M/s. Hitech Comprint Private Limited, Bengaluru V. Deputy Commissioner of Income Tax, Circle-11(4), Bengaluru

ITA 5/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5555 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-09-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 02-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA
• Assessee Lawyers: RAVISHANKAR S V
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 143(1); 250; 143(2); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.05/BANG/2019 ASSESSMENT YEAR : 2010 11 M/S HITECH COMPRINT PVT. LTD., NO.20, 1 ST MAIN ROAD, SUNDER INDUSTRIAL ESTATE, NEW TIMBER YARD LAYOUT, MYSORE ROAD CROSS, BENGALURU-560 026. PAN AAACH 4792 B VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-11(4), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI RAVI SHANKAR S.V, ADVOCATE RESPONDENT BY : SHRI PRIYADARSHI MISHRA, JCIT (DR) DATE OF HEARING : 16-09-2020 DATE OF PRONOUNCEMENT : 06-10-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED 12/11/2018 PASSED BY LD.CIT(A)-3, BANGALORE F OR ASSESSMENT YEAR 2010-11 ON FOLLOWING GROUNDS OF APP EAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX [APPEALS] PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGA INST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. PAGE 2 OF 9 ITA NO.05/BANG/2019 2. THE APPELLANT DENIES ITSELF LIABLE TO BE TAXED O VER AND ABOVE THE INCOME RETURNED BY THE APPELLANT OF RS. 15,98,780/- , UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ADDITIONAL EVIDENCE DULY ADMITTED AND REMANDED TO THE FILE OF THE AO FOR THE PURPOSE OF ADDITIONAL EVIDENCE, WAS NOT TO BE ADMITTED IN A DJUDICATING THE CASE, AFTER RECEIPT OF A DETAILED REMAND REPORT FROM THE AO, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE CIT(A) ERRED IN LAW AND ON FACT, IN NOT HOLD ING THAT ASSESSMENT PASSED UNDER SECTION 144 OF THE ACT, WAS WITHOUT PR OPER APPLICATION OF MIND AND THAT THE AO HAS NOT MADE A PROPER ESTIMATE , WHICH WAS CONSUMERATE TO THE BUSINESS OF THE APPELLANT, ON TH E FACTS AND CIRCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE, THE POWERS OF THE CIT(A) WAS CO-TERMINUS WITH THE AO AND LIE OUGHT TO HAVE VERIFIED THE DETAILS ETC A ND APPRECIATED THE EVIDENCE FILED BEFORE HIM DURING THE COURSE OF HEAR ING THE APPEAL AND ALLOWED THE APPEAL, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURE OF 69,57,364/- WHICH WERE GENUINE EXPENSES INCURRED BY THE APPELLANT AND THE ASSESSED INCOME WAS IN EXCESS OF 400% OF THE RE TURNED INCOME OF THE APPELLANT, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE. 7. WITHOUT PREJUDICE AND NOT CONCEDING THAT THE APP ELLANT HAS OFFERED ITS TRUE INCOME IN ITS RETURN OF INCOME, THE AO OUGHT T O HAVE ESTIMATED THE INCOME, RELYING ON BUSINESSES SIMILAR TO THAT OF TH E APPELLANT, RATHER THAN DISALLOWING THE ENTIRE EXPENDITURE CLAIMED, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE APPELLANT DENIES THE LIABILITY TO PAY INTERE ST UNDER SECTION 23413, 234C AND 234D OF THE ACT IN VIEW OF THE FACT THAT T HERE IS NO LIABILITY TO ADDITIONAL TAX AS DETERMINED BY THE LEARNED ASSESSI NG OFFICER. WITHOUT PREJUDICE THE RATE, PERIOD AND ON WHAT QUANTUM THE INTEREST HAS BEEN LEVIED ARE NOT DISCERNABLE FROM THE ORDER AND HENCE DESERVES TO BE CANCELLED ON THE FACTS AND CIRCUMSTANCES OF THE CAS E 9. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY , DELETE OR SUBSTITUTE ANY OR ALL OF THE GROUNDS AND TO FILE A PAPER BOOK AT THE TIME OF HEARING THE APPEAL. 10. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE TAKEN AT THE TIME OF THE HEARING THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS A COMPANY AND FILED ITS RETURN OF IN COME FOR YEAR UNDER CONSIDERATION ON 02/10/2010, DECLARING I NCOME OF RS.15,98,780/-. RETURN WAS PROCESSED AND NOTICE UND ER SECTION 143(1) AND 143(2) WAS ISSUED TO ASSESSEE. LD.AO ISS UED NOTICES PAGE 3 OF 9 ITA NO.05/BANG/2019 FOR HEARING, HOWEVER ASSESSEE FAILED TO APPEAR BEFO RE LD.AO. ACCORDINGLY, ASSESSMENT WAS COMPLETED UNDER SECTION 144 READ WITH 143 (3) OF THE ACT, ON BEST JUDGMENT. LD.AO WH ILE PASSING ASSESSMENT ORDER, MADE ADDITION AMOUNTING TO RS.69, 57,364/- DISALLOWING EXPENDITURE CLAIMED BY ASSESSEE. 3. AGGRIEVED BY ADDITIONS MADE BY LD.AO, ASSESSEE P REFERRED APPEAL BEFORE LD.CIT(A). 4. DURING THE APPELLATE PROCEEDINGS, ASSESSEE FILED VARIOUS DETAILS IN SUPPORT OF ITS CONTENTIONS, THAT DISALLO WANCE ARE WRONGLY MADE BY LD.AO. LD.CIT(A) CALLED FOR REMAND REPORT FROM LD.AO BY REMITTING DOCUMENTS FILED BY ASSESSEE IN SUPPORT OF CLAIMS DISALLOWED. LD.CIT(A) DIRECTED LD.AO TO GIVE ONE MORE OPPORTUNITY TO ASSESSEE AND VERIFIED ALL DETAILS A ND TO SEND REMAND REPORT. 5. LD.AO VIDE LETTER DATED 22/10/2014 CALLED UPON A SSESSEE TO FILE DETAILS RELIED UPON BEFORE LD.CIT(A). THEREAF TER LD.AO PASSED REMAND REPORT WHICH WAS FORWARDED TO OFFICE OF LD. CIT(A) ON 30/07/2018. IN REMAND REPORT LD.AO NOTED THAT ASS ESSEE ONLY FILED LEDGER DETAILS OF EXPENSES AND DID NOT FURNIS H ANY DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM OF EXP ENSES WHICH WERE DISALLOWED. THEREAFTER ASSESSEE ONCE AGAIN REQ UESTED LD.CIT(A) VIDE ITS LETTER ATED 02/08/2018 THAT, BEF ORE FINALISING REMAND REPORT, LD.AO FAILED TO GRANTED OPPORTUNITY TO ASSESSEE TO PRODUCE EVIDENCES. LD.CIT(A) VIDE LETTER DATED 09/0 8/2018, ONCE AGAIN DIRECTED LD.AO TO ACCEPT DETAILS FILED BY ASS ESSEE. LD.AO ACCORDINGLY GRANTED OPPORTUNITY OF BEING HEARD TO A SSESSEE AND PAGE 4 OF 9 ITA NO.05/BANG/2019 TO PRODUCE SUPPORTING EVIDENCES FOR EXPENSES DISAL LOWED IN ASSESSMENT ORDER DATED 25/03/2018. ASSESSEE ACCORDI NGLY, ON 14/08/2018 AND 21/08/2018 FURNISH DETAILS AND EVIDE NCE IN SUPPORT OF CLAIM BEING BREAKUP OF EXPENSES AND CORR ESPONDING SUPPORTING EVIDENCES. 6. LD.AR REFERRING TO PAGE 47 OF PAPER BOOK SUBMITT ED THAT, DETAILS FILED BY ASSESSEE ALONG WITH SUPPORTING DOC UMENTS HAVE BEEN LISTED IN REMAND REPORT BY LD.AO. HOWEVER, LD .AO DID NOT VERIFY THE SAME AND REQUESTED LD.CIT(A) TO DECIDE T HE ISSUE ON MERITS. 7. LD.AR SUBMITTED THAT, IN REMAND PROCEEDINGS EVEN AFTER CLEAR DIRECTION BY LD.CIT(A), LD.AO FAILED TO TAKE NECESSARY STEPS TO VERIFY DETAILS FILED BY ASSESSEE IN RESPECT OF E XPENSES CLAIMED. HE ALSO SUBMITTED THAT, LD.CIT(A) ON RECEIPT OF RE MAND REPORT DATED 21/08/2018, DISMISSED ASSESSEES APPEAL BY HO LDING THAT, ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM. LD.CIT(A ) ALSO REJECTED DOCUMENTS FILED BY ASSESSEE BY NOT ADMITTING IT. LD .AR SUBMITTED THAT, THIS AMOUNTS TO VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE AS LD.CIT(A) ORIGINALLY DIRECTED LD.AO TO CALL FOR DET AILS AND TO CARRY OUT VERIFICATION. AND SUBSEQUENTLY WHEN RELEVANT DE TAILS WERE FURNISHED BY ASSESSEE BEFORE LD.AO, IN REMAND PROC EEDINGS, NEITHER LD.AO NOR LD.CIT(A) ACTED UPON TO VERIFY TH ESE DOCUMENTS/EVIDENCES. HE THUS SUBMITTED THAT, ISSUE MAY BE REMANDED IN ORDER TO VERIFY THE DOCUMENTS FILED BY ASSESSEE. 8. LD.SR.DR SUBMITTED THAT THE ISSUE MAY BE SENT BA CK TO LD.CIT(A) FOR VERIFICATION OF EVIDENCES FILED BY AS SESSEE. PAGE 5 OF 9 ITA NO.05/BANG/2019 9. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. 10. IN OUR OPINION THERE WAS NO APPLICATION OF MIND BY LD.AO IN REMAND PROCEEDINGS. IT IS NOTED THAT, LD.CIT(A) CA TEGORICALLY DIRECTED LD.AO TO CALL UPON RELEVANT EVIDENCES FROM ASSESSEE AND TO VERIFY IN ORDER TO CONSIDER THE CLAIM OF EXPENDI TURE. WE NOTE THAT, WHEN ASSESSEE FILED BILLS/VOUCHERS/EVIDENCES IN SUPPORT OF EXPENDITURE CLAIMED BEFORE LD.AO DURING 2 ND REMAND PROCEEDINGS, NO STEPS WERE TAKEN BY LD.AO TO VERIFY THE SAME FOR CONSIDERING THE CLAIM OF ASSESSEE IN ACCORDANCE WI TH LAW. WE FURTHER NOTE THAT, LD.CIT(A) DOES NOT ADMIT EVIDEN CES FILED BY ASSESSEE AS ACCORDING TO LD.CIT(A) ASSESSEE FAILED TO SHOW THAT PROPER OPPORTUNITY TO ADDUCE EVIDENCE WAS NOT GRANT ED TO ASSESSEE. 11. ACTION OF LD.AO IS CONTRARY TO REMAND NOTICE D ATED 20/10/2014, WHEREIN LD.CIT(A) DIRECTS LD.AO TO GIVE ONE MORE OPPORTUNITY TO ASSESSEE AND VERIFY ALL DETAILS BEF ORE SENDING THE REPORT. FOR THE SAKE OF CONVENIENCE, THE SAID LETTE R ISSUED BY LD.CIT(A) TO LD.AO IS REPRODUCED HEREIN BELOW: ........SPACE LEFT INTENTIONALLY .......... PAGE 6 OF 9 ITA NO.05 /BANG/20 /BANG/20 19 PAGE 7 OF 9 ITA NO.05/BANG/2019 12. IN OUR OPINION, LD.CIT(A) CANNOT BLOW HOT AND C OLD AT THE SAME TIME AND WAS DUTY BOUND TO VERIFY DOCUMENTS/EV IDENCES FILED BY ASSESSEE HIMSELF, WHEN LD.AO FAILED TO CAR RY OUT DIRECTION IN ACCORDANCE WITH LAW. LD.CIT(A) HAS COTERMINOUS P OWERS WITH LD.AO. UNDER SUCH CIRCUMSTANCES WE REMAND THIS ISSU E BACK TO LD.CIT(A) WITH A DIRECTION TO VERIFY DOCUMENTS/EVI DENCES FILED BY ASSESSEE IN SUPPORT OF ITS CLAIM OF EXPENDITURES. W E ALSO DIRECT THAT, LD.CIT(A) SHALL PASS DETAILED ORDER ON MERIT S, IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT PROPER OPPORTUNITY O F BEING HEARD MUST BE GRANTED TO ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY ASSESSEE STANDS ALLO WED FOR STATISTICAL PURPOSES. IN THE RESULT, APPEAL FILED BY ASSESSEE STANDS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH OCT, 2020 SD/- SD/- (B. R. BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 6 TH OCT, 2020. /VMS/ PAGE 8 OF 9 ITA NO.05/BANG/2019 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 9 OF 9 ITA NO.05/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -09-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -09-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -09-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -09-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -09-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -09-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -09-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS