DCIT, New Delhi V. Indian Delco Pvt. Ltd., Delhi

ITA 2363/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86983 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHWANI TANGA
• Assessee Lawyers: S GILL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL IN (DELHI BENCH C NEW DELHI) BEFORE SHRI R.S.SYAL, ACCOUNTANT MEMBER AND SHRI C.M.GARG, JUDICIAL MEMBER ITA NO. 2363/DEL/2013 (ASSESSMENT YEAR: 2009-10) DCIT VS. INDIAN DELCO PVT. LTD., CENT, CIRCLE 22 B- 11/45 , MOHAN COOPERATIVE INDL. ESTATE NEW DELHI MATHURA ROAD, BADARPUR BORDER DELHI PAN : AAACI1586N (APPLICANT) (RESPONDENT) ASSESSEE BY : SH. R.I.S. GILL, DR REVENUE BY : SH. ASHWANI TANGA, FCA DATE OF HEARING : 18.03.2015 DATE OF PRONOUNCEMENT : .03.2015 ORDER PER C.M.GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), NEW DELHI ITA NO. 2363/ DEL/2013 2 DATED 11/02/2013 IN APPEAL NO. 125 / 11-12 / CI T(A) III FOR A.Y. 2009- 10. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN THIS APPEAL :- ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 83,71,53, 585/- MADE BY THE A.O. ON ACCOUNT OF EXPENSES CLAIMED, BU T NO DETAILS IN SUPPORT OF ITS CONTENTION HAD BEEN FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) HAS ERRED IN VIOLATION OF RULE 46A OF THE IN COME TAX RULES, 1962, BY NOT FOLLOWING THE DECISION OF THE H ONBLE HIGH COURT IN THE CASE OF M/S MANISH BUILDWELL PVT. LTD. 204 TAXMAN 106, WHEREIN IT WAS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT TO GIVE TWO STAGE OPPORTU NITY UNDER RULE 46A I.E. FIRST BEFORE ADMISSION OF ADDIT IONAL EVIDENCE AND SECOND AFTER ADMISSION OF ADDITIONAL EVIDENCES. 3 . BRIEFLY, STATED THE FACTS GIVING RISE TO THI S APPEAL ARE THAT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 144 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) BY DISALLOWING CL AIMED EXPENSES OF RS. 83,71,53,585/- AND ADDED THE SAME TO THE RETURN INCOME OF THE ASSESSEE. THE ASSESSING OFFICER NOTED THAT SINCE TH E ASSESSEE DID NOT PRODUCE ANY DETAILS IN SUPPORT OF EXPENSES CLAIMED IN THE RETURN OF INCOME THEREFORE, HE DISALLOWED ENTIRE AMOUNT OF EX PENSES TO THE TOTAL INCOME OF THE ASSESSEE. BEING AGGRIEVED BY THE ABOV E ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE CIT( A) WHICH WAS ALLOWED BY PASSING THE IMPUGNED ORDER AND THE FIRST APPELLATE AUTHORITY ITA NO. 2363/ DEL/2013 3 DELETED THE ENTIRE ADDITION MADE BY THE AO. NOW TH E AGGRIEVED REVENUE IS BEFORE THIS TRIBUNAL WITH THE GROUNDS AS REPRODUCED HEREINABOVE. 4. APROPOS GROUND NOS. 1 & 2 :- WE HAVE HEARD ARGUMENT OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERI AL AVAILABLE ON RECORD BEFORE US. THE LD. DEPARTMENTAL REPRESENTATI VE (DR) SUBMITTED THAT THE CIT(A) HAS ERRED IN LAW AND ON F ACTS IN DELETING THE IMPUGNED ADDITION MADE BY THE AO ON ACCOUNT OF CLAI MED EXPENSES AS THE AO MADE ADDITION ON JUSTIFIED GROUND AS NO D ETAILS IN SUPPORTS OF EXPENSE CLAIM AND BEING FILED BY THE ASSESSEE DU RING THE ASSESSMENT PROCEEDINGS. PLACING RELIANCE ON THE DEC ISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF M/S. MANISH BUIL D WELL PVT. LTD. (SUPRA), THE LD. DR SUBMITTED THAT THE CIT(A) HAS E RRED IN LAW IN ADMITTING AND CONSIDERING ADDITIONAL EVIDENCE OF TH E ASSESSEE UNDER RULE 46A OF THE INCOME TAX RULES, 1962. THE LD. DR FURTHER SUBMITTED THAT IMPUGNED ORDER MAY BE SET ASIDE BY R ESTORING THAT OF THE AO. ALTERNATIVELY, THE LD. DR SUBMITTED THAT IF IT IS FOUND JUST AND PROPER THEN THE CASE MAY BE RESTORED TO THE FILE OF EITHER TO THE FILE OF AO OR TO THE FILE OF CIT(A) FOR AFRESH ADJUDICATION . ITA NO. 2363/ DEL/2013 4 5. REPLYING TO THE ABOVE, LD. COUNSEL FOR THE A SSESSEE VEHEMENTLY CONTENDED THAT THE ASSESSING OFFICER DO NOT PROVID E DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND THE AO COMPLETED AS SESSMENT U/S 144 OF THE ACT IN AN ARBITRARILY MANNER BY DISALLOW ING ENTIRE CLAIM OF EXPENSES. THE LD. COUNSEL OF THE ASSESSEE FURTHER P OINTED OUT THAT SINCE THE ASSESSEE COULD NOT GET AN OPPORTUNITY OF BEING HEARD BEFORE THE AO AND SOME RELEVANT AND NECESSARY DOCUMENTS, E VIDENCE AND EXPLANATION, WHICH COULD NOT BE FILED BEFORE THE A O FOR SUFFICIENT REASON, THEREFORE, THE SAME WERE SUBMITTED BEFORE T HE CIT(A) AS ADDITIONAL EVIDENCES AND THE SAME WAS RIGHTLY ADMI TTED AND CONSIDERED BY THE FIRST APPELLATE AUTHORITY AS PER PROVISIONS OF RULE 46A OF THE RULES. HOWEVER, THE LD. COUNSEL OF THE A SSESSEE FINALLY SUBMITTED THAT IF IT IS FOUND JUST AND PROPER THEN THE CASE MAY BE RESTORED TO THE FILE OF AO FOR AFRESH ADJUDICATION AND THE ASSESSEE HAS NO SERIOUS OBJECTION TO THAT. 6. ON CAREFULLY CONSIDERATION OF ABOVE RIVAL CONTENTION OF BOTH THE SIDES AT THE VERY OUTSET, WE NOTE THAT THE ASSESSIN G OFFICER COMPLETED ASSESSMENT PROCEEDINGS EX PARTIE U/S 144 OF THE ACT AND THE ASSESSEE WAS PREVENTED BY THIS REASON IN FILING NECESSARY AN D RELEVANT EXPLANATION, DETAILS AND EVIDENCE BEFORE THE AO. HE NCE, WE FURTHER, ITA NO. 2363/ DEL/2013 5 HOLD THAT IN THIS SITUATION THE ASSESSEE WAS HAVING RIGHT TO SUBMIT ADDITIONAL EVIDENCE DURING FIRST APPELLATE PROCEEDI NGS UNDER RULE 46A OF THE RULES. AT THE SAME TIME, WE NOTE THAT THE CI T(A) CALLED REMAND REPORT OF THE AO ON THE ADMISSIBILITY OF ADDITIONAL EVIDENCE AND THE ASSESSING OFFICER OBJECTED TO THE ADMISSION OF ADDI TIONAL EVIDENCE WITHOUT VERIFYING, EXAMINING AND COMMENTING UPON TH E MERITS OF THE ADDITIONAL EVIDENCE. FROM THE VIGILANT READING OF T HE IMPUGNED ORDER WE NOTE THAT THE CIT(A) REJECTED THE OBJECTION OF T HE AO AND ADMITTED THE ADDITIONAL EVIDENCE BUT THE REMAND REPORT OF TH E AO WAS NOT CALLED AND AO WAS NOT ALLOWED TO COMMENT UPON THE MERITS O F THE ADDITIONAL EVIDENCE. IN THIS SITUATION, IT CAN SAFELY BE PRESU MED THAT THE CIT(A) CONSIDERED ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE RULES AND GRANTED RELIEF FOR THE ASSESSEE. 7. ON THE BASIS OF OUR FOREGOING DISCUSSIONS , WE REACH TO A CONCLUSION THAT THE AUTHORITIES BELOW DID NOT ADJUD ICATED THE CASE IN A PROPER MANNER AND HENCE, ASSESSMENT ORDER AS WELL AS THE IMPUGNED ORDER IS NOT FOUND TO THE SUSTAINABLE AND WE SET AS IDE THE SAME. FURTHER, WE RESTORED THE ENTIRE CASE TO THE FILE OF ASSESSING OFFICER FOR FRAMING OF AFRESH DENOVO ASSESSMENT AFTER AFFORDIN G DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND WITHOUT BEING PREJU DICED FROM THE ITA NO. 2363/ DEL/2013 6 EARLIER ASSESSMENT AND IMPUGNED ORDER. ACCORDINGL Y GROUND NO. 1 AND 2 OF THE REVENUE ARE DEEMED TO BE ALLOWED FOR S TATISTICAL PURPOSES. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED AS I NDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 20 TH MARCH , 2015. SD/- SD/- (R.S.SYAL) (C.M.GARG) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED 20 TH MARCH, 2015 B.RUKHAIYAR COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. BY ORDER AR, ITAT N. DELHI ITA NO. 2363/ DEL/2013 7 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 1 8 .03.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 18.03.2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 20.03.2015 7. DATE OF FILE SENT TO THE BENCH CLERK 20.03.2015 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO. 2363/ DEL/2013 8