DCIT, Rohtak V. Sh. Anil Kumar Arya, New Delhi

ITA 4553/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61742 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-06-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 13-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Keywords: Principle of natural justice; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI U.B.S.BEDI, JUDICIAL MEMBER AND SHRI A.N.PAHUJA, ACCOUNTANT MEMBER I.T.A .NO.4553/DEL/2010 ASSESSMENT YEAR-2002-03 DEPUTY COMMISSIONER OF VS. SHRI ANIL K UMAR ARYA INCOME TAX, ROHTAK CIRCLE, PROP SATPRIYA & SONS, ROHTAK OLD ANAJ MANDI, ROHTAK [PAN : ACGPA1099M] (APPELLANT) (RESPONDENT) REVENUE BY: MRS. ANUSHA KHURANA, DR ASSESSEE BY: SHRI NAVIN GUPTA, AR DATE OF HEARING 19-06-2012 DATE OF PRONOUNCEMENT 22-06-2012 ORDER A.N.PAHUJA : THIS APPEAL FILED ON 13 TH OCTOBER, 2010 BY THE REVENUE AGAINST AN ORDER DATED 06-08-2010(INCORRECTLY MENTIONED AS 6.8 .2008) OF THE LD. CIT(A)- ROHTAK, RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN ALLOWING THE COMPUTATION OF INCOME OF THE ASSESSEE U/S 44AE OF THE INCOME TAX A CT, 1961 WHEN THE ASSESSEE IS HAVING MORE THAN TEN TRUC KS AT A POINT OF TIME DURING THE RELEVANT PERIOD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN ALLOWING THE APPEAL OF T HE ASSESSEE BY FOLLOWING THE JUDGMENTS OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ANIL KU MAR ARYA IN 310 ITR 205 AS THE ASSESSEE WAS HAVING MORE THAN TEN TRUCKS AT A POINT OF TIME DURING THE RELEVANT P ERIOD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSE SSEE WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE WAS HAVING MORE THAN TEN TRUCKS AT A POINT OF TIME DURING THE RELEVANT 2 I.T.A .NO.4553/DEL/2010 PERIOD, AS PER CONTRACTS ENTERED INTO WITH OIL COMP ANIES I.E HPCL, IOC, BPCL ETC. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS W ELL AS APPELLATE PROCEEDINGS, THE ASSESSEE HAD NOT PRODUCE D DOCUMENTARY EVIDENCE TO PROVE THE SALE OF THREE TRU CKS. 5. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. FACTS ,IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF ` 2,76,580/-,COMPRISING INCOME OF ` 2,16,000/- FROM PLYING OF TRUCKS/TANKERS AND ` 60,583/- FROM BANK INTEREST, FILED ON 15-11-2002 BY THE ASSESSEE, WAS PROCESSED ON 29-03-2004 U/S 143(1) OF THE INCOME TA X ACT, 1961[HEREINAFTER REFERRED TO AS THE ACT]. THEREAFTER, THE ASSESSME NT WAS REOPENED U/S 147 OF THE ACT, AFTER RECORDING REASONS IN WRITING, WITH THE S ERVICE OF A NOTICE U/S 148 OF THE ACT ON 18-05-2005. THE OBJECTIONS RAISED BY THE AS SESSEE AGAINST THE ISSUE OF NOTICE U/S 148 OF THE ACT, WERE DISPOSED OF VIDE OR DER DATED 17.07.2006. LATER, ON A WRIT PETITION NO. 3053 OF 2006 FILED BY THE A SSESSEE, HONBLE HIGH COURT VIDE THEIR JUDGMENT DATED 28-02-2006 ORDERED THAT REASSESSMENT PROCEEDINGS MAY CONTINUE BUT FINAL ASSESSMENT ORDERS SHALL NOT BE PASSED. SUBSEQUENTLY, VIDE ORDER DATED 11.01.2008, HONBLE PUNJAB & HARYA NA HIGH COURT DISMISSED THE WRIT PETITION HOLDING AS UNDER:- WE ARE NOT INCLINED TO ENTERTAIN THIS PETITION. HO WEVER, WE ARE OF THE OPINION THAT THE PETITIONER MAY RAISE ALL THE POINTS RAISED IN THIS PETITION BEFORE THE AO INCLUDING THE ORDER PASSED BY THE AO FOR THE SUBSEQUENT ASSES SMENT YEARS AND THE AO WILL PASS THE REASSESSMENT ORDER AFTER CONSIDERING THOSE POIN TS RAISED BY THE PETITIONER IN ACCORDANCE WITH LAW. 2.1 DURING THE COURSE OF REASSESSMENT PROCEEDING S, THE AO ASKED TO ASSESSEE TO EXPLAIN AS TO WHY ITS INCOME BE NOT COMPUTED WIT H THE APPLICATION OF RATE OF 8 % ON GROSS RECEIPTS, THE ASSESSEE HAVING RECEIVED PAYMENTS RUNNING INTO CRORES OF RUPEES FROM PLYING OF TRUCKS/TANKERS AND THAT T HE PROVISIONS OF SECTION 44AE OF THE ACT BEING NOT APPLICABLE IN THEIR CASE. INTER ALIA, THE AO ASKED THE ASSESSEE 3 I.T.A .NO.4553/DEL/2010 TO PRODUCE THEIR BOOKS OF ACCOUNTS AND LOG BOOKS MA INTAINED FOR VARIOUS VEHICLES IN SUPPORT OF INCOME REFLECTED IN THE RETURN BESID E FURNISHING COPY OF THEIR BALANCESHEET AS ON 31.3.2002 AND NAME & ADDRESS OF THE PERSONS FROM WHOM TRUCKS WERE PURCHASED OR SOLD DURING THE YEAR AS ALSO COPIES OF THEIR RCS. IN RESPONSE, THE ASSESSEE REPLIED THAT SOME OF THE TR UCKS BELONGED TO OTHER PERSONS, SEPARATELY ASSESSED TO TAX AND THE ASSESS EE ENCLOSED COPIES OF THEIR CONFIRMATIONS AND IT RETURNS. INTER ALIA, THE ASSES SEE CLAIMED THAT THEIR CASE WAS COVERED U/S 44AE OF THE ACT. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE AO REJECTED THE CONTENTIONS OF THE ASSESSEE THAT PROVI SIONS OF SECTION 44AE WERE APPLICABLE IN THEIR CASE. SINCE TOTAL RECEIPTS SHOW N BY THE ASSESSEE WERE ` 1,38,06,862/-,THE AO WAS OF THE OPINION THAT THE AS SESSEE WAS REQUIRED TO MAINTAIN THE BOOKS AS STIPULATED U/S 44AA OF THE A CT AND SINCE THE ASSESSEE REFLECTED INCOME FROM ONLY NINE TRUCKS WHILE IT DID NOT FURNISH DETAILS OF THREE TRUCKS SOLD DURING THE YEAR NOR EXPLAINED THE UTIL IZATION OF SALE PROCEEDS OF THESE TRUCKS WHILE THESE TRUCKS COULD NOT BE SOLD WITHOUT PERMISSION OF THE OIL COMPANIES AND THE CREDIT FOR ENTIRE TDS OF ` 2,58,474/- MENTIONED IN THE TDS CERTIFICATES IN THE NAME OF THE ASSESSEE HAVING BEE N CLAIMED IN ITS RETURN, THE AO DETERMINED INCOME OF THE ASSESSEE BY APPLYING THE RATE OF 8% OF THE GROSS RECEIPTS OF ` 1,38,06,862/-,AMOUNTING TO 11,04,848/-. 3. ON APPEAL, THE LD. CIT(A) WHILE RELYING ON THE DECISION OF THE HONBLE JURISDICTIONAL HONBLE HIGH COURT IN THE ASSESSEE S OWN CASE FOR THE AY 2001-02 ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND DELETE D THE ADDITION, WITHOUT RECORDING ANY FINDINGS ON THE FACTS POINTED OUT BY THE AO IN THE ASSESSMENT ORDER. THE FINDINGS OF THE LD. CIT(A) READ AS UNDER : I HAVE GONE THROUGH THE RECORDS AND FOUND THAT T HE SLP FILED BY THE DEPARTMENT IN THE CASE OF THE ASESSEE ON THE ISSUE UNDER CONSIDERATION HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT VIDE OR DER DATED 2.3.2009 AND THEREFORE ATTAINED FINALITY. RESPECTFULLY FOLLOWING THE ORDER OF THE HONBLE PUNJAB & HARYANA HIGH COURT, THE ADDITION MADE BY THE AO I S DIRECTED TO BE DELETED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGA INST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR WHILE CARRYING US THROUG H THE FINDINGS OF THE AO 4 I.T.A .NO.4553/DEL/2010 VEHEMENTLY ARGUED THAT THOUGH THE ASSESSEE REFLECT ED RECEIPTS FROM MORE THAN 10 TRUCKS DURING THE YEAR AND CLAIMED CREDIT FOR T DS ACCORDINGLY IN THEIR RETURN, IT CLAIMED THE BENEFIT OF PROVISIONS OF 44AE OF THE AC T WITHOUT EVEN FURNISHING THE DETAILS OF CERTAIN TRUCKS SOLD DURING THE YEAR. T HE LD. CIT(A) DID NOT CONTROVERT THE FINDINGS OF THE AO IN THE YEAR UNDER CONSIDERAT ION AND MERELY FOLLOWED THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT R ENDERED ON FACTS OF THE CASE IN THE PRECEDING YEAR. THE IMPUGNED ORDER IS CRYPTIC A ND NON-SPEAKING ONE, THE LD. DR ADDED. ON THE OTHER HAND, THE LD. AR ON BEHALF O F THE ASSESSEE SUPPORTED THE FINDINGS IN THE IMPUGNED ORDER. TO A QUERY BY T HE BENCH, THE LD. AR ON BEHALF OF THE ASSESSEE REPLIED THAT SINCE IN THE TENDER F ILED WITH THE OIL COMPANIES, THEY HAD CLAIMED CERTAIN TRUCKS ,CREDIT FOR TDS ON INCO ME FROM PLYING OF THE TRUCKS SHOWN IN THE TENDER IN THEIR NAME ,WAS CLAIMED BY T HEM, EVEN THOUGH INCOME DID NOT BELONG TO THE ASSESSEE AND EVEN WHEN THE RETURN S WERE FILED BY CERTAIN OTHER PERSONS, REFLECTING INCOME ATTRIBUTABLE TO THE SAID TRUCKS . 5. WE HAVE HEARD THE BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE ASSESSEE DID NOT FURNISH COMPLETE DETAILS OF TRUCKS SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WHILE CLAIMING CREDIT FOR TDS IN RESPECT OF INCOME GENERATED FROM TRUCKS ,REFLECTED IN THE TENDER DOCUMENT FILED BEFORE THE OIL COMPANIES. AS A RESULT , THE AO CONC LUDED THAT THE ASSESSEE OWNED MORE THAN 10 TRUCKS AND WAS, THUS, BEYOND THE PURVIEW OF PROVISIONS OF SEC. 44AE OF THE ACT. ON APPEAL, THE LD. CIT(A) WIT HOUT RECORDING ANY FINDINGS ON THE FACTS POINTED OUT BY THE AO IN THE ASSESSMEN T ORDER,MERELY RELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT RENDERED ON FACTS FOUND IN THE PRECEDING ASSESSMENT YEAR AND ACCEPTED THE CLAI M OF THE ASSESSEE. THERE IS NOTHING TO SUGGEST AS TO WHETHER OR NOT THE ASSESSE E FURNISHED DETAILS OF TRUCKS OWNED OR SOLD BY IT DURING THE YEAR UNDER CONSID ERATION BEFORE THE LD. CIT(A) NOR THE LD. CIT(A) RECORDED HIS SPECIFIC FINDINGS O N THE NUMBER OF TRUCKS/TANKERS OWNED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATI ON. AS IS APPARENT FROM THE OBSERVATIONS IN PARA 4 OF THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE WITHOUT EVEN ANALYZING THE ISSUES O R RECORDING HIS SPECIFIC 5 I.T.A .NO.4553/DEL/2010 FINDINGS ON THE SAID ISSUES RAISED IN THE GROUNDS OF APPEAL BEFORE HIM . A MERE GLANCE AT THE IMPUGNED ORDER REVEALS THAT THE ORDER PASSED BY THE LD. CIT(A) IS CRYPTIC AND GROSSLY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE, NAMELY, THAT EVERY JU DICIAL/QUASI-JUDICIAL BODY/AUTHORITY MUST PASS A REASONED ORDER, WHICH SH OULD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHORITY TO T HE ISSUES/POINTS RAISED BEFORE IT. THE APPLICATION OF MIND TO THE MA TERIAL FACTS AND THE ARGUMENTS SHOULD MANIFEST ITSELF IN THE ORDER. SECTION 250(6) OF THE ACT MANDATES THAT THE ORDER OF THE CIT(A) WHIL E DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POIN TS FOR DETERMINATION, THE DECISION THEREON AND THE REASONS FOR THE DECISION. THE REQUIREMENT OF RECORDING OF REASONS A ND COMMUNICATION THEREOF BY THE QUASI-JUDICIAL AUTHORI TIES HAS BEEN READ AS AN INTEGRAL PART OF THE CONCEPT OF FAIR PRO CEDURE AND IS AN IMPORTANT SAFEGUARD TO ENSURE OBSERVANCE OF THE RUL E OF LAW. IT INTRODUCES CLARITY, CHECKS THE INTRODUCTION OF EXTR ANEOUS OR IRRELEVANT CONSIDERATIONS AND MINIMIZES ARBITRARINE SS IN THE DECISION-MAKING PROCESS. HONBLE DELHI HIGH COURT I N THEIR DECISION IN VODAFONE ESSAR LTD. VS. DRP,196 TAXMAN423(DELHI) HE LD THAT WHEN A QUASI JUDICIAL AUTHORITY DEALS WITH A LIS, IT IS OBLIGATORY ON IT S PART TO ASCRIBE COGENT AND GERMANE REASONS AS THE SAME IS THE HEART AND SOUL O F THE MATTER AND FURTHER, THE SAME ALSO FACILITATES APPRECIATION WHEN THE ORDER I S CALLED IN QUESTION BEFORE THE SUPERIOR FORUM. WE MAY POINT OUT THAT A DECISION DOES NOT MERELY MEAN THE CONCLUSION. IT EMBRACES WITHIN ITS FOLD THE REASONS FORMING BASIS FOR THE CONCLUSION.[MUKHTIAR SINGH VS . STATE OF PUNJAB,(1995)1SCC 760(SC)].AS ALREADY OBSERVED, THE IMPUGNED ORDER SUFFERS FROM LACK OF REASONING AND IS NOT A SPEAKING ORDER ON ANY OF THE ISSUES FOR WHICH ADDITIONS WERE MADE BY THE AO. IN VIEW OF THE FOREGOING, ESPECIALLY WHEN THE LD. CIT(A) HA VE NOT PASSED A SPEAKING ORDER ON VARIOUS ISSUES RAISED IN THE APP EAL , WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF T HE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE AFO RESAID ISSUES, 6 I.T.A .NO.4553/DEL/2010 AFRESH IN ACCORDANCE WITH LAW, AFTER ALLOWING SUFFI CIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE RED ECIDING THE APPEAL, THE LD. CIT(A) SHALL PASS A SPEAKING ORDER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISIONS OF SEC. 250(6 ) OF THE ACT. WITH THESE OBSERVATIONS, GROUND NOS. 1 TO 4 IN THE APPEA L ARE DISPOSED OF. 6. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE U S IN TERMS OF RESIDUARY GROUND NO.5 IN THE APPEAL, ACCORDINGLY, THIS GROUND IS DISMISSED. 7. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 8. IN THE RESULT, APPEAL IS ALLOWED BUT FOR STAT ISTICAL PURPOSES. SD/- SD/ - (U.B.S.BEDI) (A.N.PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. ASSESSEE 2. DEPUTY COMMISSIONER OF INCOME TAX, ROHTAK CIRCL E, ROHTAK 3. CIT CONCERNED 4. CIT(APPEALS),ROHTAK 5. DR: A BENCH,ITAT, NEW DELHI 6. GUARD FILE ASSISTANT REGISTRAR ITAT NEW DELHI