Sun Investments Pvt. Ltd, New Delhi V. ACIT, New Delhi

ITA 3295/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0687 (ITAT-DELHI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 04-01-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 06-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Rule 8D; Set aside
• Section: 14A

Judgement Text

I.T.A. NO. /DEL/ 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.3295 /DEL/2010 ASSESSMENT Y EAR : 2007-08 SUN INVESTMENTS PVT. LTD., ACIT, 12-JINDAL CENTRE, CIRCLE-9(1), BHIKAJI CAMA PLACE, NEW DELHI. NEW DELHI. V. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACS AAACS AAACS AAACS- -- -0389 0389 0389 0389- -- -M MM M APPELLANT BY : SHRI K. SAMPATH, ADVOCATE. RESPONDENT BY : SHRI RK GUPTA, CIT-DR. ORDER PER A.K. GARODIA, AM: THIS IS AN ASSESSEE'S APPEAL FILED AGAINST THE ORDER OF LD CIT(A)XII, NEW DELHI DATED 23.3.2010 FOR ASSESSMENT YE AR 2007-08. GROUND NO.1 IS GENERAL. GROUND NO. 2 READS AS UNDER:- 2. THAT THE LD CIT(A) ERRED IN CONFIRMING THE ORDE R OF THE ASSESSING OFFICER WITHOUT PROVIDING REASONABLE ADEQUATE AND PROPER OPPORTUNITY OF HEARING. 2.1. THAT THE LD CIT(A) ERRED IN PASSING THE ORDER ON LY ON THE BASIS OF ADDITIONAL EVIDENCES FILED DURING THE COURSE O F APPELLATE PROCEEDINGS. THE LD CIT(A) DID NOT PROVIDE ANY OPPOR TUNITY TO THE APPELLANT TO PRESENT ITS CASE ON MERITS. HENCE, THE ORDER IS . I.T.A. NO.310308/DEL/ 2/5 BAD AND VOID ABINITIO AS THE SAME VIOLATES THE PRINCIP LES OF NATURAL JUSTICE. 2. IT WAS SUBMITTED BY THE LD AR OF THE ASSESSEE THAT A REQUEST WAS MADE BEFORE LD CIT(A) FOR ADMISSION OF ADDITIONAL EVI DENCE AS PER RULE 46A OF THE IT RULES, 1962 AS PER SUBMISSION DATED 11.3.2 010 AS HAS BEEN NOTED BY THE LD CIT(A) ON PAGE NO. 9 OF THE OR DER OF LD CIT(A). IT IS FURTHER SUBMITTED THAT THE ASSESSEE WAS REQUIRED TO MAK E SUBMISSION BEFORE LD CIT(A) ON MERIT AFTER THE DECISION OF LD CIT(A) REGARDING REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE EITHER BY WAY OF ADMISSION OR BY WAY OF REJECTING THE REQUEST FOR ADMISSI ON OF ADDITIONAL EVIDENCE BUT LD CIT(A) HAS NOT INTIMATED HIS DECISION ON THIS ACCOUNT I.E. REJECTION OF THE REQUEST OF THE ASSESSEE FO R ADMISSION OF ADDITIONAL EVIDENCE. HENCE, THE ASSESSEE COULD NOT MAKE ANY SUBMISSION BEFORE LD CIT(A) ON MERIT OF THE ISSUES INVOLV ED. IT IS ALSO SUBMITTED THAT THE ORDER HAS BEEN PASSED BY LD CIT(A) ON 23.3.2010 AND IT ALSO GOES TO SHOW THAT THE DECISION OF LD CIT(A) REGARDING REJECTION OF THE REQUEST FOR ADMISSION OF ADDITIONAL E VIDENCE WAS NOT INTIMATED TO THE ASSESSEE FOR MAKING SUBMISSION ON MERIT W ITHOUT TAKING HELP OF THE ADDITIONAL EVIDENCE. IT IS SUBMITT ED THAT UNDER THESE FACTS, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LD CIT(A) FOR A FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3, AS AGAINST THIS, IT WAS SUBMITTED BY THE LD DR OF THE REVENUE THAT NO MISTAKE COULD BE POINTED OUT BY THE LD AR OF THE ASSESSEE REGARDING THE ORDER OF LD CIT(A) IN REJECTING THE R EQUEST OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE AND HENCE, EVEN IF THE MATTER IS RESTORED BACK TO THE FILE OF LD CIT(A), NO DIRECTION SHULD BE GIVEN FOR ADMISSION OF ADDITIONAL EVIDENCE AND LD CIT (A) SHOULD BE DIRECTED TO PROVIDE OPPORTUNITY TO THE ASSESSEE FOR MA KING . I.T.A. NO.310308/DEL/ 3/5 SUBMISSIONS BEFORE HIM WITHOUT ANY HELP FROM ADDITIONAL EVIDENCE AND THEREAFTER, THE LD CIT(A) SHOULD PASS FRESH ORDER AS PER LAW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE TH ROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT HAS BE EN NOTED BY THE LD CIT(A) ON PAGE NO.9, 12 & 17 OF HIS ORDER THAT VIDE SUBMISSION DATED 11.3.2010, THE AR OF THE ASSESSEE HAD REQUESTED FOR ADMI SSION OF ADDITIONAL EVIDENCE UNDER RULE 46A IN CONNECTION WI TH GROUND OF APPEAL NO.5, 6 & 7 RAISED BEFORE HIM. LD CIT(A) HAS R EJECTED THIS REQUEST OF THE ASSESSEE REGARDING ADMISSION OF ADDITIONAL EVIDENCE BUT THERE IS NO MENTION IN THE ORDER OF LD CIT(A) THAT S UCH REJECTION OF THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE BY HIM H AS BEEN INTIMATED TO THE AR OF THE ASSESSEE AND OPPORTUNITY WAS PROVIDED BY HIM TO THE ASSESSEE TO MAKE SUBMISSION BEFORE HIM WITHOUT ANY HELP FROM THE ADDITIONAL EVIDENCE. UNDER THESE FACTS, WE A RE IN AGREEMENT WITH LD AR OF THE ASSESSEE THAT THE MATTER SHOULD GO BA CK TO THE FILE OF LD CIT(A) FOR A FRESH DECISION. WE ALSO FIND THAT ONE OF THE ISSUES RAISED BEFORE US IS REGARDING DISALLOWANCE OF `.346.60 LAKHS U/S 14A OF THE INCOME TAX ACT, 1961 BY APPLYING RULE 8D OF THE IT RULES, 1962. LD CIT(A) HAS FOLLOWED THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF DAGA CAPITAL MANAGEMENT PVT . LTD. AS REPORTED IN 117 ITD 169 BUT THEREAFTER, THERE IS JUDGMENT OF HON'BLE BOMBAY HIGH COURT ON THIS ISSUE RENDERED IN THE CASE OF GODRE J BOYCE MFG. CO.PVT. LTD. AS REPORTED IN 43 DTR 177 (BOM.). AS PER THIS JUDGMENT OF HON'BLE BOMBAY HIGH COURT, RULE 8D IS PROSPECTIVE AND NOT RETROSPECTIVE. RULE 8D WAS INSERTED W.E.F. 24.3.2008 A ND HENCE, THE SAME IS APPLICABLE FOR ASSESSMENT YEAR 2008-09 AND LATER YEARS AND THEREFORE, THE SAME IS NOT APPLICABLE IN THE PRESENT Y EAR I.E. ASSESSMENT YEAR 2007-08. UNDER THIS FACTUAL POSITION, THI S ISSUE IS REQUIRED TO GO BACK FOR A FRESH DECISION IN ANY CASE A S PER THIS RECENT JUDGMENT OF HON'BLE BOMBAY HIGH COURT. WE, THEREFOR E, SET ASIDE THE ORDER OF LD CIT(A) ON ALL THE ISSUES IN THE INTEREST OF JUSTICE AND RESTORE . I.T.A. NO.310308/DEL/ 4/5 THE ENTIRE MATTER BACK TO THE FILE OF THE LD CIT(A) FOR A FRESH DECISION AFTER ALLOWING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. REGARDING REQUEST OF THE LD DR OF THE REVENUE FOR NO T ASKING THE LD CIT(A) TO ADMIT ADDITIONAL EVIDENCE, WE WOULD LIKE TO OBSERVE THAT WE DO NOT PUT ANY FETTER ON LD CIT(A) AND HE IS FREE TO DECIDE THE APPEAL AFRESH IN THE MANNER HE DEEMS FIT AND PROPER AND THE ONLY DIRECTION OF US IS THAT ADEQUATE OPPORTUNITY OF BEING HEARD SHOULD BE ALLOWED BY HIM TO BOTH SIDES. IT IS UP TO LD CIT(A) TO DECIDE AS T O WHETHER HE DEEMS IT FIT OR PROPER OR NOT TO ADMIT ADDITIONAL EV IDENCE. WE DO NOT GIVE ANY DIRECTION TO HIM ON THIS ASPECT. 5. IN VIEW OF OUR DECISION, IN THE ABOVE PARAS WITH R EGARD TO GROUND NO.2 OF THE APPEAL, NO ADJUDICATION IS CALLED FOR RE GARDING OTHER GROUNDS RAISED BY THE ASSESSEE BECAUSE WE HAVE ALREADY REM ITTED THE MATTER BACK TO THE FILE OF LD CIT(A) FOR A FRESH DEC ISION ON ALL THE ISSUES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND S ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. 6 TH JANUARY, 2010. SD/- AD/- (A.D. JAIN) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 6.1.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. (ITAT, NEW DELHI). . I.T.A. NO.310308/DEL/ 5/5