Roopesh K.P., RAJKOT-GUJARAT V. The Income Tax Officer, Ward-3(3), RAJKOT-GUJARAT

ITA 23/RJT/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7681 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 24-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Salary income; TDS; Set aside
• Section: 143(3); 13

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDABAD) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER , , BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER & SHRI WASEEM AHMED , ACCOUNTANT MEMBER ./ I.T.A. NO. 23 /RJT/2017 ( / ASSESSMENT YEAR : 2011 - 1 2) SHRI ROOPESH K.P. , 2 ND FLOOR, MARUTI NANDAN - A, JALARAM - 2, UNIVERSITY ROAD , RAJKOT . / VS. I.T .O , W ARD - 3(3) , RAJKOT . ./ ./ PAN/GIR NO. : AGDPR9145G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : WRITTEN SUBMISSION / RESPONDENT BY : SHRI ANIL KUMAR , SR. D . R / DATE OF HEARING 03/12 /201 9 / DATE OF PRONOUNCEMENT 23 / 01/2020 / O R D E R PER WASEEM AHMED ACCOUNTANT M EMBER : THE CAPTIONED APPEAL HA S BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 2 , RAJKOT [ LD. CIT(A) IN SHORT] DATED 10/11/2016 , ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER R EFERRED TO AS 'THE ACT') DATED 24 /0 1 /20 14 RELEVANT TO ASSESSMENT YEAR S (A . Y . ) 2011 - 1 2. ITA NO .23 /RJT / 2017 A.Y . 20 1 1 - 12 - 2 - THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ADDITION OF RS. 17,78,731/ - . THE ADDITION NEEDS DELETION. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ADDITION OF RS. 12,16,421/ - TREATING THE SAME AS SALARY AND ARREARS RECEIVED FROM 'NHPC LTD. WITHOUT GIVING EL IGIBLE DEDUCTION AND RELIEF THERE FROM. THE ADDITION NEEDS DELETION / SUITABLE REDUCTION. 3. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ADDITION OF RS. 12,16,421/ - TREATING THE SAME AS SALARY AND ARREARS RECEIVED FROM NHPC LTD. WITHOUT GIVING EL IGIBLE DEDUCTION AND RELIEF THERE FROM. THE ADDITION NEEDS DELETION / SUITABLE REDUCTION BESIDE GIVING BENEFIT OF PROVISIONS OF SECTION 89(1). 4. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ADDITION OF RS. 5,57,290/ - . THE ADDITION NEEDS DELETION. 5. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ADDITION OF RS. 5,57,290/ - WITHOUT CONSIDERING THE FACTUAL ASPECTS. THE ADDITION NEEDS DELETION. 6. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ADDITION OF RS. 5,57,290/ - WITHOUT CONSIDERING THE PEAK POSITION. THE ADDITION NEEDS DELETION / SUITABLE REDUCTION. 7. THE LD. C1T(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING ADDITION OF RS. 5,020/ - . THE.ADDITION NEEDS DELETION. 8. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY, FACTU AL, ACCOUNTING AND ADMINISTRATIVE ASPECTS, NO ADDITION AMOUNTING TO RS. 12,16,421/ - , RS. 5,57,290/ - AND RS. 5,020/ - OUGHT TO HAVE BEEN CONFIRMED. THE ADDITION NEEDS DELETION. 9. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY, FACTUAL, ACCOUNTING AND ADMINIST RATIVE ASPECTS, NO ADDITION AMOUNTING TO RS. 12,16,421/ - OUGHT TO HAVE BEEN CONFIRMED WITHOUT GIVING BENEFIT OF PROVISION OF SECTION 89(1). THE ADDITION NEEDS DELETION / SUITABLE REDUCTION. 10. WITHOUT PREJUDICE, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT THE ASSESSMENT MADE IS BAD IN LAW AND DESERVES ANNULMENT. 11. WITHOUT PREJUDICE, THE LD. C1T(A) HAS ERRED IN NOT CONSIDERING THAT NO REASONABLE OPPORTUNITY HAS BEEN GIVEN BY THE LD. A.O. WHILE PASSING ASSESSMENT ORDER. THE SAME NEEDS ANNULMENT 12. WITHOUT PR EJUDICE, THE LD. C1T(A) HAS ERRED IN NOT CONSIDERING THAT NO ADEQUATE, SUFFICIENT AND REASONABLE OPPORTUNITY HAS BEEN PROVIDED WHILE PASSING ASSESSMENT ORDER. THE ASSESSMENT NEEDS ANNULMENT. 13. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AND/OR SUBSTITUTE ANY OR ALL GROUND OF APPEAL BEFORE THE ACTUAL HEARING TAKES PLACE. 2. THE ASSESSEE HAS RAISED AS MANY AS 13 GROUNDS OF APPEAL BUT THE EFFECTIVE ISSUE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO FOR RS. 17,78,731/ - TO THE TO TAL INCOME OF THE ASSESSEE. ITA NO .23 /RJT / 2017 A.Y . 20 1 1 - 12 - 3 - 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND DRAWING SALARY FROM THE COMPANY NAMELY POWER GRID CORPORATION OF INDIA . T HE ASSESSEE IN HIS RETURN OF INCOME DECLARED SALARY INCOME OF RS. 6, 77,060/ - WHICH WAS DRAWN FROM THE COMPANY NAMELY P OWER G RID CORPORATION OF INDIA . 3.1 T HE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ADMITTED THAT HE WAS EMPLOYED TILL JUNE 2010 AS THE DEPUTY MANAGER ( ELECTRICAL ) IN N ATIONAL HYDRO POWER CORPORATION LTD . (IN SHORT NHPC). T HUS THE ASSESSEE CLAIMED THAT HE HAS RECEIVED SALARY TILL JUNE 2010 FROM SUCH COMPANY AMOUNTING TO RS. 4,96,190/ - ALONG WITH PRODUCTIVITY LINK BONUS WHICH WAS NOT DISCLOSED IN THE INCOME TAX RETURN AS HE DID NOT RECEIVE FORM 16 FROM HIS PREVIOUS EMPLOYER. HOWEVER, THE ASSESSEE AGREED TO MAKE AN OFFER FOR THE SUM OF RS. 4,96,190/ - TO TAX AND FURTHER REQUESTED TO ALLOW THE CREDIT OF THE TDS DEDUCTED BY HIS PREVIOUS EMPLOYER NHPC . 3.2 HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDINGS OBSER VED CERTAIN FACTS AS DETAILED UNDER: I. T HE ASSESSEE HAS RECEIVED A TOTAL SUM OF RS. 12,16,421/ - FROM HIS PREVIOUS EMPLOYER NAMELY NHPC WHICH WAS NOT OFFERED TO TAX IN HIS INCOME TAX RETURN. II. THERE WERE CERTAIN CREDIT S ENTRIES IN THE BANK ACCOUNT OF THE ASSE SSEE AMOUNTING TO RS. 5,57,290/ - WHICH WERE NOT EXPLAIN ED BY HIM. III. THERE WAS THE INTEREST INCOME AMOUNTING TO RS. 5,020/ - WHICH WAS NOT DISCLOSED IN THE INCOME TAX RETURN. 3.3 HOWEVER, THE ASSESSEE ON QUESTION BY THE AO FAILED TO PROVIDE ANY SATISFACTORY REPLY. THEREFORE IN THE ABSENCE OF ANY COGENT REPLY FROM THE ASSESSEE THE AO ADDED THE IMPUGNED AMOUNT OF RS. 17,78,731/ - BEING THE ITA NO .23 /RJT / 2017 A.Y . 20 1 1 - 12 - 4 - AMOUNT RECEIVED FROM NHPC, BANK INTEREST AND UNEXPLAINED BANK CREDITS TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSES SEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 4. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT THE AMOUNT RECEIVED FROM THE PREVIOUS EMPLOYER BEING NHPC REPRESENTS 2 MAJOR ITEMS FIRSTLY ARREARS OF SALARY FOR RS. 6,04,478/ - AND PRODUCTIVITY LIN K ED BONUS OF RS. 3,42,562/ - . 4.1 THE ASSESSEE ACCORDINGLY SUBMITTED THAT HE IS ENTITLED FOR RELIEF UNDER SECTION 89(1) OF THE ACT WITH RESPECT TO THE A R REA RS OF THE SALARY WHICH THE AO HAS NOT ALLOWED. 4.2 THE ASSESSEE FURTHER CLAIMED THAT THERE IS NO INFORMATION AVAILABLE ABOUT THE PRODUCTIVITY LINK ED BONUS OF RS. 3,42,562/ - WHETHER IT WAS RECEIVED IN THE UNDER CONSIDERATION OR ANY OTHER YEAR. THEREFORE, THE SAME CANNOT BE TAXED IN THE YEAR UNDER CONSIDERATION UNTIL THE INFORMATION IS GATHERED FROM THE PREVIOUS EMPLOYER. THE ASSESSEE ALSO EXPRESSED HIS INABILITY TO COLLECT THE REQUISITE DETAILS FROM THE PREVIOUS EMPLOYER AFTER LEAVING THE ORGANIZATION. 4.3 THE ASSESSEE FURTHER SUBMITTED THAT THE CREDIT ENTRIES SHOWN IN HIS BANK ACCOUNT IS NOTHING BUT THE RECEIPT FROM THE PREVIOUS EMPLOYER WHICH HAS ALREADY BEEN ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDINGLY THE ASSESSEE CLAIMED THAT FURTHER ADDITION OF SUCH AMOUNT OF RS. 5,57,290/ - WILL LEAD TO THE DOUBLE ADDITION TO THE TOTAL INCOME WHICH IS A GAINST THE PROVISIONS OF LAW. 4.4 HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT IT IS THE DUTY OF THE ASSESSEE TO FURNISH THE DETAILS ITA NO .23 /RJT / 2017 A.Y . 20 1 1 - 12 - 5 - ABOUT THE PRODUCTIVITY LINK BONUS OF RS. 3,42,562 WHETHER IT IS TAXABLE IN A NY OTHER ASSESSMENT YEAR. 4.5 SIMILARLY THE LEARNED CIT (A) ALSO OBSERVED THAT THE ASSESSEE SHOULD BE AWARE OF THE AMOUNTS CREDITED IN HIS BANK ENTRIES AND THEREFORE HE CANNOT SHIFT HIS BURDEN TO THE AO TO VERIFY THE SAME BY COLLECTING THE DETAIL S FROM H IS PREVIOUS EMPLOYER NAMELY NHPC. 4.6 HOWEVER, THE LEARNED CIT (A) WAS PLEASED TO DIRECT THE AO TO ALLOW THE RELIEF UNDER SECTION 89(1) OF THE ACT, AS PER THE PROVISIONS OF LAW SUBJECT TO THE PRODUCTION OF THE NECESSARY DOCUMENTS BY THE ASSESSEE QUA HIS C LAIM. THUS THE LEARNED CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE IN PART. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED AR BEFORE US CONTENDED IN HIS WRITTEN SUBMISSION THAT THE ASSESSEE IS UNA BLE TO COLLECT THE REQUISITE INFORMATION FROM HIS PREVIOUS EMPLOYER AS HE HAS LEFT THE ORGANIZATION LONG BACK. ACCORDINGLY THE ASSESSEE PRAYED BEFORE US TO DIRECT THE AO TO COLLECT THE NECESSARY INFORMATION FROM THE COMPANY NAMELY NHPC AND ADJUDICATE THE I SSUE A FRESH AS PER THE PROVISIONS OF LAW. 6. ON THE OTHER HAND, THE LEARNED DR RAISED NO OBJECTION IF THE MATTER IS SET ASIDE TO THE FILE OF THE AO FOR FRESH ADJUDICATION AS PER THE PROVISIONS OF LAW. 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL S AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAS NOT DISCLOSED THE SALARY INCOME RECEIVED FROM HIS PREVIOUS EMPLOYER AS DISCUSSED ABOVE. FURTHERMORE THE ASSESSEE ITA NO .23 /RJT / 2017 A.Y . 20 1 1 - 12 - 6 - HAS ALSO FAILED TO FURNISH THE REQUISITE DETAILS TO MATCH THE AMOUNT OF SALARY SHOWN IN FOR M 26 AS VIZ A VIZ THE AMOUNT ACTUALLY SHOWN TO HAVE BEEN TRANSFERRED BY HIS PREVIOUS EMPLOYER. SIMILARLY, THE ASSESSEE ALSO FAILED TO MATCH THE AMOUNT OF CREDIT ENTRIES SHOWN IN HIS BANK ACCOUNT WITH THE AMOUNT OF SALARY/ OTHER AMOUNT RECEIVED FROM HIS PRE VIOUS EMPLOYER. 7.1 INDEED THE ONUS WAS ON THE ASSESSEE BUT THE AO WAS ALSO UNDER THE OBLIGATION TO TAX THE REAL INCOME OF THE ASSESSEE. MOREOVER, THE AO WAS EMPOWERED UNDER THE STATUTE UNDER SECTION 133(6)/131(1)/142(2) COLLECT THE NECESSARY DETAILS FROM THE PREVIOUS EMPLOYER OF THE ASSESSEE TO DIG OUT THE TRUTH TO ASSESS THE ACTUAL INCOME OF THE ASSESSEE. BUT THE AUTHORITIES BELOW HAVE NOT EXERCISED THEIR POWERS GRANTED UNDER THE STATUTE. THUS, THE AO TO TAX THE INCOME CANNOT MERELY DEPEND UPON THE INFOR MATION TO BE FURNISHED BY THE ASSESSEE. THE AO BEING ACTING IN THE CAPACITY OF QUASI JUDICIAL AUTHORITY IS EXPECTED TO ARRIVE AT SUBJECTIVE SATISFACTION ON AN OBJECTIVE CRITERIA BEFORE MAKING ADDITION AS HELD BY HON BLE GUJARAT HIGH COURT IN THE CASE OF HE MJAY CONSTRUCTION CO. (P) LTD. REPORTED IN 419 ITR 39 . ACCORDINGLY, THE AO WAS REQUIRED TO COLLECT THE NECESSARY INFORMATION FOR THE QUANTIFICATION OF THE INCOME OF THE ASSESSEE. 7.2 IT IS ALSO PERTINENT TO NOTE THAT, THE ASSESSEE TIME AND AGAIN BEFORE T HE AUTHORITIES BELOW HAS EXPRESSED HIS INABILITY TO COLLECT THE NECESSARY DETAILS FROM HIS PREVIOUS EMP LOYER AS HE IS LEFT THE ORGANIZA TION LONG BACK. NONE OF THE AUTHORITIES BELOW HAS DOUBTED ON THE INABILITY OF THE ASSESSEE TO FURNISH THE NECESSARY DETAI LS AS DISCUSSED ABOVE. AS SUCH THE AUTHORITIES BELOW HAVE SHIFTED THE ENTIRE ONUS ON THE ASSESSEE TO FURNISH THE DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CONTENTION WITHOUT UNDERSTANDING THE DIFFICULTY OF THE ASSESSEE. ITA NO .23 /RJT / 2017 A.Y . 20 1 1 - 12 - 7 - 7.3 MOREOVER, THE INFORMATION RECEIVE D BY THE AO FROM THE PREVIOUS EMPLOYER OF THE ASSESSEE APPEARS TO BE INCOMPLETE SO FAR IT DOES NOT CONTAIN THE PERIOD TO WHICH THE ARREAR OF SALARY PERTAINS, WHEN AND IN WHICH MANNER THE ACTUAL PAYMENT WAS MADE TO THE ASSESSEE AND WHETHER THE PRODUCTIVITY LINKED BONUS WAS TAXABLE IN THE YEAR UNDER CONSIDERATION. 7.4 IN VIEW OF THE ABOVE WE DIRECT THE AO TO COLLECT THE NECESSARY DETAILS FROM THE PREVIOUS EMPLOYER OF THE ASSESSEE NAMELY NHPC AND ADJUDICATE THE ISSUE DE - NOVO AS PER THE PROVISIONS OF LAW AND IN THE LIGHT OF THE ABOVE STATED DISCUSSION. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR THE STATISTICAL PURPOSES. 7.5 W ITHOUT PREJUDICE TO ABOVE IT IS ALSO PERTINENT NOTE THAT THERE WAS NO SUBMISSION MADE BY THE ASSESSEE QUA THE AMOUNT OF INTEREST INCOME OF RS. 5020 .00. A CCORDINGLY WE UPHOLD THE ADDITION MADE BY THE AUTHORITIES BELOW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR THE STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 23 / 01/2020 - SD - - SD - ( ) ( ) (RAJPAL YADAV) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) DATED 23 /01/2020 MANISH