99 AND 1999-2000. IN THIS CONTEXT, WE HAVE TO MAKE A FINDING THAT HE WAS NOT PROPERLY ADVISED IN THIS REGARD, MAY BE, BY HIS TAX ADVISOR. BUT IT IS TO BE SEEN THAT IN HIS ORDER PA SSED UNDER SEC.264 AGAINST THE APPLICATION FILED BY THE ASSESS EE BEFORE HIM, THE COMMISSIONER OF INCOME-TAX, BY AND LARGE ACCEPT ED THE GRIEVANCES OF THE ASSESSEE IN NOT ADDRESSING HIS PR OBLEM AT APPROPRIATE FORUM AT APPROPRIATE TIME. 5. WHEN GOING THROUGH THE GAMUT OF THE SITUATION OF THE ASSESSEE, WE FIND THAT THE ASSESSEE CANNOT BE HELD TO BE CARELESS AND IRRESPONSIBLE IN NOT FILING THE APPEAL BEFORE THE TRIBUNAL FOR THE ASSESSMENT YEAR 1999-2000. 6. THE ESTABLISHED PRINCIPLE OF LAW IS THAT IF THER E IS ANY DOUBT, THE BENEFIT OF DOUBT SHOULD GO TO THE ASSESSEE. WH EN THE ASSESSEE HAS FILED THE APPEAL FOR THE ASSESSMENT Y EAR 1998-99 AND WAS LARGELY SUCCESSFUL BEFORE THE TRIBUNAL, THE RE IS NO REASON TO BELIEVE THAT THE ASSESSEE DID NOT PURPOSELY FILE THE APPEAL FOR ITA 1656/12 :- 7 -: THE ASSESSMENT YEAR 1999-2000. THEREFORE, IN THE F ACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSE E WAS PREVENTED BY SUFFICIENT REASONS IN NOT PREFERRING T HE SECOND APPEAL BEFORE THE TRIBUNAL, IN TIME. WE ARE OF THE CONSIDERED VIEW THAT IN THE INTEREST OF JUSTICE, THE DELAY CAU SED IN FILING THE APPEAL BEFORE THE TRIBUNAL NEEDS TO BE CONDONED. A CCORDINGLY, THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED FO R HEARING ON THE ROLLS OF THE TRIBUNAL. 7. REGARDING THE ISSUES ON MERIT, WE FIND THAT THE TRIBUNAL HAS CONSIDERED THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 1998-99 THROUGH THEIR ORDER DATED 20.3.2008 PA SSED IN ITA NO.16/MDS/2006. AFTER CONSIDERING THE FACTS OF THE CASE AND ALSO REFERRING TO SIMILAR DECISION TAKEN BY THE TRIBUNAL IN THE CASE OF M/S. CENTRE FOR INDIVIDUAL AND CORPORATION ACTION(C ICA), THE TRIBUNAL HAD HELD THAT 40% OF THE PROFESSIONAL RECE IPTS WOULD BE TREATED AS INCOME OF THE ASSESSEE. FOLLOWING THE S AID ORDER OF THE TRIBUNAL FOR THE EARLIER ASSESSMENT YEAR, WE H OLD THAT FOR THIS IMPUGNED ASSESSMENT YEAR ALSO THE INCOME OF THE ASS ESSEE SHALL BE DETERMINED AT 40% OF HIS TOTAL PROFESSIONAL RECE IPTS. THE ITA 1656/12 :- 8 -: ASSESSING OFFICER IS DIRECTED TO COMPUTE THE INCOME OF THE ASSESSEE IN THE MANNER STATED ABOVE. 8. ANOTHER SPECIFIC GROUND RAISED BY THE ASSESSEE I N THE PRESENT CASE IS THAT THE LOWER AUTHORITIES HAVE ERR ED IN NOT ALLOWING THE DEDUCTION OF ` 4 LAKHS PAID TO M/S. CICA. IT IS TO BE SEEN THAT M/S. KCP LTD. FOR WHOM THE ASSESSEE HAD D ONE SOME ASSIGNMENTS, HAD IN FACT PAID THE AMOUNT OF ` 4 LAKHS TO M/S. CICA AND THAT AMOUNT NEVER CAME TO THE HANDS OF THE ASSESSEE. THEREFORE, THERE IS NO JUSTIFICATION IN TREATING TH E SAID AMOUNT AS THE INCOME OF THE ASSESSEE. ACCORDINGLY, THE SUM O F ` 4 LAKHS IS DELETED FROM THE TOTAL PROFESSIONAL RECEIPTS OF THE ASSESSEE. IT IS ON THE BALANCE TOTAL RECEIPTS THAT THE ASSESSING OF FICER HAS TO COMPUTE THE INCOME AT 40%. 9. ANOTHER POINT RAISED BY THE ASSESSEE IS THAT THE LOWER AUTHORITIES HAVE NOT GIVEN FULL CREDIT FOR THE TAX DEDUCTED AT SOURCE AND NOT CREDITED TO THE ASSESSEES ACCOUNT. SINCE THE PAYERS HAVE DEDUCTED TAX AT SOURCE FROM THE PAYMENTS MADE TO THE ASSESSEE, IT IS THE DUTY OF THOSE PAYERS TO MAKE PA YMENTS TO THE GOVERNMENT AND THE ASSESSEE CANNOT BE DENIED CREDIT THEREOF. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO GIVE FULL CREDIT OF ITA 1656/12 :- 9 -: TDS AVAILABLE IN THE HANDS OF THE ASSESSEE BEFORE F INALIZING ULTIMATE PAYMENT OR REFUND. 10. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED TO THE ABOVE EXTENT. ORDER PRONOUNCED ON TUESDAY, THE 22 ND OF JANUARY, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR.O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 22 ND OF JANUARY, 2013 MPO* COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR