ITO, New Delhi V. Rambhu Kumar Raj, New Delhi

ITA 2525/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7063 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 10-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Procedural lapse; Assessment record
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 271E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-II, NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO.2525/DEL/2016 ASSESSMENT YEAR : 2010-11 ITO, WARD- 40(1), NEW DELHI. VS. RAMBHU KUMAR RAJ, KD-171, 2 ND FLOOR, PITAMPUR, NEW DELHI. PAN : ADZPR 52 66 R (APPELLANT) (RESPONDENT) APPELLANT BY SHRI F.R. MEENA, SR.DR RESPONDENT BY NONE DATE OF HEARING 10-11-2016 DATE OF PRONOUNCEMENT 09-01-2017 O R D E R PER DIVA SINGH, J.M. : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 01.02.2016 OF THE CIT(A)-14, NEW DELHI, PERTAINING TO 2010-11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW CIT(A) HAS ERRED IN 1. DELETING THE PENALTY U/S 271E OF IT ACT IMPOSED AMOUNTING TO RS. 13,05,000/- EVEN AFTER THE ASSESSEE COULDN'T PROVE THAT THE CHE QUE OF RS. 30,00,000/- PAID TO M/S AGGARWAL CORPORATION WAS ACTUALLY A REPAYMENT O F LOAN OF THREE PARTIES BY SUBMITTING SUPPORTING DOCUMENTS/LEDGERS/CONFIRMATIO N FROM ALL THE PARTIES CONCERNED. 2. NOT ASKING FOR A REMAND REPORT ON THE NEW FACTS , RELATED TO LOAN GIVEN BY M/S NARENDRA AGENCIES TO ASSESSEE DURING F.Y. 2006- 07, PRESENTED BEFORE HIM DURING APPELLATE PROCEEDINGS, THEREBY NOT AFFORDING AN OPPORTUNITY TO AO, VERIFY THE FACTS. 3. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE A PPEAL. 2. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING. HOWEVER, ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD IT WAS SUBMITTED BY THE LD.SR.DR THAT DUE TO THE ISSUE ADDRESSED IN GROUND NO.2 THE PROCEDURAL LAPSE IS EVIDENT FROM THE RECORD ITSELF THUS IT CAN BE DECIDED WITHOUT HEARING THE ASSESSEE. REFE RRING TO GROUND NO.2 IT WAS SUBMITTED THAT THE EVIDENCE TAKEN INTO CONSIDERATION BY THE C IT(A) HAS NOT BEEN CONFRONTED TO THE ASSESSING OFFICER AS WOULD BE EVIDENT FROM THE CONC LUSION DRAWN BY THE LD. CIT(A) ON FACTS. CARRYING US THROUGH THE SAID FINDING IT WAS HIS SUB MISSION THAT THE STATEMENTS OF THE ASSESSEE IN FACT HAVE BEEN ACCEPTED BLINDLY AS N EITHER THE CIT(A) HAS CARED TO PERSONALLY 2 ITA NO.2525/DEL/2016 CARRY OUT ANY VERIFICATION AND ARRIVED AT A FINDING NOR HAS HE RECORDED THAT HE PERSONALLY HAS SEEN THE FACTS AND EVIDENCES. MOREOVER, THE EVIDEN CES HAVE NOT BEEN CONFRONTED TO THE ASSESSING OFFICER ALSO. THE FINDING UNDER IS CHALL ENGED REPRODUCED HEREUNDER :- ON PERUSAL OF RECORDS IT IS OBSERVED THAT THE LD. AO HAS NOT BROUGHT ANYTHING ON RECORD TO ESTABLISH THAT THE APPELLANT REPAID RS.13,05,000/- TO M/S NARENDER AGENCIES IN CASH. AS PER THE ABOVE SU BMISSIONS OF THE LD. AR THE PAYMENTS WERE MADE THROUGH CHEQUES ON WHICH THE PROVISIONS OF SECTION 271E ARE NOT ATTRACTED. 2.1. LD. SR. DR INVITING ATTENTION TO THE ORDER U/S 271E SUBMITTED THAT ADMITTEDLY THE ASSESSEE HAD PAID IN CASH TO M/S NARENDER AGENCIES AN AMOUNT OF RS.13,05,000/-. SINCE THE PAYMENT WAS MADE IN CASH THE PROCEEDINGS WERE I NITIATED REQUIRING THE ASSESSEE TO EXPLAIN THE SAME. REFERRING TO THE ORDER IT WAS SU BMITTED THAT THE ASSESSEE WAS REQUIRED TO DEMONSTRATE THAT HE WAS REQUIRED TO PAY AS ALLEGED BY IT M/S AGGARWAL CORPORATION RS.30,00,000/- ON BEHALF OF THE FOLLOWING THREE PAR TIES :- ON BEHALF OF NARENDRA AGENCIES RS.13,05,000/- ON BEHALF OF R. K. ENTERPRISES RS. 9,95,000/- ON BEHALF OF AAPPICO GROUP INDIA RS. 7,00,000/- TOTAL RS.30,00,000/- 2.2. THE ASSESSEE RELIED UPON THE ENTRIES IN LEDGER ACCOUNT OF THESE PARTIES AND THE ASSESSEE CLAIMED THAT THESE THREE PARTIES WERE DEBT ORS OF M/S AGGARWAL CORPORATION. THE FACTUAL EVIDENCES IN SUPPORT OF THE SAID SUBMISSION IT WAS SUBMITTED WERE REQRIED TO BE FILED SINCE AS PER THE ASSESSEE THESE THREE ENTITIES WERE EITHER DEBTORS OF M/S AGGARWAL CORPORATION EITHER DUE TO ANY SALES OR BY ANY A DVANCE/LOANS MADE TO THESE PARTIES. ACCORDINGLY IN ORDER TO ASCERTAIN GENUINENESS OF TH E CLAIM, IT WAS SUBMITTED SUMMONS WERE ISSUED TO THESE THREE ENTITIES BY THE AO AND ALSO T O M/S AGGARWAL CORPORATION. ALL THESE RETURNED WITH THE COMMENT NO SUCH PERSON. ONLY I N THE CASE OF M/S R. K. ENTERPRISES A REPLY WAS RECEIVED BUT EVEN THEY FAILED TO ACKNOWLE DGE ANY TRANSACTION WITH M/S AGGARWAL CORPORATION. ACCORDINGLY, IN THESE CIRCUMSTANCES, IT WAS SUBMITTED PENALTY OF RS.13,05,000/- WAS LEVIED FOR TRANSACTION IN VIOLATION OF PROVISIO NS OF SECTION 369T. THE FOLLOWING CONCLUSION ARRIVED AT BY THE ASSESSING OFFICER IT WAS SUBMITTE D HAS NOT BEEN CONSIDERED NOR HAS IT BEEN ADDRESSED BY THE CIT(A), WHO HAS MERELY BLINDLY ACC EPTED THE ASSESSEES VERSION :- HENCE, IT IS PERTINENT TO MENTION THAT ALONG WITH HIS REPLY DATED 21.01.2014, THE ASSESSEE SUBMITTED COPY OF ACCOUNT OF M/S R.K. ENTE RPRISES AND M/S AAPPICO GROUP INDIA AND CREDIT BALANCE AS ON 31.03.2009 AGA INST THEM WERE SHOWN AT RS.9,95,000/- AND RS.7,00,000/-; RESPECTIVELY BUT A S PER DETAILS AVAILABLE ON ASSESSMENT RECORDS OF THE ASSESSEE FOR A.Y. 2009-10 , THESE PERSONS, WHAT TO SAY OF ANY BALANCES, HAVE NOT BEEN SHOWN IN EITHER ANNE XURE-C' WHICH CONTAINS DETAILS OF UN-SECURED LOAN AS ON 31 ST MARCH 2009 OR IN ANNEXURE- D WHICH CONTAINS DETAILS OF SUNDRY CREDITORS AS ON 31 ST MARCH 2009. ALL THESE FACTS SHOW THAT THE ASSESSEE HAS FURNISHED A FALSE SUBMISSION IN RESPECT OF AMOUNT DUE TO M/S 3 ITA NO.2525/DEL/2016 R. K. ENTERPRISES AND M/S AAPPICO GROUP INDIA, WHIC H, HE CLAIMED, WAS PAID TO M/S AGGARWAL CORPORATION AND HE FAILED TO SUBMIT CORREC T ADDRESS OF M/S AGGARWAL CORPORATION SO AS TO ENABLE THE DEPARTMENT TO VERIF Y HIS CLAIM OF ADJUSTMENT OF LOAN TAKEN FROM M/S NARENDRA AGENCIES TOWARDS PAYMENT TO M/S AGGARWAL CORPORATION AS ACCORDING TO THE ASSESSEE NARENDRA AGENCIE S WAS HAVING M/S AGGARWAL CORPORATION AS CREDITOR IN THEIR BOOKS OF ACCOUNTS. THIS MAKES IT CLEAR THAT THE ASSESSEE HAS COME UP WITH A CONCOCTED STORY REGARDI NG PAYMENT TO M/S AGGARWAL CORPORATION MADE ON BEHALF OF M/S NARENDRA AGENCIES . FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT ASSESSE E REPAID LOAN OF RS.13,05,000/- OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE/DRAFT. THIS TRANSACTION OF RS.13,05,000/- IS IN VIOLATION OF THE PROVISIONS OF SECTION 269T. 3. I HAVE HEARD THE SUBMISSIONS OF THE LD.SR.DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A READING OF THE IMPUGNED ORDER, IT IS SEEN THAT THE ASSESSEE HAS CLAIMED THAT M/S NARENDER AGENCIES WAS REPAID BY WAY OF AN ACCOU NT PAYEE CHEQUE AND THERE IS NO CASH ENTRY IN THE BOOKS OF ACCOUNTS. CONSIDERING THE OV ERALL FACTUAL MATRIX I AM OF THE VIEW THAT ON FACTS THE SUBMISSIONS OF THE LD. SR. DR THAT THE CIT(A) HAS BLINDLY ACCEPTED THE ASSESSEES VERSION IS FOUND TO BE CORRECT. NEITHER HAS THE CIT(A) CARED TO HIMSELF PERUSE THE RECORD AND ARRIVE AT A CONCLUSION NOR HAS HE CARED TO REMAND THE EVIDENCE IF ANY TO THE AO. 3.1. THE CIT(A) AS A FIRST APPELLATE AUTHORITY HAS ALL THE POWERS AS HELD BY AN ASSESSING OFFICER AND THE ACT EMPOWERS HIM TO CALL FOR, EXAMI NE AND DECIDE THE ISSUE ARISING IN THE APPEAL ON THE BASIS OF THE EVIDENCE DIRECTED TO BE PRODUCED BEFORE HIM. HOWEVER, THE LD.CIT(A) FAILS TO RECORD HIS PERSONAL SATISFACTION ON THE ISSUE EXAMINED. IN VIEW OF THE ABOVE, THE IMPUGNED ORDER IS SET-ASIDE AND THE ISSU E IS RESTORED BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO RE-CONSIDER IT ON THE BASIS OF FACTS AND EVIDENCES AND IF NECESSARY THE ASSESSEE IS PERMITTED TO FILE FRESH EVIDENCES AND T HE LD. CIT(A) AFTER CONFRONTING THE SAME TO THE ASSESSING OFFICER AND OBTAINING A REMAND REPORT IS DIRECTED TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09 TH JANUARY, 2017. SD/- SD/- SD/- SSDSSDSDSSSD (A. N. MISHRA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SUJEET/AMIT KUMAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTR AR, ITAT NEW DELHI