The Income-tax Officer, Jalandhar V. M/s. PPR Development & Builders, Jalandhar

ITA 210/ASR/2014

• Counselvise Citation: 21020914 RSA 2014
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Principle of natural justice; Additional evidence
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS.210 & 211(ASR)/2014 ASSESSMENT YEARS:2008-09 & 2009-10 PAN :JLDP3012C INCOME TAX OFFICER, VS. M/S. PPR DEVELOPERS & BUIL DERS, (TDS)-1, JALANDHAR. SILVER OAK APARTMENTS, NAKODAR ROAD, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.V.K.SINGH, DR RESPONDENT BY:NONE DATE OF HEARING:19/02/2015 DATE OF PRONOUNCEMENT:26/02/2015 ORDER PER A.D.JAIN,AM: THESE ARE THE DEPARTMENTS APPEALS FOR THE ASSESSM ENT YEARS 2008-09 & 2009-10 AGAINST THE SEPARATE ORDERS OF CIT(A), JA LANDHAR, EACH DATED 16.02.2012. BOTH THESE APPEALS ARE BEING DISPOSED O F BY THIS COMMON ORDER, SINCE THEY INVOLVE A COMMON ISSUE. 2. THE FOLLOWING COMMON GROUNDS IN BOTH THE APPEALS HA VE BEEN TAKEN : 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE B Y NOT ITA NO.210 & 211(ASR)/2014 2 FOLLOWING THE CONDITIONS AS LAID DOWN IN RULE 46 OF I.T. RULES. 2. THAT THE LD. CIT(A) HAS ERRED IN GIVING RELIEF O N THE PLEA OF THE ASSESSEE THAT EXTERNAL DEVELOPMENT CHARGES W ERE PAID FOR GETTING APPROVAL FOR LICENSE OF DEVELOPING COLONY WHEREAS THESE CHARGES WERE PAID FOR INFRASTRUCTURAL DEVELOPMENT I.E. FOR ROADS, WATER SUPPLY, SEWERAGE ETC. WHICH IS DIFFERENT FROM LICENSE FEE. 3. THAT THE LD. CIT(A) HAS NOT APPRECIATED THE PROV ISIONS OF SECTION 5(5) OF PUNJAB APARTMENT AND PROPERTY REGULATION ACT, 1955 UNDER WHICH THE ASSESSEE WAS REQUIRED TO ENTER INTO AGREEMENT WITH PUDA WHICH IN ITSELF DETERMINED THE CHARACTER OF THE PAYMENTS AS BEING CONTRACTUAL. 4. THAT THE LD. CIT(A) HAS NOT APPRECIATED THAT PUD A PROVIDES INFRASTURE TO THE DEVELOPERS WHICH IS FURT HER DEVELOPED BY MUNICIPAL CORPORATION AND OTHER AGENCI ES AND THAT THE RELATIONSHIP OF THE ASSESSEE AND PUDA IS THAT OF CONTRACTEE AND CONTRACTOR. 3. GROUND NO.5 IN ITA NO.210(ASR)/2014 PERTAINS TO LOW TAX, CONTENDING THAT THE APPEAL BE DECIDED ON MERITS AS THE ISSUE INVOLVED PERTAINS TO OTHER APPEALS ALSO. THIS GROUND DOES NO T APPEAR IN ITA NO.211(ASR)/2014. 4. THE NOTICE ISSUED TO THE ASSESSEE HAS NOT BEEN R ECEIVED BACK UNSERVED. HOWEVER, NONE PUT IN APPEARANCE BEFORE US ON BEHAL F OF THE ASSESSEE. ON THE EARLIER DATE ALSO, I.E., ON 30.12.2014, NONE HA D APPEARED ON BEHALF OF THE ASSESSEE, THOUGH THE NOTICE ISSUED FOR THAT DATE H AD ALSO NOT BEEN RECEIVED ITA NO.210 & 211(ASR)/2014 3 BACK UNSERVED. AS SUCH, WE ARE PROCEEDING TO DECIDE THIS APPEAL IN THE ABSENCE OF REPRESENTATION ON BEHALF OF THE ASSESSEE , ON HEARING THE LD. DR. 5. AS PER GROUND NO.1, THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE IN VIOLATION OF THE PROVISION OF RULE 46A OF THE I.T. RULES. IN THIS REGARD, AS AVAILABLE FROM THE ORDER UNDER APPEAL, I N THE WRITTEN SUBMISSIONS DATED 24.01.2014, FILED BY THE ASSESSEE BEFORE THE LD. CIT(A), THE ASSESSEE HAD, INTER-ALIA, CONTENDED AS FOLLOWS: SIR, MOREOVER, IT IS SUBMITTED THAT IN REGARD TO T HE PAYMENT OF EDC WE HAVE CALLED INFORMATION FROM JALANDHAR DEVELOPME NT AUTHORITY UNDER RTI ACT, 2005 VIDE LETTER DATED 16.12.2011, I N RESPONSE TO WHICH THE JALANDHAR DEVELOPMENT AUTHORITY HAS SENT INFORMATION, WHICH IS REPRODUCED HEREIN BELOW: 1. PERMANENT A/C NO.JDA IS AAALC0454G. 2. STATUS OF INCOME TAX JALANDHAR DEVELOPMENT AUTHORITY IS A REGULAR INCOME -TAX ASSESSEE SINCE ITS FORMATION I.E. 16.07.2007 AND F ILED RETURNS OF INCOME REGULARLY AND PAID INCOME TAX DUE AS PER INC OME TAX RETURNS. 3. THAT NO SUCH RELATION AS LICENSE AND CONTRACTOR EXI ST. 4. THIS ORGANIZATION ITSELF DOES NOT UNDERTAKE/CARRY OUT ANY DEVELOPMENT WORK ON THE BASIS OF PAYMENT MADE TO TH IS DEPARTMENT AS EXTERNAL DEVELOPMENT CHARGES. 5. THIS PARA DOES NOT RELATE TO THIS DEPARTMENT 6. THE EXTERNAL DEVELOPMENT CHARGES DO NO FORM A PART OF INCOME OF THIS DEPARTMENT BECAUSE THIS IS A LIABILI TY OF THE DEPARTMENT, WHICH WILL BE REIMBURSED TO GOVT. AFTER WARS ON THEIR DEMAND COPY OF THE SAME IS ALSO ENCLOSED HEREWITH. SIR, IT IS SUBMITTED THAT FROM THE ABOVE STATED INF ORMATION IT IS VERY MUCH CLEAR THAT FIRST, THERE IS NO SUCH RELATI ON AS LICENCEE AND CONTRACTOR EXIST, SECONDLY, THE ORGANIZATION ITSELF DOES NOT UNDERTAKE/CARRY OUT ANY DEVELOPMENT WORK ON THE BAS IS OF PAYMENT ITA NO.210 & 211(ASR)/2014 4 MADE TO THIS DEPARTMENT AS EXTERNAL DEVELOPMENT CHA RGES. THIRDLY, THE EXTERNAL DEVELOPMENT CHARGES DO NOT FORM THE PA RT OF INCOME OF THIS DEPARTMENT BECAUSE THIS IS A LIABILITY OF THE DEPARTMENT, WHICH WILL BE REIMBURSED TO GOVT. AFTERWARD ON THEIR DEMA ND, THEREFORE, ALL THE THINGS ARE CLEAR THAT NO CONTRACTOR CONTRACTEE RELATIONSHIP IS ESTABLISHED, NO WORK HAS BEEN DONE/EXECUTED BY THE AUTHORITY AGAINST EDC RECEIVED BY THE AUTHORITY, SO PROVISION OF SECT ION 194C IS NOT APPLICABLE IN THE CASE OF ASSESSEE AND ADDITION MAD E BY THE AO MAY KINDLY BE DELETED. SIR, WORK HAS ALREADY BEEN EXECUTED BY THE GOVT. AN D WE ARE TO MAKE PAYMENT JUST TO TAKE BENEFIT OF THE EXISTING I NFRASTRUCTURE OF THE GOVT. SO THIS PAYMENT CANNOT BE COVERED UNDER THE P ROVISION OF SECTION 194C. THEREFORE, IT IS REQUESTED THAT CONSI DERING THE FACTS AND CIRCUMSTANCES OF THIS CASE ADDITION MADE BY THE LD. ASSESSING OFFICER MAY KINDLY BE DELETED. 6. THE LD. CIT(A) DELETED THE DEMAND OF RS.69,710/- RAISED BY THE AO FOR THE ASSESSMENT YEAR 2008-09 (RS.5,72,547/- FOR THE A.Y. 2009-10) ON THE ASSESSEE U/S 201(1) AND 201(1A) OF THE I.T.ACT, 196 1. WHILE DOING SO, IT WAS OBSERVED AS FOLLOWS: I HAVE ALSO CONSIDERED THE OTHER MATERIAL BROUGHT O N RECORD. ON CAREFUL CONSIDERATION OT THE MATERIAL BROUGHT O N RECORD, I AM OF THE OPINION THAT PAYMENT MADE BY THE ASSESSEE TO PU DA AS LICENSE FEE IS NOT COVERED UNDER THE PROVISION OF SECTION 1 94C OF THE ACT, AS IS CLEAR FROM THE INFORMATION CALLED FOR BY THE ASSESS EE FROM JALDANDHAR DEVELOPMENT AUTHORITY (JDA) UNDER RTI ACT, 2005. TH E JDA VIDE LETTER DATED 16.12.2011, MOST PARTICULARLY IN PARA 3, 4 & 5 WHICH ARE MOST RELEVANT HERE THE JDA IN PARA 3 HAS CATEGORICA LLY STATED THAT NO SUCH RELATION AS LICENSE AND CONTRACTOR EXIST, IN PARA 4, IT HAS BEEN STATED THAT THIS ORGANIZATION ITSELF DOES NOT UNDER TAKE/CARRY OUT ANY DEVELOPMENT WORK ON THE BASIS OF PAYMENT MADE TO TH IS DEPARTMENT AS EXTERNAL DEVELOPMENT CHARGES AND IN PARA 5, IT IS S TATED BY JDA THAT THE EXTERNAL DEVELOPMENT CHARGES DO NOT FORM A PAR T OF INCOME OF THIS DEPARTMENT BECAUSE THIS IS A LIABILITY OF THE DEPARTMENT WHICH WILL BE REIMBURSED TO THE GOVT. AFTERWARDS ON THEIR DEMAND. ITA NO.210 & 211(ASR)/2014 5 7.4. IN THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND MORE PARTICULARLY WHEN THE JDA ITSELF ADMITTED THA T THEY HAD NOT DONE ANY WORK ON BEHALF OF THE ASSESSEE, I AM OF THE CONSIDERED OPINION THAT THERE IS NO CONTRACTOR/LICE NSE RELATION BETWEEN THE ASSESSEE AND JDA. I AM, THEREFORE, HAVI NG NO HESITATION IN DELETING THE DEMAND RAISED BY THE AO AT RS.69,710/- U/S 201(1) & 201(1A) OF THE INCOME-TAX AC, 1961. ACCORDINGLY, THE DEMAND RAISED BY THE AO IS, THEREF ORE, DIRECTED TO BE DELETED. IN THE RESULT, GROUND OF AP PEAL NO.2 TAKEN BY THE ASSESSEE IS ALLOWED. 7. THUS, IT IS EVIDENT THAT IN DELETING THE DEMAND RAISED BY THE AO ON THE ASSESSEE, THE LD. CIT(A) UNILATERALLY TOOK INTO CON SIDERATION AND MADE IT THE BASIS OF SUCH DELETION, THE INFORMATION CONTAINED IN THE LETTER DATED 16.12.2011, ISSUED TO THE ASSESSEE UNDER THE RTI A CT. THE DEPARTMENT IS AGGRIEVED OF THIS ACTION OF THE LD. CIT(A). 8. THE LD. DR HAS CONTENDED THAT THE AFORESAID ACTI ON OF THE LD. CIT(A) IN DELETING THE DEMAND IS IN VIOLATION OF RULE 46A OF I.T. RULES. THE GRIEVANCE OF THE DEPARTMENT IS WELL FOUNDED. A READ ING OF THE ORDER UNDER APPEAL, AS ABOVE, SHOWS THAT THE LD. CIT(A) DID N OT CONFRONT THE AO WITH THE AFORESAID LETTER ISSUED UNDER THE RTI ACT BY TH E JDA ON THE REQUEST OF THE ASSESSEE. THE DEMAND RAISED BY THE AO HAS BEEN DELETED TAKING THIS LETTER AS THE SOLE BASIS FOR SUCH DELETION. THIS AC TION IS ENTIRELY VIOLATIVE OF RULE 46A OF I.T. RULES. IT IS A SETTLE PRINCIPLE OF NATURAL JUSTICE THAT ANY ITA NO.210 & 211(ASR)/2014 6 EVIDENCE WHICH IS USED AGAINST A PERSON MUST BE CON FRONTED TO SUCH PERSON BEFORE USING IT. 9. IN VIEW OF THE ABOVE, WE REMIT BOTH THESE APPEAL S TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON DULY TAKING INTO CONSIDERATION THE JDA LETTER ISSUED TO THE ASSESSEE . THE ASSESSEE SHALL BE PROVIDED DUE AND ADEQUATE OPPORTUNITY OF HEARING TO SUPPORT HIS CASE. THE ASSESSEE SHALL CO-OPERATE WITH THE AO IN THE REMAND PROCEEDINGS. 10. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26TH FEBRUARY, 2015. SD/- SD/- (B.P. JAIN) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26TH FEBRUARY, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S. PPR DEVELOPERS & BUILDERS, JALAN HDAR 2. THE ITO TDS-1, JLR 3. THE CIT(A), JLR 4. THE CIT, JLR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR. ITA NO.210 & 211(ASR)/2014 7