ITO, New Delhi V. Smt. Tara Devi, Noida

ITA 3583/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61727 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 24-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: SB GUPTA
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence
• Section: 68; 69; 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H NEW DELHI BEFORE SHRI A.N. PAHUJA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.3583/DEL/2010 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, VS TARA DEVI, WARD 33(4), A-65, S ECTOR-31, C.R. BUILDING, NOIDA. I.P. ESTATE, (PAN NO. AEBPD5766P) NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: DR. B.R.R. KUMAR, SR.DR RESPONDENT BY : SHRI S.B. GUPTA O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAI NST THE ORDER OF LD. CIT(A)-XXVI, NEW DELHI DATED 14.5.2010 ON THE F OLLOWING GROUND:- THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.10 LAKH MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN RELIEF RBI BOND U/S 68 OF THE I.T.ACT , 1961, RELYING ON THE ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46-A OF I.T. RULE, 1962. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED THE RETURN DECLARING INCOME OF RS.2,64,396 ON 25.8.2006. THE SAME WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) AND A ITA NO.3583/DEL/2010 2 NOTICE U/S 143(2) OF THE ACT WAS ISSUED BUT NEITHER THE ASSESSEE NOR HIS REPRESENTATIVE ATTENDED THE HEARING. SUBSEQUENTLY, A NUMBER OF NOTICES WERE ISSUED TO THE ASSESSEE AND FINALLY, NOTICE U/S 142( 1) OF THE ACT WAS ISSUED ON 29.9.2008, FIXING THE CASE FOR HEARING ON 7.10.2008 BUT NOBODY ATTENDED THE HEARING OF THE ASSESSMENT PROCEEDINGS ON BEHALF OF THE ASSESSEE. LASTLY, A SHOW CAUSE NOTICE ON 8.10.2008 WAS ALSO ISSUED TO T HE ASSESSEE GIVING SEVEN DAYS TIME BUT THE SAME REMAINED UNATTENDED. IN THE SE CIRCUMSTANCES, THE AO PROCEEDED TO COMPLETE THE ASSESSMENT EX PARTE U/ S 144 OF THE ACT ON THE BASIS OF BEST JUDGEMENT PRINCIPLE. THE AO NOTED TH AT THE ASSESSEE HAS NO EXPLANATION TO OFFER WITH REGARD TO THE INVESTMENT OF RS.10 LAKH INVESTED IN RBI BONDS ON 31.3.2006 AND HE MADE AN ADDITION OF T HE SAME AMOUNT U/S 69 OF THE ACT TO THE INCOME AS DECLARED BY THE ASSESSE E IN THE RETURN OF RELEVANT YEAR. 3. BEING AGGRIEVED BY THE ABOVE ASSESSMENT ORDER, T HE ASSESSEE INVOKED THE LD. CIT(A)-XXVI, NEW DELHI AND THE APPEAL WAS A LLOWED BY ADMITTING AND CONSIDERING ADDITIONAL EVIDENCE SUBMITTED BY TH E ASSESSEE. LD. CIT(A) OBSERVED THAT DUE TO NON-SERVICE OF ANY OF THE NOTI CES, THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FURNISHING THE E VIDENCE BEFORE THE AO AND THE FIRST APPELLATE AUTHORITY ADMITTED THE ADDI TIONAL EVIDENCE UNDER ITA NO.3583/DEL/2010 3 RULE 46A OF THE I.T. RULES, 1962. LD. CIT(A) FINAL LY PASSED THE IMPUGNED ORDER AND DELETED THE ADDITION MADE BY THE AO. 4. LD. DR VEHEMENTLY SUBMITTED THAT THE LD. CIT(A) GROSSLY ERRED IN DELETING THE ADDITION OF RS. 10 LAKH MADE ON ACCOUN T OF UNEXPLAINED INVESTMENT IN RBI BOND U/S 68 OF THE ACT, RELYING ON ADDITIONAL EVIDENCE, WHICH WAS ADMITTED BY HIM IN CONTRAVENTION OF RULE 46A OF THE RULES. HE ALSO SUBMITTED THAT THE ASSESSEE AVOIDED TO ATTEND THE PROCEEDINGS BEFORE THE AO AND THE ASSESSEE BYPASSED THE AUTHORITY OF AO AN D DIRECTLY SUBMITTED THE ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A). THE ADDITIONAL EVIDENCE WAS ADMITTED BY THE CIT(A) AFTER CALLING A REPORT FROM THE AO BUT THE SAME WAS NOT CONFRONTED TO THE AO FOR EXAMINATION AND REBUTT AL. THEREFORE, THE ACTION OF LD. CIT(A) WAS NOT JUSTIFIED. 5. THE ASSESSEES REPRESENTATIVE SUPPORTED THE IMPU GNED ORDER AND REPLIED THAT THE NOTICES WERE ISSUED BY THE AO BUT THESE WERE NOT DULY SERVED ON THE ASSESSEE. THEREFORE, THE ASSESSEE PR EVENTED BY SUBMITTING RELEVANT EVIDENCE BEFORE THE AO AND ADDITION WAS MA DE ON ERRONEOUS AND BASELESS GROUNDS. HE ALSO SUBMITTED THAT THE LD. C IT(A) RIGHTLY ADMITTED THE ADDITIONAL EVIDENCE AND THE DELETION MADE BY HIM WA S ON REASONABLE AND JUSTIFIED GROUNDS. ITA NO.3583/DEL/2010 4 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS OF BOTH T HE PARTIES AND CAREFULLY PERUSED THE ENTIRE RECORD BEFORE US. ON BARE READING OF THE IMPUGNED ORDER, WE OBSERVE THAT THE LD. CIT(A) SOUG HT THE COMMENTS OF THE LD. AO FOR THE ADMISSIBILITY OF THE ADDITIONAL EVID ENCE AND IN RESPONSE TO THAT, THE AO SUBMITTED, VIDE THE REMAND REPORT DATE D 10.3.2010, WITH AN OBJECTION BY THE AO THAT THE ASSESSEE DID NOT PARTI CIPATE IN THE ASSESSMENT PROCEEDINGS DESPITE SEVERAL NOTICES ISSUED TO HIM, THEREFORE, ADDITIONAL EVIDENCES SHOULD NOT BE ADMITTED. WE ALSO OBSERVE THAT THE LD. CIT(A) ALSO NOTED THAT THE AO HAS NOT COMMENTED ON THE MERITS O F REDEMPTION PROCEEDS AND LOAN OF RS. 2 LAKH FROM MS DIMPLE GUPTA AS SOUR CES OF INVESTMENT MADE BY THE ASSESSEE. LD. CIT(A) ASKED THE ASSESSEE TO FURNISH REJOINDER TO THE REMAND REPORT AND THE SAME WAS SUBMITTED. 7. LD. CIT(A) FURTHER NOTED THAT THE AO HAS NOT MAD E ANY ADVERSE REMARKS IN RESPECT OF REMAND PROCEEDS OF 9% RELIEF BONDS AMOUNTING TO RS.7.765 LAKHS, THUS, THE SOURCE HAS BEEN ACCEPTED BY THE AO. THE LD. CIT(A) HAS ALSO DRAWN A FINDING THAT THE COPY OF TH E INCOME TAX RETURN OF MS DIMPLE GUPTA IN SUPPORT OF HER CREDITWORTHINESS WAS ALSO NOT ADVERSELY COMMENTED BY THE AO IN THE REMAND REPORT. THEREFORE, THE LD. CI T(A) CONCLUDED WITH A FINDING THAT LOAN TRANSACTION FROM MS DIMPLE GUPTA WAS RELIABLE AS HER IDENTITY AND CREDITWORTHINESS, COUPLED WITH GENUINENESS OF THE T RANSACTION, WAS ESTABLISHED BY THE ASSESSEE. ITA NO.3583/DEL/2010 5 8. IN VIEW OF ABOVE, WE FINALLY OBSERVE THAT THE LD . CIT(A) ADMITTED THE ADDITIONAL EVIDENCE AFTER CONSIDERING THE REMAND RE PORT FROM AO ON JUST AND REASONABLE GROUNDS AS THE NOTICES ISSUED BY THE AO WERE NOT DULY SERVED ON THE ASSESSEE AND DUE TO THIS REASON, THE ASSESSEE W AS PREVENTED FROM FILING RELEVANT EVIDENCE BEFORE THE AO BUT THE LD. CIT(A) DID NOT COMPLY WITH THE MANDATORY PROCEDURE AS PER RULE 46A (3) OF THE RULE S AS THE AO HAS NOT BEEN ALLOWED REASONABLE OPPORTUNITY TO EXAMINE THE EVIDENCE AND TO PRODUCE ANY EVIDENCE OR DOCUMENTS IN REBUTTAL OF TH E ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE. 9. IN VIEW OF ABOVE, WE FINALLY OBSERVE THAT THE LD . CIT(A) CONSIDERED ADDITIONAL EVIDENCE WITHOUT ALLOWING REASONABLE OPP ORTUNITY TO THE AO TO EXAMINE THE EVIDENCE AND TO REBUT THE SAME AND WE A LSO OBSERVE THAT HE DID NOT FOLLOW THE REQUIRED PROCEDURE AS PER RULE 46A O F THE RULES. THEREFORE, WE FIND IT APPROPRIATE TO REMIT THE MATTER BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION AFTER FOLLOWING THE REQUIRED PRO CEDURE AND PROVIDING AN OPPORTUNITY TO BE HEARD TO THE ASSESSEE. THE ASSES SEE SHALL COOPERATE IN THE FRESH PROCEEDINGS BEFORE THE LD. CIT(A). 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.3583/DEL/2010 6 ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2012. SD/- SD/- ( A.N. PAHUJA ) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 31 ST MAY, 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR