Sh. Ram Kishan Dass, New Delhi V. ACIT, New Delhi

ITA 3647/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3664 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 05-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: VED JAIN ADV SH ASHISH CHADHA
• Keywords: Principle of natural justice; Earning of tax free income
• Section: 14A; 154

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI H. S. SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3647/DEL/2014 (ASSESSMENT YEAR: 2009 - 10 ) RAM KISHAN DASS, PROP M/S. BISHAN SAROOP RAM KISHAN, 25/75, SHAKTI NAGAR, NEW DELHI PAN:AAEPD0805G VS. ACIT, CIRCLE - 20(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VED JAIN, ADV SH. ASHISH CHADHA, CA REVENUE BY: SH. FR MEENA, SR. DR DATE OF HEARING 05/04 / 2017 DATE OF PRONOUNCEMENT 10 / 04 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - XXII, NEW DELHI DATED 11.02.2014 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] IS BAD, BOTH IN THE EYE OF LAW AND ON FACTS. 2(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT ADMITTING THE APPEAL ON THE GROUND THAT THE ASSESSEE HAS NOT PAID THE TAX DUE ON THE RETURNED INCOME. (II) THAT THE ABOVE SAID FINDING OF THE LEARNED CIT(A) IS AGAINST THE FACTS ON RECORD. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE AMOUNT OF BEING THE TAX DEDUCTED AT SOURCE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN DECIDING THE APPEAL EXP ARTE IN GROSS VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE CIT(A) IS UNSUSTAINABLE IN VIEW OF THE FACT THAT THE SAME HAS BEEN PAGE 2 OF 4 PASSED DESPITE RECORDING A FINDING THAT THE NOTICE SE NT BY IT HAS BEEN RECEIVED BACK UNSERVED. 5(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 5,35,306 / - MADE BY THE AO UNDER SECTION 14A OF THE ACT. 3. BRIEF FACTS OF TH E CASES THAT ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2009 10 ON 30/09/2009 DECLARING AN INCOME OF RS. 4793300/ . THE ASSESSMENT WAS COMPLETED AT INCOME OF RS. 5328610 / - AFTER MAKING DISALLOWANCE OF RS. 535306/ - UNDER SECTION 14A OF THE INCOME TAX ACT . ASSESSEE, AGGRIEVED WITH THE ORDER OF THE LD. AO PREFERRED AN APPEAL BEFORE THE LD. CIT APPEAL . THE LD. CIT APPEAL CONFIRMED THE DISALLOWANCE MADE BY THE LD. ASSESSING OFFICER UNDER SECTION 14 A OF THE ACT AS ASSESSEE DI D NOT SUBMIT THE REQUIRED DETAILS AND FURTHER HELD THAT ACCORDING TO THE RETURN OF INCOME FILED BY THE ASSESSEE THAT THE ASSESSEE DID NOT PAY THE DUE TAXES ON THE RETURNED INCOME AND THEREFORE IN VIEW OF THE PROVISIONS OF SECTION 249 (4) OF THE INCOME TAX ACT, NO APPEAL U NDER CHAPTER XX CAN BE ADMITTED UNLESS AT THE TIME OF FILING OF THE APPEAL THE ASSESSEE HAS PAID THE TAX DUE ON THE INCOME RETURNED BY HIM IN CASES WHEN THE RETURN HAS BEEN FILED BY THE ASSESSEE. THEREFORE, HE HELD THAT THE APPEAL FILED BY THE ASSESSEE IS REJECTED AND DISMISSED AND HELD NOT TO BE LIABLE TO BE ADMITTED . ASSESSEE AGGRIEVED WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX APPEALS HAS PREFERRED AN APPEAL BEFORE US. 4. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT WITH RESPECT TO THE ADMISSION OF THE APPEAL ASSESSEE HAS SUBMITTED AN APPLICATION UNDER SE CTION 154 OF THE INCOME TAX ACT TO LD. ASSESSING OFFICER ON 04/06/2014 TO GIVE EFFECT TO THE EARLIER ORDER PASSED UNDER SECTION 154 AN D TO ALLOW THE CREDIT OF SELF - ASSESSMENT TAXES PAID . HE FURTHER SUBMITTED THAT THE CREDIT OF TAX PAID UNDER SECTION 140A OF THE INCOME TAX ACT OF RS. 682231/ IS ALSO NOT ALLOWED TO THE ASSESSEE. IN VIEW OF THIS, HE SUBMITTED THAT FULL TAX HAS BEEN PAI D BY THE ASSESSEE BEFORE THE FILING OF THE APPEAL AND WHICH ARE PENDING FOR RECTIFICATION UNDER SECTION 154 OF THE INCOME TAX ACT . THEREFORE, THE LD. CIT APPEAL HAS ERRED IN HOLDING THAT ASSESSEE HAS NOT PAID THE ADMITTED TAX ON THE RETURNED INCOME AND TH EREFORE THE APPEAL OF THE ASSESSEE IS NOT LIABLE TO BE ADMITTED . WITH RESPECT TO THE QUANTUM OF THE ADDITION IT IS SUBMITTED THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME AND THEREFORE THE PROVISIONS OF SECTION 14 A DO NOT APPLY . HE PAGE 3 OF 4 REFERRED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CHEMINVEST LIMITED VERSUS CIT (2015) [ 378 ITR 33 ] TO HOLD THAT WHEN THERE IS NO EXEMPT INCOME EARNED BY THE ASSESSEE DISALLOWANCE UNDER SECTION 14 A OF THE INCOME TAX ACT CANNOT BE MADE . HE THEREFORE SU BMITTED THAT ON OTH COUNTS ORDER OF LD. CIT APPEAL IS NOT SUSTAINABLE. 5. THE LD. SENIOR DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTESTED THAT THE ASSESSEE HAS NOT APPEARED BEFORE THE LD. CIT APPEAL AND THEREFORE THE EVIDENCE SUBMITTED BEFORE THE TRIBUNAL COULD NOT BE ADMITTED AT ALL AS DESPITE REPEATED OPPORTUNITY GRANTED BY THE LD. CIT APPEAL THE ASSESSEE HAS FAILED TO GIVE ANY EVIDENCE WITH RESPECT TO THE DISALLOWANCE UNDER SECTION 14 A OF THE INCOME TAX ACT OR ABOUT THE ADMITTED TAX PAID BY THE ASSESSE E . HE FURTHER SUBMITTED THAT THE 154 APPLICATION FURNISHED BY THE ASSESSEE BEFORE THE TRIBUNAL ARE NOT GIVEN TO THE LD. CIT APPEAL . THEREFORE, HE SUBMITTED THAT IN THE ABSENCE OF ANY CLARIFICATION GIVEN BEFORE THE LD. CIT APPEAL THE MATTER SHOULD BE REST ORED BACK TO THE FILE OF THE LD. CIT APPEAL TO DECIDE THE ISSUE ON MERIT AND CANNOT BE ADJUDICATED UPON HERE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES . ACCORDING TO PARA NO. 8.2 OF THE LD. CIT APPEA L THE DETAILS ASKED BY HIM WITH RESPECT TO 2 YEARS WERE NOT SUBMITTED . HE FURTHER ASKED WHETHER THERE IS ANY INCOME FROM DIVIDEND OR OTHER TAX - FREE EXEMPT INCOME HAS BEEN EARNED BY THE ASSESSEE OR NOT . HE HAS FURTHER INQUIRED WITH RESPECT TO THE COPIES OF ASSESSMENT AND APPELLANT ORDERS FOR PRECEDING 3 YEARS. THE ASSESSEE DESPITE REPEATED OPPORTUNITIES GRANTED BY THE 1 ST APPELLATE AUTHORITY HAS NOT SUBMITTED ANY OF THE INFORMATION REQUIRED BY HIM AND THEREFORE, HE DISMISSED T HE CLAIM OF THE ASSESSEE WITH RESPECT TO DISALLOWANCE UNDER SECTION 14 A OF THE INCOME TAX ACT. WITH RESPECT TO THE ADMITTED TAX PAID BY THE ASSESSEE BEFORE FILING OF THE APPEAL BEFORE THE 1 ST APPELLATE AUTHORITY , ASSESSEE DID NOT SUBMIT ANYTHING BEFORE T HE LD. CIT A. NO W ASSESSEE HAS GIVEN A DETAILED ANSWER BEFORE US ABOUT THE ADMITTED TAX PAID BY THE ASSESSEE AS WELL AS THE ISSUE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE DELHI HIGH COURT . IN FACT. GROUND NO. 3 OF THE APPEAL OF THE ASSESSEE ALSO DESIROUS OF GETTING THE BETTER RESTORED BACK TO THE FILE OF THE 1 ST APPELLATE AUTHORITY. THEREFORE , WE ARE CONSTRAINED TO DECIDE THE ISSUE HERE ITSELF AS THE AMOUNT OF ADMITTED TAX PAID BY THE ASSESSEE IS REQUIRED TO BE VERIFIED BY THE LD. 1 ST APPELLATE AUTHORITY AND THEN PAGE 4 OF 4 TO DECIDE THE ISSUE OF DISALLOWANCE UNDER SECTION 14 A OF THE INCOME TAX. THEREFORE, IN THE INTEREST OF JUSTICE WE SET ASIDE , ALL THE ISSUES OF APPEAL OF THE ASSESSEE TO THE FILE OF THE LD. CIT APPEAL TO VERIFY WHETHER THE ADMITTED TAX PAID BY THE ASSESSEE AFTER OBTAINING THE REPORT OF THE LD. ASSESSING OFFICER AND THEN TO DECIDE THE ISSUE OF DISALLOWANCE UNDER SECTION 14 A OF THE INCOME TAX ACT ON MERIT. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. ACCORDING TO ABOUT DIRECTION. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 1 0 / 04 / 2017 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 0 / 04 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI