ACIT, New Delhi V. Smt. Kamal Grover, Delhi

ITA 2584/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77680 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 11-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Keywords: Audit objection; Principle of natural justice
• Section: 143(3); 154

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 2584 /DEL/ 2013 (ASSESSMENT YEAR: 2008 - 09 ) ACIT CIRCLE - 4(1), ROOM NO.1 07, DRUM SHAPE BUILDING , I. P. ESTATE NEW DELHI 110002 VS. KAMAL GROVER, 1815/1, BHAGIRATH PALACE, CHANDNI CHOWK DELHI PAN : AAJPG6293J (APPELLANT) (RESPONDENT) APPELLANT BY : S.N. BHATIA , DR RESPONDENT BY: RAJ KUMAR GUPTA & SUMIT GUPTA, CA O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XXV , NEW DELHI DATED 08.02.2013 FOR THE ASSESSMENT YEAR 2008 - 09 . 2. THE SOLE GROUND OF APPEAL IS THAT : - THE LD CIT(A) HAS ERRED IN LAW AND FACTS IN DIRECTING THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE WHICH AMOUNTS TO SETTING - ASIDE THE MATTER WHICH IS NOT PERMITTED AS PER LAW. 3. THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961(HEREIN AFTER THE ACT) ON 24.12.2010 FOR THE RELEVANT AY. ON RECEIPT OF AUDIT OBJECTION, THE AO ISSUED A NOTICE U/S 154 OF THE ACT, TO THE ASSESSEE ON 30.05.2012 AND AN EX - PARTE ORDER WAS PASSED U/ S 154 ON 09.08.2012. THIS ORDER OF THE AO PASSED U/S 154 WAS CHALLENGED BEFORE THE LD CIT(A) WHO HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIF IED TO MAKE THE ADDITION WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE AND REMITTED THE CASE BACK TO THE ASSE SSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE. THE SOLE GROUND OF THE REVENUE IS THAT THIS ORDER OF THE LD CIT(A) VIRTUALLY AMOUNTS TO SETTING ASIDE THE ORDER OF THE ASSESSING OFFICER WHICH IS NOT PERMISSIBLE UNDER THE LAW . THEREFORE ACCORDING TO THE L D DR THE IMPUGNED ORDER HAS TO BE SET ASIDE. IN ORDER TO FIND OUT WHETHER THE ACTION OF THE LD CIT(A) IS VALID OR NOT , WE HAVE TO LOOK INTO THE PROVISIONS OF LAW WHICH GIVES POWER TO THE LD CIT(A) . FOR PAGE NO. 2 CONVENIENCE, SECTION 251 IS REPRODUCED BELOW: - 251. ( 1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING POWERS - (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. (AA) ... (B).. (C) IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN THE APPEAL AS HE THINKS FIT. 5. A PERUSAL OF THE ABOVE SECTION REVEALS THAT WHEN AN APPEAL IS PREFERRED AGAINST THE ASSESSMENT ORDER , CIT(A) HAS THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. HOWE VER WE FIND THAT THIS ORDER OF THE LD CIT(A) IS FROM AN APPEAL PREFERRED AGAINST AN ORDER PASSED BY ASSESSING OFFICER U/S 154 OF THE ACT I.E. FOR RECTIFICATION OF THE MISTAKE. AN APPEAL AGAINST SECTION 154 ORDER OF THE ACT OF THE ASSESSING OFFICER DOES NOT FALL UNDER SECTION 251(1)(A), THE POWER OF THE LD CIT(A), THEREFORE HAS TO BE DRAWN FROM SECTION 251(1)(C) WHICH CLEARLY STATES THAT IN ANY OTHER CASE HE MAY PASS SUCH ORDERS AS HE TH INKS FIT. SINCE THE ORDER IMPUGNED BEFORE THE LD CIT(A) FALLS UNDER THE CATEGORY IN ANY OTHER CASES ENVISAGED U/S 251 (1) (C), HE IS EMPOWERED TO PASS SUCH ORDERS AS HE TH INKS FIT . AND IN THIS CASE WE FIND THAT ONLY ONE NOTICE WAS SEND BY AO, TO ASSESSEE ON 15.06.2012 FIXING THE MATTER ON 30.05.20 12 ; AND SINCE NO REPLY OR NONE APPEARED ON BEHALF OF THE ASSESSEE , THE ASSESSING OFFICER PASSED AN EX - PARTE ORDER U/S 154 OF THE ACT; AN APPEAL AGAINST SUCH AN ORDER PASSED U/S 154 OF THE ACT WHEN APPEALED BEFORE THE LD CIT(A), HE NECESSARILY HAS TO DRAW THE POWER EN VI SAGED U/S 251(1)(C) AND NOT U/S 25 1 (1)(A); AND WHEN THE LD CIT(A) ADJUDICATES SUCH AN APPEAL HE DRAWS HIS POWER FROM SUB - SECTION (1)(C) OF SECTION 251 WHICH ENTAILS HIM TO PASS ANY ORDER AS HE THINKS FIT AND WE DO NO T FIND ANY RESTRICTION IN THE SAID POWER AND WE CANNOT READ ANY RESTRICTIONS WHICH IS NOT THERE IN SUB - SECTION (1)(C) OF SECTION 251 AND THEREFORE HE HAS POWERS TO SET - ASIDE ALSO . HOWEVER WE FIND THAT THE LD CIT(A) HAS NOT SET ASIDE THE IMPUGNED ORDER OF THE ASSESSING OFFICER WHICH WAS PASSED U/S 154 , WHEREAS, , HE HAS ONLY REMITTED THE CASE BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE ON THE GROUND OF VIOLATION OF NATURAL JUSTICE. THEREFORE, WE FIND NO INFIRMITY WHATSOEVER IN THE DIRECTION PAGE NO. 3 PASSED BY THE LD CIT(A) AND THEREFORE WE FIND NO MERIT IN THE SAID APPEAL PREFERRED BY THE REVENUE, SO WE UPHOLD THE ORDER OF THE LD CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 5 . 04 .2014. - S D / - - S D / - ( S.V. MEHROTRA ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 2 5 / 0 4 / 2014 A K KEOT /A.K. VERMA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI