ITO, Ludhiana V. Sh. Bir Parkash Malhotra, Ludhiana

ITA 273/CHANDI/2013

• Counselvise Citation: 27321514 RSA 2013
• Duration Of Justice: 2 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 273/CHD/2013 ASSESSMENT YEAR: 2008-09 THE ITO,, WARD II(1), VS. SH. BIR PARKASH MALHOTRA , LUDHIANA PROP. M/S GANPATI TRADERS, LUDHIANA PAN NO. ACHPM4534E (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. MITTAL RESPONDENT BY : SH. SUDHIR SEHGAL DATE OF HEARING : 16.09.2015 DATE OF PRONOUNCEMENT : 24.09.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A)-I, LUDHIANA DATED 3.12.2012 RELATING TO ASSESSMENT YE AR 2008-09. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS:- I) THAT THE LD. CIT(A) HAS ERRED IN LAW IN DELETIN G THE ADDITION OF RS. 19,72,788/- OUT OF RS. 20.01,725/- MADE BY ASSESSING OFFICER ON ACCOUNT OF UNCONFIRMED SUNDRY CREDITORS U/S 68 OF THE INCOME-TAX ACT, 1961. II) THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS FACTS OF THE CASE IN DISPOSING THE APPEAL ON MERITS WITHOUT RECORDING 2 THE REASON FOR ADMISSION OF ADDITIONAL EVIDENCE AS ENVISAGED IN RULE 46A(2) OF INCOME TAX RULE, 1962. III) THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SSESSEE DERIVES INCOME FROM TRADING IN SHAWLS AND CLOTH. THE ASSESSING OFFICER OBSERVED THAT AS PER QUESTIONNAIRE DATED 25.5.2010 THE ASSESSEE WAS REQU IRED TO PROVIDE CONFIRMATIONS OF THE SUNDRY CREDITORS. HOWEVER, THE ASSESSEE COUL D NOT PRODUCE ALL THE SUNDRY CREDITORS. THE ASSESSEE ALSO FAILED TO FURNISH ANY NAME AND ADDRESS, PAN NUMBERS OF SUNDRY CREDITORS, THEREFORE, THE ASSESSING OFFIC ER COULD NOT VERIFY THE SAME. AS PER THE ASSESSING OFFICER, THE FOLLOWING SUNDRY CRE DITORS WERE OUTSTANDING AS PER BALANCE SHEET:- A) M/S GANPATI TRADERS RS. 6,45,126/- B) M/S BPL FABRICS, LUDHIANA RS. 0 C) M/S RAJ TRADERS, LUDHIANA RS. 0 D) M/S SHIV SHANKER MEGA MART, RAJPURA RS. 13,56,599/ - RS. 201,01,725/- IN VIEW OF THE ABOVE, THE ASSESSING OFFICER MADE TH E ADDITION OF RS. 20,01,725/-. 4. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). DURING THE COUR SE OF APPELLATE PROCEEDINGS, BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT HE HAS OBTAINED THE CONFIRMED STATEMENT OF ITS ACCOUNT FROM M/S SHITAL INTERNATIO NAL, PLOT NO. 10, SECTOR 29, PANIPAT, M/S JAIN APPARELS, INDUSTRIAL AREA A, PHAS E-1, CHANDIGARH M/S KUNDAN ENTERPRISES, 57, STREET NO.4, DABA ROAD, LUDHIANA A ND M/S AARYA FORGINGS, 775, LODHA ROAD, BHIWANI. THE ASSESSEE FURNISHED THESE CONFIRMED STATEMENTS BEFORE 3 THE CIT(A) AND REQUESTED HIM TO ADMIT THE SAME AS A DDITIONAL EVIDENCE UNDER RULE 46A OF THE I.T. RULES, 1962. THE CONTENTION OF THE ASSESSEE WAS THAT THE ADDITIONAL EVIDENCE NOW SOUGHT TO BE ADDUCED BY HIM IS VERY MUCH RELEVANT TO THE GROUNDS OF APPEAL PREFERRED BY HIM AND GOES TO THE VERY ROOT OF THE MATTER FOR RENDERING SUBSTANTIAL JUSTICE IN THE MATTER. A CCORDINGLY, THE ASSESSEE REQUESTED THE CIT(A) TO ALLOW HIM TO FURNISH THE A DDITIONAL EVIDENCE AS PER PROVISIONS OF SECTION 46A OF THE ACT. THE LD. CIT( A) FORWARDED THE SUBMISSIONS OF THE ASSESSEE TOGETHER WITH THE CONFIRMATION LETT ERS BEING ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER FOR HIS COMMENTS. AFTER RECEI VING THE COMMENTS / REMAND REPORT DATED 29.10.2012 OF THE ASSESSING OFFICER, T HE CIT(A) DELETED THE ADDITION OF RS. 19,72,788/- OUT OF RS. 20,01,725/- MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF UNCONFIRMED SUNDRY CREDITORS U/S 68 OF T HE INCOME TAX ACT, 1961. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. SHRI SUDHIR SEGHAL, LD. COUNSEL FOR THE ASSESSEE REFERRED TO SECTION 250(4) OF THE ACT WHICH READS A S UNDER:- THE COMMISSIONER (APPEALS), MAY, BEFORE DISPOSING OF ANY APPEAL, MAKE SUCH FURTHER INQUIRY AS HE THINKS FIT, OR MAY DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIR Y AND REPORT THE RESULT OF THE SAME TO THE COMMISSIONER (APPEALS ). HE FURTHER REFERRED TO RULE 46A(3) AND (4) OF THE I NCOME TAX RULES, 1962, WHICH ARE REPRODUCED HEREIN BELOW. ' (3) THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE ASS ESSING OFFICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY- (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROS S- EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR 4 (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WIT NESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY B E, THE COMMISSIONER (APPEALS) TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ENA BLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENA LTY (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE ASSESSING OFFICER) UNDER CLAUSE (A) OF SUB-SECTION (1) OF SEC TION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.' IN VIEW OF THE ABOVE PROVISIONS, SHRI SUDHIR SEHGAL , LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) AT THE TIME OF H EARING OF THE APPEAL CAN MADE SUCH FURTHER ENQUIRY AS HE DEEM FIT AND MAY ASK ASS ESSING OFFICER TO MAKE SUCH AN INQUIRY. ACCORDING TO THE LD. COUNSEL FOR THE A SSESSEE THIS PROVISION IN THE ACT VESTS THE CIT(A) WITH THE POWER TO MAKE FURTHER INQUIRY WHICH INCLUDES THE POWER TO ADMIT FURTHER EVIDENCE. SHRI SUDHIR SEHGA L LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN THE INSTANT CASE, THE CIT (A) HAS ADMITTED THE ADDITIONAL EVIDENCE AFTER ACCEPTING THE SUBMISSIONS MADE BY TH E ASSESSEE TO THE EFFECT THAT ASSESSEE WAS PREVENTED BY THE CIRCUMSTANCES BEYOND ITS CONTROL IN OBTAINING AND FURNISHING THE CONFIRMATION STATEMENT OF ACCOUNT OF THE ABOVE PARTIES. THE CIT(A) HAS ALSO ACCEPTED THE CONTENTION OF THE ASSE SSEE THAT THERE WERE MANY PROBLEMS WITH THE PARTIES TO TAKE THE CONFIRMATIONS BECAUSE OF THE DISPUTES WITH THE PARTIES AND ASSESSING OFFICER WAS UNABLE TO ALL OW SUFFICIENT TIME TO THE ASSESSEE TO COMPLY WITH THE SAID REQUIREMENT AS THE ASSESSMENT WAS GETTING TIME BARRED ON 31.12.2010. ACCORDINGLY, THE CIT(A) KEE PING IN VIEW THE PROVISIONS OF SUB RULE (3) OF RULE 46A FORWARDED THE SUBMISSIO NS OF THE ASSESSEE AND THE ADDITIONAL EVIDENCE IN THE FORM OF DOCUMENTARY EVI DENCE TO THE ASSESSING OFFICER FOR EXANIMATION. IN OTHER WORDS THE CIT(A) HAS AFF ORDED A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE OR DOCUMENTS PRODUCED BY THE ASSESSEE. THE CIT(A) ALSO REQUIRED THE ASSESSING OFFICER TO G IVE HIS COMMENTS ON MERITS OF 5 THE CASE. ON THE BASIS OF REMAND REPORT, THE CIT (A) DELETED THE ADDITION OF RS. 19,72,788/- AS AGAINST RS. 20,01,725 MADE BY THE A SSESSING OFFICER. 7. SHRI S.K. MITTAL LD. DR SUBMITTED THAT CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN DISPOSING OF THE APPEAL ON MERITS WITHOUT RECORDING THE REASONS FOR ADMISSION OF ADDITIONAL EVIDENCE AS EN VISAGED IN RULE 46A(2) OF THE INCOME TAX RULES, 1962. SUB RULE (2) OF RULE 46A P ROVIDES THAT NO ADDITIONAL EVIDENCE SHALL BE ADMITTED UNLESS THE COMMISSIONER (APPEALS) RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. ADMITTEDLY, IN THE INSTANT CASE, THE CIT(A) HAS NOT COMPLIED WITH THE PROVISIONS OF SUB RULE (2) OF RULE 46A. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) IN TOTO AND REMAN D THE MATTER TO CIT(A) TO COMPLY WITH THE PROVISIONS OF SUB RULE (2) OF RULE 46A AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER AFFORDING DUE A ND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. SINCE, WE HAVE SET ASIDE THE ORDER OF THE CIT(A) IN TOTO, THEREFORE, NO COMMENTS ARE BEING GIVEN ON MERITS OF THE CASE. AC CORDINGLY, WE REMAND THE ISSUE RELATING TO MERITS OF THE CASE ALSO TO THE CI T(A) FOR A FRESH ADJUDICATION. 9. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 24.09.2015 SD/- SD/- (ANNAPURNA MEHROTRA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 24 TH SEPTEMBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6