Supreme Build Cap P.Ltd, New Delhi V. PrCIT, Central-1, New Delhi

ITA 4739/DEL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5004 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 28-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: ROHIT TIWAN
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 143(3); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI O.P.KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4739/DEL./2018 (ASSESSMENT YEAR : 2014-15) SUPREME BUILD CAP P. LTD. VS. PR. CIT, 8-A, COMMISSIONER LANE, CIVIL LANES, CENTRAL-1 NEW DELHI ROOM NO. 336, ARA CENTRE, E-2 JHANDEWALAN NEW DELHI (PAN :AABCS3168B) APPELLANT RESPONDENT ASSESSEE BY : SH. ROHIT TIWAN, ADV. REVENUE BY : SHRI S.S.RANA, CIT-DR DATE OF HEARING : 10.10.2018 DATE OF ORDER : 25.10.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : PRESENT APPEAL HAS BEEN FILED WITH THE DELAY OF 8 DAYS. ASSESSEE MOVED THE APPLICATION FOR CONDONATION OF D ELAY ON THE ON THE GROUNDS INTER ALIA THAT THE IMPUGNED ORDER P ASSED BY LD. PR. CIT WAS RECEIVED BY ASHOK PASWAN WHO WAS NOT AW ARE OF THE LEGAL PROCEEDINGS AND ; THAT DUE TO INADVERTENCE, HE HAS KEPT THE ORDER WITH HIMSELF LEADING TO THE DELAY OF 8 DAYS F ILING THE APPEAL. THE LD. CIT-DR OPPOSED THE APPLICATION FOR CONDONATION ITA NO.4739/DEL./2018 2 OF DELAY. HOWEVER, WE ARE OF THE CONSIDERED VIEW TH AT SINCE THE APPLICATION OF CONDONATION OF DELAY IS SUPPORTED WI THIN AFFIDAVIT OF THE DIRECTOR OF THE ASSESSEE COMPANY AND REASONS DISCLOSED APPEARS TO BE SUSTAINABLE, 8 DAYS DELAY IN FILING T HE PRESENT APPEAL STANDS CONDONED. 2. APPELLANT, SUPREME BUILD CAP P. LTD. ( HEREINAFTER REFERRED TO AS THE ASSESSEE), BY FILING THE PRESENT APPEA L SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 30.03.2018 PASSED BY THE PR. CIT, NEW DELHI, QUA THE ASSESSMENT YEAR 14-15 ON T HE GROUNDS INTER ALIA THAT :- 1. THAT THE ORDER OF PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL 1, NEW DELHI (LD. PR. CIT) UNDER SECTION 263 OF THE INCOME TAX ACT (ACT) IS AGAINST THE LAW AND WITHOUT JURISDICTION. 2. THAT THE LD. PR. CIT GROSSLY ERRED IN LAW AND ON FACTS IN SETTING ASIDE THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT BY THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX, NEW DELHI (LD. AO). 3. THE LD. PR. CIT OUGHT TO HAVE CONSIDERED WHILE FRAMING THE ORDER UNDER SECTION 263 THAT THE ASSESSMENT HAD BEEN FRAMED BY THE LD. AO AFTER CONSIDERING DETAILS AND THE LAW APPLICABLE IN THE CIRCUMSTANCES OF THE CASE AND THEREFORE, THE ORDER OF ASSESSMENT WAS FRAMED AFTER PROPER ENQUIRY AND THEREFORE, SUCH ORDER COULD NOT BE CONSIDERED AS ERRONEOUS WITHIN THE MEANING OF SECTION 263 OF THE ACT. 4. THAT THE LD. PR. CIT HAS GROSSLY ERRED IN LAW AND ON FACTS IN TREATING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF TH E REVENUE WHEN THE LD. AO HAS COMPLETED THE ASSESSMENT U/S 143(3) AFTER DETAILED VERIFICATION ITA NO.4739/DEL./2018 3 OF THE DOCUMENTS FURNISHED BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS. 5. THAT THE LD. PR. CIT HAS GROSSLY ERRED IN LAW AND ON FACTS IN NOT ALLOWING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE APPELLANT DURING THE COURSE OF PROCEEDINGS UNDER SECTION 263 OF THE ACT. 6. THAT THE LD. PR. CIT HAS GROSSLY ERRED IN LAW AND ON THE FACTS IN NOT APPRECIATING THAT THE EXPENDITURE OF RS. 1,89,08,562/- UNDER THE HEAD LEGAL & PROFSSIONAL CHARGES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AND APPLICABLE TAXES WERE DEDUCTED AT SOURCE ON SUCH PAYMENTS AND WERE DULY DEPOSITED. THAT THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 3. BRIEFLY STATED THAT FACTS NECESSARY FOR ADJ UDICATION OF THE CONTROVERSY AT HAND ARE : ASSESSMENT IN THIS CASE W AS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON AT INCOME OF RS. 1,14,80,270/-. LD. C OMMISSIONER OF INCOME TAX (CIT) BY INVOKING PROVISIONS CONTAI NED U/S 263 OF THE ACT PERUSED THE RECORD AND NOTICED THAT THE ASSESSEE COMPANY HAS CLAIMED AN EXPENDITURE OF RS. 1,89,08,5 62/- UNDER THE HEAD LEGAL AND PROFESSIONAL CHARGES DURING THE YEAR UNDER ASSESSMENT IN PROFIT AND LOSS ACCOUNT. LD. CIT AFTE R ADJOURNING THE PROCEEDINGS FOR 3 DATES, REJECTED THE ADJOURNME NT APPLICATION ON 3 RD DATE AND PROCEEDED TO CONCLUDE THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PR E-JUDICIAL TO THE INTEREST OF REVENUE IN SO FAR AS THE EXPENSES C LAIM OF RS. ITA NO.4739/DEL./2018 4 1,89,08, 562/- OF THE ASSESSEE IS CONCERNED AND A LLOWED THE SAME WITHOUT DUE CARE AND VERIFICATION BY THE AO AN D DIRECTED THE AO TO MAKE FRESH ASSESSMENT AFTER EXAMINING THE CLAIM OF THE ASSESSEE IN RESPECT OF SUCH EXPENSES. 4. FEELING AGGRIEVED THE ASSESSEE HAS CHALLENGE D THE IMPUGNED ORDER PASSED BY LD. CIT BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIV ES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LD. AR FOR THE ASSESSEE CHALLENGED THE IM PUGNED ORDER ON TWO GROUNDS ; ONE THAT SUFFICIENT OPPORTUNITY O F BEING HEARD HAS NOT BEEN GIVEN BY THE LD. CIT BEFORE THE PASSIN G THE IMPUGNED ORDER; TWO THAT THE ADEQUATE INQUIRY HAS BEEN CONDUCTED BY AO WHOM THE ENTIRE RECORD AS TO CLAIMI NG THE EXPENDITURE OF RS. 1,89,08,562/- WERE SUPPLIED DURI NG THE ASSESSMENT PROCEEDINGS. 7. ON THE OTHER HAND LD. DR IN ORDER TO REPEL THE ARGUMENT ADDRESSED BY LD. AR CONTENDED THAT THE ORDER HAS BE EN PASSED WITHOUT MAKING ANY INQUIRIES OR VERIFICATIONS AND R ELIED UPON ITA NO.4739/DEL./2018 5 EXPLANATION 2, TO SECTION 263 OF THE ACT INSERTED B Y FINANCE ACT, 2015 WITH EFFECT FROM 01.06.2015. THE LD. DR FURTHE R RELIED UPON DECISION RENDERED BY THE HONBLE SUPREME COURT AND HONBLE HIGH COURTS CITED AS DENIEL MERCHANTS PVT. LTD. VS. ITO (APPEAL NO. 2396/2017) DATED 29.11.2017), MALAB AR INDUSTRIAL CO. LTD. VS. CIT [2000] 109 TAXMAN 66 (S C) / [2000] 243 ITR 83 (SC)/[2000] 159 CTR 1(SC), RAJMAN DIR ESTATES (P.) LTD. VS. PCIT [2016] 386 ITR 162 8. SO FAR AS THE QUESTION OF PROVIDING THE ADE QUATE OPPORTUNITY OF BEING HEARD BY LD. CIT TO THE ASSESSEE IS CONCER NED UNDISPUTEDLY FIRST NOTICE WAS ISSUED TO THE ASSESSE E TO APPEAR ON 14.03.2018, ON WHICH DATE NONE-APPEARED. THEN LD. C IT RECEIVED AN ADJOURNMENT APPLICATION FOR 21.03.2018 . AGAIN ON 21.03.2018 ASSESSEE FAILED TO FILE ANY REPLY AND DO CUMENTARY EVIDENCE AND HIS REQUEST FOR FURTHER ADJOURNMENT WA S REJECTED AND LD. CIT(A) AND PROCEEDED TO PASS THE ORDER EX PARTE. FACTS SHOW THAT SUFFICIENT OPPORTUNITIES WERE GIVEN TO THE ASSESSEE BUT HE HAS NOT PREFERRED TO DEFEND THE CASE BY FILING R EPLY SUPPORTED WITH DOCUMENTARY EVIDENCE. SO THIS CONTENTION RAISE D BY THE ASSESSEE IS NOT SUSTAINABLE. 9. NOW THE SECOND QUESTION TO BE DECIDED IS AS TO WHETHER ITA NO.4739/DEL./2018 6 THE ASSESSING OFFICER HAS MADE ADEQUATE INQUIRY OR VERIFICATION WHICH WAS REQUIRED TO BE MADE AS PER AMENDED PROVIS IONS CONTAINED IN EXPLANATION 2 SECTION 263 OF THE ACT. 10. FOR READY PERUSAL PROVISION CONTAINED U/S 2 63 EXPLANATION 2 EFFECTIVE FROM 01.06.2015 ARE EXTRACTED AS UNDER :- EXPLANATION 2-FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSI NG OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR A S IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF , I N THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER,- (A)THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B)THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WIT H ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, REND ERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE C ASE OF THE ASSESSEE OR ANY OTHER PERSON. 11. NOW COMING TO THE FACTS OF THIS CASE, THE LD. AR FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS PAGE 54 TO 58 O F PAPER BOOK , WHICH IS THE REPLY FILED BY THE ASSESSEE TO THE QUE RIES RAISED BY THE AO. AT ITEM NO. 20 AT PAGE 57 OF PAPER BOOK AO HAS MADE SPECIFIC QUERY THAT : 20. DETAILS OF ALL EXPENSES EXCEEDING RS. 80,000/- DEBITED IN ACCOUNTS AND COPIES OF LEDGER ACCOUNTS WITH NECESSARY EVIDENCES FOR THE YEAR ENDING 31.03.2014 IS ENCLOSE D. ITA NO.4739/DEL./2018 7 12. NO DOUBT, THE ASSESSING OFFICER HAS RAISED SPECIFIC QUERY THAT ALL EXPENSES EXCEEDING RS. 80,000/- DEBITED IN THE ACCOUNTS AND COPIES OF LEDGER ACCOUNTS WITH NECESSARY EVIDEN CES ARE TO BE PRODUCED. BUT THE LD. AR FOR THE ASSESSEE HAS FAILE D TO POINT OUT IF HE HAS PRODUCED BILLS VOUCHERS AND NATURE OF THE LEGAL AND PROFESSIONAL CHARGES PAID TO THE LEGAL PROFESSIONAL S BEFORE AO. WE ARE OF THE CONSIDERED VIEW THAT ENQUIRIES AS TO THE EXPENSES CLAIM OF LEGAL AND PROFESSIONAL CHARGES CANNOT BE A LLOWED MERELY ON THE BASIS OF LEDGER UNLESS SUPPORTED WITH DOCUME NTARY EVIDENCE. SO, WE ARE OF THE CONSIDERED VIEW THAT EX PLANATION 2 TO SECTION 263 IS ATTRACTED IN THIS CASE AND THE ASSES SING OFFICER HAS PASSED ORDER WITHOUT MAKING ENQUIRIES OR VERIFICATI ON WHICH SHOULD HAVE BEEN MADE DURING THE ASSESSMENT PROCEED INGS. 13. EVEN OTHERWISE, THE LD. CIT(A) HAS PASSED A LEGAL AND VALID ORDER DIRECTING THE ASSESSING OFFICER TO MAKE FRESH ASSESSMENT SO FAR AS EXPENSES CLAIM OF RS. 1,89,08 ,562/- IS CONCERNED , BY AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND IN THESE CIRCUMSTANCES NO PREJUDIC E IS BEING CUASED TO ASSESSEE WHO CAN PRODUCE THE NECESSARY EV IDENCE IN SUPPORT OF ITS CLAIM BEFORE THE AO BEFORE WHOM ASSE SSMENT IS PENDING AS PER IMPUGNED ORDER PASSED BY LD. CIT. S O FINDING ITA NO.4739/DEL./2018 8 NO ILLEGALITY OR PERVERSITY APPEAL FILED BY THE ASS ESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH OCTOBER, 2018. SD/- SD/- (O.P.KANT) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 25/10/ 2018 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI. DATE OF DICTATION 10 .10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 10.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 12.10.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 25.10.2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 25 .10.2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS .10.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT .10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .10.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER ITA NO.4739/DEL./2018 9