M/s. Kamaljit Singh & Co. BKO, Kapurthala V. Income Tax Officer, Kapurthala-I

ITA 329/ASR/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0602 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 20-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIADR
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.329(ASR)/2010 ASSESSMENT YEAR:2005-06 PAN :AAEFK0205R M/S. KAMALJIT SINGH & CO. VS. INCOME TAX OFFICER, KAPURTHALA. KAPURTHALA-I, KAPURTHALA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SATISH KUMAR RESPONDENT BY:SH. R.L. CHHANALIA,DR DATE OF HEARING: 02/01/2013 DATE OF PRONOUNCEMENT:07/01/2013 ORDER PER BENCH : THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 27.04.2010 PASSED BY THE CIT(A), JALANDHAR, F OR THE ASSESSMENT YEAR 2005-06 ON THE FOLLOWING GROUNDS: 1. THAT THE IMPUGNED ORDER IS AGAINST THE LAW AND FACTS ON RECORD. 2. THAT THE WORTHY CIT(A) HAS ERRED IN PASSING TH E IMPUGNED ORDER BY REJECTING THE APPLICATION UNDER RULE 46( A) 1 OF THE ACT ITA NO.329(ASR)/2010 2 AND VALID EXPLANATION OF THE APPELLANT AND CONFIR MING THE ADDITION OF RS.1,35,260/-. 3. THAT THE AO WAS NOT JUSTIFIED WHILE PASSING THE ORDER U/S 143 AND DENYING THE STATUS AS PARTNERSHIP FIRM OF APP ELLANT AND MAKING ADDITION OF RS.1,35,260/-. 2. THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.10 .2005 IN THE STATUS OF A FIRM. HOWEVER, THE RETURN WAS NOT ACCOMPANIED BY A CERTIFIED COPY OF THE REVISED INSTRUMENT OF PARTNERSHIP AS REQUIRED U/S 1 84(4) OF THE INCOME TAX ACT, 1961. THE AO ASKED THE ASSESSEE TO SUBMIT EVID ENCE IN RESPECT OF THE PARTNERSHIP DEED SUBMITTED BY IT ALONGWITH PHOTOCOP Y OF THE SAME. THE ASSESSEE DID NO INITIALLY COMPLY WITH THE REQUIREME NT, BUT SUBMITTED A COPY OF PARTNERSHIP DEED ON 5.9.2007. THE AO ISSUED A SH OW CAUSE NOTICE TO THE ASSESSEE AS TO WHY IT SHOULD NOT BE ASSESSED U/S 18 5 OF THE ACT AND THE DEDUCTION CLAIMED BY WAY OF INTEREST TO THE PARTNER S TOTALING TO RS.1,35,260/- NOT BE DISALLOWED AS PROVIDED U/S 185 OF THE ACT. T HE ASSESSEE DID NOT FILED ITS REPLY TO THE SHOW CAUSE NOTICE. THE AO COMPLETE D ASSESSMENT U/S 143(3) OF THE ACT ON 30.11.2007 IN WHICH HE NOTED THAT INT EREST PAID TO THE PARTNERS WAS DISALLOWED DUE TO NON-FILING OF INSTRUMENT OF PARTNERSHIP ALONGWITH RETURN. ITA NO.329(ASR)/2010 3 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY. 4. THE ASSESSEE HAS ALSO FILED AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962 STATING THEREIN THAT THERE W AS CHANGE IN THE CONSTITUTION OF THE FIRM DURING THE YEAR UNDER REFE RENCE AND THE ASSESSEE FILED SELF CERTIFIED COPY OF PARTNERSHIP DEED ON 4. 5.2005 AND HENCE THE SAME WAS NOT ATTACHED THE INCOME TAX RETURN FILED ON 31. 10.2005. DURING THE ASSESSMENT PROCEEDINGS, THE AO ISSUED SHOW CAUSE NO TICE CALLING AS TO WHY THE EXPENSES CLAIMED BEING INTEREST PAID TO THE PAR TNERS BE NOT DISALLOWED. A COPY OF THE ACKNOWLEDGEMENT FOR FURNISHING THE SELF CERTIFIED COPY OF PARTNERSHIP DEED COULD NOT BE PRODUCED AS THE SAME WAS SUBMITTED THROUGH THE ACCOUNTANT WHO LEFT THE FIRM AFTER CHANGE IN CO NSTITUTION AND THE A.O. DISALLOWED THE EXPENSES SO CLAIMED. THE ASSESSEE FU RTHER SUBMITTED IN THE APPLICATION UNDER RULE 46A OF THE I.T. RULES, 1962 BEFORE THE LD. FIRST APPELLATE AUTHORITY THAT AFTER BEST EFFORTS AND INT ERVENTION OF THE OUTGOING PARTNERS, THE ASSESSEE COULD GET THE SAID ACKNOWLED GEMENT AND THE ASSESSEE ENCLOSED THE SAME FOR READY REFERENCE AND REQUESTED THE LD. FIRST APPELLATE AUTHORITY TO ADMIT IT AS ADDITIONAL EVIDENCE. BUT THE LD. FIRST APPELLATE AUTHORITY REJECTED THE APPLICATION FILED BY THE ASS ESSEE UNDER RULE 46A OF ITA NO.329(ASR)/2010 4 I.T. RULES, 1962 BY STATING THAT SINCE SUFFICIENT O PPORTUNITY WAS PROVIDED BY THE AO DURING THE ASSESSMENT PROCEEDINGS TO THE ASS ESSEE TO LEAD EVIDENCE OF SUBMITTING CERTIFIED COPY OF PARTNERSHIP DEED AN D THE ASSESSEE HAS NOT FILED THE SAME BEFORE HIM, THEREFORE, THE APPLICATI ON UNDER RULE 46A DOES NOT DESERVES TO BE ACCEPTED. LASTLY, THE LD. FIRST APPELLATE AUTHORITY HAS ALSO HELD SINCE THE ASSESSEE HAS NOT COMPLIED WITH THE P ROVISIONS OF SECTION 184, THE AO WAS JUSTIFIED IN DISALLOWING INTEREST PAID T O THE PARTNERS U/S 185 OF THE ACT. 5. AGGRIEVED BY THE IMPUGNED ORDER, THE ASSESSEE F ILED THE PRESENT APPEAL BEFORE US. 6. AT THE TIME OF HEARING, SH. SATISH KUMAR APPEARE D FOR THE ASSESSEE RELIED UPON THE ARGUMENTS ADVANCED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. 7. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US. WE HAVE THOROUGHLY GONE THROUGH THE ORDERS PASSED BY THE AUTHORITIES BELOW ESPECIALLY THE IMPUGNED ORDER IN WHICH THE LD. CIT(A) HAS HELD THAT THE ASSESSEE HAS SUBMITTED ONLY PHOTOCOPY OF PARTNERSHIP DEED AND ITA NO.329(ASR)/2010 5 NOT CERTIFIED COPY OF THE PARTNERSHIP DEED. HE HAS UPHELD THE ORDER OF THE AO AND DISALLOWED THE INTEREST PAID TO PARTNERS DUE TO NON-COMPLIANCE OF THE PROVISIONS OF SECTION 184(4) OF THE ACT. AS PER ASS ESSMENT ORDER, THE ASSESSEE FILED ITS RETURN OF INCOME AT RS. 51,990/- ON 31.10.2005 AND THE AO ISSUED NOTICES U/S 143(2)/142(1) OF THE ACT AND ISS UED QUESTIONNAIRE TO THE ASSESSEE. VARIOUS DETAILS WERE FILED BY THE ASSESSE E AS IT WAS THE REQUIREMENT OF THE AO. HOWEVER, VIDE OFFICE LETTER DATED 18.09.2007, THE ASSESSEE WAS ASKED TO EXPLAINED THAT THE RETURN FIL ED BY THE ASSESSEE WAS NOT ACCOMPANIED BY A CERTIFIED COPY OF THE INSTRUMENT OF PARTNERSHIP IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION 3 AND 4 OF SECTION 184 OF THE ACT AND REQUESTED THE ASSESSEE TO SHOW CAUSE THAT SINCE THE FIRM DID NOT COMPLY WITH THE PROVISION OF SECTION 184 OF THE ACT , WHY YOUR FIRM MAY NOT BE ASSESSED U/S 185 OF THE ACT AND DEDUCTION CLAIME D BY WAY OF INTEREST TO THE PARTNERS WHICH MAY NOT BE DISALLOWED AMOUNTING TO RS.1,35,260/-. ON 28.09.2007, THE LD. COUNSEL FOR THE ASSESSEE APPEAR ED AND PRODUCED THE BOOKS OF ACCOUNT AND OTHER INFORMATION BUT DID NOT FILE ANY EVIDENCE OF HAVING FILED THE INSTRUMENT OF PARTNERSHIP ALONGWIT H RETURN ON . ON 29.09.2007 NOTICE U/S 143(2) OF THE ACT WAS AGAIN S ENT ALONGWITH A LETTER FIXING THE CASE FOR 12.11.2007. ON 12.11.2007 ASSE SSEE FILED WRITTEN REPLY BUT DID NOT ADDUCE ANY EVIDENCE OF HAVING FILED CER TIFIED COPY OF INSTRUMENT ITA NO.329(ASR)/2010 6 OF PARTNERSHIP ALONGWITH THE RETURN AND THE AO COM PLETED THE ASSESSMENT AND DISALLOWED THE INTEREST CLAIMED BY THE ASSESSEE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE VIDE ORDER DATED 30.11.2 007 PASSED U/S 143(3) OF THE ACT. 9. IT IS A MATTER OF RECORD THAT THE ASSESSEE FILED AN APPLICATION UNDER RULE 46A OF THE I.T. RULES, 1962 BEFORE THE LD. FIR ST APPELLATE AUTHORITY ALONGWITH ACKNOWLEDGMENT OF SELF CERTIFIED COPY OF PARTNERSHIP DEED ATTACHED WITH THE RETURN FILED BY THE ASSESSEE ON 3 1.10.2005. THE ASSESSEE HAS ALSO STATED THAT AFTER BEST EFFORTS AND INTERVE NTION OF THE OUT-GOING PARTNER, THE ASSESSEE COULD GET THE SAID ACKNOWLEDG MENT AND HE ATTACHED THE SAME AS ADDITIONAL EVIDENCE BEFORE THE LD. FIRST AP PELLATE AUTHORITY, WHO HAS NOT ADMITTED THE SAME. 10. IN OUR CONSIDERED OPINION, THE REASONS MENTION ED BY THE ASSESSEE FOR NOT FILING THE ACKNOWLEDGEMENT/PROOF FOR FILING THE CERTIFIED COPY OF PARTNERSHIP DEED SHOWING THE CHANGE IN THE CONSTITU TION OF THE FIRM DURING THE YEAR UNDER REFERENCE ARE SUFFICIENT REASONS FOR ADMISSION OF THIS ADDITIONAL EVIDENCE, WHICH HAS NOT BEEN ACCEPTED BY THE LD. FIRST APPELLATE AUTHORITY. IN THE INTEREST OF JUSTICE, WE DIRECT TH E LD. FIRST APPELLATE AUTHORITY TO ADMIT THE ADDITIONAL EVIDENCE AND CONSIDER THE S UBMISSIONS OF THE ITA NO.329(ASR)/2010 7 ASSESSEE ALONGWITH THE ADDITIONAL EVIDENCE AND DECI DE THE ISSUE IN DISPUTE AFRESH UNDER THE LAW AND AFTER GIVING OPPORTUNITY T O THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7TH JANUARY, 2013. SD/- SD/- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7TH JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. KAMALJIT SINGH & CO.KAPURTHALA. 2. THE ITO KAPURTHALA-1. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.