The State Bank of Patiala, Patiala V. ACIT, Patiala

ITA 434/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9059 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 28-09-2016
• Assessment Year: 1996-1997
• Appeal Filed On: 27-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS.434 TO 439/CHD/2016 A.Y. 1996-97,1998-99,1999-2000 2001-02,2002-03 & 2006-07 THE STATE BANK OF PATIALA, VS THE ACIT, H.O. THE MALL, CIRCLE, PATIALA. PATIALA. PAN: AACCS0143D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.NARESH RESPONDENT BY : SHRI SUSHIL KUMAR DATE OF HEARING : 28.09.2016 DATE OF PRONOUNCEMENT : 05.10.2016 O R D E R PER BHAVNESH SAINI, JM ALL THE APPEALS BY SAME ASSESSEE ARE DIRECTED AGAINST COMMON ORDER OF LD. LD. CIT(APPEALS) MEERUT CAMP AT PATIALA DATED 11.02.2016 FOR THE ABOVE ASSESSMENT YEARS, CHALLENGING THE ADDITIONS ON ACCO UNT OF PRIOR PERIOD EXPENSES DISALLOWED IN A SUM OF RS. 8 LACS, RS. 10 LACS, RS. 4,81,174/-, RS. 10,44,226/-, RS. 38,82,672/- AND RS. 41,58,174/- FOR ALL THE ABOVE ASSESSMENT YEARS RESPECTIVELY. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE FINDINGS OF AUTHORITIES BEL OW. 2 3. THE APPEALS IN ITA 434/2016 TO 437/2016 ARE TAKEN UP FOR DISPOSAL FOR THE RELEVANT ASSESSMENT Y EARS BEING ITS THIRD ROUND APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL. 4. THE ASSESSEE IN SECOND ROUND OF APPELLATE PROCEEDINGS BEFORE ITAT CHANDIGARH BENCH IN ITA 451 TO 455/2011 FOR ASSESSMENT YEARS 1996-97, 1998-99, 1999-2000, 2001-02 AND 2002-03, HAS RAISED THE ISSU E OF DISALLOWANCE OF PRIOR PERIOD EXPENSES IN ALL THE APPEALS WHICH HAVE BEEN DECIDED BY THE TRIBUNAL VID E ORDER DATED 25.01.2012, COPY OF THE ORDER IS PLACED ON RECORD. THE TRIBUNAL IN THIS ORDER REFERRED TO ITS FIRST ORDER AND THE OPERATIVE PART OF THE FIRST ROUND APP ELLATE ORDER READS, HOWEVER, ASSESSING OFFICER IS ENTITLED TO VERIFY THE CLAIM OF ASSESSEE AND DEMANDING DETAILS OF SUCH EXPENSES. WE RESTORE THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR FRESH DECISION IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. 5. THE ITAT CHANDIGARH BENCH IN THE SECOND ROUND OF APPELLATE PROCEEDINGS WHILE PASSING THE ORDER DATED 25.01.2012 (SUPRA) HAS CONSIDERED THE OBSERVATION O F THE ASSESSING OFFICER WHICH INDICATED THAT ASSESSEE HAD NOT COOPERATED WITH THE ASSESSING OFFICER IN THE MA TTER OF FURNISHING THE REQUIRED DETAILS FOR PROPER APPRECIATION AND ADJUDICATION OF THE ISSUE OF PRIOR 3 PERIOD EXPENSES. THE OPERATIVE PORTION OF THE FINDI NGS OF THE TRIBUNAL READS AS UNDER : THE ASSESSEE IS DIRECTED TO RENDER NECESSARY COOPERATION IN THE MATTER OF FILING EVIDENCES AND A NY OTHER DETAIL, AS REQUIRED BY ASSESSING OFFICER FOR THE PURPOSE OF FRAMING ASSESSMENT. THE ASSESSING OFFICER IS ALSO DIRECTED TO COMPLY WITH THE NECESSA RY DIRECTIONS CONTAINED IN THE DECISION OF ITAT IN ASSESSEE'S OWN CASE, REPRODUCED ABOVE AND PROVIDE PROPER AND REASONABLE OPPORTUNITY TO THE ASSESSEE. THE APPEALS OF THE ASSESSEE FOR THESE YEARS ON THE ISSUE OF DISALLOWANCE OF PRIOR PERIOD EXPENSES WERE ALLOW ED FOR STATISTICAL PURPOSES. 6. THE ASSESSING OFFICER IN THE BACKGROUND OF THESE TWO APPELLATE ORDERS, MAINLY LAST ORDER DATED 25.01 .2012 (SUPRA) HAD TAKEN UP THE MATTER FOR ASSESSMENT FOR CONSIDERING THE ISSUE OF PRIOR PERIOD EXPENSES AND PASSED THE ORDER UNDER SECTION 143(3)/254 OF THE AC T. THE ASSESSING OFFICER NOTED IN THE ASSESSMENT ORDER S THAT SHOW CAUSE NOTICES UNDER SECTION 142(1) OF THE ACT WERE SERVED UPON ASSESSEE SEEKING EXPLANATION AS TO WHY THESE PRIOR PERIOD EXPENSES MAY NOT BE DISALLOW ED IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE. THE ASSESSING OFFICER ALSO NOTED THAT ASSESSEE HAS NOT AVAILED THE OPPORTUNITY AND ALSO DID NOT SEEK ANY ADJOURNMENT. THE ASSESSING OFFICER ALSO NOTED THAT ITAT CHANDIGARH BENCH RESTORED THE MATTER TO THE FI LE OF ASSESSING OFFICER FOR THE PURPOSE OF EXAMINING THE CLAIM 4 OF PRIOR PERIOD EXPENSES THROUGH ADDUCING THE EVIDE NCE WHICH THE ASSESSEE WAS REQUIRED TO BRING ON RECORD. HOWEVER, THE ASSESSEE IN ITS REPLY HAS MERELY STATE D THE POSITION OF LAW IN CONTEXT OF PRIOR PERIOD EXPENSES BUT THE ORDER OF THE TRIBUNAL IS NOT COMPLIED WITH IN W HICH ASSESSING OFFICER WAS REQUIRED TO VERIFY THE CLAIM OF THE ASSESSEE. SINCE NO EVIDENCES HAVE BEEN FURNISHED BY THE ASSESSEE EXCEPT FEW SAMPLE VOUCHERS/BILLS, THE ASSESSING OFFICER HAD TAKEN ADVERSE INFERENCE AGAIN ST THE ASSESSEE. THUS IN THE ABSENCE OF COMPLETE EVID ENCE SUPPORTING THE CLAIM OF THE ASSESSEE, ASSESSING OFF ICER DISALLOWED THE PRIOR PERIOD EXPENSES IN ALL THE YEA RS AND MADE THE ADDITIONS. 7. THE ASSESSEE CHALLENGED THESE ADDITIONS BEFORE L D. CIT(APPEALS) AND HIS SUBMISSIONS HAVE BEEN REPRODUC ED IN THE IMPUGNED ORDER. THE LD. CIT(APPEALS) ALSO N OTED THAT THERE WERE SPECIFIC DIRECTIONS OF THE ITAT TO THE ASSESSING OFFICER TO VERIFY THE CLAIM OF EXPENSES, THEREFORE, IT WAS INCUMBENT UPON THE ASSESSEE TO PRODUCE ALL THE RELEVANT DOCUMENTS AND EVIDENCES BE FORE ASSESSING OFFICER SO THE CLAIM OF THE ASSESSEE COUL D BE VERIFIED. IN APPEAL ALSO, ASSESSEE DID NOT PRODUCE ANY ADDITIONAL EVIDENCE DESPITE OPPORTUNITY GIVEN, THER EFORE, NO INTERFERENCE WAS CALLED FOR IN THE MATTER AND LD . CIT(APPEALS) DISMISSED ALL THE APPEALS OF THE ASSES SEE. 8. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT ASSESSEE DOES NOT KNOW WHICH OF THE EVIDENCES WERE TO 5 BE FURNISHED BEFORE ASSESSING OFFICER. HE HAS SUBM ITTED THAT ASSESSEE HAS FILED THE CHART OF THE EXPENDITUR E DISALLOWED BY THE ASSESSING OFFICER AND AUDIT REPOR T AND IT WAS ALSO EXPLAINED IN THE REPLY BEFORE ASSESSING OFFICER THAT THERE ARE NO PRIOR PERIOD EXPENSES IN VIEW OF THE REGULAR SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE BANK. ON THE OTHER HAND, LD. DR SUBMITTED THAT ASSESSEE FAILED TO COMPLY WITH DIRECTIONS OF T HE TRIBUNAL AND NO EVIDENCE HAVE BEEN FURNISHED BEFORE THE AUTHORITIES BELOW AS WELL AS BEFORE TRIBUNAL, THERE FORE, ADDITION HAS BEEN RIGHTLY CONFIRMED BY THE LD. CIT(APPEALS). 9. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE AR E NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. IT IS ADMITTED FACT THAT PRESEN T APPELLATE PROCEEDINGS ARE THIRD ROUND APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL ON THE SAME MATTER IN ISSUE OF PRIOR PERIOD EXPENSES. THE LD. COUNSEL FOR THE ASSESSEE WAS DIRECTED TO EXPLAIN WHETHER THE CHART SUBMITTED BY ASSESSEE WITH AUDIT REPORT ARE EVIDENC E TO CLAIM DEDUCTION ON ACCOUNT OF PRIOR PERIOD EXPENSES , HOWEVER, LD. COUNSEL FOR THE ASSESSEE WAS NOT ABLE TO POINT OUT AS TO HOW THE FILING OF CHART AND AUDIT R EPORT ARE EVIDENCE TO SATISFY THE REQUIREMENTS OF LAW AS HAVE BEEN DIRECTED BY THE TRIBUNAL IN FIRST TWO FOUNDS O F APPELLATE PROCEEDINGS. THE CONTENTION OF THE LD. C OUNSEL FOR THE ASSESSEE IS, THEREFORE, REJECTED. THE LD. COUNSEL 6 FOR THE ASSESSEE ALSO SUBMITTED IN THE REPLY BEFORE ASSESSING OFFICER THAT THERE ARE NO PRIOR PERIOD EXPENSES IN VIEW OF THE REGULAR SYSTEM OF ACCOUNTIN G FOLLOWED BY THE BANK. HOWEVER, THE TRIBUNAL IN FIR ST TWO APPELLATE PROCEEDINGS WHILE RESTORING THE MATTER TO THE FILE OF ASSESSING OFFICER HAVE DIRECTED ASSESSING O FFICER TO VERIFY CLAIM OF THE ASSESSEE AND DEMAND DETAILS OF SUCH EXPENSES. THE TRIBUNAL ALSO HELD THAT ASSESSE E IS DIRECTED TO RENDER NECESSARY COOPERATION IN THE MAT TER OF FILING EVIDENCES AND OTHER DETAILS AS REQUIRED B Y THE ASSESSING OFFICER FOR THE PURPOSE OF FRAMING ASSESS MENT. SINCE THE ASSESSING OFFICER HAD BEEN CONSIDERING TH E MATTER IN ISSUE OF PRIOR PERIOD EXPENSES IN SET ASI DE PROCEEDINGS AS DIRECTED BY THE TRIBUNAL, THEREFORE, THE ASSESSING OFFICER WAS BOUND TO FOLLOW THE ORDER OF THE TRIBUNAL AND SHOULD HAVE RESTRICTED HIS FINDINGS TO THE DIRECTIONS ISSUED BY THE TRIBUNAL WITH REGARD TO DISALLOWANCE OF PRIOR PERIOD EXPENSES. WE RELY UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KARTAR SINGH VS CIT 111 ITR 184 AND DECISIO N OF ALLAHABAD HIGH COURT IN THE CASE OF S.P.KOCHHAR VS ITO 145 ITR 255. 10. SINCE THE DIRECTIONS HAVE BEEN EARLIER ISSUED B Y THE TRIBUNAL TO THE ASSESSEE TO PRODUCE EVIDENCES B EFORE ASSESSING OFFICER AS DEMANDED BY THE ASSESSING OFFI CER AND TO COOPERATE WITH THE ASSESSING OFFICER, THEREF ORE, ASSESSEE WAS REQUIRED TO FURNISH COMPLETE DETAILS A ND 7 EVIDENCES BEFORE ASSESSING OFFICER FOR CLAIMING DEDUCTION ON ACCOUNT OF EXPENSES INCURRED FOR PRIOR PERIOD. HOWEVER, ASSESSEE HAS FAILED TO PRODUCE AN Y EVIDENCE BEFORE THE AUTHORITIES BELOW AND NO EVIDEN CE OR DETAILS HAVE BEEN FURNISHED. IT IS WELL SETTLED LA W THAT WHEN ASSESSEE CLAIMED DEDUCTION OF THE EXPENDITURE, BURDEN WOULD BE UPON ASSESSEE TO PROVE THAT EXPENSE S HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS TO THE SATISFACTION OF THE ASSE SSING OFFICER, HOWEVER, ASSESSEE FAILED TO DO SO. THE CL AIM OF THE ASSESSEE BEFORE ASSESSING OFFICER WAS THAT NO P RIOR PERIOD EXPENSES WERE INCURRED IN VIEW OF REGULAR SY STEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE BANK, WOULD HAVE NO RELEVANCE IN VIEW OF THE SPECIFIC DIRECTIONS ISS UED EARLIER BY THE TRIBUNAL FOR PRODUCING DETAILS AND EVIDENCES OF PRIOR PERIOD EXPENSES BEFORE ASSESSING OFFICER. IN THE ABSENCE OF ANY EVIDENCE OR MATERIA L PRODUCED BEFORE AUTHORITIES BELOW AS WELL AS BEFORE TRIBUNAL, WE DO NOT FIND ANY JUSTIFICATION TO INTER FERE WITH THE ORDERS OF AUTHORITIES BELOW. THESE APPEAL S OF THE ASSESSEE HAVE NO MERIT, SAME ARE ACCORDINGLY, DISMISSED. 11. IN ITA 439/2016 FOR ASSESSMENT YEAR 2006-07, TH E ISSUE AND FINDINGS OF AUTHORITIES BELOW ARE SAME. IN THIS CASE, IT IS STATED THAT IT THE SECOND ROUND AP PELLATE PROCEEDINGS BEFORE THE TRIBUNAL, HOWEVER, THE FACT REMAINED THE SAME. THE ASSESSEE DID NOT PRODUCE AN Y 8 EVIDENCE BEFORE ASSESSING OFFICER, THEREFORE, ASSES SEE FAILED TO COMPLY WITH DIRECTIONS OF THE TRIBUNAL, THEREFORE, FOLLOWING THE REASONS FOR DECISION IN IT A 434 TO438/2016 (SUPRA), WE DISMISS THIS APPEAL OF THE ASSESSEE AS WELL. 12. IN THE RESULT, ALL THE APPEAL OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH OCTOBER, 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD