Sh. Rajesh Kumar, Bathinda V. The Income-tax Officer, Bathinda

ITA 333/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2437 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 17-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GHANSHAM SHARMA
• Assessee Lawyers: P N ARORA
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.333(ASR)/2014 ASSESSMENT YEAR:2008-09 PAN: ACZPK4340C SH. RAJESH KUMAR, VS. INCOME TAX OFFICER, PROP. M/S. RAJESH GARG TRADING CO. WARD 1(1), BATH INDA. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. P.N.ARORA, ADVOCATE RESPONDENT BY:SH. GHANSHAM SHARMA, DR DATE OF HEARING: 17/11/2015 DATE OF PRONOUNCEMENT: 08/01/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2008-09 AGAINST THE ORDER DATED 07.02.2014, PASSED BY THE L D. CIT(A), BATHINDA. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN C ONFIRMING THE ORDER US 144 DATED 14.12.2010 IN WHICH THE INCOME H AS BEEN ASSESSED AT RS.6,47,350/-. 2. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN WH ILE RECORDING THE FINDING REGARDING THE NON ADMISSION OF ADDITION AL EVIDENCE DESPITE THE FACT THAT THE ADDITIONAL EVIDE NCE WAS FORWARDED TO THE AO FOR HIS COMMENTS AND THE SAME I S DEEMED TO BE ADMITTED. THE ADDITIONAL EVIDENCE HAS NOT BEEN ADMITTED ONLY ON ACCOUNT OF THE TECHNICAL REASON TH AT THERE IS NO REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE. THUS, THE FINDING OF THE CIT(A) IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 3. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN DI SMISSING THE GROUNDS OF APPEAL PERTAINING TO ADDITION OF RS.1,00 ,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CREDIT. TH E ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 2 EVIDENCE FILED DURING THE COURSE OF APPELLATE PROCE EDINGS HAS BEEN IGNORED. 4. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN DI SMISSING THE GROUNDS OF APPEAL PERTAINING TO ADDITION OF RS.52,5 8/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CREDITS. 5. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN DI SMISSING THE GROUNDS OF APPEAL PERTAINING TO ADDITION OF RS.2,72 ,928/- MADE BY THE AO ON ACCOUNT OF NON CHARGING OF INTERE ST FROM DEBTORS FURNISHED DURING THE COURSE OF APPELLATE PR OCEEDINGS HAS BEEN IGNORED. 6. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN CO NFIRMING THE DISALLOWANCE OF 50% OF THE EXPENSES AS AGAINST THE DISALLOWANCE OF RS.50,000/- MADE BY THE AO. THE DISALLOWANCE DESERVED TO BE DELETED. 7. THAT THE APPELLATE CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DIS POSED OFF. 2. AS PER GROUND NO.2, THE LD. CIT(A) HAS ERRED IN REFUSING TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, DESP ITE THE FACT THAT THE ADDITIONAL EVIDENCE WAS FORWARDED BY THE LD. CIT(A) TO THE AO FOR HIS COMMENTS. 3. IN THIS REGARD, AS PER THE IMPUGNED ORDER: 1.1. THE LD. A/R OF THE ASSESSEE IN THE WRITTEN SU BMISSIONS FILED DURING THE APPELLATE PROCEEDINGS HAS FURNISHED SOM E EVIDENCE IN SUPPORT OF HIS CONTENTIONS BUT HAS FAILED TO OBSERV E THAT RULE 46A OF THE I.T. RULES, 1962 PROVIDES THAT THE ASSESSEE SHALL NOT BE ENTITLED TO PRODUCE ANY EVIDENCE OTHER THAN THE EVI DENCE PRODUCED BY HIM BEFORE THE AO EXCEPT IN THE FOLLOWING CIRCUM STANCES: A) THE AO REFUSED TO ADMIT ANY EVIDENCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. RATHER THE ASSESSEE FAILED TO SUBMIT THE SAME DESPITE BEING REQUIRED TO FURNISH T HE SAME. B) THE ASSESSEE WAS PREVENTED FROM FURNISHING SUCH INFORMATION/EVIDENCE. ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 3 C) THE ASSESSEE WAS HAVING SUFFICIENT CAUSE IN FURN ISHING THE EVIDENCE BEFORE THE THEN AO AT THE TIME OF ASSESSME NT PROCEEDINGS. D) THE AO HAS MADE THE ORDER THE APPEALED AGAINST W ITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. 1.3. THE LD. A/R OF THE ASSESSEE HAS NOT COME FORWA RD WITH ANY EXPLANATION OR REASONS FOR NON PRODUCTION OF THE EV IDENCE BEFORE THE AO EXCEPT THAT THE MENTAL AFFAIRS OF THE ASSESS EE WAS NOT IN A POSITION TO RESPOND TO THE VARIOUS DATES FIXED FOR HEARING BUT NO EVIDENCE TO PROVE THE SAME HAS BEEN FURNISHED. THER E IS NO REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE. IT IS SETTLED LAW THAT THE ASSESSEE IS NOT ENTITLED TO PRODUCE THE ADDITIONAL EVIDENCE AS A MATTER OF RIGHT AND HE CAN BE PERMITTED TO PRODUCE ADDITIONAL EVIDENCE IN A FIT CASE. THE RELIANCE IS PLACED ON T HE JUDGMENT OF HAJI LAL MOHD. BIRI WORKS (2005) 275 ITR 496 (ALL/) . HENCE, THE EVIDENCE I.E. AFFIDAVIT AND CERTIFICATE FROM BANK E TC. ARE NOT ADMITTED AS ADDITIONAL EVIDENCE. (THERE IS NO PARA 1.2 IN THE ORDER). 4. THUS, THE LD. CIT(A) REJECTED THE ADDITIONAL EVI DENCE FILED BY THE ASSESSEE, OBSERVING THAT THE ASSESSEE HAD FAILED T O EXPLAIN WITH PROOF, WHY THE SAME WAS NOT PRODUCED BEFORE THE AO. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT AS NOTED BY THE LD. CIT(A), AT PAGE-2, PARA 1.1. OF THE IMPUGNE D ORDER, THE ASSESSEE HAD FILED WRITTEN SUBMISSIONS BEFORE THE LD. CIT(A) ALONGWITH ADDITIONAL EVIDENCE TO SUPPORT SUCH WRITTEN SUBMISSIONS; THAT THIS ADDITIONAL EVIDENCE CONSISTED OF AFFIDAVIT OF SH. GAURAV GIRDH AR S/O SH. NARINDER KUMAR ALONGWITH BANK CERTIFICATE DATED 18.02.2013 ISSUED BY HDFC BANK, BATHINDA ALONGWITH BANK STATEMENT OF THE ASSE SSEE WITH HDFC BANK, BATHINDA, IN RESPECT OF CONFIRMATION OF AMOUN T OF RS.44,958/- RECEIVED FROM ALANKIT HEALTHCARE, BANK STATEMENT OF THE ASSESSEE WITH CANARA BANK SHOWING THE AMOUNT CREDITED AT RS.7.600 /-, COPY OF ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 4 ACCOUNT OF M/S. BENTEX INDUSTRIES, MANDI GOBINDGARH IN THE BOOKS OF THE ASSESSEE FOR THE PERIOD FROM 01.04.2007 TO 31.0 3.2008, COPY OF ACCOUNT OF M/S. KINARA TRANSPORT SERVICE PVT. LTD., IN THE BOOKS OF THE ASSESSEE FOR THE PERIOD FROM 01.04.2007 TO 31.03.20 08, COPY OF ACCOUNT OF M/S. SINGHAL TRANSPORT CO. KILLANWALA IN THE BOO KS OF THE ASSESSEE FOR THE PERIOD FROM 01.04.2007 TO 31.03.2008, COPY OF A CCOUNT OF MRS. POONAM GARG IN THE BOOKS OF THE ASSESSEE FOR THE PE RIOD FROM 01.04.2007 TO 31.03.2008 AND INTEREST ACCOUNT FOR THE PERIOD F ROM 01.04.2007 TO 31.03.2008. COPIES OF THESE DOCUMENTS AS WELL AS T HE ASSESSEES WRITTEN SUBMISSIONS AS HAD BEEN FILED BEFORE THE LD. CIT(A) ARE IN THE ASSESSEES PAPER BOOK FILED BEFORE ME. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE LD. CIT(A), VIDE LETTER NO.165, DATED 17/21.05.2013 (APB-16), S ENT THE ASSESSEES AFORESAID WRITTEN SUBMISSIONS AND EVIDENCE TO THE A O, SEEKING HIS VERIFICATION AND COMMENTS THEREON; THAT VIDE LETTER NO.582-83, DATED 08.07.2013 (APB-17), THE LD. CIT(A) SENT A REMINDER TO THE AO; AND THAT A SECOND REMINDER WAS SENT BY THE LD. CIT(A) TO THE A O VIDE LETTER NO.1266- 67, DATED 28.10.13/18.11.2013. IT HAS BEEN CONTENDE D THAT THE AO SENT HIS REMAND REPORT (APB 3 & 4) DATED 31.12.2013 TO T HE LD. CIT(A). IT HAS BEEN CONTENDED THAT IN THIS REMAND REPORT, THE AO H AS GIVEN HIS COMMENTS REGARDING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE LD. CIT(A). IT HAS BEEN SUBMITTED THAT, HOWEVER , THIS REMAND REPORT WAS NEVER CONFRONTED TO THE AO BY THE LD. CIT(A); T HAT NOT ONLY THIS, IN ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 5 THE IMPUGNED ORDER, THE LD. CIT(A) DID NOT MAKE EV EN AS MUCH AS A MENTION OF THIS REMAND REPORT AND REJECTED THE EVID ENCE FILED BY THE ASSESSEE BY MERELY OBSERVING THAT THE ASSESSEE HAD FAILED TO EXPLAIN AS TO WHY THE SAME HAS NOT BEEN FILED BEFORE THE AO, EVEN WITHOUT REFERRING TO THE AOS COMMENTS ON THE MERITS OF THIS EVIDENCE, AS MADE IN THE REMAND REPORT. IT HAS BEEN CONTENDED THAT IN THE CA SE OF SHAHRUKH KHAN VS. DCIT, 25 CCH 506 (MUM. TRIBUNAL) (COPY PL ACED ON RECORD), IT STANDS HELD THAT AFTER CALLING FOR A REMAND REPORT FROM THE AO ON MERIT, AS ENVISAGED UNDER RULE 46A(3), THE LD. CIT(A) HAS NO DISCRETION TO REFUSE TO ADMIT THE ADDITIONAL EVIDENCE. 8. ON THE OTHER HAND, RELYING ON THE IMPUGNED ORDER , THE LD. DR HAS CONTENDED THAT THE ASSESSEE HAS MISERABLY FAILED TO EXPLAIN AS TO WHY THE ADDITIONAL EVIDENCE WAS NOT PRODUCED BEFORE THE AO, DESPITE ADEQUATE OPPORTUNITY HAVING BEEN GRANTED FOR THE PURPOSE AND THAT, THEREFORE, THE LD. CIT(A) HAS CORRECTLY REFUSED TO ADMIT SUCH ADDI TIONAL EVIDENCE. 9. THE FACTS BEING NOT IN DISPUTE, IT IS TO BE SEEN AS TO WHETHER OR NOT, THE LD. CIT(A), IN THE LIGHT OF RULE 46(A) OF THE RULES AND SHAHRUKH KHAN (SUPRA), ERRED IN REFUSING TO ADMIT THE ADDIT IONAL EVIDENCE FILED BY THE ASSESSEE. 10. RULE 46A (RELEVANT PORTION OF THE RULE) IS AS U NDER: PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE DEPUT Y COMMISSIONER(APPEALS AND COMMISSIONER (APPEALS) 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRO DUCE BEFORE THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY B E, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 6 DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY H IM DURING THE COURSE OF PROCEEDINGS BEFORE THE ASSESSING OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY: (A) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CA USE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE ASSESSING OFFICER; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CA USE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO AN Y GROUND OF APPEAL. 2. NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1) UNLESS THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY B E, THE COMMISSIONER (APPEALS) RECORDS IN WRITING THE REASO NS FOR ITS ADMISSION. 3. THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CAS E MAY BE, THE COMMISSIONER (APPEALS) SHALL NOT TAKE INTO ACC OUNT 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 CROSS- EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. 11. ACCORDING TO RULE 46A(2), THE LD. CIT(A) SHALL ADMIT ADDITIONAL EVIDENCE ONLY BY RECORDING THE REASONS FOR DOING S O. 12. AS PER RULE 46A(3)(A), THE LD. CIT(A) CAN TAKE INTO ACCOUNT THE ADDITIONAL EVIDENCE ONLY ON ALLOWING REASONABLE O PPORTUNITY TO THE AO, INTER-ALIA, TO EXAMINE THE EVIDENCE. ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 7 13. HEREIN, THE LD. CIT(A) DID NOT RECORD ANY REAS ON FOR ADMITTING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. RATHER, HE, DIRECTLY, VIDE LETTER NO. CIT(A)/BTI/13-14/165 DATED 17/21.05.2013 (APB-1 6), CALLED FOR THE AOS VERIFICATION AND COMMENTS THEREON. HOWEVER, B Y VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) REFUSED TO ADMIT THE ADDITIONAL EVIDENCE AND REJECTED THE SAME. 14. NOW, IN SHAHRUKH KHAN (SUPRA), UNDER SIMILAR CIRCUMSTANCES, THE TRIBUNAL FOUND FROM THE RECORD THAT IT WAS NOT DISCERNIBLE WHETHER THE LD. CIT(A) HAD GRANTED PERMISSION TO ADDUCE ADD ITIONAL EVIDENCE BY RECORDING REASONS IN WRITING UNDER RULE 46A(2) OF T HE I.T. RULES. HOWEVER, THE LD. CIT(A) HAD DIRECTLY SENT IT TO TH E AO UNDER RULE 46A(3), FOR VERIFICATION. THE TRIBUNAL HELD THAT IT WAS IMP LIED THAT THE ADDITIONAL EVIDENCE WAS RELEVANT MATERIAL AND THAT THE LD. CIT (A) HAD ENTERTAINED IT AND HAD ONLY THEREAFTER SENT IT TO THE AO FOR VERIF ICATION, CALLING FOR A REMAND REPORT ON MERITS. ON THIS, IT WAS HELD THAT AFTER DOING SO, THE LD. CIT(A) WAS PRECLUDED FROM REFUSING TO ADMIT THE ADD ITIONAL EVIDENCE. IT WAS OBSERVED THAT THE LD. CIT(A) COULD HAVE AT THAT STAGE, REJECTED THE EVIDENCE AS NOT SUFFICIENT, OR NOT PROVED, BUT IT H AD TO BE CONSTRUED THAT THE EVIDENCE HAD BEEN TAKEN ON RECORD. IT WAS OBSER VED THAT THIS APART, AS PER RULE 46A(4), THE LD. CIT(A) HAS VAST POWERS UNDER WHICH HE CAN EXERCISE HIS DISCRETION FOR ENTERTAINING ANY EVIDEN CE, EVEN IF THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE EXCEPTIONS PR OVIDED UNDER RULE 46A(1)(A) TO (D). IT WAS OBSERVED THAT THE MOMENT T HE LD. CIT(A) ARRIVES AT ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 8 A CONCLUSION THAT THE EVIDENCE SOUGHT TO BE PRODUCE D BY THE ASSESSEE IS ESSENTIAL FOR THE JUST DECISION OF THE APPEAL, OR FOR THE CAUSE OF SUBSTANTIAL JUSTICE,. IT IS NECESSARY TO CALL SUCH MATERIAL ON RECORD AND THAT IN THAT SITUATION, THE INTERDICTION PROVIDED I N RULES 46A(1) AND (2) WOULD NOT COME IN THE WAY. 15. AS SEEN, IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, SHAHRUKH KHAN (SUPRA), IS SQUARELY APPLICABLE. NO DECISION CONTRARY THERETO HAS BEEN REFERRED TO BY THE DEPARTMENT. TH EREFORE, SINCE THE MATTER REQUIRES FRESH ADJUDICATION ON MERITS RIGHT FROM THE STAGE OF ASSESSMENT IN THE LIGHT OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, AS ADMITTED BY ME AND THE AOS COMMENTS THEREON, AS MADE IN THE REMAND REPORT, WHICH WAS NEVER PUT TO THE ASSESSEE, I REMIT THE MATTER TO THE AO, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. TH E ASSESSEE, NO DOUBT, SHALL CO-OPERATE BEFORE THE AO IN THE FRESH PROCEE DINGS. 16. THE ABOVE REMAND TAKES CARE OF ALL THE GROUNDS TAKEN BY THE ASSESSEE. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08/01/2016 SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: /01/2016 /SKR/ COPY OF ORDER FORWARDED TO: ITA NO.333(ASR)/2014 ASSESSMENT YEAR: 2008-09 9 1. THE ASSESSEE:SH. RAJESH KUMAR, PROP. M/S. GARG T RADING CO. BATHINDA 2. THE ITO, WARD 1(1), BATHINDA. 3. THE CIT(A), BATHINDA 4. THE CIT, BATHINDA 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.