Saga Department Stores Ltd., New Delhi V. ACIT, New Delhi

ITA 3317/DEL/2012

• Counselvise Citation: 331720114 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 04-02-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 28-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Rectification of order; Charitable institution; Opportunity of being heard; Principle of natural justice; Tax effect
• Section: 143(3); 54; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI I. C. SUDHIR, JUDICIAL MEMBER ITA NO. 3317/DEL/2012 ASSESSMENT YEAR: 2005- 2006 M/S. SAGA DEPARTMENT STORES LIMITED V S. ACIT FLAT NO. F. GROUND FLOOR, CIRCLE-7(1), DCM BUILDING INCOME TAX OFFICE, 16, BARAKHAMBA ROAD, C.R. BUILDING, NEW DELHI 110 001 NEW DELHI. PAN AAACS4171P (APPELLANT) (RESPONDENT) APPELLANT : SHRI C.S. AGARWAL, S R. ADVOCATE, SHRI R.P.MALL, ADVOCATE RESPONDENT BY : SHRI RAMESH CH ANDRA, CIT DR ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER O N THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEANED CIT (A) HAS ERRED IN LAW IN SETTING ASIDE THE MATTE R TO THE ASSESSING OFFICER WHEN THE POWER TO SET ASIDE HAS BEEN SPECIF ICALLY WITHDRAWN AND OMITTED BY THE FINANCE ACT, 2001. 1.1 WHETHER THE CIT(A) IS JUSTIFIED IN HOLDING THAT THE POWER OF SETTING ASIDE THE ASSESSMENT ORDER AS WITHDRAWN BY THE FINA NCE ACT, 2001 DOES NOT APPLY TO THE ORDER OF RECTIFICATION U/S 15 4 OF THE ACT ? WITHOUT PREJUDICE : ITA NO. 3317/DEL/2012 A.Y. 2005-06 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) HAVING HELD THERE HAS BEEN A VIOLATION OF TH E PROVISIONS OF SECTION 129 AND THE PRINCIPLES OF NATURAL JUSTICE A ND REMANDING THE MATTER TO THE ASSESSING OFFICER, OUGHT NOT TO HAVE PASSED THE ORDER ON MERITS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N UPHOLDING THE ORDER OF THE AO DISREGARDING THE FACT THERE WAS NO APPARENT MISTAKE U/S 154, IN THE ORDER DATED 6.1.2009 GIVING EFFECT TO THE ORDER OF TRIBUNAL AND THAT THE DEDUCTION IN RESPECT OF COMMI SSION EXPENSES HELD ALLOWABLE AGGREGATING TO RS. 10,08,89,873/- HAD BEE N CORRECTLY COMPUTED AND ADOPTED. 3.1 THAT IN DOING SO THE CIT(A) HAS FAILED TO COMPR EHEND THAT THE ASSESSEE HAD BEEN ALLOWED A DEDUCTION OF RS. 1,21,5 5,213/- IN RESPECT OF COMMISSION EXPENSES BY THE ASSESSING OFFICER ON WHICH THE TAX AT SOURCE HAD BEEN DEDUCTED AND THE DEDUCTION WHICH WA S DISPUTED WAS OVER AND THE ABOVE THE AMOUNT WHICH HAD BEEN SPECIF ICALLY ALLOWED BY THE AO AND THEREFORE THERE WAS NO JUSTIFICATION TO REDUCE THE SAID SUM WHILE CALCULATING THE DEDUCTION. 3.2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, WHETHER BY RESORTING TO SECTION 154, THE COMMISSION EXPENSES A LREADY ALLOWED IN THE ASSESSMENT MADE U/S 143 (3) CAN BE DISALLOWED. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN SUSTAINING THE ACTION OF THE LEARNED ASSESSING OFFICER OF CHARGING INTEREST U/S 220. 2. IN THE GROUND NOS. 1 & 1.1, THE ASSESSEE HAS QUESTIONED ACTION OF THE LD. CIT(A) IN SETTING ASIDE THE MATTER TO THE AO IN VIEW OF THE WITHDRAWAL OF SETTING ASIDE POWER OF LD. CIT(A) BY THE FINANCE A CT 2001. GROUND NO. 2, 3, 3.1 AND 3.2 ARE ALTERNATIVE GROUNDS. IN GROUND NO. 4 TH E ACTION OF THE LD. CIT(A) IN SUSTAINING THE CHARGING OF INTEREST U/S 220 BY THE AO HAS BEEN QUESTIONED. ITA NO. 3317/DEL/2012 A.Y. 2005-06 3 3. SO FAR AS GROUND NOS. 1 & 1.1 OF THE APPEAL ARE CON CERNED, THE RELEVANT FACTS ARE THAT THE ASSESSEE IN THE BUSINESS OF TRAD ING AND EXPORT OF GARMENTS, HANDICRAFTS, MADE UPS ETC. HAD DISCLOSED INCOME OF RS. 1,43,29,770/- IN ITS RETURN OF INCOME FILED ON 31.10.2005. IN THIS RETUR N OF INCOME GROSS TURN OVER OF RS. 55.65 CRORES AND COMMISSION EXPENSES OF RS. 11. 45 CRORES HAVE BEEN SHOWN. THE AO WHILE FRAMING THE ASSESSMENT U/S 143(3) OF A CT ON 27.12.2007 DISALLOWED A SUM OF RS. 10,23,92,724/- OUT OF THE C LAIMED TOTAL COMMISSION OF RS. 11,45,47,937/-. THIS ACTION OF THE AO WAS QUEST IONED BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY. THE LD. CIT(A) VIDE ITS ORDER DATED 15.4.2008 DIRECTED THE AO TO ALLOW THE COMMISSION @14% OF THE GROSS TURN OVER I.E. RS. 55.64 CRORES. ON FURTHER APPEAL AGAINST THE FIRST A PPELLATE ORDER, THE TRIBUNAL VIDE ITS ORDERS DATED 29.7.2008 IN ITA NO. 1686/D/2 008, PARTIALLY ALLOWED THE PLEA OF THE ASSESSEE AND DIRECTED THE AO TO ALLOW T HE COMMISSION EXPENSES AT 16% OF THE TOTAL TURN OVER. BOTH THESE APPELLATE OR DERS WERE GIVEN EFFECT TO BY THE AO BY PASSING APPEAL EFFECT ORDER U/S 250 AND 2 54 OF THE I.T. ACT. THEREAFTER, THE AO ISSUED A NOTICE U/S 154 DATED 19 .8.2009 SEEKING TO RECTIFY THE FOLLOWING MISTAKES APPARENT FROM RECORD. (EXTRACT FROM NOTICE U/S 154 DATED 19.8 .2009) PARTICULARS OF MISTAKE PROPOSED TO BE RECTIFIED THERE IS SOME MISTAKE WHILE COMPUTING THE TOTAL INC OME AS RELIEF ALLOWED BY LD. CIT(A) HAS BEEN GIVEN MORE BY RS. 1, 21,55,210/- RESULTING IN TAX EFFECT OF RS. 62,35,775/- INCLUDIN G INTEREST U/S 234B. ITA NO. 3317/DEL/2012 A.Y. 2005-06 4 4. THE AO DID NOT AGREE WITH THE OBJECTION RAISED BY THE ASSESSEE AGAINST THE PROPOSED RECTIFICATION U/S 154 OF THE ORDER AND HE RECTIFIED MISTAKES BY PASSING ON ORDER U/S 154 OF THE ACT ON 24.8.2012. 5. THE ASSESSEE QUESTIONED THE RECTIFICAT ION ORDER DATED 24.8.2012 BEFORE THE FIRST APPELLATE AUTHORITY BUT COULD NOT SUCCEED . IN THE PRESENT APPEAL THE ASSESSEE HAS QUESTIONED THE ACTION OF THE LD. CIT(A ) IN UPHOLDING THE ORDER PASSED U/S 154 OF THE ACT BY THE AO. IN SUPPORT OF THE GROUND NOS. 1 AND 1.1 OF THE APPEAL THE LD. AR SUBMITTED THAT FOLLOWING ISSU ES WILL HAVE TO BE ADJUDICATED UPON FOR DISPOSAL OF THESE GROUNDS :- 1. WHETHER NOTICE ISSUED U/S 154 OF TEH ACT BY THE AO WAS WITH OR WITHOUT JURISDICTION ? 2. WAS THE NOTICE ISSUED U/S 154 WA S VALID.? AND 3. WHETHER THERE WAS ANY MISTAKE AP PARENT FROM RECORD IN THE ORDER OF THE ASSESSMENT DATED 27.12.2 007 ? 6. THE LD. AR SUBMITTED THAT THE ACTION PR OPOSED U/S 154 OF THE ACT BY THE AO WAS NOT ONLY MISCONCEIVED BUT ALSO WITHOUT J URISDICTION APART FROM THE FACT THAT THERE WAS NO ERROR OR ANY MISTAKE APPAREN T FROM RECORD IN THE ORDER OF THE ASSESSMENT DATED 27.12.2007. IN REPLY TO THE NO TICE ISSUED U/S 154 THE ASSESEE HAD CONTENDED THAT THERE WAS NO MISTAKE IN THE ASSESSMENT ORDER PASSED ON 27.12.2007 AND THE SAME WAS EXPLAINED BY THE ASSESSEE IN DETAIL IN ITS REPLY DATED 7.10.2009, A COPY THEREOF HAS BEEN MADE AVAILABLE AT PAGE 89 TO ITA NO. 3317/DEL/2012 A.Y. 2005-06 5 93 OF THE PAPER BOOK. IT WAS SUBMITTED THAT ASSESSE E COMPANY ENGAGED IN THE BUSINESS OF TRADING AND EXPORT OF CARPET, HANDICRAF T, MADE-UPS ETC. HAVING 10 SHOW ROOMS ACROSS INDIA WHICH LARGELY CATER TO FORE IGN TOURISTS. IN ORDER TO INCENTIVIZE DRIVERS OF TOURIST BUSES, TOURISTS TA XIES ETC. TO BRING THEIR VEHICLES CARRYING FOREIGN TOURISTS TO THE ASSESSEES SHOW RO OMS, THE ASSESSEE PAYS COMMISSION AS A PROPORTION OF THE PURCHASES MADE BY THE FOREIGN TOURISTS BROUGHT BY SUCH DRIVERS AND GUIDES. FOR THE PREVIOU S YEAR RELEVANT TO THE ASSESSMENT YEAR 2005-06, THE ASSESSEE COMPANY HAD M ADE PAYMENT OF COMMISSION AMOUNTING TO RS. 11,45,47,937/- REPRESEN TING SUCH INCENTIVE PAID TO DRIVERS TO TOURIST VEHICLES FOR BRINGING FOREIGN T OURISTS TO THE ASSEESSS SHOWROOMS AND CLAIMED DEDUCTION THEREOF. THE AO VI DE ASSESSMENT ORDER DATED 27.12.2007 HELD THAT EXPENDITURE BY WAY OF THIS PAY MENT OF COMMISSION WAS UNVOUCHED. THE AO SEGREGATED THE COMMISSIONS PAID I NTO TWO PARTS, FIRSTLY IN RESPECT OF TRANSACTIONS ON WHICH TDS HAS BEEN DEDUC TED AMOUNTING TO RS. 1,21,55,213/- ALLOWING IT IN FULL AND SECONDLY, A S UM OF RS. 10,23,92,724/- ON WHICH TDS DEDUCTION WAS NOT MADE DISALLOWING IT IN FULL. HE SUBMITTED THAT IN FIRST APPEAL THE LD. CIT(A) VIDE ORDER DATED 15.4.2 008 ALLOWED COMMISSION PAID @ 14% OF THE TURN OVER FOR THE RELEVANT PREVIOUS YE AR. IN COMPLIANCE INCOME OF THE ASSESSEE WAS RECOMPUTED VIDE ORDER DATED 18.6.2 008 AT RS. 4,17,61,560/- AFTER ALLOWING FURTHER DEDUCTION OF COMMISSION AMOU NTING TO RS. 7,76,42,828/-. ON FURTHER APPEAL FILED BY THE ASSESSEE , THE TRIBU NAL VIDE ITS ORDER DATED ITA NO. 3317/DEL/2012 A.Y. 2005-06 6 29.8.2008 (SUPRA) ALLOWED DEDUCTION FOR COMMISSION @ 16% OF THE TOTAL TURN OVER AS AGAINST 14% ALLOWED BY THE LD. CIT(A). IN C OMPLIANCE THE INCOME OF THE ASSESSEE WAS RECOMPUTED VIDE ORDER DATED 6.1.2009 A T RS. 3,06,69,730/- AFTER ALLOWING ADDITIONAL DEDUCTION OF COMMISSION AMOUNTI NG TO RS. 1,10,91,833/-. 7. LD. AR POINTED OUT THAT ALL IT WAS ONLY THE COMMISSION ON WHICH TDS HAD BEEN DEDUCTED. IT IS CLEAR FROM THE ASSESSMENT ORDE R DATED 27.12.2007, AND THE INTENTION AND UNDERSTANDING OF THE AO, WHILE COMPUT ING AND ISSUING NOTICE IN TAX. IN THE NOTICE ISSUED U/S 154 / 155 OF THE ACT AO PROPOSED TO PASS RECTIFICATION ORDER ON THE GROUNDS THAT RECOMPUTATI ON OF INCOME VIDE ORDER DATED 18.6.2008 MADE IN PURSUANT TO THE FIRST APPELLATE O RDER AND CONSEQUENTLY THE RECOMPUTATION OF INCOME VIDE ORDER DATED 6.1.2009 M ADE IN PURSUANCE TO THE ORDER OF THE TRIBUNAL, HAS RESULTED IN ADDITIONAL RELIEF OF RS. 1,21,55,210/-. 8. LD. AR SUBMITTED THAT THE AO VIDE ASSESS MENT ORDER DATED 27.12.2007 U/S 143(3) OF THE ACT HAD ALLOWED DEDUCTION IN RESP ECT OF COMMISSION PAID TO THE TUNE OF RS. 1.21 CRORES IN RESPECT OF WHICH ADMITTE DLY THE ASSESSEE HAS DEDUCTED TDS. THE DISALLOWANCE MADE BY THE AO WAS RESTRICTED TO TRANSACTIONS AMOUNTING TO RS. 10,23,92,724/- ON WHICH THE AO HAD ALLEGED T HAT NO TDS HAD BEEN DEDUCTED. HE SUBMITTED THAT ASSESSEE AGITATED IN TH E APPEAL BEFORE THE LD. CIT(A) WAS DISALLOWANCE OF RS. 10,23,92,724/- OUT O F PAYMENT OF COMMISSION. THE RELIEF ALLOWED BY THE LD. CIT(A) TO THE EXTENT TO RS. 7,76,42,828/- WAS OUT OF DISALLOWED AMOUNT OF RS. 10,23,92,724/-. READING TH E ORDER PASSED BY THE LD. ITA NO. 3317/DEL/2012 A.Y. 2005-06 7 CIT(A) IN THE CONTEXT OF SPECIFIC GROUNDS RAISED BE FORE IT, IT COULD BE SEEN THAT THE ADDITIONAL RELIEF OF RS. 7,76,42,828/- ALLOWED BY THE LD. CIT(A) WAS FOR THE COMMISSION, DISALLOWED, SINCE THE AMOUNT OF RS. 1,2 1,55,213/- ON WHICH TDS WAS DEDUCTED AND ALLOWED BY THE AO, WAS NEVER IN DI SPUTE. 9. THE LD. AR SUBMITTED THAT THE RELIEF GRAN TED BY THE TRIBUNAL WAS IN THE CONTEXT OF THE DISALLOWANCE SUSTAINED BY THE LD. CI T(A). IN THAT WAY OF THE MATTER, THE RELIEF ALLOWED BY THE LD. CIT(A) / TRIB UNAL IS ONLY FOR COMMISSION DISALLOWED AND NOT THE ORIGINALLY ALLOWED BY THE A O AT THE STAGE OF ASSESSMENT WHICH WAS TREATED SEPARATELY DUE TO DEDUCTION OF TD S. 10. LD. AR CONTENDED THAT THE AO WHILE FRAMING THE ASSESSMENT ORDER HAD ALLOWED THE DEDUCTION AT RS. 1,21,55,213/- REPRESE NTED SUCH AMOUNT ON WHICH TDS HAD BEEN DEDUCTED AT SOURCE THUS THERE WAS NO M ISTAKE APPARENT FROM RECORD. 11. LD. AR CONTENDED FURTHER THAT RELIEF GRAN TED BY THE LD. CIT(A) WAS BY AN ORDER DATED 15.4.2008 I.E. AFTER THE ORDER OF ASSES SMENT DATED 27.12.2007 AS SUCH, APPARENTLY THE NOTICE ISSUED U/S 154 ON 19.8. 2009 PROPOSING TO RECTIFY AN ORDER OF ASSESSMENT DATED 27.12.2007 IS BASED ON TH E RELIEF GRANTED BY AN ORDER DATED 15.4.2008. THUS IT IS APPARENT THE SAID NOTIC E U/S 154 OF THE ACT IS CONTRARY TO THE ORDER MADE U/S 154 OF THE ACT. THUS IN THE PRESENT CASE THE ISSUE WHICH NEEDS ADJUDICATION IS AS TO WHETHER THE AO HA D ACTED WITHIN HIS JURISDICTION IN MAKING AN ORDER DATED 16.8.2011 WHI CH ORDER HAS BEEN MADE ON ITA NO. 3317/DEL/2012 A.Y. 2005-06 8 THE BASIS OF A NOTICE ISSUED U/S 154 OF THE ACT AND IS DATED 19.7.2009. THUS THE ASSUMPTION OF JURISDICTION U/S 154 OF THE ACT IS BA SED ON FUNDAMENTAL MISCONCEPTION OF FACTS AND IS THUS WITHOUT JURISDIC TION. THE LD. AR SUBMITTED THAT ORDER PASSED U/S 154 OF THE ACT RECTIFYING ORDER DA TED 18.6.2008 WITHOUT NOTICE IS MISPLACED. HE SUBMITTED THAT BY MAKING THE PROPO SED RECTIFICATION THE TAX LIABILITY HAS GOT ENHANCED THUS IT WAS MANDATORY TO ISSUE NOTICE PRIOR TO RECTIFYING THE ORDER DATED 18.6.2008 PASSED BY THE LD. CIT(A). ON THIS GROUND ALSO THE IMPUGNED ORDER PASSED U/S 154 OF THE ACT DATED 16.8 .2011 IS WITHOUT JURISDICTION. 12. IN SUPPORT OF THE ALTERNATIVE GROUNDS 2, 3,3.1 & 3.2 THE LD. AR SUBMITTED THAT THE AUTHORITIES BELOW HAVE FAILED TO APPRECIAT E THAT EVEN OR OTHERWISE INVOCATION OF SECTION 154 OF THE ACT IS NOT TENABLE . THE RELIEF WAS IN THE CONTEXT OF DISALLOWANCE SUSTAINED BY THE LD. CIT(A) AND THU S ORDER OF THE LD. CIT(A) HAVING BEEN MERGED WITH THE ORDER OF THE APPELLATE TRIBUNAL, TO WHICH AN EFFECT HAD ALREADY BEEN GRANTED, THERE CAN BE NO RECTIFICA TION MADE TO SUCH AN ORDER GIVING EFFECT TO THE ORDER OF THE LD. CIT(A). HE SU BMITTED THAT HAD THE EFFECT BEEN NOT GRANTED TO THE ORDER OF THE LD. CIT(A) BY AN ORDER PASSED ON 18.6.2008, WHEREBY TOTAL INCOME HAD BEEN COMPUTED A T RS. 4,17,61,560/-, IT IS DIFFICULT TO SAY WHETHER THE TRIBUNAL WOULD HAVE ST ILL ALLOWED THE RELIEF OR WOULD HAVE RESTRICTED THE SAME TO WHAT PERCENTAGE OF THE GROSS TURN OVER, SINCE IT WAS NOTICED THAT THE AO WHILE GIVING THE EFFECT THE ORD ER OF THE LD. CIT(A) HAD ITA NO. 3317/DEL/2012 A.Y. 2005-06 9 ALREADY ALLOWED THE DEDUCTION OF RS. 1,21,55,213/-. IN OTHER WORDS, SUBMITTED THE LD. AR THAT THE ORDER GIVING EFFECT TO THE FIRS T APPELLATE ORDER WAS DATED 18.6.2008 AND THE TRIBUNAL WHILE DISPOSING OFF THE SAID APPEAL ON 29.7.2008, HAD WITH IT THE AFORESAID ORDER GIVING EFFECT TO THE OR DER OF THE LD. CIT(A), WHEN IT WAS NOTICED THAT THE ASSESSEE HAD BEEN ALLOWED DEDU CTION OF RS. 7,76,42,828/-, WHICH HAD BEEN CALCULATED @ 14% OF THE TURN OVER AN D THUS DIRECTED THE DISALLOWANCE TO BE MADE IN EXCESS TO 16% BUT BY HOL DING THAT THE SAID SUM WOULD BE INCLUDED THE AMOUNT WHICH HAD ALREADY BEEN ALLOWED BY THE AO AND WAS TREATED AS COMMISSION. THUS RECTIFICATION OF OR DER DATED 18.6.2008 IS PER SE WITHOUT JURISDICTION. THE LD. AR SUBMITTED THAT IT IS WELL SETTLED DECISION THAT OVER A MISTAKE TO FALL WITHIN THE AMBIT OF SECTION 154 OF THE ACT IT SHOULD NOT BE NECESSARY TO HOLD INVESTIGATION OR GO INTO LENGTHY AND COMPLICATED ARGUMENTS TO FIND OUT THE MISTAKE. ANY MISTAKE WHICH CAN ONLY BE FOUND OUT BY ARGUMENTS AND IS NOT OTHERWISE OBVIOUS FROM THE RECORD, CAN NOT B E AN ERROR OR MISTAKE APPARENT FROM THE RECORD. IN SUPPORT HE PLACED RELI ANCE ON THE FOLLOWING DECISIONS :- INDIA FOILS LIMITED. V. INCOME TAX OFFICER AND ANO THER. 87 ITR 333 T.S. BALARAM, ITO VS. VOLKART BROTEHRS AND ORS 82 I TR 50 (SC) ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LD. (2008) 305 ITR 227 (SC) CIT VS. HERO CYCLES (P) LTD. 228 ITR 463 (SC) ITA NO. 3317/DEL/2012 A.Y. 2005-06 10 S.R.F. CHARITABLE TRUST VS UNION OF INDIA AND OTHER S 193 ITR 55 (DELHI) MAYA RAM JIA LAL V COMMISSIONER OF INCOME-TAX 152 ITR 608 (P & H) CTO VS. SRI VENKATESWARAN OIL MILLS 32 STC 660 (SC) SETH MADAN LAL VS. CIT 261 ITR 49 PARASHURAM POTTERY WORKS CO. LTD. VS. ITO 106 ITR 1 (SC) CIT VS. INTERCONTINENTAL TRADING AND INVESTMENT CO. LTD. 350 ITR 316 (SC) (DELHI) SNEH ENTERPRISES V. COMMISSIONER OF CUSTOMS (2206) 7 SCC 714 13. THE LD. AR SUBMITTED FURTHER THAT U/S 2 ( 40) OF THE ACT HAS BEEN DEFINED THE REGULAR ASSESSMENT HENCE CLAUSE (A) TO SECTIO N 151(1) OF THE ACT WILL BE APPLICABLE IN THE PRESENT CASE. THUS THE LD. CIT(A) WAS NOT JUSTIFIED THAT ORDER PASSED U/S 154 OF THE ACT NOT BEING A REGULAR ASSES SMENT WILL FALL IN CLASS (C) TO SECTION 151 (1) OF ACT. 14. THE LD. CIT, DR ON THE OTHER TRIED TO JUST IFY THE RECTIFICATION ORDER PASSED UNDER SECTION 154 OF THE ACT AND THE FIRST APPELLAT E ORDER UPHOLDING THE SAME. HE POINTED OUT THAT THE AO HAS ONLY RECTIFIED ITS MISTAKE IN RECOMPUTATION OF THE RELIEF GRANTED BY THE APPELLATE AUTHORITIES AS WHIL E GIVING EFFECT TO THOSE RELIEF, THE AO COMMITTED A MISTAKE APPARENT IN NOT REDUCING THE RELIEF ALREADY GRANTED BY THE AO IN THE ASSESSMENT FRAMED ON 27.12.2007 TO WARDS THE CLAIMED COMMISSION EXPENSES. THE AO HAS THUS NOT INTERFERED WITH THE APPELLATE ORDERS IN THIS REGARD AS ALLEGED BY THE LD. AR. TO UNDERST AND IT IN A BETTER WAY HE HAS ITA NO. 3317/DEL/2012 A.Y. 2005-06 11 ALSO DRAWN OUR ATTENTION TO THE DATES OF THE EVENTS . THE CHRONOLOGY OF THE EVENTS ARE AS UNDER :- DATE EVENT 31.10.2005 RETURN OF INCOME FILED 27.12.2007 ASSESS MENT FRAMED U/S 143 (3) OF THE ACT 15.4.2008 LD. C IT(A) DISPOSED OFF THE APPEAL 18.6.2008 AO M ADE AN ORDER GIVING EFFECT TO THE FIRST APPELLATE ORDER 5.5.2008 THE ASSESSEE PREFERRED AN APPEAL AGAINST THE FIRST APPELLATE ORDER DATED 15.4.2008 29.8.2008 THE I NCOME TAX APPELLATE TRIBUNAL DISPOSED OFF THE APPEAL 6.1.2009 THE AO PASSED AN ORDER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL 19.8.2009 THE A O ISSUED A NOTICE U/S 154/155 OF THE ACT PROPOSING TO AMEND THE ORDER OF ASSESSMENT DATED 27.12.2007 FRAMED U/S 143(3) OF THE ACT. 16.8.2011 AO U /S 154 OF THE ACT STATING THAT THERE WAS A MISTAKE IN THE ORDER OF ASSESSMENT U/S 143(3) AND FURTHER ADDED THAT WHILE GIVING EFFECT TO THE ORDER OF LD. CIT(A) A RELIEF OF RS. 1,21,55,213/- AS WRONGLY BEEN ALLOWED. 30.3.2012 THE LD. CIT(A) HAS SET ASIDE THE ORDER FOR FRESH ADJUDICATION. ITA NO. 3317/DEL/2012 A.Y. 2005-06 12 15. THE LD. DR ALSO TRIED TO JUSTIFY THE FIRST APPELLATE ORDER IN SETTING ASIDE THE MATTER TO THE FILE OF THE AO UNDER SECTIO N 251(1) OF THE ACT TO REMOVE THE IRREGULARITIES CAUSED BY THE AO DUE TO N ON-COMPLIANCE OF THE PROVISIONS UNDER SECTION 129 OF THE ACT TO AFFORD T HE ASSESEE OPPORTUNITY OF BEING HEARD BEFORE PASSING ORDER UNDER SECTION 154 OF THE ACT AFTER LAPSE OF TWO YEARS FROM ISSUANCE OF NOTICE U/S 154 BY A DIFFEREN T INCUMBENT WHO WAS TRANSFERRED IN BETWEEN. HE ALSO SUBMITTED THAT MIST AKE IN NOT REDUCING THE RELIEF ALREADY GRANTED BY THE AO WHILE GIVING EFFECT TO T HE APPELLATE ORDER WAS APPARENT AND OBVIOUS, HENCE THE DECISIONS RELIED UP ON BY THE LD. AR ARE NOT HELPFUL TO THE ASSESSEE. 16. IN GROUND NOS. 1 & 1.1 THE ASSESSEE HAS QUESTIONED THE ACTION OF THE LD. CIT(A) IN SETTING ASIDE THE MATTER TO THE AO WI TH THIS CONTENTION THAT POWER OF FIRST APPELLATE AUTHORITY IN SETTING ASIDE THE A SSESSMENT ORDER HAS ALREADY BEEN WITHDRAWN BY THE FINANCE ACT 2001. THE FURTHER CONTENTION OF THE LD. AR REMAINED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN H OLDING THAT DIRECTION TO THE AO TO AFFORD FRESH OPPORTUNITY OF BEING HEARD AND THEN PASS A FRESH ORDER U/S 154 OF THE ACT FALLS U/S 251(1)(C) OF THE ACT. THE OBJECTI ON OF LD. AR REMAINED THAT GIVING EFFECT TO THE DIRECTION OF THE APPELLATE AUT HORITY IN THE ASSESSMENT ORDER BY THE AO IS ALSO AN ASSESSMENT HENCE IT FALLS U/S 251(1)(A) OF THE ACT AS PER WHICH SETTING ASIDE THE MATTER TO THE FILE OF THE A O WHICH WAS EARLIER LYING WITH THE LD. CIT(A) HAS BEEN WITHDRAWN W.E.F 1.6.2001 BY THE FINANCE ACT 2001. IN ITA NO. 3317/DEL/2012 A.Y. 2005-06 13 OTHER WORDS CONTENTION OF THE LD. AR REMAINED THAT AN ORDER OF RECTIFICATION U/S 154 OF THE ACT QUESTIONED BEFORE THE LD. CIT(A) WIL L FALL UNDER THE PROVISIONS OF SECTION 251 (1)(A) OF THE ACT AND NOT U/S 251(1)(C) OF THE ACT AS THE LD. CIT(A) HAS TRIED TO, THE LD. CIT(A) WAS NOT JUSTIFIED IN S ETTING ASIDE THE MATTER I.E. ORDER OF RECTIFICATION PASSED U/S 154 OF THE ACT BY THE A O TO THE FILE OF THE AO FOR ITS FRESH CONSIDERATION AFTER AFFORDING FRESH OPPORTUNI TY OF BEING HEARD TO THE ASSESEE. TO UNDERSTAND THE PROVISION U/S 251 OF THE ACT THE RELEVANT PROVISIONS CITED ABOVE ARE BEING REPRODUCED HEREUNDER :- 251. (1) IN DISPOSING OF AN APPEAL, THE COMMISS IONER (APPEALS) SHALL HAVE THE FOLLOWING POWERS :- (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. (AA) IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT IN RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSI ON ABATES UNDER SECTION 245HA, HE MAY, AFTER TAKING INTO CONS IDERATION ALL THE MATERIAL AND OTHER INFORMATION PRODUCED BY THE ASSE SSEE BEFORE , OR THE RESULTS OF INQUIRY HELD OR EVIDENCE RECORDED BY , THE SETTLEMENT COMMISSION, IN THE COURSE OF THE PROCEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD, CON FIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT ; (B) IN AN APPEAL AGAINST AN ORDER IMPOSING A PENAL TY, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHE R TO ENHANCE OR TO REDUCE THE PENALTY. IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN THE APPEAL AS HE THINKS FIT. (2) THE COMMISSIONER (APPEALS) SHALL NOT ENHA NCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE A PPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUC H ENHANCEMENT OR REDUCTION. ITA NO. 3317/DEL/2012 A.Y. 2005-06 14 EXPLANATION IN DISPOSING OF AN APPEAL, THE COMMISS IONER (APPEALS) MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF THE P ROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, NOTWITHSTANDING THAT S UCH MATTER WAS NOT RAISED BEFORE THE COMMISSIONER(APPEALS) BY THE APPELLANT. 17. ON PERUSAL OF ABOVE PROVISIONS THERE IS NO SCOPE OF DEBATE THAT IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, THE LD. CIT( A) MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT AS PER CLAUSE (A) T O SUB SECTION (1) TO SECTION 251 OF THE ACT. IN OTHER WORDS IN SUCH APPEAL AGAIN ST AN ORDER OF ASSESSMENT THE LD. CIT(A) DOES NOT HAVE POWER TO SET ASIDE THE ASS ESSMENT TO THE FILE OF THE AO FOR FRESH CONSIDERATION OF THE MATERIAL INSTEAD HE HAS TO DECIDE THE APPEAL EITHER BY CONFIRMING THE ASSESSMENT ORDER OR REDUCE OR ENH ANCE THE ADDITION / DISALLOWANCE OR ANNUL THE ASSESSMENT. IN ANY OTHER CASE AS PER CLAUSE (C) OF THE SECTION THE LD. CIT(A) IS HAVING DISCRETION TO PASS SUCH ORDERS IN THE APPEAL AS HE THINKS FIT. IN OTHER WORDS IN ANY OTHER CASES EX CEPT ORDER OF ASSESSMENT QUESTIONED BEFORE THE LD. CIT(A), THE LD. CIT(A) IS EMPOWERED TO PASS SUCH ORDERS IN THE APPEAL AS HE THINKS FIT. NOW THE FATE OF THE ISSUE RAISED IN GROUND NOS. 1 AND 1.1 DEPENDS ON THE FINDING AS TO WHETHER ORDER OF RECTIFICATION PASSED U/S 154 OF THE ACT BY THE AO WILL BE TREATED AS AN ORDER OF ASSESSMENT OR WILL IT FALL UNDER THE CATEGORY OF IN ANY OTHER CASE AS PROVIDED IN CLAUSE (C) OF THIS SECTION 251(1) OF THE ACT. IN THE PRESENT CASE BEFO RE US AS IT IS EVIDENT FROM THE ITA NO. 3317/DEL/2012 A.Y. 2005-06 15 ORDER PASSED U/S 154 OF THE ACT BY THE AO, THE PROV ISIONS HAVE BEEN INVOKED BY THE AO FIRSTLY TO RECTIFY THE FIGURE MENTIONED IN T HE ORIGINAL ASSESSMENT ORDER FRAMED U/S 143(3) OF THE ACT ON 27.12.2007 AND SECO NDLY GIVING EFFECT OF THE APPELLATE ORDERS OF THE CORRECTED FIGURE BASED ON T HE SAID RECTIFIED FIGURE. THIS ACTION OF THE AO TAKEN U/S 154 OF THE ACT IN OUR VI EW CANNOT BE EQUATED WITH THE ORDER OF ASSESSMENT NOR THE ORIGINAL ASSESSMENT ORD ER PER SE WAS THE SUBJECT MATTER BEFORE THE LD. CIT(A) IN THE FIRST APPEAL IN QUESTION. THE REGULAR ASSESSMENT HAS BEEN DEFINED IN THE ACT IN SECTION 2 (40) AS PER WHICH REGULAR ASSESSMENT MEANS THE ASSESSMENT MADE UNDER SUB SEC TION 3 OF SECTION 143 OR SECTION 144. IN SUB SECTION (8) TO SECTION 2 OF TH E ACT IT HAS BEEN MADE CLEAR THAT ASSESSMENT INCLUDES REASSESSMENT. IN THE PRE SENT CASE IT IS THE ACTION OF THE AO INVOKING THE PROVISIONS U/S 154 OF THE ACT H AS BEEN QUESTIONED WITH THIS CONTENTION THAT HE WAS HAVING NO JURISDICTION UNDER THE PROVISIONS U/S 154 OF THE ACT TO RECTIFY THE ORIGINAL ASSESSMENT ORDER AND SE CONDLY HE WAS HAVING NO JURISDICTION U/S 154 OF THE ACT TO INTERFERE WITH O R RECTIFY THE APPELLATE ORDERS. THIS ACTION OF THE AO WAS QUESTIONED BEFORE THE LD. CIT(A) ON SEVERAL GROUNDS AND THE FATE OF RECTIFIED ORDER PASSED U/S 154 OF THE ACT, WHICH THE LD. AR HAS TRIED TO TREAT AS ASSESSMENT ORDER BEFORE US WAS NO THING BUT A RESULT OF THE SAID RECTIFICATION ACTION BY THE AO QUESTIONED BEFORE T HE LD. CIT(A). IF THE ACTION U/S 154 TAKEN BY THE AO IS TREATED AS A N ASSESSMENT THEN THE WHOLE PURPOSE OF THE PURPOSE OF THE PROVISIONS LAID DOWN UNDER CLAUSE (C) ITA NO. 3317/DEL/2012 A.Y. 2005-06 16 TO SUB SECTION (1) TO SECTION 251 OF THE ACT WILL B E DEFEATED. IT CAN ALSO BE UNDERSTOOD THAT THE ASSESSEE HAD ALREADY QUESTIONED ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT BEFORE THE LD. CIT(A) AND THE SAME REMAINED ALSO THE SUBJECT MATTER BEFORE THE TRIBUNAL IN THE SECOND AP PEAL AND APPEAL EFFECT HAS BEEN GIVEN BY THE AO TO THE SAID ORIGINAL ASSESSMEN T SO THAT IT MAY BE OPERATED AS PER DIRECTION OF THE APPELLATE AUTHORITIES. BEFO RE THE FIRST APPELLATE AUTHORITY WHOSE ORDER IS THE SUBJECT MATTER OF THE PRESENT AP PEAL BEFORE US, THE ASSESSEE HAS QUESTIONED THE VERY ACTION OF THE AO IN GIVING EFFECT TO THE APPELLATE ORDERS AFTER RECTIFYING THE ORIGINAL ASSESSMENT ORDER BY T HE AO INVOKING THE PROVISIONS OF SECTION 154 OF THE ACT. WE THUS HOLD THAT THE L D. CIT(A) HAS RIGHTLY COME TO THE CONCLUSION THAT THE ORDER PASSED BY HIM DIRECTI NG THE AO TO AFFORD FRESH OPPORTUNITY OF BEING HEARD AND THEN PASS A FRESH OR DER U/S 154 OF THE ACT WILL FALL IN THE CATEGORY IN ANY OTHER CASE AS PER CLAUSE (C) TO SECTION 251(1) OF THE ACT HENCE THE LD. CIT(A) WAS VERY MUCH EMPOWERED TO SET ASIDE THE ORDER IN QUESTION FOR FRESH CONSIDERATION. THE GROUND NOS. 1 & 1.1 ARE THUS REJECTED. 18. IN GROUND NO. 2 AN ALTERNATIVE CONTENTI ON TO THOSE RAISED IN GROUND NOS. 1 & 1.1., HAS BEEN RAISED QUESTIONING THE ACTI ON OF THE LD. CIT(A) THAT AFTER HAVING HELD THAT THERE HAS BEEN A VIOLATION OF THE PROVISIONS OF SECTION 129 AND THE PRINCIPLES OF NATURAL JUSTICE AND REMANDING THE MATTER TO THE FILE OF THE AO, HE OUGHT NOT TO HAVE PASSED THE ORDER ON MERIT. ITA NO. 3317/DEL/2012 A.Y. 2005-06 17 19. HAVING GONE THROUGH THE ORDER IMPUGN ED WE FIND THAT BEFORE THE LD. CIT(A) VIDE GROUND NO. 8 OF THE FIRST APPEAL IT WAS CONTENDED BY THE ASSESSEE THAT THE NOTICE ISSUED U/S 154 OF THE ACT WAS WITHO UT JURISDICTION AND THE ORDER PASSED IN FURTHERANCE THERETO IS BAD IN LAW. THE CO NTENTION OF THE ASSESSEE QUESTIONING THE VALIDITY OF NOTICE ISSUED U/S 154 O F THE ACT AND THE ORDER PASSED IN FURTHERANCE THERETO, REMAINED THAT THE NOTICE U/ S 154 ON 19.8.2008 WAS SENT BY SHRI NIMESH YADAV, THE THEN DCIT CIRCLE 7 (1) WH EREAS THE IMPUGNED ORDER U/S 154 WAS PASSED BY SHRI PANKAJ SAXENA ACIT, CIRC LE 7 (1) ON 16.8.2011, AFTER ALMOST 2 YEARS. THE GRIEVANCE OF THE ASSESSEE WAS T HAT SINCE THERE WAS A CHANGE OF INCUMBENT AND THE ORDER U/S 154 WAS PASSED ALMO ST TWO YEARS AFTER ISSUANCE OF THE NOTICE AND OBTAINING OF THE REPLY, IN ORDER TO GIVE A FAIR HEARING TO THE ASSESSEE. AO SHOULD HAVE GIVEN ANOTHER OPPORTUNITY TO THE ASSESEE. IT WAS CONTENDED THAT WHILE THE AO IN HIS NOTICE U/S 154 P ROPOSED TO RECTIFY THE INCOME BASED ON THE RELIEF ALLOWED BY THE LD. CIT(A ) I.E. THE ALLOWANCE OF 14% OF THE TOTAL TURN OVER TOWARDS COMMISSION EXPENSES, THE AO, IN HIS ORDER, HAS EVEN RECTIFIED THE ORDER GIVING EFFECT TO ITATS OR DER WHICH HAD IN THE MEANWHILE BEEN PASSED ON 29.4.2008 AND THE SAME HAD ALREADY B EEN GIVEN EFFECT TO ON 6.1.2009. ON THE BASIS OF THIS CONTENTION THE ASSES SEE PLEADED THAT ISSUANCE OF NOTICE U/S 154 ITSELF WAS BAD IN LAW SINCE ON THE D AY WHEN THE SAID NOTICE WAS ISSUED WITH A VIEW TO RECTIFY THE ORDER GIVING EFF ECT TO FIRST APPELLATE ORDER, ORDER OF THE TRIBUNAL WAS ALREADY AVAILABLE WITH THE AO A ND THE SAME HAD ALSO BEEN ITA NO. 3317/DEL/2012 A.Y. 2005-06 18 GIVEN EFFECT TO VIDE HIS ORDER DATED 6.1.2009. THE AO THUS MOVED BEYOND THE SCOPE OF THE NOTICE BY RECTIFYING EVEN THE ORDER GI VING EFFECT TO TRIBUNALS ORDER WHILE THE NOTICE HAD BEEN ALREADY ISSUED IN ORDER T O RECTIFY THE ORDER GIVING EFFECT TO CIT(A)S ORDER, CONTENDED THE LD. AR. HE POINTED OUT THAT THE LD. CIT(A) REFERRING THE CONTENTS OF PROVISIONS LAID DO WN U/S 129 OF THE ACT ACCEPTED THE FIRST GRIEVANCE OF THE ASSESSEE THAT AFTER CHAN GE OF INCUMBENT IN BETWEEN NOTICE ISSUED AND BEFORE PASSING OF THE ORDER THERE UNDER NO FRESH OPPORTUNITY TO PLEAD ITS CASE WAS GRANTED TO THE ASSESSEE BY THE N EW INCUMBENT, ALTHOUGH THE SAME IS MANDATED U/S 129 OF THE ACT. HOLDING THAT T HERE HAS BEEN A VIOLATION OF PROVISIONS OF SECTION 129 OF THE ACT AND THE PRINCI PLES OF NATURAL JUSTICE LD. CIT(A) CAME TO THE CONCLUSION A GRAVE INJUSTICE HAS BEEN CAUSED TO THE ASSESSEE. LD. CIT(A) HOWEVER DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE ON NEXT GRIEVANCE THAT WHILE ISSUING THE NOTICE U/S 154 THE AO HAD PROPOSED TO COMPUTE THE MISTAKE IN CALCULATING THE RELIEF ALLOW ED BY THE LD CIT(A) BUT WHILE PASSING THE ORDER IMPUGNED THE AO HAS NOT ONLY RECO MPUTED THE RELIEF ALLOWED BY THE FIRST APPELLATE AUTHORITY BY RECTIFYING THE SAME HE HAS ALSO RECTIFIED A SIMILAR MISTAKE WHICH HAD CREPT IN WHILE GIVING EFF ECT TO ORDER OF THE TRIBUNAL IN THE SAME CASE. IN CONCLUDING PARA NO. 4.7 OF THE FI RST APPELLATE ORDER THE LD. CIT(A) HAS SET ASIDE THE ORDER IMPUGNED I.E. ORDER PASSED U/S 154 OF THE ACT WITH A DIRECTION TO THE AO TO AFFORD AFRESH OPPORTU NITY OF BEING HEARD AND THEN PASS A FRESH ORDER SINCE NO SUCH OPPORTUNITY HAS BE EN GRANTED BY THE SUCCESSOR ITA NO. 3317/DEL/2012 A.Y. 2005-06 19 IN OFFICE, WHO HAD PASSED THE ORDER ALMOST TWO YEAR S AFTER ISSUANCE OF THE NOTICE U/S 154 IN THIS REGARD. THE GRIEVANCES OF THE ASSES SEE IN GROUND NO. 2 RAISED BEFORE US IS THAT WHILE SETTING ASIDE THE IMPUGNED ORDER TO THE FILE OF THE AO FOR FRESH CONSIDERATION AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, LD. CIT(A) SHOULD NOT HAVE PASSED HIS FINDING ON TH E MERITS OF THE ORDER IMPUGNED WE FIND SUBSTANCE IN THIS GRIEVANCE ON TH E REASON BEING THAT IN SUCH A SITUATION WHEN THE MATTER IS SET ASIDE TO THE FIL E OF THE AO FOR HIS FRESH CONSIDERATION AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, FINDING OF AN APPELLATE AUTHORITY ON THE MERITS OF THE SAME MATTER WILL CERTAINLY INFLUENCE THE DECISION OF THE AO IN THE SET ASIDE PROCEEDING S AS DIRECTED ON THE MERITS OF THE SUBJECT MATTER. IN OUR VIEW SINCE THE ISSUE RAI SED IN GROUND NO. 8 BEFORE THE LD. CIT(A) GOES TO THE ROOT OF THE MATTER QUESTIONI NG THE VERY JURISDICTION OF THE AO WHO HAD PASSED THE ORDER IMPUGNED AFTER CHANGE O F THE INCUMBENT I.E. HIS SUCCESSOR ON TRANSFER WHO HAD ISSUED NOTICE U/S 154 OF THE ACT ALMOST TWO YEARS BEFORE THE PASSING OF THE ORDER IMPUGNED, LD. CIT(A ) SHOULD HAVE DECIDED THIS ISSUE FIRST BEFORE ADJUDICATING UPON THE OTHER ISSU ES ESPECIALLY WHICH WERE RELATED TO THE MERIT OF THE ORDER IMPUGNED. IN RE SULT WE THUS SET ASIDE THE FINDING OF THE LD. CIT(A) ON GROUND NOS. 1 TO 6 RAI SED BEFORE HIM IN THE FIRST APPEAL PREFERRED BY THE ASSESSEE. THE GROUND NO. 2 IS THUS ALLOWED. SINCE THE ISSUE RAISED IN GROUND NOS. 3,3.1, 3.2 AND 4 ARE OU TCOME OF THE DECISION OF THE LD. CIT(A) ON THE MERITS OF THE ORDER PASSED U/S 15 4 OF THE ACT, THESE ARE ALSO ITA NO. 3317/DEL/2012 A.Y. 2005-06 20 SET ASIDE. THE ASSESSEE WILL BE AT LIBERTY TO ADVAN CE HIS ARGUMENTS IN SUPPORT OF THE ISSUES RAISED IN GROUND NOS. 3,3.1 AND 3.2 IN S ETTING ASIDE PROCEEDINGS BEFORE THE AO AND CHARGING OF INTEREST U/S 220 QUES TIONED IN GROUND NO. 4 IS CONSEQUENTIAL IN NATURE AS IT DEPENDS UPON THE FATE OF THE OUTCOME OF THE DECISION TAKEN ON THE ISSUES RAISED IN GROUND NOS. 3,3.1 AND 3.2. GROUND NOS. 3,3.1,3.2, AND 4 ARE THUS ALLOWED FOR STATISTICAL P URPOSES. 20. IN THE RESULT THE GROUND NOS. 1 AND 1.1 A RE REJECTED, GROUND NO. 2 IS ALLOWED AND THE REMAINING GROUND NOS. 3,3.1, 3.2 AN D 4 ARE ALLOWED FOR STATISTICAL PURPOSES. 21. CONSEQUENTLY APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2013. SD/- SD/- (G.D. AGRAWAL) ( I.C. SUDHIR ) VICE PRESIDENT JUDICIAL MEMBER DATE : 8 TH AUGUST, 2013 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT