Mera Baba Reality Associates (P) Ltd, New Delhi V. Pr. CIT, New Delhi

ITA 3451/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2975 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: S GOYAL
• Keywords: Search and seizure; Principle of natural justice; Question of law
• Section: 153A; 263; 132; 139

Judgement Text

1 ITA NO. 3451/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3451/DEL/201 5 ( A.Y 2007-08) MERA BABA REALITY ASSOCIATES (P) LTD. D-MALL, PLOT NO. 1, NETAJI SUBHASH PLACE DISTRICT CENTRE, WAZIRPUR, PITAMPURA NEW DELHI AADCM9592M (APPELLANT) VS PR. CIT CENTRAL II, 3 RD FLOOR, ARA CENTRE, E-2, JHANDEWALAN EXTENSION NEW DELHI (RESPONDENT) APPELLANT BY SH. S. GOYAL, CA RESPONDENT BY SH. KAUSHLENDRA TIWARI, SR. DR ORDER PER SUCHITRA KAMBLE THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31/03/2015 PASSED BY PR. CIT, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE ORDER OF THE LEARNED PRINCIPAL C.I.T. CENTRAL-II, NEW DELHI IN PASSING THE REVISION ORDER U/S 263 OF THE INCOME TA X ACT, 1961 IN RESPECT OF ASSESSMENT ORDER DATED 28.03.2013 PASSED U/S 153 A/143(3) OF THE INCOME TAX ACT, 1961 FOR A.Y. 2007-08 IS TOTALLY WR ONG, BAD IN LAW AND NEEDS TO BE QUASHED. DATE OF HEARING 07.03.2018 DATE OF PRONOUNCEMENT 14.03.2018 2 ITA NO. 3451/DEL/2015 2. THAT THE REVISION PROPOSAL OF THE U/S 263 WAS PR OPOSED BY THE SAME DCIT WHO PASSED THE ORDER ABOUT TWO MONTHS BACK CIT ING THE REASONS THAT INTEREST @40% HAS NOT BEEN BOOKED IN BOOKS OF ACCOUNTS I.E. PAID OUT OF UNDISCLOSED INCOME IS TOTALLY WRONG, BAD IN LAW AND NEEDS TO BE QUASHED. VIRTUALLY AO HAS NO EVIDENCE ON RECORD TO PROVE THA T EXCESS INTEREST HAS BEEN PAID THAN WHAT WAS RECORDED IN THE BOOKS OF AC COUNTS. IT IS WORTH NOTING THAT WHILE PUTTING THE PROPOSAL FOR REVISION HE HAS MENTIONED THAT DUE TO OVERSIGHT/HEAVY WORK LOAD I COULD NOT MAKE T HE ADDITION AND I DEEPLY REGRET FOR THE ERROR. SUCH TYPE OF EXCUSES D OES NOT HAVE ANY VALUE IN THE EYE OF LAW AND AT LEAST ASSESSEE SHOULD NOT SUFFER FOR SUCH TYPE OF THE NEGLIGENCE OF A SENIOR OFFICER. IT IS AGAINST T HE PRINCIPLE OF NATURAL JUSTICE. THUS THE ORDER U/S 263 CANCELLING THE ASSE SSMENT IS TOTALLY WRONG, BAD IN LAW AND NEEDS TO BE QUASHED. 3. THAT THE OTHER REASON MENTIONED IN PUTTING THE R EVISION PROPOSAL OF THE U/S 263 WAS THAT THE ASSESSEE DID NOT FILE COMPLETE DETAILS OF SUNDRY CREDITORS. AS PER THE ASSESSEE, HE HAS FILED ALL TH E DETAILS DURING ASSESSMENT PROCEEDINGS. THE ASSESSEE ALSO SUBMITTED BEFORE THE PRINCIPAL CIT THAT HE HAS FILED ALL THE DETAILS BEFORE THE AO AND SAME DETAILS WERE FILED AGAIN BEFORE THE PRINCIPAL CIT BUT THE PRINCI PAL CIT DID NOT CONSIDER THE SUBMISSION OF THE ASSESSEE AND PASSED ORDER U/S 263 FOR REVISION OF ASSESSMENT. ON THIS POINT ALSO, THE AO VIRTUALLY CO ULD NOT POINT OUT EVEN A SINGLE INSTANCE WHERE THE ASSESSEE DID NOT FILE DET AIL OF THE SUNDRY CREDITORS. FURTHER, IT IS WORTH NOTING THAT WHILE P UTTING THE PROPOSAL FOR REVISION HE HAS MENTIONED THAT DUE TO OVERSIGHT/HEA VY WORK LOAD I COULD NOT MAKE THE ADDITION AND I DEEPLY REGRET FOR THE E RROR. SUCH TYPE OF EXCUSES DOES NOT HAVE ANY VALUE IN THE EYE OF LAW A ND AT LEAST ASSESSEE SHOULD NOT SUFFER FOR THE NEGLIGENCE OF A SENIOR OF FICER. IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. THUS THE ORDER U/S 26 3 CANCELLING THE ASSESSMENT IS TOTALLY WRONG, BAD IN LAW AND NEEDS T O BE QUASHED. 3 ITA NO. 3451/DEL/2015 4. THAT THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ANOTHER. 5. THAT THE ASSESSEE PRAYS PERMISSION TO ADD, DEL ETE OR AMEND ONE OR MORE GROUNDS OF APPEAL. 4. THAT THE ORDER U/S 263 IS BAD, ILLEGAL AND UNJUSTIF IED ON THE MERITS OF THE CASE AND MUST BE QUASHED. 3. THE ASSESSEE FILED INCOME TAX RETURN FOR ASS ESSMENT YEAR 2007-08 U/S 139(4) DECLARING TAXABLE INCOME OF RS.1,09,72,200/- . A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 WAS U NDERTAKEN AT THE BUSINESS PREMISES OF THE ASSESSEE AT PLOT D, DISTRI CT CENTRE, PASCHIM VIHAR, NEW DELHI-110063 ALONGWITH OTHER RELATED PERSON AND ASSOCIATES ON 14.09.2010. NOTICE FOR A.Y. 2007-08 WAS ISSUED U/S 153A ON 22.10.2012. VIDE REPLY DATED 19.12.2012, THE ASSESSEE SUBMITTED THE COPY OF THE ORIGINAL RETURN FILED U/S 139 AND REQUESTED TO TREAT THE SAME AS RE TURNS FILED IN RESPONSE TO NOTICE U/S 153A. THE ASSESSEE FILED REPLIES FROM TI ME TO TIME AS ASKED BY THE DCIT. AFTER DISCUSSION, INCOME WAS ASSESSED AT RETU RNED INCOME FOR THE ASSESSMENT YEAR 2007-08 AND ASSESSMENT ORDER WAS PASSED ON 28.03.2013 WITH THE APPROVAL OF ADDL. CIT CENTRAL, RANGE-IV, N EW DELHI IN TERMS OF PROVISION OF SECTION 153D OF THE ACT. 4. AFTER A PERIOD OF TWO MONTHS, THE SAME DCIT WHO PASSED THE ASSESSMENT ORDER UNDER SECTION 153A/143(3) DATED 28.03.2013 PU T A PROPOSAL ON 05.06.2013 TO THE CIT CENTRAL-II FOR REVISION OF OR DER U/S 263 OF THE ACT CITING THE REASONS THAT ASSESSEE HAS PAID INTEREST @40% TO CERTAIN PEOPLE AND ALSO DID NOT DISCLOSE COMPLETE DETAILS OF SUNDRY CREDITO RS. HE HAS ALSO MENTIONED WHILE SENDING THE PROPOSAL FOR 263 THAT ADDITION FO R DIFFERENTIAL AMOUNT OF INTEREST PAID COULD NOT BE MADE DUE TO OVERSIGHT/HE AVY WORK LOAD. AFTER THIS THE ASSESSEE RECEIVED SHOW CAUSE NOTICE DATED 02.02 .2015 FROM PRINCIPAL CIT CENTRAL-II MENTIONING WHY ASSESSMENT ORDER FOR A.Y. 2007-08 DATED 4 ITA NO. 3451/DEL/2015 28.03.2013 MAY NOT BE CONSIDERED AS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF THE REVENUE U/S 263 OF THE INCOME TAX, ACT. THE NOTICE WAS GIVEN AS IN THE OPINION OF THE DCIT THAT ASSESSEE DID NOT FILE COMP LETE DETAILS OF SUNDRY CREDITORS AND DID NOT SHOW HIGH RATE OF INTEREST I. E. 40% PAID BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS. THE PRINCIPAL CIT PASSED ORDER UNDER SECTION 263 OF THE ACT ON 31.03.2015 WHEREBY THE ASSESSMENT ORDERS FOR A.Y. 2007-08 TO 2011-12 PASSED IN THE ASSESSEES CASE ARE PREJUDICI AL TO THE INTEREST OF THE REVENUE AND DIRECTED THE ASSESSING OFFICER TO FRAME THE ASSESSMENT IN ALL THE 5 ASSESSMENT YEARS AFRESH. 4. BEING AGGRIEVED BY THE ORDER OF THE PR. CIT, THE ASSESSEE IS BEFORE US. 5. THE LD. AR SUBMITTED THAT THE A SSESSMENT ORDER FOR ASSESSMENT YEARS 2007-08 TO 2011-12 WAS PASSED ON 28.03.2013 U/S 153 A/143(3). THE PRINCIPAL CIT, CENTRAL-2, NEW DELHI PASSED REVISION ORDER U/S 263 FOR ALL THE ASSESSMENT YEARS BY A SINGLE ORDER ON 31.03.2015. T HE SAME DCIT I.E. ASSESSING OFFICER WHO PASSED ASSESSMENT ORDERS ON 2 8.03.2013 SENT PROPOSAL FOR REVISION U/S 263 TO THE PCIT, CENTRAL-2 ON 05.0 6.2013. THE REASONS MENTIONED IN THE LETTER DATED 05.06.2013 THAT INVE STIGATION / ENQUIRIES IN THE MATTER COULD NOT BE CARRIED OUT DUE TO LATE RECEIPT OF INFORMATION AND SHORTAGE OF TIME / OVERSIGHT / HEAVY WORKLOAD AND I DEEPLY R EGRET FOR THE ERROR. OUT OF THE ABOVE FIVE YEARS, NOTICE FOR A.Y. 2007-08 WAS N OT ISSUED BY THE ITAT EITHER IT WAS LEFT BY OVERSIGHT OR FILE WAS NOT AVAILABLE AT THE TIME OF ISSUE OF NOTICE FOR OTHER ASSESSMENT YEARS. THE ASSESSEE FILED APPEAL I N ITAT AGAINST THE ORDER PASSED U/S 263 ON 31.03.2015 FOR ALL THE ASSESSMENT YEARS. THE ITAT VIDE ORDER DATED 10.11.2016 SET ASIDE THE ORDER IMPUGNED U/S 263 OF THE ACT AND RESTORE THE ASSESSMENT ORDER IN QUESTION FOR THE AS SESSMENT YEAR 2008-09 2011-12 (ITA NO. 3452 TO 3455/DEL/2006 ORDER DATED 18.11.2016 BY OBSERVING AS UNDER: AT THE MOST, IT MAY BE A CASE OF INADEQUATE ENQUIR Y ON THE PART OF THE AO, WHICH E HAS FAIRLY ADMITTED IN HIS LETTER DATED 05. 06.2013 ADDRESS TO THE 5 ITA NO. 3451/DEL/2015 CIT, ON THE BASIS OF WHICH THE LA. CIT HAD ISSUED SHOW CAUSE NOTICE U/S 263 OF THE ACT. AS DISCUSSED IN THE ABOVE CITED DEC ISIONS, IT HAS-BEEN HELD THAT INVOCATION OF PROVISIONS U/S 263 OF THE ACT CA NNOT BE ALLOWED MERELY ON THE BASIS THAT THE ENQUIRY CONDUCTED BY THE AO W AS INADEQUATE AND THEREFORE THE LD. CIT WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT IN THE PRESENT CASE. THE LD. AR FURTHER SUBMITTED THAT AGAINST THE ORDER OF THE ITAT, THE DEPARTMENT FILED APPEAL IN THE HIGH COURT OF DELHI WHICH WAS DISMISSED VIDE ORDER DATED 31.10.2017 MENTIONING THAT NO SUBSTANTI AL QUESTION OF LAW ARISES FROM THE IMPUGNED ORDER OF THE ITAT. 6. THE LD. DR RELIED UPON THE ORDERS OF THE LOWER A UTHORITIES, BUT ADMITTED THAT THE ITAT HAS PASSED ORDER IN FAVOUR OF THE ASS ESSEE FOR A.YS 2008-09 TO 2011-12. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RECORDS. WE HAVE GONE THROUGH THE ORDERS OF THE TRIBUNAL AND HONBLE HIGH COURT IN ASSESSEES OWN CASE. THIS APPEAL ALSO CHALLENGES THE ORDER DAT ED 31.03.2015 WHICH WAS A COMMON ORDER CHALLENGED IN THE APPEALS FILED IN A.Y . 2008-09 TO 2011-12 THE ASSESSEE BEFORE THE TRIBUNAL. THE SAID TRIBUNAL DEC ISION IS UPHELD BY THE HONBLE HIGH COURT. THE HONBLE HIGH COURT VIDE ORD ER DATED 21.08.2017 (ITA NOS. 637, 507, 508, 509 OF 2017) HELD AS UNDER: 16. ..AS NOTICED BY THE ITAT, FOLLOWING THE NOTIC ES ISSUED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS BY THE AO, ON MORE TH AN ONE OCCASION THE ASSSESSEE FURNISHED THE COMPLETE DETAILS SOUGHT. WH ERE THE ASSESSEE HAS IN FACT FURNISHED THE DETAILS THAT ARE AVAILABLE WITH HIM ALONG WITH EXPLANATION TO THE QUERIES RAISED BY THE AO, TO PERMIT THE EXER CISE OF THE REVISIONARY JURISDICTION ONLY ON THE GROUND THAT THE AO DID NOT HAVE SUFFICIENT TIME TO VERIFY THE DETAILS FURNISHED WOULD BE UNFAIR TO THE ASSESSEE. THE PCIT MUST BE SATISFIED, AFTER APPLICATION OF HIS MIND, THAT T HE ORDER OF THE AO WAS ERRONEOUS WITH RESPECT TO THE MATERIAL MADE AVAILAB LE TO HIM. NO SUCH 6 ITA NO. 3451/DEL/2015 APPLICATION OF MIND BY THE PCIT IS EVIDENT FROM THE IMPUGNED ORDER WHICH WAS UNDER CHALLENGE BEFORE THE ITAT. THUS, THE ISSUE HEREIN IS ALREADY DECIDED BY THE T RIBUNAL VIDE ORDER DATED 18.11.2016 WHICH IS CONFIRMED BY THE HONBLE HIGH COURT. HENCE, APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH MARCH, 2 018 . SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 14/03/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 7 ITA NO. 3451/DEL/2015 DATE 1. DRAFT DICTATED ON 08/03/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 09/03/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 14.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 14.03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.