Smt. Annakalanjiyam M, CHENNAI V. ITO, CHENNAI

ITA 2304/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4892 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 13-04-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2016
• Court: TRIBUNAL
• Department Lawyers: B NISCHAL JT
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Principle of natural justice; Agreed addition
• Section: 143(3)

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A/SMC, CHENNAI , ! BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ITA NO.2304/MDS/2016 ' # $%# / ASSESSMENT YEAR : 2012-13 ANNAKALANJIYAM M, NO.91/15, EAST JONES ROAD, SAIDAPET, CHENNAI 600 015. [PAN: AAGPM 1853P] VS. INCOME TAX OFFICER, NON CORPORATE WARD-13(1), CHENNAI. ( /APPELLANT ) ( / RESPONDENT ) &' ( ) / APPELLANT BY : SHRI A.S.SRIRAMAN, ADVOCATE *+&' ( ) / RESPONDENT BY : SHRI B.NISCHAL, JT. CIT , $ ( - / DATE OF HEARING : 13.04.2017 .% ( - / DATE OF PRONOUNCEMENT : 20.04.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-14, CHENNAI ( CIT(A) FOR SHORT) DATED 30.06.2016, DISMISSING THE ASSESSEES APPEAL CONTE STING HER ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREI NAFTER) DATED 20.03.2015 FOR THE ASSESSMENT YEAR (AY) 2012-13. 2. THE APPEAL RAISES THE FOLLOWING GROUNDS: 1 . THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) 14, CHENNAI DATED 30.06 . 2016 IN I.T.A. NO . 17 4/2015-16 FOR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW , FACTS , AND IN THE CIRCUMSTANCES OF THE CASE . 2 ITA NO. 2304/MDS/2016 (AY 2012-13) ANNAKALANJIYAM M V. ITO 2 . THE CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS . 6 LAKHS TOWARDS INSUFFICIENT DRAWINGS IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THERE S HOULD NOT BE ANY PRESUMPTION OF AGREED ADDITION IN ORDER TO JUSTIFY THE COMPUTATION OF TAXABLE TOTAL INCOME AS WELL AS THE MAINTAINABILITY OF THE APPEAL AND OUGHT TO HAVE APPRECIATED THAT THE DISTINCTION BETWEEN THE COURT OF RECORD AND THE QUASI JUDICIA L PROCEEDINGS WAS NOT CONSIDERED IN REACHING THE WRON G CONCLUSION . 4 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE SUS TENANCE ' OF THE ADDITION OF RS . 6 LAKHS WAS WRONG AND INCORRECT ON ALL FACETS, THER EBY VITIATING THE REASONS RECORDED IN PARA 4.1 OF THE IMPUGNED ORDER. 5 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THERE W AS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED ORDER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTICE WOULD BE NULLITY IN LAW. 6 . THE APPELLANT CRAVES L EAVE TO FILE ADDITIONAL GROUNDS/ARGUMENTS AT THE TI ME OF HEARING. 3. OPENING THE ARGUMENTS FOR AND ON BEHALF OF THE A SSESSEE-APPELLANT, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR) , THE ASSESSEES COUNSEL, THAT THE ONLY BASIS FOR EFFECTING THE IMPUGNED ADDI TION ON ACCOUNT OF THE LOW WITHDRAWALS IS THAT THE ASSESSEES AUTHORIZED REPRE SENTATIVE IN THE ASSESSMENT PROCEEDINGS, SH. M.S. PANDIAN, CA AGREED THERETO BE FORE THE ASSESSING OFFICER (AO). THERE IS, HE WOULD ARGUE, FIRSTLY, NOTHING T O SUGGEST THAT THE SAID COUNSEL HAD BEEN AUTHORIZED BY THE ASSESSEE TO MAKE A CONCE SSION OR AGREE. HIS AGREEMENT, THEREFORE, HAS NO LEGAL SANCTION AND CAN NOT BIND THE ASSESSEE. TWO, EVEN SO, THE AGREEMENT WOULD NOT PRECLUDE THE ASSES SEE TO CHALLENGE THE ADDITION ON MERITS. ON BEING ASK TO, THEREFORE, PRO CEED ON MERITS, HE STATED THAT THE MATTER, FOR THE PURPOSE, MAY BE RESTORED TO THE FILE OF THE AO. FURTHER, ON BEING REQUIRED TO MAKE OUT A CASE QUA THE ASSESSEES GROUND 5, ALLEGING NON GRANT OF PROPER OPPORTUNITY BY THE LD. CIT(A), HE C OULD NOT FURNISH ANY SATISFACTORY ANSWER. THE LD. DEPARTMENTAL REPRESENT ATIVE (DR) WOULD, ON THE OTHER HAND, DRAW MY ATTENTION TO THE ORDER SHEET EN TRY DATED 19.3.2005 BY THE AO, REPRODUCED AT PARA 4.1 OF THE IMPUGNED ORDER, W HICH READS AS UNDER: 3 ITA NO. 2304/MDS/2016 (AY 2012-13) ANNAKALANJIYAM M V. ITO 'THE AR STATED THAT THE LOAN REPAYMENTS WERE MADE O N MONTHLY BASIS OUT OF THE RENTAL RECEIPTS. CONSIDERING THE DRAWINGS AND LOAN REPAYMENTS MADE THE DRAWINGS OF THE ASSESSEE IS ESTIMATED AT RS. 60,000 /- PER MONTH. THE ASSESSEE HAS SHOWN A DRAWINGS 0F RS.1,20,000/-. HENCE, A FURTHER ADDITION OF RS. 6 , 00,000/- IS ADDED TO THE INCOME RETURNED. THE AR AG REED FOR THE ADDITION OF RS.6,00,000/- TOWARDS INSUFFICIENT DRAWINGS. HEARIN G CONCLUDED AT THIS STAGE. ' 4. I HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. WITHOUT DOUBT, CONCESSION WOULD NOT CONFER JURISDI CTION NOR BY ITSELF SERVE AS A GROUND FOR MAKING ANY ADJUSTMENT TO THE ASSESS EES RETURNED INCOME; THERE BEING NO ESTOPPEL AGAINST LAW. THE MATTER ARISING I S PRINCIPALLY FACTUAL. THE MOOT QUESTION, WHICH IS ONE OF FACT, IS WHETHER THE ADDITION STANDS MADE ON THE BASIS OF A CONCESSION OR AGREEMENT, AS CLAIMED BY T HE ASSESSEE, OR ON MERITS, AS THE REVENUE CONTENDS. THAT THE AO ALSO DRAWS SUPPOR T FROM THE FACT THAT THE ASSESSEES COUNSEL BEFORE HIM CONCEDES TO THE PROPO SED ADDITION, IS A DIFFERENT MATTER ALTOGETHER. THE AO CANNOT BE FAULTED FOR INF ERRING THERE-FROM THAT THE ASSESSEE HAS NOTHING (FURTHER) TO SAY IN THE MATTER . THE RELEVANT FINDINGS BY THE AO, WHICH ARE AT PAGE 2 OF THE ASSESSMENT ORDER, RE AD AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VARIO US DETAILS WERE CALLED FOR AND THE SAME W E RE PRODUCED. ON VERIFICATION OF THE DETAILS, IT IS SEEN THAT THE ASSESSEE HAS VERY LOW DRAWINGS WHEN COMPARED TO THE RECURRING PAYMENTS, LIKE REPAYMENT OF HOUSE PROPERTY LOAN, ETC., INCURRED BY THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. THE ASSESSEE HAS AGR EED FOR AN ADDITION OF RS.6,00,000 TOWARDS INSUFFICIENT DRAWINGS. HENCE, A SUM OFRS.6,00,000 IS ADDED TO THE INCOME RETURNED. IT IS CLEAR THEREFORE THAT ON THE BASIS OF THE DET AILS CALLED FOR AND FURNISHED IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE CASH R EQUIREMENT ON ACCOUNT OF THE REPAYMENT OF HOUSING LOAN, AND OTHER RECURRING PAYM ENTS, VIZ. FOR HOUSEHOLD PURPOSES, ETC., WERE ASSESSED BY THE AO AT . 7.20 LACS (I.E., AT 60,000/- PER MONTH) AND, FINDING THE ASSESSEES WITHDRAWALS FOR THE YEAR TO BE AT . 1.2 LACS ONLY, BROUGHT THE BALANCE . 6 LACS TO TAX, I.E., IN THE ABSENCE OF THE ASSESS EE FURNISHING ANY SATISFACTORY EXPLANATION TOWARD THE SHORTFALL. HIS ALLUDING TO THE ASSESSEES COUNSEL AGREEING THERETO ONLY UNDERSCO RES AN ACCEPTABILITY OF THE 4 ITA NO. 2304/MDS/2016 (AY 2012-13) ANNAKALANJIYAM M V. ITO REASONABILITY OF THE PROPOSED ASSESSMENT AS WELL AS AN INABILITY TO EXPLAIN THE ASSESSED SHORTFALL. NO CASE ON MERITS WAS MADE OUT BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY AS WELL. EVEN AS SHE RAIS ES SEVERAL GROUNDS BEFORE HIM, THE ASSESSEE QUESTIONED ONLY THE LEGAL COMPETENCE O F THE AO TO MAKE THE IMPUGNED ADDITION ON AGREED BASIS. NOTHING STOPPED THE ASSESSEE FROM PLEADING HER CASE ON MERITS, OF WHICH THERE IS NO WHISPER, B EING, RATHER, A CONCOMITANT OF HER DISPUTING THE SAID LEGAL COMPETENCE. FURTHER ST ILL, AS I OBSERVE, EVEN IN THE APPELLATE PROCEEDINGS, THE LD. AR, WHO IS THE SAME AS BEFORE ME, MADE A CATEGORICAL STATEMENT THAT THE APPELLANT SHALL HAVE NO OBJECTION TO THE IMPUGNED ADDITION IN CASE IT IS FOUND THAT THE ASSESSEES RE PRESENTATIVE HAD AGREED TO THE ADDITION, AND WHICH THE LD. CIT(A) FOUND AS A FACT (REFER PARA 4.1 OF HIS ORDER), EVEN AS HE OBSERVES THE AO TO HAVE MADE AN ESTIMATE OF THE WITHDRAWALS REQUIRED AND, THUS, THE SHORTFALL THEREIN. THE ASSE SSEE IN THE PRESENT PROCEEDINGS HAS NOT REBUTTED THE OBSERVATIONS AND FINDINGS BY T HE LD. CIT(A) AT PARA 4.1 OF HIS ORDER TO THAT EFFECT, AND THUS ASSUMES A CONTRARY STAND BEFORE ME . THIS AMBIVALENCE ON THE PART OF THE ASSESSEE CAN ONLY BE DISCOUNTENANCED. BE THAT AS IT MAY, IT HAS ALREADY BEEN EXPLAINED T HAT, NOTWITHSTANDING THE CONCESSION BY THE LD. AR, THE ADDITION STANDS MADE ON MERITS AND, FURTHER, CONFIRMED ON THAT BASIS. THE FINDING/S REMAINS UN-R EBUTTED THROUGHOUT, I.E., EVEN BEFORE ME. FURTHER, THE REFERENCE TO THE CONCESSION /AGREEMENT BY THE ASSESSEES COUNSEL, IS ONLY TOWARD REINFORCING ITS CASE BY TH E REVENUE, INFERRING THE ASSESSEE AS HAVING NOTHING FURTHER TO STATE IN DEFE NSE. NO CASE ON MERITS STANDS MADE OUT EVEN BEFORE ME NOR, AS AFORE-STATED, QUA THE NON GRANT OF OPPORTUNITY AT THE FIRST APPELLATE STAGE. I, ACCORDINGLY, FIND NO REASON TO INTERFERE. I DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. 5 ITA NO. 2304/MDS/2016 (AY 2012-13) ANNAKALANJIYAM M V. ITO ORDER PRONOUNCED ON APRIL 20, 2017 AT CHENNAI SD/- ( ) (SANJAY ARORA) /ACCOUNTANT MEMBER /CHENNAI, / /DATED, APRIL 20, 2017 EDN 0 ( *'-12 32%- /COPY TO: 1. &' /APPELLANT 2. *+&' /RESPONDENT 3. , 4- ( )/CIT(A) 4. , 4- /CIT 5. 2$56 *'-' /DR 6. 67# 8 /GF