Mr. Rakesh Kumar Tongar, Uttar Pradesh V. ITO, Noida

ITA 2660/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4775 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Gift; Opportunity of being heard; Competent authority
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.2660/DEL./2017 ASSESSMENT YEAR 2009-2010 MR. RAKESH KUMAR TONGAR, E-434, GAMMA-1, GREATER NOIDA, UTTAR PRADESH. PAN AHAPT0955A VS. THE ITO, WARD - 3(3), INCOME TAX OFFICE, AAYAKAR BHAVAN, A-2D, SECTOR-24, NOIDA 201 301. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SAMEER KAPOOR, C.A. FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. DATE OF HEARING : 0 4 .09.2017 DATE OF PRONOUNCEMENT : 13 .09.2017 ORDER THIS APPEAL HAS BEEN DIRECTED AGAINST THE ORDER O F LD. CIT(A)-1, NOIDA, DATED 23 RD FEBRUARY, 2017, FOR THE A.Y. 2009-2010, CHALLENGING THE DISMISSAL OF ASSESSEES APPEAL UNDE R SECTION 271(1)(C) OF THE I.T. ACT, 1961. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME DECLARING NET INCOME OF RS.1,56,79 0. THE A.O. MADE ADDITION OF RS.15 LAKHS ON ACCOUNT OF UNEXPLAINED C ASH CREDIT UNDER SECTION 68 OF THE I.T. ACT, 1961, AS THE ASSESSEE C OULD NOT EXPLAIN THE 2 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. GENUINENESS OF THE GIFTS RECEIVED BY HIM. THE A.O. VIDE SEPARATE ORDER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT, 1961. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE LD. CI T(A). THE ASSESSEE HOWEVER, DID NOT APPEAR BEFORE THE LD. CIT(A) TO PR OSECUTE THE APPEAL. 3. THE LD. CIT(A) IN THE ABSENCE OF THE ASSESSEE C ONSIDERING THE MATERIAL ON RECORD NOTED THAT BEFORE CONSIDERIN G THE MERITS OF THE CASE OR THE LACK OF THE SAME, IT IS NECESSARY TO CO NSIDER THE PECULIAR LEGAL ISSUE WHICH HAS ARISEN IN THIS CASE WITHOUT T HERE BEING ANY FAULT ON THE PART OF THE ASSESSEE AND WHICH IS SOLELY BEC AUSE OF THE CONFUSION CREATED BY THE FINANCE ACT, 2016 UNDER CH APTER-X PROVIDING THE DIRECT TAX DISPUTE RESOLUTION SCHEME , 2016 WHICH HAS CONSCIOUSLY CHOSE NOT TO SUPERSEDE OR OVERRIDE THE PROVISIONS OF INCOME TAX ACT UNDER SECTION 251(1)(A) UNDER CHAPTE R-XX. 3.1. THE LD. CIT(A) NOTED THAT THE PROVISIONS OF F INANCE ACT, 2016 UNDER CHAPTER-X PROVIDE THE DIRECT TAX DISPUT E RESOLUTION SCHEME, 2016 HAS PROVIDED A SCHEME TO THE ASSESSEE S HAVING APPEALS PENDING AGAINST THE ORDER PASSED BY THE A.O . UNDER THE PROVISIONS OF THE I.T. ACT AS ON 28 TH FEBRUARY, 2016 WHEREBY SUBJECT 3 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. TO COMPLIANCE OF THE PROVISIONS OF THAT SCHEME AN A SSESSEE WAS PERMITTED TO PAY THE DISPUTED TAX AT CERTAIN SPECIF IED RATES, PROVIDED, ASSESSEE SHALL WITHDRAW SUCH APPEAL OR WRIT PETITIO N WITH THE LEAVE OF THE COURT WHEREVER REQUIRED AND FURNISH PROOF OF SUCH WITHDRAWAL ALONG WITH THE DECLARATION REFERRED TO IN SUB-SECTI ON (1) OF SECTION 203 OF THE FINANCE ACT, 2017. THE LD. CIT(A) FURTHE R NOTED THAT SECTION 251(1)(A) OF THE I.T. ACT PROVIDES THAT IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEAL) SHALL HAVE POWERS IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT TO CONFIRM, REDUCE, ENHANCE OR ANNUL ASSESSMENT AND IN AN APPEAL AGAINST THE ORDER IMPOS ING PENALTY TO CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHE R TO ENHANCE OR REDUCE THE PENALTY. IT WOULD, THEREFORE, NOT GIVE J URISDICTION TO THE CIT(A) TO PERMIT WITHDRAWALS OF THE APPEALS ONCE TH E SAME IS FILED BEFORE CIT(A). THE LD. CIT(A) FURTHER NOTED IN PARA -18 OF THE ORDER THAT THE ASSESSEE IN THE BACKGROUND OF THE ABOVE LE GAL POSITION HAS BONAFIDELY APPROACHED THE PR. CIT, NOIDA FOR AVAILI NG THE BENEFITS OF DIRECT TAX DISPUTE RESOLUTION SCHEME, 2016 AND THE LD. PR. CIT, NOIDA HAS ISSUED CERTIFICATE IN FORM-5, UNDER RULE- 6 OF THE DIRECT TAX DISPUTE RESOLUTION SCHEME, 2016, CERTIFYING THA T THE ASSESSEE 4 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. HAD PAID AN AMOUNT OF RS.5,50,750 BEING 25% OF THE AMOUNT OF THE PENALTY IMPOSED BY THE A.O, THOUGH, THE PENDING APP EALS WAS NEITHER WITHDRAWN BY ASSESSEE NOR WAS PERMITTED TO BE WITHD RAWN BY THE UNDERSIGNED. THE LD. CIT(A) ALSO NOTED THAT ASSESSE E HAS NOT MADE ANY APPLICATION FOR WITHDRAWAL OF THE APPEAL. THERE FORE, APPEAL IS DECIDED WITH THE PRESUMPTION THAT THOUGH THE ASSESS EE HAS NOT MADE SPECIFIC REQUEST FOR WITHDRAWAL OF THE APPEAL IT IS INTENDED IN TERMS OF DTDRS-16 TO WITHDRAW THE PRESENT APPEAL. THE LD. CIT(A) FURTHER NOTED THAT AS PER SECTION 203 OF FINANCE ACT, 2016, WHICH REQUIRES ASSESSEE TO WITHDRAW APPEAL AND FURNISH THE PROOF O F SUCH WITHDRAWAL BEFORE THE COMPETENT AUTHORITY, TO AVAIL SUCH BENEFIT, HOWEVER, LD. CIT(A) CANNOT PERMIT TO WITHDRAW THE A PPEAL FOR WANT OF JURISDICTION. THE LD. CIT(A) ALSO NOTED THAT THERE CANNOT BE ANY DISPUTE THAT FINANCE ACT, 2016 BEING AN ENABLING AC T WILL PREVAIL OVER THE PROVISIONS OF I.T. ACT, IN CASE, THERE BEING AN Y CONFLICT BETWEEN THE TWO. THE LD. CIT(A) FURTHER NOTED THAT CHAPTER- X OF THE FINANCE ACT, 2016 RUNNING FROM SECTIONS 200 TO 211 NOWHERE PROVIDES SUPERSESSION OF PROVISIONS OF SECTION 251(1)(A) OF THE I.T. ACT. THE LD. CIT(A) IS NOT PERMITTED TO ALLOW WITHDRAWAL OF APPE AL WHICH IS ALSO 5 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. NOT ASKED BY ASSESSEE. THE LD. CIT(A) ACCORDINGLY, PROCEEDED TO DECIDE THE APPEAL ON MERIT AND DISMISSED THE APPEAL OF ASSESSEE. 4. I HAVE HEARD LEARNED REPRESENTATIVES OF BOTH TH E PARTIES. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT PR. CIT, NOIDA HAS ISSUED A CERTIFICATE UNDER DIRECT TAX DISPUTE RESOL UTION SCHEME, 2016, CERTIFYING THAT ASSESSEE HAS PAID REQUIRED AM OUNT OF THE TAX IMPOSED BY THE A.O. THEREFORE, AS PER APPENDIX OF T HE DIRECT TAX DISPUTE RESOLUTION SCHEME, 2016, THE PROVISIONS OF I.T. ACT SHALL BE SUPERSEDED BY THIS RULE AS PROVIDED UNDER SECTION 2 02 OF THE SAID SCHEME. HE HAS FURTHER SUBMITTED THAT AS PER RULE 2 03(2) OF THE DIRECT TAX DISPUTE RESOLUTION SCHEME, 2016 WHERE DECLARATION IS IN RESPECT OF TAX ARREAR, CONSEQUENT TO SUCH DECLARATI ON, THE APPEAL IN RESPECT OF THE DISPUTED INCOME, DISPUTED WEALTH AND TAX ARREAR PENDING BEFORE THE CIT(A) OR COMMISSIONER OF WEALTH TAX (A) AS THE CASE MAY BE SHALL BE DEEMED TO HAVE WITHDRAWN. SUB-RULE(5) OF RULE 203 OF THE DIRECT TAX DISPUTE RESOLUTION SCHEME, 20 16 ALSO PROVIDES THAT NO APPELLATE AUTHORITY OR ARBITRATOR, CONCILIATOR OR MEDIATOR SHALL PROCEED TO DECIDE ANY ISSUE RELATING TO THE SPECIFI ED TAX MENTIONED IN THE DECLARATION AND IN RESPECT OF WHICH AN ORDER HA D BEEN MADE UNDER 6 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. SUB-SECTION (1) OF SECTION 204 BY THE DESIGNATED AU THORITY OR THE PAYMENT OF THE SUM DETERMINED UNDER THAT SECTION. LEARNED COUNSEL FOR THE ASSESSEE THEREFORE SUBMITTED THAT LD. CIT(A ) SHOULD NOT HAVE DECIDE THE APPEAL OF ASSESSEE ON MERIT AND SHOULD N OT HAVE DISMISSED THE SAME. 5. THE LD. D.R. ON THE OTHER HAND RELIED UPON THE IMPUGNED ORDER AND SUBMITTED THAT SINCE ASSESSEE DID NOT APP EAR BEFORE THE LD. CIT(A) AND NO SUCH CONTENTIONS HAVE BEEN RAISED , THEREFORE, MATTER MAY BE REMANDED TO THE LD. CIT(A) FOR FRESH DISPOSAL IN ACCORDANCE WITH LAW. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS. THE LD . CIT(A) MAINLY CONSIDERED THE PROVISIONS OF SECTION 251(1)( A) OF THE I.T. ACT ON THE PROPOSITION THAT IN DISPOSING OF THE APPEALS , THE COMMISSIONER (APPEAL) SHALL HAVE POWER TO CONFIRM THE ASSESSMENT , REDUCE, ENHANCE OR ANNUL THE ASSESSMENT AND IN APPEALS AGAI NST IMPOSITION OF THE PENALTY, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY SO AS TO EITHER TO ENHANCE OR REDUCE THE PENALTY. THE LD. CI T(A) SPECIFICALLY RECORDED IN THE IMPUGNED ORDER THAT ASSESSEE HAS AP PROACHED THE 7 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. LD. PR. CIT, NOIDA FOR OBTAINING THE BENEFIT OF DIR ECT TAX DISPUTE RESOLUTION SCHEME, 2016 AND PR. CIT, NOIDA HAS ISSU ED CERTIFICATE IN FAVOUR OF ASSESSEE. THE ASSESSEE HAS FILED COPIES O F SECTIONS 202 AND 203 OF THE DIRECT TAX DISPUTE RESOLUTION SCHEME, 20 16 AND EXPLAINED THAT THE ABOVE SCHEME WILL SUPERSEDE THE PROVISIONS CONTAINED UNDER THE INCOME TAX ACT ON FILING THE DE CLARATION AND ACCEPTED BY THE DESIGNATED AUTHORITY. THE RULE ALSO PROVIDES FOR DEEMING WITHDRAWAL OF THE APPEALS WHEN DECLARATION IS FILED IN SPECIFIED FORM AND ACCEPTED BY THE DESIGNATED AUTHO RITY. THE SCHEME ALSO PROVIDES THAT NO APPELLATE AUTHORITY SH ALL DECIDE THE APPEAL ON ANY ISSUE RELATING TO THE SPECIFIED TAX M ENTIONED IN THE DECLARATION AND IN RESPECT OF WHICH AN ORDER HAS BE EN MADE UNDER SECTION 204 BY THE DESIGNATED AUTHORITY OR THE PAYM ENT OF SAME DETERMINED UNDER THAT SECTION. THE ASSESSEE, THEREF ORE, EXPLAINED THAT THESE SPECIAL SCHEME WOULD PREVAIL THE PROVISI ONS OF INCOME TAX ACT AND THE APPEAL PENDING BEFORE LD. CIT(A) SHALL BE DEEMED TO HAVE BEEN WITHDRAWN. HOWEVER, THESE SUBMISSIONS HAVE NOT BEEN MADE BY THE ASSESSEE BEFORE THE LD. CIT(A) AND ASSESSEE DID NOT APPEAR BEFORE LD. CIT(A) TO APPRAISE HIM OF ALL THE RELEVANT PROV ISIONS OF THE SPECIAL 8 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. SCHEME ENACTED BY THE DIRECT TAX DISPUTE RESOLUTION SCHEME, 2016. THE ASSESSEE ALSO DID NOT MAKE REQUEST TO WITHDRAW APPEAL. THE MATTER THEREFORE, REQUIRES RECONSIDERATION AT THE L EVEL OF THE LD. CIT(A). I, ACCORDINGLY, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE APPEAL OF ASSESSEE TO HIS FILE WITH A DIRECTION TO RE-DECIDE THE APPEAL OF THE ASSESSEE CONSIDERING THE OBJECTIONS O F THE ASSESSEE NOW RAISED BEFORE THE TRIBUNAL. ASSESSEE IS DIRECTED TO COOPERATE WITH THE LD. CIT(A) FOR FINALIZATION OF THE MATTER. LD. CIT( A) SHALL GIVE REASONABLE, SUFFICIENT OPPORTUNITY OF BEING HEARD T O THE ASSESSEE AND A.O. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 13 TH SEPTEMBER, 2017 VBP/- 9 ITA.NO.2660/DEL./2017 MR. RAKESH KUMAR TONGAR, GREATER NOIDA, UTTAR PRADESH. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES DELHI.