East End Apartments CGHS Ltd, Delhi V. ITO Ward 60(1), New Delhi

ITA 2713/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2317 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Initiation of penalty proceedings; Tangible material
• Section: 142(1); 194J; 147; 148

Judgement Text

1 ITA NO. 2713/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I(2) + SM C-1 NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEM BER, AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 2713/DEL/2019 ( A.Y 2010-11) EAST END APARTMENTS CGHS LTD. 17, MAYUR VIHAR PHASE-1, EXTENSION NEW DELHI PIN 110096 PAN: AAATT9792N (APPELLANT) VS ITO WARD-60(1) ROOM NO. 306 A, F BLOCK, VIKAS BHAWAN NEW DELHI (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. PRADEEP SINGH GAUTAM, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 14/02/2019 PASSED BY CIT(A)-19, NEW DELHI, FOR ASSESSMENT YEA R 2010-11. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. WHETHER THE LD. CIT (A) WAS JUSTIFIED BY UPHOLDING THE LD. A.O. ORDER DT.28. 12.2017 WHICH ARE TOTALLY BASED ON A GENERAL INFORMATION P ROVIDED ON THE BASIS OF AIR/CIB FOR VERIFICATION ON SUSPICIOUS STR BUT NOTHING TO DO OR EVEN A WHISPER OR ANY TANGIBLE MATERIAL TOWARDS THE APPELLANT. 2. WHETHER THE LD. CIT(A) WAS JUSTIFIED IN SUSTAINING THE ASSUMPTION OF JURISDICTION UNDER SECTION 147 BY HOLDING THAT IT H AS BEEN RECORDED AS PER LAW AND NOTICE ISSUED U/SL48 AFTER GETTING APPROVAL AS APPRISED BY CIT (A) DATE OF HEARING 05.03.2020 DATE OF PRONOUNCEMENT 20.03.2020 2 ITA NO. 2713/DEL/2019 HIMSELF AS APPEARED ON PAGE 11 OF CIT(A) ITSELF . 3. WHETHER THE LD. CIT (A) WAS JUSTIFIED IN UPHOLDING THE REASONS RECORDED AND ISSUE OF NOTICE BY THE LD. A.O. AFTER APPLICATI ON OF JUDICIAL MIND , ARE ACCORDING TO THE LAW. 4. WHETHER THE LD. CIT (A) WAS JUSTIFIED IN UPHOLDING THE A.O. ORDER WHICH WAS MADE ON A DIFFERENT FOOTING AND NOT A WHISPER T OWARDS THE REASONS AND FURTHER BY DISMISSING THE RIGHTFUL CLAIM OF APPELLA NT BY HOLDING MAINTENANCE CHARGES ARE NOTHING BUT IT WAS RENTAL INCOME AND OU T OF IT 30% STATUTORY DEDUCTION ALLOWABLE AND AS A RESULT THE ADDITIONS I S BEING RESTRICTED AT RS.5,33,050/- 5. WHETHER THE LD. CIT (A) WAS JUSTIFIED IN PASSING T HE ORDER IN HURRIED MANNER AS APPEARED FROM PARA 6.2 OF ORDER ITSELF WH ERE ONLY ONE GROUND TAKEN FOR CONSIDERATION DESPITE 4 EFFECTIVE GROUND TAKEN IN FORM NO 35. 6. WHETHER THE LD. CIT (A) WAS JUSTIFIED TO UPHOLD THE LD. AO ORDER ON CHARGEABILITY OF INTEREST IN A MECHANICAL WAY AS WE LL AS INITIATION OF PENALTY PROCEEDINGS U/S 271(L)(C). 3. THE ASSESSEE IS A GROUP HOUSING SOCIETY. THE CASE O F THE ASSESSEE WAS REOPENED ON THE BASIS OF AIR/CIB INFORMATION. THE A SSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS DEPOSITED CASH OF RS. 32,07,2 92/- IN THE SAVING BANK ACCOUNT AND RECEIVED PAYMENT OF RS. 8,39,423/- UNDE R SECTION 194A, 194J AND 194H BUT DID NOT FILE RETURN OF INCOME FOR A.Y. 2010-11. NOTICE UNDER SECTION 148 WAS ISSUED ON 30.NIL.2017 WAS ISSUED AN D SUBSEQUENTLY NOTICE U/S 142(1) WAS ISSUED. BUT NO RESPONSE WAS RECEIVE D THEREFORE FINAL OPPORTUNITY WAS GIVEN BY THE ASSESSING OFFICER VIDE NOTICE DATED 05.12.2017. THE SAME WAS REPLIED AND DURING THE PROCEEDING, THE ASSESSEE FILED RETURN OF INCOME ON 25.12.2017 AT RS. 3,60,485/-. THE RETURN OF INCOME WAS BASED ON THE INCOME FROM BANK INTEREST AND INTEREST ON FIXED DEPOSITS. THE INCOME FROM RENT FROM TOWERS OF MTNL, RELIANCE AND AIRTEL INSTA LLED ON THE FLATS TO THE EXTENT OF RS. 7,61,500/- WAS ADDED BY THE ASSESSING OFFICER TO THE INCOME OF THE ASSESSEE. 3 ITA NO. 2713/DEL/2019 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE AND THER E IS NO ADJOURNMENT APPLICATION ON BEHALF OF THE ASSESSEE. THE NOTICE HAS BEEN SERVED TO THE ASSESSEE. THEREFORE, WE ARE TAKING UP THE SUBMISSI ONS OF THE ASSESSEE BEFORE THE CIT(A) AS WELL AS BEFORE THE ASSESSING OFFICER . 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL A VAILABLE ON RECORD. THE ASSESSEE BEFORE THE CIT(A) CONTENDED THAT DURIN G THE PROCEEDINGS NEITHER THE ASSESSING OFFICER HAS PROVIDED THE COPY OF RECO RDED REASONS, APPROVAL U/S 151(1) NOR THE SAME HAS BEEN MENTIONED IN THE BODY OF ORDER. SINCE THE ASSESSEE HAS VERY LITTLE KNOWLEDGE ABOUT THE LAW HE NCE, THE SAME HAVE NOT BEEN RAISED DURING THE PROCEEDINGS. THE ASSESSEE FU RTHER SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSING OFFICER HAS GONE BEYOND T HE LIMITED JURISDICTION, FOR WHICH THE PROCEEDINGS U/S 147 HAVE BEEN INITIATED, EVEN WITHOUT SUSTAINING THE REASONS IN THE ORDER AND HAS TAKEN A NEW STAND TOWARDS THE AMOUNT RECEIVED AS MAINTENANCES TREATED AS RENT FROM THE T OWER OF MTNL, RELIANCE, AIRTEL. THE ASSESSING OFFICER HAS SUO-MOTO DRAWN AN ADVERSE INFERENCES FOR NOT FILING OF ITR ON TIME AS WELL AS ADDITIONS BY WAY O F TREATING MAINTENANCE CHARGES UNDER THE GARB OF RENT. THE ADDITIONS WHICH HAVE BEEN MADE HAVE NO LEGS TO STAND AND THEREFORE SUO-MOTO ASSESSMENT HAS BEEN FRAMED VIDE ORDER DT. 28.12.2017 WHICH ARE AGAINST THE LAW AND CONTRA RY TO FACTS ON RECORD. THEREFORE, THE ASSESSEE PRAYED BEFORE THE CIT(A) TH AT ALL THE ADDITIONS ARE LIABLE TO BE DELETED. 8. AFTER GOING THROUGH THE ASSESSMENT ORDER AND THE OR DER OF THE CIT(A), IT CAN BE SEEN THAT THE CIT(A) AS WELL AS THE ASSESSIN G OFFICER HAS NOT AT ALL CONSIDERED THE CONTENTIONS OF THE ASSESSEE. THEREFO RE, WE ARE OF THE OPINION 4 ITA NO. 2713/DEL/2019 THAT, IT WILL BE APPROPRIATE TO REMAND BACK THIS IS SUE TO THE FILE OF THE CIT(A). NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THUS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 9. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2020. SD/- SD/ (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 20/03/2020 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 2713/DEL/2019 DATE OF DICTATION 17.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 2 0 .03.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 0 .03.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 0 .03.2020 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER