Shri Virender Pal Khurana, New Delhi V. ACIT, New Delhi

ITA 188/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4514 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK GARG SENIOR
• Assessee Lawyers: ADITYA JAIN
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.188/DEL./2016 (ASSESSMENT YEAR : 2006-07) SHRI VIRENDER PAL KHURANA, VS. ADDL. CIT, C/O SHRI MAYANK JAIN, ADVOCATE RANGE 39, JAIN SINGH AND COMPANY, NEW DELHI. 2, CENTRAL LANE (BASEMENT), BENGALI MARKET, NEW DELHI 110 001. (PAN : AALPK5249G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ADITYA JAIN, ADVOCATE REVENUE BY : SHRI DEEPAK GARG, SENIOR DR DATE OF HEARING : 26.09.2017 DATE OF ORDER : 28.09.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THERE IS A DELAY OF 221 DAYS IN FILING THE PRESENT APPEAL WHICH THE ASSESSEE HAS SOUGHT TO BE CONDONED ON THE GROUNDS INTER ALIA THAT THE FILE CONTAINING ORDER PASSED UNDER SE CTION 154 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) DATED 30 .03.2015 PASSED BY LD. CIT (A) GOT MISPLACED DURING THE TERMITE CLE ANING OF THE OFFICE OF THE COUNSEL OF THE ASSESSEE WHICH WAS SUB SEQUENTLY FOUND ITA NO.188/DEL./2016 2 WHILE SHRI SANJAY KUMAR, CLERK OF THE COUNSEL OF TH E ASSESSEE WAS SORTING OUT THE DISPOSED OFF FILES; THAT THE DELAY IN FILING THE APPEAL IS NEITHER INTENTIONAL NOR DELIBERATE; THAT THE ASS ESSEE HAS A GOOD CASE ON MERITS IN HIS FAVOUR. THE LD. DR VEHEMENTL Y OPPOSED THE APPLICATION FOR CONDONATION OF DELAY AND SOUGHT TO DISMISS THE APPEAL. 2. KEEPING IN VIEW THE FACTS INTER ALIA THAT WHEN T HE ASSESSEE HAS BEEN CONTINUOUSLY CONTESTING THE ASSESSMENT PRO CEEDINGS BEFORE THE AO AND THE LD. CIT (A) BY FILING APPEAL AND THEN AGAIN BEFORE LD. CIT (A) BY FILING APPLICATION U/S 154 OF THE ACT, IT APPEARS GENUINE THAT THE DELAY IN FILING THE PRESEN T APPEAL IS ATTRIBUTED TO THE COUNSEL FOR THE ASSESSEE ONLY WHO WAS UNDER OBLIGATION TO FILE THE SAME WITHIN PERIOD OF LIMITA TION. SO, THE INADVERTENCE OR NEGLIGENCE, AS THE CASE MAY BE, ON THE PART OF THE LD. COUNSEL FOR THE ASSESSEE IN NOT FILING APPEAL W ITHIN TIME CANNOT BE ATTRIBUTED TO THE ASSESSEE WHO HAS THE RIGHT TO BE HEARD ON MERITS, HENCE THE DELAY OF 221 DAYS FOR FILING THE APPEAL IS HEREBY CONDONED. 3. THE APPELLANT, SHRI VIRENDER PAL KHURANA (HEREIN AFTER REFERRED TO AS THE ASSESSEE), BY FILING THE PRESE NT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 03.10.2011 PASSE D BY THE ITA NO.188/DEL./2016 3 COMMISSIONER OF INCOME-TAX-XXVIII, NEW DELHI QUA TH E ASSESSMENT YEAR 2006-07 ON THE GROUNDS INTER ALIA T HAT :- 1. THAT THE LD. CIT (A) ERRED IN HOLDING THAT FAILURE OF CIT (A) TO ADJUDICATE THE GROUND RAISED BEFORE IT IS NOT A PRIMA FACIE MISTAKE AND CANNOT BE DECIDED UNDER SECTION 154 OF THE ACT. 2. THAT THE ORDER PASSED BY THE LD.CIT (A) UNDER SECTION 154 OF THE ACT IS OPPOSED TO FACTS AND LAW. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND LAW IN ASSUMING THAT THE MATTER HAS BEEN DISCUSSED AND NO RELIEF HAS BEEN ALLOWED SHOWS THAT THE ISSUE HAS BEEN DIRECTLY CONFIRMED IN APPEAL. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FAILED TO RECTIFY THE MISTAKE APPARENT FROM RECORD, THAT THE ADDITION OF RS.3,15,000/- ON THE APPLICATION OF 12% INTEREST IS CONTRARY TO THE RATE OF MARK FOR THE LOAN FROM CENTURION BANK OF 9.25%. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUNDS OF APPEAL. 6. ALTERNATIVELY AND WITHOUT PREJUDICE THE ABOVE RATE AND QUANTUM OF ADDITION SUSTAINABLE IS BEING PRAYED TO THE DIFFERENTIAL OF 9.25% AND 9% RESPECTIVELY. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : DURING ASSESSMENT PROCEED INGS, AO NOTICED THAT THE ASSESSEE HAS FORWARDED A LOAN OF R S.60,00,000/- TO M/S. KAPSON POLYCOATS OUT OF CAPITAL GAIN OFFERED F OR TAXATION TO THE TUNE OF RS.50,00,000/- AND BALANCE RS.10,00,000 /- HAS BEEN ITA NO.188/DEL./2016 4 SHOWN AS LOAN RETURNED BY M/S. KAPSON POLYCOATS WHI CH HAS AGAIN BEEN FORWARDED TO THE SAID PARTY. ASSESSEE HAS GIV EN THE LOAN OF RS.60,00,000/- TO M/S. KAPSON POLYCOATS AT AN INTER EST OF 9% WHEREAS ASSESSEE HAS TAKEN LOAN OF RS.28,81,502/- F ROM CENTURION BANK, CONNAUGHT PLACE, NEW DELHI TOWARDS CONSTRUCTI ON AT AN INTEREST OF 9.25%. ASSESSEE CLAIMED THAT THE LOAN WAS GIVEN IN THE BEST BUSINESS INTEREST AND OUT OF COMMERCIAL EXPEDI ENCY. HOWEVER, AO DECLINED TO ACCEPT THE SUBMISSIONS MADE BY THE ASSESSEE AND APPLIED THE MARKET RATE OF 12% ON THE LOAN GIVEN TO M/S. KAPSON POLYCOATS AND THEREBY MADE AN ADDITION OF RS.3,15,000/-. 5. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS PARTLY ALLOWED THE SAME. F EELING AGGRIEVED, THE ASSESSEE MOVED AN APPLICATION U/S 15 4 OF THE ACT TO ADJUDICATE UPON GROUNDS NO.2(A) AND 2(B) RAISED BEF ORE LD. CIT (A) REGARDING THE ISSUE IN CONTROVERSY, WHICH WAS DISMI SSED BY LD. CIT (A). FEELING AGGRIEVED, THE ASSESSEE HAS COME UP B EFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUGNED ORDER P ASSED BY LD. CIT (A) . 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.188/DEL./2016 5 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. LD. CIT (A) WHILE DISPOSING OFF THE APPLICATION U/S 154 OF THE ACT RETURNED THE FINDINGS VIDE ORDER DATED 30.0 3.2015 AS UNDER:- THE APPELLANT HAS FILED APPLICATION UNDER SECTION 154 VIDE LETTER DATED 01.09.2014 THAT THE COMMISSIO NER OF INCOME TAX(A) HAS FAILED TO ADJUDICATE ON GROUND NO.2(A) AND 2(B) I.E. ON THE ADDITION OF RS.3,15,00 0/- BY APPLICATION OF 12% RATE AS AGAINST RATE OF LOAN FRO M CENTURION BANK AT 9.25%. HOWEVER, THE PERUSAL OF TH E APPELLATE ORDER DATED 03.10.2011 FOR THE RELEVANT ASSESSMENT YEAR SHOWS THAT THE ISSUE HAS BEEN REFER RED TO BY THE COMMISSIONER OF INCOME TAX(A) AND NO SPECIFIC DECISION IS APPARENT ON THE MATTER. HOWEVE R THE FACT THAT THE MATTER HAS BEEN DISCUSSED AND NO RELI EF HAS BEEN ALLOWED SHOWS THAT THE ISSUE HAS BEEN INDIRECT LY CONFIRMED IN APPEAL. FURTHER, THE CLAIM OF THE APPE LLANT TO CONSIDER THE QUANTUM OF ADDITION SUSTAINABLE AS DIFFERENTIAL OF 9.25% AND 9% OR AT THE RATE OF LOAN TAKEN FROM THE CENTURION BANK ARE NOT ISSUES WHICH FALL UNDER THE DEFINITION OF MISTAKE APPARENT FROM RECORD. THEY REQUIRE APPLICATION OF MIND AND THEREF ORE ARE NOT PRIMA FACIE MISTAKES WHICH CAN BE DECIDED UNDER SECTION 154. SINCE THE MISTAKE ARE NOT APPARENT FROM RECORD THE ADDITION OF RS.3,15,000/- IS UPHELD AND APPLICA TION UNDER SECTION 154 OF THE APPELLANT IS REJECTED. 8. BARE PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) DATED 03.10.2011 WHILE DECIDING THE APPEAL SHOW S THAT THE ASSESSEE HAS RAISED SPECIFIC GROUNDS NO.2(A) AND 2( B) QUA THE ISSUE IN CONTROVERSY BUT NO FINDINGS HAVE BEEN RETURNED B Y THE LD. CIT ITA NO.188/DEL./2016 6 (A). THIS FACT HAS BEEN ADMITTED BY LD. CIT (A) IN THE ORDER DATED 30.03.2015 PASSED U/S 154 BUT DECLINED TO DECIDE TH E ISSUE ON THE GROUND THAT THIS ISSUE REQUIRES APPLICATION OF MIND AND AS SUC H IS NOT A MISTAKE APPARENT ON RECORD TO BE DECIDED U/S 154 OF THE ACT . 9. WHEN NO FINDINGS HAVE BEEN RETURNED BY LD. CIT ( A) ON THE ISSUE IN CONTROVERSY NEITHER AT THE TIME OF DECIDIN G THE APPEAL NOR AT THE TIME OF DISPOSING OFF AN APPLICATION U/S 154 OF THE ACT FILED BY THE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE IS REQUIRED TO BE REMITTED BACK TO LD. CIT (A) TO RETU RN FINDINGS ON THE ISSUE SPECIFICALLY RAISED BY THE ASSESSEE VIDE GROU NDS NO.2(A) & 2(B) AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HENCE, THE IMPUGNED ORDER PASSED BY THE DL. CIT (A) IS SET ASIDE AND CONSEQUENTLY, APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 28 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (N.K. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 28 TH DAY OF SEPTEMBER, 2017 TS ITA NO.188/DEL./2016 7 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XXVIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.