Arvind Dev, Delhi V. ITO, New Delhi

ITA 4990/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7010 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 10-11-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 20-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; TDS; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 40A(3); 271(1)(b); 139; 92; 40(a)(ia)

Judgement Text

I.T.A .NO.-4990/DEL/2016 ARVIND DEV VS ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-4990/DEL/2016 (ASSESSMENT YEAR-2012-13) ARVIND DEV, B-56, DDA MIG FLATS, EAST OF LONI ROAD, SHAHDARA, DELHI-110093. PAN-AEMPD3878D ( APPELLANT) VS ITO, WARD-56(3), NEW DELHI. (RESPONDENT) ASSESSEE BY SH.BHAVESH KUMAR, CA REVENUE BY S H. F.R.MEENA, SR.DR DATE OF HEARING 10 . 11 .2016 DATE OF PRONOUNCEMENT 12.01.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 21.07.2016 OF CIT(A)-19, NEW DELHI PERT AINING TO 201213 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1.1. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE C IT(A) ERRED IN NOT DELETING ADDITION ON ACCOUNT OF JOB WORK CHARGES OF RS.11,14 ,152/-. 1.2. THAT THE ADDITION IS UNJUSTIFIED AND UNSUSTAIN ABLE IN LAW AS WELL AS ON MERITS IN VIEW OF THE COMPLETE DETAILS AND DOCUMENT S BEING FURNISHED BEFORE AO. 1.3. THAT WITHOUT PREJUDICE, NO ADDITION CAN BE MAD E UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSEE IN THE YEAR UNDER CONSIDERATION RETURNED AN INCOME OF RS.5,14,781/-. THE SAID RETUR N WAS SELECTED FOR SCRUTINY UNDER CASS. THE ASSESSEE IS A PROPRIETOR OF M/S TANISHQ I ONS AND THE MAIN BUSINESS OF THE ASSESSEE FIRM WAS STATED TO BE TRADING OF WATER TRE ATMENT PLANTS. THE ASSESSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS REQUIRED T HE ASSESSEE TO EXPLAIN THE DEBITED RS.11,57,505/- UNDER THE HEAD JOB WORK CHARGES. TH E EXPLANATION OFFERED WAS NOT ACCEPTED ON THE FOLLOWING REASONING:- (B) JOB WORK CHARGES ON PERUSAL OF PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE, IT IS NOTICED THAT THE ASSESSEE HAS DEBITED RS.11,57,505/- UNDER THE HEAD JOB WORK CHARGES. THE AR OF THE ASSESSEE WAS ASKED TO FURNISH COMPLETE PARTY WISE DETAILS WITH PAN NUMBER AND ADDRESSES. IN RESPONSE TO THIS, THE AR O F THE ASSESSEE HAS FILED DETAILS VIDE LETTER DATED 16.03.2015. ON PERUSAL OF DETAILS FILED BY THE ASSESSEE, IT REVEALS THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON THE ENTIRE AMOUNT OF JOB PAGE 2 OF 3 I.T.A .NO.-4990/DEL/2016 ARVIND DEV VS ITO WORK. MOREOVER, THE PAYMENT TO THESE PARTIES HAS NO T BEEN MADE THROUGH THE BANK ACCOUNT. THEREFORE, IT IS CLEAR THAT EITHER TH ESE ARE THE BOGUS EXPENSES OR THE ASSESSEE HAS MADE CASH PAYMENT TO THESE PARTIES . ACCORDINGLY, THIS FACT WAS CONFRONTED BEFORE AR OF THE ASSESSEE THAT THE ASSES SEE HAS VIOLATED THE PROVISIONS OF SECTION 40A(3) AND 40(A)(IA) OF THE I T.ACT. 1961. IN RESPONSE TO THIS, THE AR OF THE ASSESSEE HAS NOT SUBMITTED ANY EXPLAN ATION TILL DATE OF PASSING OF THE ORDER. IN VIEW OF THESE FACTS, RS. 11,57,505/- ARE DISAVOWED ARID ADDED TO THE INCOME OF THE ASSESSEE U/S 40(A)(IA)/40A(3) OF I.T. ACT, 1961. PENALTY PROCEEDINGS U/S 271(1)(C) IS BEING SEPARATELY INITIATED FOR FUR NISHING INACCURATE PARTICULARS OF INCOME. (DISALLOWANCE RS. 11,57,505/-) 3. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, STATING THAT ALL THE DETAILS OF JOB WORKS SUCH AS AMOUNT, PART Y NAME ALONGWITH THEIR PAN CARD PHOTOCOPIES WERE PROVIDED TO MR.JAI PRAKASH AND INCOME TAX OFFICER. HOWEVER, THE AO ALSO REQUIRED FABRICATED JOB WORK DETAILS OF A FEW PARTIES WHICH WERE NOT SHOWN AS IT WAS HARD TO HANDLE SO MUCH DOCUMENTS. ADDRESSING THE LACK OF TDS DEDUCTION, IT WAS SUBMITTED ALL THE JOB WORK WAS LESS THAN OF RS.60,000/- WHIC H DOES NOT COME UNDER TDS DEDUCTION. THE FOLLOWING SERIOUS ALLEGATION IS ALSO FOUND TO HAVE BEEN MADE BEFORE THE CIT(A) AND IS FOUND REPRODUCED IN HIS ORDER AT THAT TIME WE WERE NOT AWARE THAT MR.JAI PRAKASH WOULD USE THIS TACTIC TO BLACKMAIL US FOR H IS BRIBE DEMAND. NOTHING WAS BOGUS AND WE HAVE ALL THE RELEVANT DOCUMENTS AND PA RTIES. 4. HOWEVER, CONSIDERING THE FACT THAT PAYMENT WAS M ADE TO ATLEAST SIX PERSONS OF AMOUNTS ON WHICH TDS SHOULD HAVE BEEN DEDUCTED THE ADDITION MADE WAS CONFIRMED. 5. THE LD.AR SUBMITTED THAT THE REMAND REPORT WAS N EVER CONFRONTED TO THE ASSESSEE AND INFACT IT IS A CASE OF HARASSMENT OF THE ASSESS EE. THE LD. SR.DR WAS ALSO UNABLE TO STATE WHETHER THE REMAND REPORT HAS BEEN CONFRONTED TO THE ASSESSEE OR NOT. IN THE CIRCUMSTANCES, LD.AR REQUESTED FOR A REMAND WHICH W AS NOT OBJECTED TO BY THE LD.SR.DR. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE AFORE-MENTIONED PECULIAR FAC TS AND CIRCUMSTANCES OF THE CASE AND CONSIDERING THE SUBMISSIONS OF THE PARTIES BEFORE T HE BENCH, IT IS DEEMED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) DIRECTING THE SAID AUTHORITY TO CONFRONT THE REMAND REPORT TO THE ASSESSEE AND AFTER AFFORDING A PAGE 3 OF 3 I.T.A .NO.-4990/DEL/2016 ARVIND DEV VS ITO REASONABLE OPPORTUNITY OF BEING HEARD AND TAKING IN TO CONSIDERATION THE EXPLANATION OFFERED IF ANY THE LD.CIT(A SHALL PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW. 6.1. BEFORE PARTING IT MAY NOT BE OUT OF PLACE TO S UGGEST THAT THE SERIOUS ALLEGATIONS MADE BY THE ASSESSEE IN WRITING BEFORE THE CIT(A) O N THE CONDUCT OF MR. JAI PRAKASH WHICH THE LD. COMMISSIONER HAS DEEMED IT APPROPRIATE TO R EPRODUCE SHOULD NOT IDEALLY BE LEFT ADMINISTRATIVELY UNADDRESSED. THE TAX ADMINISTRATI ON SHOULD NOT BE SEEN TO BE HELPLESS TO ADDRESS THE MAL-PRACTICE ALLEGED AS SUCH A PERCEPTI ON WOULD NOT ONLY INTERFERE IN JUSTICE DELIVERY SYSTEM BUT MAY ALSO APPEAR TO SUGGEST A TA CIT ACCEPTANCE OF THE DEVIANT BEHAVIOR. SUCH A PERCEPTION IT GOES WITHOUT SAYING WOULD LARG ELY ERODE THE TRUST AND FAITH PLACED BY THE TAXPAYERS IN THE EXPECTATION OF FAIRNESS AND IM PARTIALITY OF THE DEPARTMENT. IGNORING SUCH ADMINISTRATIVE COMPLAINTS EITHER AGAINST A RE GULAR EMPLOYEE OR AN OUTSOURCED EMPLOYEE WOULD BE DETRIMENTAL TO THE ADMINISTRATIVE CONTROL AND AT THE COST OF HARMING THE LEGITIMACY OF THE TAX DEPARTMENT. THE RELEVANT PARA IS EXTRACTED FROM THE IMPUGNED ORDER FOR APPROPRIATE ADMINISTRATIVE CORRECTIVE ACTION:- D. REFER TO PARA B (JOB WORK CHARGES). ALL THE DE TAILS OF JOB WORKS SUCH AS AMOUNT, PARTY NAME ALONGWITH THEIR PAN CARD PHOTOCO PIES WERE PROVIDED TO MR.JAI PRAKASH AND INCOME TAX OFFICER. BUT THEY ASKED US TO PROVIDE FEW NOS. OF THE FABRICATED JOB WORK DETAILS AS IT WAS HARD T O HANDLE SO MUCH DOCUMENTS. AS PER TDS IS CONCERNED ALL THE JOB WORK WAS LESS THAN OF RS.60,000/- WHICH DOES NOT COME UNDER TDS DEDUCTION. AT THAT TIME WE WERE NOT AWARE THAT MR.JAI PRAKASH WOULD USE THIS TACTIC TO BLACKMAIL US FOR H IS BRIBE DEMAND. NOTHING WAS BOGUS AND WE HAVE ALL THE RELEVANT DOCUMENTS AND PARTIES. (EMPHASIS PROVIDED) 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 12 TH OF JANUARY 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR, ITAT NEW DELHI