ACIT, New Delhi V. Smt. Shashi Puri, New Delhi

ITA 3378/DEL/2011

• Counselvise Citation: 337820114 RSA 2011
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 29-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: V K AGGARWAL
• Keywords: Gift; Charitable institution; Additional evidence; Reasonable cause; Corroborative evidences
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G , NEW DELHI) BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NOS.3378/DELL2011 ASSESSMENT YEAR : 2007-08 ASSTT. COMMISSIONER OF VS. SMT. SHASHI PURI, INCOME TAX, A-1/36, PANCHSHEEL ENCLAVE, CENTRAL CIRCLE-13, NEW DELHI ROOM NO. 332, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI AND I.T.A NO.3379/DEL/2011 (ASSESSMENT YEAR : 2007-08) ASSTT. COMMISSIONER OF SMT. SHASHI PURI, LEGAL INCOME TAX, HEIR OF LATE SH. VINAY PURI, CENTRAL CIRCLE-13, A-1/36, PANCHSHEEL ROOM NO. 332, ARA ENCLAVE, NEW DELHI CENTRE, JHANDEWALAN EXTN., NEW DELHI (PAN: AFWPP8805K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SH. RAMESH CHANDRA, CIT(DR) RESPONDENT BY : SHRI SH. V.K. AGGARWAL, ADV. DATE OF HEARING : 19.11.2014 DATE OF ORDER : 28.11.2014 ITA NOS.3378 & 3379/DEL/2011 2 INTERIM ORDER THESE TWO APPEALS FILED BY THE REVENUE AGAINST SEPA RATE ORDERS OF LD. CIT(A) BOTH DATED 06.04.2011 WERE HEARD TOGETHER ON THE LIMITED ISSUE; AS TO WHETHER LD. CIT(A) HAD ERRED IN ADMITTING ADD ITIONAL EVIDENCE IN VIOLATION OF RULE 46A. THE REVENUE HAS TAKEN THIS G ROUND OF APPEAL AS GROUND NO.2 IN BOTH THE APPEALS WHICH READS AS UNDE R: 'WHETHER LD. CIT(A) HAS ERRED IN ADMITTING EVIDENCE UNDER RULE 46A DURING THE COURSE OF APPELLATE PROCEEDINGS, EVE N THOUGH THE ASSESSEE HAD BEEN GIVEN SUFFICIENT OPPORTUNITY DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. ' 2. LD. D.R. WHILE ARGUING THIS GROUND OF APPEAL, IN VITED OUR ATTENTION TO THE FACTS OF THE CASE AND SUBMITTED THAT LD. CIT(A) HAS HASTENED TO PASS THE ORDER BY ADMITTING ADDITIONAL EVIDENCE WITHOUT PROVIDING PROPER AND SUFFICIENT OPPORTUNITY TO THE A.O. WHICH WAS IN VIO LATION OF THE PROVISIONS OF RULE 46A. LD. D.R. FURTHER SUBMITTED THAT IN PARA 2 OF LD. CIT(A)'S ORDER, HE HAS MENTIONED THAT APPLICATION F OR ADMISSION OF ADDITIONAL EVIDENCE WAS FORWARD TO THE A.O. WITH TH E DIRECTION THAT IF THE REPORT WAS NOT RECEIVED THEN IT WILL BE PRESUMED TH AT A.O. HAD NOTHING TO SAY ON THIS. IT WAS SUBMITTED THAT LD. CIT(A) THEN ADMITTED THE ADDITIONAL EVIDENCE WITHOUT WAITING FOR THE REMAND REPORT OF A .O. LD. D.R. RELIED UPON THE CASE LAW OF MANISH BUILD P. LTD. DECIDED B Y HON'BLE DELHI HIGH COURT WHICH HAS CLEARLY HELD THAT ADDITIONAL EVIDEN CE HAS TO BE ADMITTED ONLY AFTER CONFRONTING THE SAME TO A.O. IT WAS ARGU ED THAT HON'BLE DELHI HIGH COURT IN THAT CASE HAD RESTORED THE MATTER TO LD. CIT(A) WITH A DIRECTION TO COMPLY WITH THE REQUIREMENT OF RULE 46 A AND SINCE THE REQUIREMENT OF RULE 46A HAS NOT BEEN MET IN THE P RESENT APPEALS ALSO, ITA NOS.3378 & 3379/DEL/2011 3 THEREFORE, THESE APPEALS NEED TO GO BACK TO LD. CIT (A) FOR DECIDING AFRESH AFTER TAKING INTO ACCOUNT THE REMAND REPORT FROM A. O. 3. LD. A.R. ON THE OTHER HAND SUBMITTED THAT IN THE PRESENT APPEALS, THE ASSESSEE HAD FILED APPLICATION UNDER RULE 46A AS NE CESSARY AND REASONABLE OPPORTUNITY WAS NOT PROVIDED DURING ASSE SSMENT PROCEEDINGS. LD. A.R. SUBMITTED THAT DETAILED QUESTIONNAIRE ALON G WITH NOTICE U/S 142(1) WAS ISSUED ON 23.09.2009 AND ASSESSMENT ORDE R WAS PASSED ON 29.12.2009. IT WAS FURTHER SUBMITTED THAT DURING AS SESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED A LETTER DATED 08.12.2009 WH EREIN A.O. WAS INFORMED ABOUT ONE CRUCIAL ASPECT WITH RESPECT TO C OMMISSION INCOME OF MR. MOHIT PURI THE DONOR IN THESE APPEALS AND IT WA S ALSO SUBMITTED THAT MR. MOHIT THE SON OF DONEE WAS ALSO ENGAGED IN THE BUSINESS OF REAL ESTATE WITH M/S. SMART APPLICATION INDUSTRIES LTD. INC. DUBAI, AND CONFIRMATION TO THIS EFFECT WILL BE FILED SHORTLY. IN THIS RESPECT, LD. A.R. TOOK US TO PAGE 5 OF PAPER BOOK WHERE COPY OF SUCH LETTER WAS PLACED. IT WAS FURTHER SUBMITTED THAT APPLICATION UNDER RULE 4 6A CONSISTS OF ONLY CONFIRMATION FROM M/S. SMART INDUSTRIAL EQUIPMENTS, LLC, WHICH IN FACT WAS NOT AN ADDITIONAL EVIDENCE AS THIS FACT WAS ALR EADY CONVEYED TO THE A.O. VIDE LETTER DATED 08.12.2009. WITHOUT PREJUDIC E TO THE ABOVE ARGUMENT, LD. A.R. SUBMITTED THAT LD. CIT(A) VIDE L ETTER DATED 20.01.2011 HAD FORWARDED THE APPLICATION FOR ADMISS ION OF ADDITIONAL EVIDENCE TO THE A.O. BUT A.O. HAD NOT REPLIED THE S AME. IN THIS RESPECT, OUR ATTENTION WAS INVITED TO PARA 2 OF LD. CIT(A)'S ORDER. IT WAS FURTHER SUBMITTED THAT AFTER ADMITTING ADDITIONAL EVIDENCE, COPY OF WRITTEN SUBMISSION DATED 10.02.2011 FILED BY ASSESSEE WAS A LSO FORWARDED TO THE A.O. FOR HIS COMMENTS VIDE LETTER DATED 04.03.2011 FOR WHICH ALSO, THE A.O. DID NOT REPLY. IN SUPPORT, LD. A.R. TOOK US TO PAGE 3 OF CIT(A)'S ITA NOS.3378 & 3379/DEL/2011 4 ORDER WHEREIN SUCH FACTS WERE MENTIONED. INVITING OUR ATTENTION TO LT.A. NO. 3379IDE1L2011 IN THE CASE OF VI NAY PURI, LD. A .R. SUBMITTED THAT IN THIS CASE LD. CIT(A) HAD GIVEN REMINDER ALSO ON 10. 02.2011 AND 24.02.2011 AS MENTIONED IN PARA 3 OF LD. CIT(A)'S O RDER IN LT.A. NO. 3379IDE1L2011 AND HAD ALSO FORWARDED COPY OF WRITTE N SUBMISSIONS TO WHICH A.O. HAD NOT RESPONDED. IT WAS SUBMITTED THAT MR. VINAY PURI HAD EXPIRED AND MRS. SHASHI PURI IS THE LEGAL HEIR OF V INAY PURI. FURTHER, IT WAS SUBMITTED THAT THE FACTS IN BOTH THE APPEALS AR E SIMILAR AND DATE OF PASSING THE ORDER BY A.O. AND LD. CIT(A) ARE ALSO T HE SAME. IT WAS ARGUED THAT IT WAS NOT A CASE WHERE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WAS NOT FORWARDED TO THE A.O. R ATHER, IT WAS A CASE WHERE A.O. CONVENIENTLY IGNORED THE DIRECTION OF LD . CIT(A) AND DID NOT REPLY TO THE SAME EVEN DESPITE REMINDERS. IT WAS SU BMITTED THAT LD. CIT(A) WAITED FOR THE REMAND REPORT OF A.O. FOR ABO UT THREE MONTHS AFTER WHICH HE PASSED THE ORDER ON 06.04.2011 AND, THEREF ORE, IT CANNOT BE SAID THAT OPPORTUNITY WAS NOT PROVIDED TO THE A.O. IT WA S SUBMITTED THAT NON SUBMISSION OF REMAND REPORT ITSELF POINTS OUT THAT A.O. HAD NOTHING TO SAY ON THESE EVIDENCES AND THEREFORE, LD. CIT(A) WAS JU STIFIED IN PASSING THE ORDERS. LD. A.R. INVITED OUR ATTENTION TO ONE ORDER PASSED BY TRIBUNAL ON DATED 13.08.2009 IN THE CASE OF DDIT VS HUMAN CARE MEDICAL CHARITABLE TRUST, NEW DELHI AND IT WAS SUBMITTED TH AT IN THAT CASE ALSO, LD. CIT(A) HAD FORWARDED COPY OF ADDITIONAL EVIDENC E TO A.O. BUT THE A.O. DID NOT SUBMIT REMAND REPORT AND, THEREFORE, L D. CIT(A) HAD DECIDED THE MATTER WITHOUT REMAND REPORT AND HON'BL E TRIBUNAL HAD UPHELD THAT THERE WAS NO VIOLATION OF RULE 46A. 4. REPLYING TO THE RELIANCE PLACED BY LD. D.R. IN T HE CASE LAW OF MANISH ITA NOS.3378 & 3379/DEL/2011 5 BUILDWELL, LD. A.R. SUBMITTED THAT THE FACTS IN THA T CASE WERE NOT SIMILAR. IT WAS SUBMITTED THAT IN THAT CASE, LD. CIT(A) HAD ACCEPTED THE ADDITIONAL EVIDENCES WITHOUT FORWARDING THE SAME TO A.O. WHERE AS, IN THE PRESENT APPEALS, IT IS AN ADMITTED FACT THAT ADDITIONAL EVI DENCES ALONG WITH WRITTEN SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO A.O. AND HENCE, THIS CASE LAW IS NOT APPLICABLE WHEREAS THE FACTS AND CIRCUMS TANCES OF THE PRESENT APPEALS ARE SIMILAR TO THE CASE LAW RELIED UPON BY HIM. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WITHOUT COMMENTING UPON MERITS OF THE AP PEALS, THE ISSUE OF VIOLATION OF RULE 46A IS BEING DECIDED THROUGH THIS INTERIM ORDER. WE NOTE THAT THE FACTS IN BOTH THE APPEALS ARE SIMILAR WHEREIN GIFTS WERE SENT BY ONE MR. MOHIT PURI TO HIS PARENTS MR. VINAY PURI & MRS. SHASHI PURI. MR.VINAY PURI HAS SINCE EXPIRED, SMT. PURI IS NOW A SSESSEE IN BOTH THESE APPEALS ONE IN HER INDIVIDUAL CAPACITY AND ONE AS L EGAL HEIR. WE OBSERVE THAT THE A.O. ORIGINALLY ISSUED NOTICE U/S 142(1) O N 22.04.2009 AND THEN AGAIN AFTER A PERIOD OF 5 MONTHS THE A.O. AGAIN ISS UED DETAILED QUESTIONNAIRE ON 23.09.2009 AND HAS PASSED ORDER ON 29.12.2009. THE A.O. AT PAGE 2 OF HIS ORDER HAS MENTIONED THAT NO D ETAILS WERE FURNISHED BY THE ASSESSEE WHEREAS PAGE 5 IS A LETTER DATED 08 .12.2009 WRITTEN TO A.O. AND RECEIVED BY HIS OFFICE WHEREIN THE ASSESSE E HAD SUBMITTED CERTAIN EVIDENCES TO PROVE THE CREDITWORTHINESS OF MOHIT PURI. IN THE SAME LETTER, THE ASSESSEE HAD SUBMITTED THAT ANOTHER EVI DENCE OF INCOME OF MR. PURI WAS NOT YET AVAILABLE BUT WILL BE FURNISHED SH ORTLY. 6. FOR THE SAKE OF CONVENIENCE, CONTENTS OF THIS L ETTER ARE REPRODUCED BELOW: 'IN RESPECT OF ABOVE SAID MATTER, UNDER INSTRUCTION S OF THE ASSESSEE, IT IS BRING TO YOUR KIND NOTICE THAT MR. MOHIT PURI LEFT INDIA FOR THE PURPOSE OF EMPLOYMENT WITH M/S. FRIEND'S GENERAL TR ADING FZCO, ITA NOS.3378 & 3379/DEL/2011 6 DUBAI ON 09.04.2006. A COPY OF HIS EMPLOYMENT AGREE MENT IS ENCLOSED. CONFIRMATION FROM THE SAID EMPLOYER REGAR DING PAYMENT OF REIMBURSEMENTS AND COMMISSION DURING THE PERIOD APRIL 2006 TO DECEMBER, 2006 ARE ENCLOSED. ADDITIONALLY, THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF REAL ESTATE BROKERAGE AB ROAD WITH M/S. SMART INSPECTION INDUSTRIAL EQUIPMENTS LLC, DUBAI. A COPY OF CONFIRMATION FOR THE SAME IS AWAITED AND WILL BE FU RNISHED SHORTLY.' 7. THE A.O. WITHOUT COMMENTING UPON THIS LETTER HEL D THAT NO DETAILS WERE FURNISHED BY THE ASSESSEE. WE FURTHER NOTE THA T THE ASSESSEE WAS IN FACT PREVENTED BY SUFFICIENT AND REASONABLE CAUSE F OR NOT SUBMITTING THE ADDITIONAL EVIDENCE BEFORE THE A.O. AS ASSESSEE WAS ASKED TO FURNISH SUPPORTING EVIDENCE ON 23.09.2009 AND ASSESSMENT WA S COMPLETED WITHIN A SHORT PERIOD ON 29.12.2009. THE HIGH HANDEDNESS O F THE A.O. CAN BE JUDGED FROM THE FACT THAT LETTER DATED 08.L2.2009 W RITTEN BY ASSESSEE IN SUPPORT OF GIFT DOES NOT FIND MENTION IN THE ASSESS MENT ORDER. MOREOVER WE FURTHER NOTE THAT LD. CIT(A) HAD DULY FORWARDED THE COPY OF ADDITIONAL EVIDENCE UNDER RULE 46A ON 20.01.2011 IN BOTH THE CASES WHICH WAS FOLLOWED BY REMINDER DATED 10.02.2011 AND 24.02.2011 IN I.T.A.NO. 3379/DE1L2011. WE FURTHER OBSERVE THAT LD . CIT(A) HAD FORWARDED COPY OF WRITTEN SUBMISSIONS ON 04.03.2011 AND 10.02.2011 IN I.T.A. NO. 3378/DELL2011 AND 3379IDE1L2011 RESPECTI VELY TO WHICH A.O. DID NOT REPLY. THEREFORE, LD. CIT(A) HAS PASSED THE ORDER AFTER TAKING INTO ACCOUNT THE ADDITIONAL EVIDENCES ON MERITS. THEREFO RE, THESE ARE NOT THE CASES WHERE THE PROCEDURE FOR ACCEPTING ADDITIONAL EVIDENCE UNDER RULE 46A WAS VIOLATED. WHEREAS, THESE ARE THE CASES WHER E A.O. HAD NOT SUBMITTED REMAND REPORT WITHIN A REASONABLE PERIOD OF ABOUT 3 MONTHS AND) THAT TOO DESPITE REMINDERS THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN PASSING THE ORDER AFTER WAITING FOR REMAND REPORT. THE REVENUE HAS TAKEN ITA NOS.3378 & 3379/DEL/2011 7 THE GROUND THAT LD. CIT( A) HAS ACCEPTED THE ADDITI ONAL EVIDENCES IN-SPITE OF THE FACT THAT SUFFICIENT OPPORTUNITIES WERE PROV IDED TO ASSESSEE WHEREAS FROM ASSESSMENT ORDER, WE DO NOT FIND ANY SUCH OPPO RTUNITIES. THEREFORE, THE GROUND TAKEN BY REVENUE IS FACTUALLY IN CORRECT . MOREOVER WE OBSERVE THAT VIDE LETTER DATED 08.12.2009, THE ASSESSEE HAD SUBMITTED TO A.O. REGARDING ANOTHER SOURCE OF INCOME OF MR. MOHIT PUR I FOR WHICH ONLY CONFIRMATION WAS TO BE FILED WHICH COULD NOT BE FIL ED BEFORE A.O. AS ASSESSMENT ORDER WAS PASSED ON 29.12.2009 AND THERE FORE, THE SAME WAS FILED BEFORE LD. CIT(A) AS ADDITIONAL EVIDENCE. 8. IN SIMILAR CIRCUMSTANCES, ITAT IN THE CASE OF DD IT VS HUMAN CARE MEDICAL CHARITABLE TRUST IN I.T.A.NO. 2333IDELL2009 HAS HELD IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 'WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL ON RECORD. WE FIND MERIT IN THE ARGUMENT OF LD. COUNSE L. CIT(A) HAS VALIDLY EXERCISED HIS POWER TO ADMIT ADDITIONAL EVI DENCE UNDER RULE 46A BY SENDING COPY THEREOF TO A.O., WHO INSTE AD OF COMMENTING ON THE ADDITIONAL EVIDENCE FILED, SAT ON THE PROCEEDINGS. WE ALSO FIND THESE EVIDENCES ARE FILED BEFORE A.O. ON 26.12.2007 AND THE SAME WAS NOT CONSIDERED AND THE ASSESSMENT ORDER WAS PASSED ON THE SAME DAY. IN OUR VIEW, NO V IOLATION OF RULE 46A CAN BE DISCERNED. IN VIEW THEREOF, WE UPHO LD THE ORDER OF CIT(A).' 9. THE CASE LAW OF MANISH BUILDWELL RELIED UPON BY LD. D.R. IS NOT APPLICABLE AS IN THAT CASE, THE ADDITIONAL EVIDENCE S WERE ADMITTED WITHOUT CONFRONTING TO A.O. WHEREAS IN THE PRESENT APPEALS, THE ADDITIONAL EVIDENCES WERE FORWARDED TO A.O. BUT HE DID NOT REP LY. FOR THE SAKE OF CONVENIENCE THE FINDINGS OF HON'BLE DELHI HIGH COUR T IN THE CASE OF MANISH BUILDWELL ARE REPRODUCED BELOW: '24. IN THE PRESENT CASE, THE CL'T (A) HAS OBSERVED THAT THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED BECAUSE THE ASSESSEE WAS PREVENTED BY ADDUCING THEM BEFORE THE ASSESSING OFF ICER. THIS ITA NOS.3378 & 3379/DEL/2011 8 OBSERVATION TAKES CARE OF CLAUSE (C) OF SUB-RULE (1 ) OF RULE 46A THE OBSERVATION OF THE CIT (A) ALSO TAKES CARE OF SUB-R ULE (2) UNDER WHICH HE IS REQUIRED TO RECORD HIS REASONS FOR ADMI TTING THE ADDITIONAL EVIDENCE. THUS, THE REQUIREMENT OF SUB-R ULES (1) AND (2) OF RULE 46A HAVE BEEN COMPLIED WITH. HOWEVER, SUB-R ULE (3) WHICH INTERDICTS THE CIT(A) FROM TAKING INTO ACCOUNT ANY EVIDENCE PRODUCED FOR THE FIRST TIME BEFORE HIM UNLESS THE A SSESSING OFFICER HAS HAD A REASONABLE OPPORTUNITY OF EXAMINING THE E VIDENCE AND REBUT THE SAME, HAS NOT BEEN COMPLIED WITH. THERE I S NOTHING IN THE ORDER OF THE CIT (A) TO SHOW THAT THE ASSESSING OFF ICER WAS CONFRONTED WITH THE CONFIRMATION LETTERS RECEIVED B Y THE ASSESSEE FROM THE CUSTOMERS WHO PAID THE AMOUNTS BY CHEQUES AND ASKED FOR COMMENTS. THUS, THE END RESULT HAS BEEN THAT ADDITI ONAL EVIDENCE WAS ADMITTED AND ACCEPTED AS GENUINE WITHOUT THE AS SESSING OFFICER FURNISHING HIS COMMENTS AND WITHOUT VERIFIC ATION. SINCE THIS IS AN INDISPENSABLE REQUIREMENT, WE ARE OF THE VIEW THAT THE TRIBUNAL OUGHT TO HAVE RESTORED THE MATTER TO T HE CIT(A) WITH THE DIRECTION TO HIM TO COMPLY WITH SUB-RULE (3) OF RULE 46A. ' 10. THEREFORE, AFTER ANALYSIS OF BOTH CASE LAWS REL IED UPON BY LD. D.R. AND LD. A.R., WE FIND THAT THE FACTS AND CIRCUMSTAN CES OF THE PRESENT APPEALS ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES OF CASE LAW RELIED UPON BY LD. A.R. THEREFORE, FOLLOWING ABOVE AND KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT APPEALS, WE DISMISS GR OUND NO.2 OF THE REVENUE'S APPEAL. SINCE, WE HAVE DECIDED GROUND NO .2 OF THE APPEALS AGAINST REVENUE, THEREFORE, THE CASES ARE NEEDED TO BE HEARD ON MERITS. 8. IN VIEW OF ABOVE, REGISTRY IS DIRECTED TO FIX T HESE APPEALS FOR HEARING ON 15.L2.2014 AT 2.30 P.M. UNDER INTIMATION TO BOTH THE PARTIES. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 28-11-2014 . SD./- SD./- (H. S. SIDHU) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28-11-2014 SP. ITA NOS.3378 & 3379/DEL/2011 9 COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. (IT 4. (IT (A) 5. DR,ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES