Sandeep Chaufla, New Delhi V. ACIT, New Delhi

ITA 4474/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97411 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 21-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIBHU DUTT MIS HRA
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. A. T. VARKEY, JM ITA NO. 4474/DEL/2012 : ASSTT. YEAR : 2009 - 10 SANDEEP CHAUFLA, A - 17D, VATIKA APARTMENTS, RAJOURI GARDEN EXTN., NEW DELHI - 110064 VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 37(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A APC0416C ASSESSEE BY : SH. K. M. GUPTA , ADV. REVENUE BY : SH. BIBHU DUTT MIS HRA , CIT DR DATE OF HEARING : 2 1 .0 9 .2015 DATE OF PRONOUNCEMENT : 23 .09 .2015 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 20.06 .201 2 OF LD. CIT (A) - XXVIII , NEW DELHI . 2. FOLLOWING GROUND S HAVE BEEN RAISED IN THIS APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - XXVIII, NEW DELHI (CIT - A) IS CONTRARY TO THE FACTS OF THE CASE, ERRONEOUS AND BAD IN LAW, THEREFORE, THE ADDITION UPHELD BY THE CIT(A) NEEDS TO BE DELETED. 2. THE CIT(A) ERRED IN UPHOLDING DISALLOWANCE MADE BY THE AO U/S 14A OF THE INCOME - TAX ACT, 1961 (THE ACT), EVEN THOUGH THE AO MADE THE DISALLOWANCE ITA NO . 4474 /DEL /201 2 SANDEEP CHAUFLA 2 WITHOUT GIVING ANY REASONS AS TO WHY HE WAS NOT SATISFIED WITH THE CORRECTNESS OF THE APPELLANT S CLAIM, AS IS REQUIRED TO BE RECORDED U/S 14A(2) OF THE ACT. 3. THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE MADE BY THE AO IN COMPLETE DISREGARD OF THE PROVISIONS OF RULE 8D OF THE INCOME - TAX RULES, 1962 THAT PRESCRIBE THE MANNER AND CIRCUMSTANCES IN WHICH THE DISALLOWANCE U/S 14A OF THE ACT IS TO BE WORKED OUT. 4. THE CIT(A) WAS NOT JUSTIFIED IN REJECTING THE APPEAL OF THE APPELLANT BY RELYING ON THE DECISION OF THE SPECIAL BENCH IN THE CASE OF SHRI VISHNU ANANT MAHAJAN THAT PERTAINED TO AY 2006 - 07 WHEN RULE 8D WAS NOT IN FORCE, WHEREAS THE APPEAL OF THE APPELLANT PERTAINED TO AY 2009 - 10, FOR WHICH THE DISALLOWANCE U/S 14A NECESSARILY NEEDS TO BE COMPUTED U/R 8D AND NOT ON ANY OTHER BASIS. 5. THAT THE C IT (A) ERRED IN PASSING THE ORDER WITHOUT DISPOSING OF ALL THE GROUNDS TAKEN BY THE APPELLANT IN APPEAL. 6. THAT EACH OF THE ABOVE GROUND OF APPEAL IS INDEPENDENT OF THE OTHER AND THE APPELLANT CRAVES LEAVE TO ADD, AMEND, WITHDRAW, VARY ANY OTHER GROUND OF APPEAL. 3. THE MAIN GRIEVANCE OF THE ASSESSEE IN THI S APPEAL RELATES TO THE SUSTENANCE OF DISALLOWANCE MADE BY THE AO U/S 14A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). ITA NO . 4474 /DEL /201 2 SANDEEP CHAUFLA 3 4. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE LD. CIT(A) HAS NOT ADJUDICATED GROUND NO. 5 RAISED BEFORE HIM VIDE WHICH IT WAS CONTENDED THAT THE AO DID NOT RECORD THE SATISFACTION WHILE MAKING THE DISALLOWANCE U/S 14A OF TH E ACT. IT WAS FURTHER STATED THAT FOR THE YEAR UNDER CONSIDERATION THE DISALLOWANCE, IF ANY U /S 14A OF THE ACT TO BE MADE THEN IT SHOULD BE MADE AS PER RULE 8D OF THE INCOME TAX RULES, 1962 BUT THE AO HAD NOT MADE THE CALCULATION BY CONSIDERING RULE 8D OF THE INCOME TAX RULES, 1962. 5. IN HIS RIVAL SUBMISSIONS THE LD. DR ALTHOUGH SUPPORTED THE OR DER S OF THE AUTHORITIES BELOW BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE RAISED A SPECIFIC GROUND I.E. GROUND NO. 5 BEFORE THE LD. CIT(A) AS UNDER: 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO HAS ERRED IN MAKING DISALLOWANCE U/S 14A OF THE ACT WITHOUT GIVING A NY REASONS AS TO WHY HE WAS NOT SATISFIED WITH THE CORRECTNESS OF THE APPELLANT S CLAIM AS IS REQUIRED TO BE RECORDED U/S 14A(2) OF THE ACT. 7. THE AFORESAID GROUND HAS NOT BEEN ADJUDICATED BY THE LD. CIT(A). IT IS ALSO NOTICED THAT THE AO WHILE MAKING T HE DISALLOWANCE U/S 14A OF ITA NO . 4474 /DEL /201 2 SANDEEP CHAUFLA 4 THE ACT HAS NOT CONSIDERED THE PROVISIONS CONTAINED IN RULE 8D OF THE INCOME TAX RULES, 1962 WHICH ARE APPLICABLE FOR THE YEAR UNDER CONSIDERATION. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS DEEM IT APPROPRIATE TO SET A SIDE THE IMPUGNED ORDER AND REMAND THE SAME BACK TO FILE OF THE LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 23 /09 /2015 ) SD/ - SD/ - (A. T. VARKEY ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 23 /09 /2015 *SUBODH * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR