Mr. Darshan Lal, New Delhi V. ITO, New Delhi

ITA 2570/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5170 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-05-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 28-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANSHUL PRAKASH
• Assessee Lawyers: HARISH KAPOOR
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R.S. SYAL, HONBLE VICE PRESID ENT & SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER ITA NO.-2570/DEL/2014 ( ASSESSMENT YEAR: 2004-05) DARSHAN LAL D-178, KARAMPURA, NEW DELHI. AAZPL4544M VS ITO WARD 25(3) NEW DELHI. ASSESSEE BY SH. HARISH KAPOOR, CA REVENUE BY SH. ANSHUL PRAKASH, SR. DR ORDER PER SHRI K.N. CHARY, J.M. THIS IS AN APPEAL CHALLENGING THE ORDER DATED 24.0 1.2014 IN APPEAL NO. 428/2013-14 ON THE FILE OF THE LD. COMMI SSIONER OF INCOME TAX (APPEALS)-XXVIII, NEW DELHI (HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)). 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM THE CONCERN M/S GINNI ENTERPRI SES UNDERTAKING THE EMBROIDERY JOB WORK ON CONTRACT BAS IS FOR VARIOUS DATE OF HEARING 14.08.2017 DATE OF PRONOUNCEMENT 18.08.2017 2 ITA NO. 2570/DEL/2014 GARMENTS EXPORT HOUSE. FOR THE AY 2004-05 THEY HAV E FILED THEIR RETURN OF INCOME ON 01.11.2004 DECLARING A TOTAL IN COME OF RS. 1,40,850/- AND DURING THE SCRUTINY ASSESSMENT AO MA DE AN ADDITION OF RS. 26,84,505/-. CHALLENGING THE SAME ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) AND DURI NG THE APPELLATE PROCEEDINGS THE ASSESSEE PRODUCED THE ADDITIONAL EV IDENCE VIDE LETTER DATED 08.06.2007, ON WHICH THE REMAND REPORT WAS SOUGHT AND RECEIVED ON 27.08.2007. HOWEVER, FURTHER ADDIT IONAL EVIDENCE WAS FILED BY THE ASSESSEE BY MOVING AN APPLICATION UNDER RULE 46A AND BY LETTER DATED 10.11.2008 THE REPORT OF TH E AO WAS CALLED FOR. HOWEVER, LD. CIT (A) RECORDED THAT THE AO SUBMITTED A COPY OF THE REPORT ALREADY SUBMITTED AND FOR THE PU RPOSE OF COMPLIANCE WITH THE PRINCIPLE OF NATURAL JUSTICE HE PERUSED THE ADDITIONAL EVIDENCE TO DECIDE THE VARIOUS GROUNDS R AISED BY THE ASSESSEE. BY WAY OF IMPUGNED ORDER LD. CIT (A) DIS MISSED THE APPEAL. HENCE, THE ASSESSEE IS BEFORE US IN THIS A PPEAL CHALLENGING THE IMPUGNED ORDER. 3. IT IS THE ARGUMENT OF THE LD. AR THAT THE ASSESS MENT WAS FRAMED IN VIOLATION OF THE PRINCIPLES OF NATURAL JU STICE ON THE BASIS 3 ITA NO. 2570/DEL/2014 OF THE INFORMATION COLLECTED BEHIND THE BACK OF THE ASSESSEE AND THOUGH THIS ASPECT WAS RISE BEFORE THE LD. CIT (A), THE LD. CIT (A) MADE FACTUALLY INCORRECT STATEMENT STATING THAT ENO UGH OPPORTUNITIES TO REBUT THE EVIDENCE COLLECTED BY TH E AO WAS GIVEN TO THE ASSESSEE. FURTHER, ACCORDING TO THE LD. AR WHEN THE LD. CIT (A) SOUGHT A REPORT OF THE AO ON THE APPLICATIO N DATED 10.11.2008 SUBMITTED BY THE ASSESSEE UNDER RULE 46A OF THE RULES, AO DID NOT SUBMIT ANY REPORT AND THE LD. CIT (A) ALSO FAILED TO CONSIDER SUCH EVIDENCE. HE FURTHER ARGUED THAT THOUGH CONFIRMATION FROM THE CREDITORS WERE FILED THOSE WE RE NOT CONSIDERED. IT IS THE ARGUMENT OF THE LD. DR THAT VIDE PARAGRAPH NO. 4.1 THE LD.CIT (A) STATED THAT THOUGH NO REPORT WAS SUBMITTED BY THE AO IN RESPECT OF THE ADDITIONAL EVIDENCE SUB MITTED BY THE ASSESSEE ON 10.11.2008, THE LD. CIT (A) CONSIDERED ALL SUCH EVIDENCE AND DECIDED THE MATTER ON MERITS, AS SUCH NO ILLEGALITY OR IRREGULARITY WAS COMMITTED BY THE LD.CIT (A), AS SU CH THE IMPUGNED ORDER DOES NOT WARRANT ANY INTERFERENCE. 4. IN THIS MATTER, IT IS SUBMITTED BY THE AR THAT A NOTICE U/S 143(2) WAS ISSUED ON 06.09.2005 AND THE ASSESSEE WA S PRESENT ON 4 ITA NO. 2570/DEL/2014 THAT DAY BUT THE MATTER WAS ADJOURNED TO 05.10.2005 . HE FURTHER SUBMITS THAT IT IS ONLY IN OCTOBER, 2006 WITH THE I SSUANCE OF NOTICE U/S 143(2) EFFECTIVE ASSESSMENT PROCEEDINGS WERE ST ARTED AND ON 04.12.2006 THE AO CALLED FOR CERTAIN DETAILS TO BE SUBMITTED BY 11.12.2006. IN THAT SHORT TIME THOUGH ASSESSEE SUB MITTED SOME DETAILS, HE COULD NOT FURNISH FULL DETAILS, AS SUCH THOSE WERE SUBMITTED BEFORE THE LD.CIT (A). EVEN THE LD.CIT ( A) VIDE PARAGRAPH NO. 4.1 ADMITTED THAT THE AO DID NOT SUBM IT ANY REPORT IN RESPECT OF THE EVIDENCE THAT WAS PRODUCED ON 10. 11.2008. 5. WE HAVE CAREFULLY GONE THROUGH THE RECORD. THOU GH IT IS STATED IN THE ASSESSMENT ORDER THAT NO COMPLIANCE T O THE INITIAL NOTICES ISSUED TO THE ASSESSEE WAS THERE, THE STATE MENT OF THE ASSESSEE THAT THE AR WAS PRESENT ON 06.09.2005 IS N OT SPECIFICALLY DENIED. HOWEVER, THE FACT REMAINS THAT CERTAIN DET AILS WERE SOUGHT FROM THE ASSESSEE ON 04.12.2006 TO BE COMPLIED WITH BY 11.12.2006 BUT SINCE THE CASE WAS BEING TIME BARRED BY 31.12.2006 ASSESSMENT ORDER WAS PASSED ON 29.12.200 6. FURTHER, THE ORDER OF THE LD. CIT (A) ALSO SHOWS TH AT THOUGH ADDITIONAL EVIDENCE WAS PRODUCED UNDER RULE 46A ON 10.11.2008, 5 ITA NO. 2570/DEL/2014 THERE WAS NO RESPONSE FROM THE AO THOUGH HE WAS CAL LED UPON TO SUBMIT A REPORT. IN THE CIRCUMSTANCES, LD. CIT (A) RECORDED THAT IN VIEW OF THE PRINCIPLES OF NATURAL JUSTICE A PERU SAL OF THE EVIDENCE FILED BY THE APPELLANT WAS DONE. HOWEVER, THE IMPU GNED ORDER DOES NOT REFLECT THE TREATMENT GIVEN TO THE ADDITIO NAL EVIDENCE AND THE APPRECIATION THEREOF. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE, THE MATTER HAS TO BE SET ASIDE TO THE FILE OF THE AO FOR CONSIDERING THE EVIDENCE AFRESH AND TO GIVE FINDINGS THEREON. IT IS MADE CL EAR TO THE ASSESSEE THAT THEY HAVE TO FILE ALL THEIR EVIDENCES BEFORE THE AO AND COOPERATE WITH THE AO TO GET THE MATTER DECIDED ON MERITS. WITH THIS VIEW OF THE MATTER, THE MATTER IS RESTORE D TO THE FILE OF AO FOR CONSIDERING THE ADDITIONAL EVIDENCE FOR DISPOSA L OF THE MATTER AFRESH. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.08.2017 SD/- SD/- (R.S. SYAL) (K. NARSIMHA CH ARY) VICE PRESIDENT JUDICIAL MEMB ER 6 ITA NO. 2570/DEL/2014 DATED: 18.08.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(EXEMPTIONS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 16.08.2017 DRAFT PLACED BEFORE AUTHOR 17.08.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 18.8.17 APPROVED DRAFT COMES TO THE SR.PS/PS 18.8.17 KEPT FOR PRONOUNCEMENT ON 18.8.17 FILE SENT TO THE BENCH CLERK 18.817 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.