Global One India Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 5165/DEL/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5846 (ITAT-DELHI)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 30-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Assessee Lawyers: RISHABH MALHOTRA ARS; SSH KANCHUA KAUSHAL
• Keywords: Depreciation; Transfer pricing; Additional evidence; Wholly owned subsidiary; Revised return
• Section: 92D; 92E; 234B; 44AB; 13; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C, NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI G.S. PANNU, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.5165/DEL/2016 (ASSESSMENT YEAR-2004-05) GLOBAL ONE INDIA PRIVATE LIMITED DSO 601-603, 607-608, 6 TH FLOOR, DLF SOUTH COURT, SAKET, NEW DELHI-110017 PAN:AABCG 2558B VS. DCIT, CIRCLE-12(1), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY S/SH. KANCHUA KAUSHAL & RISHABH MALHOTRA, ARS RESPONDENT BY SH. SARAS KUMAR, SR.DR DATE OF HEARING 07.07.2020 DATE OF PRONOUNCEMENT 30.09.2020 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSE E AGAINST ORDER DATED 27.07.2016 PASSED BY THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS)-15, NEW DELHI {CIT(A)} FOR ASS ESSMENT YEAR 2004-05. 2 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT 2.0 THE BRIEF FACTS OF THE CASE ARE THAT GLOBAL ON E INDIA PRIVATE LIMITED IS A COMPANY INCORPORATED ON NOVEMB ER 15, 1999 UNDER THE LAWS OF INDIA AND ENGAGED IN THE BUSINESS OF PROVIDING INTERNET AND NETWORK SERVICES TO ITS GROUPS CUSTOME RS IN INDIA. IT IS A WHOLLY OWNED SUBSIDIARY OF EGN BV, NETHERLANDS ( EGN BV). THE BUSINESS OPERATIONS OF THE ASSESSEE HAVE BEEN C LOSED DOWN WITH EFFECT FROM MARCH 31, 2009. 2.1 FOR THE ASSESMENT YEAR (AY) 2004-05, THE RET URN OF INCOME WAS FILED DECLARING A LOSS OF RS. 1,04,14,970/- ON THE BASIS OF UNAUDITED ACCOUNTS. THE ASSESSEES CASE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER (AO) ASKED THE COMPANY TO PROVIDE AUDITED ACCOUNTS AND DETAILS OF EXPENSES INCURRED BY THE CO MPANY DURING THE YEAR. HOWEVER, DUE TO LACK OF AVAILABLE DATA, T HE COMPANY WAS UNABLE TO PROVIDE THE SAID DETAILS. THE ASSESSING O FFICER, VIDE ORDER DATED OCTOBER 20, 2006, ASSESSED THE INCOME AT AN AD-HOC 12% MARK-UP ON TOTAL COST OF PROVIDING SERVICES BY THE COMPANY TO ITS PARENT COMPANY. ACCORDINGLY, THE TAXABLE INCOME WAS COMPUTED AT RS. 58,66,890/- . 3 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT 2.2 THE AUDIT OF THE FINANCIAL STATEMENTS CO ULD BE COMPLETED ONLY BY JANUARY 10, 2008 I.E. BY THE TIME ASSESSMEN T PROCEEDINGS WERE ALREADY CONCLUDED. FURTHER, THE ASSESSEE ALSO FILED AN APPLICATION WITH THE COMPANY LAW BOARD ON MARCH 15, 2 011 REQUESTING COMPOUNDING OF OFFENCES UNDER COMPANIES ACT, 1956 FOR NOT FILING THE AUDITED ANNUAL ACCOUNT WHEREIN IT WAS SUBMITTED THAT THE REASONS FOR THE DELAY WERE BEYOND THE CONTR OL OF THE COMPANY AS THERE WAS CHANGE IN MANAGEMENT STRUCTURE FROM TIME TO TIME AND THERE WAS AN ABSENCE OF PERSONS RESPONSI BLE FOR COMPLIANCES. THE COMPANY LAW BOARD VIDE ORDER DATED SEPTEMBER 07, 2011 COMPOUNDED THE OFFENCES. 2.3 AGGRIEVED BY THE IMPUGNED ASSESSMENT ORDER , THE ASSESSEE FILED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCO ME-TAX (APPEALS) [CIT (A)] WHO DECIDED THE APPEAL EX-PARTE VIDE ORDER DATED SEPTEMBER 12, 2008 BY UPHOLDING THE ADDITIONS MADE BY THE AO AND NOTED THAT THE ASSESSEE DID NOT APPEAR FOR THE HEARINGS DESPITE BEING NOTICES ISSUED. 2.4 AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL TOOK NOTE OF THE FACT THAT N OTICES FOR HEARING 4 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT WERE ISSUED BY THE LD. CIT (A) AT A WRONG ADDRESS AND , THUS, THE NOTICES WERE NOT RECEIVED BY THE ASSESSEE. IN VIEW O F THE SAME, THE MATTER WAS REMANDED BACK TO THE FILE OF LD. CIT (A) VIDE ORDER DATED FEBRUARY 10, 2010 WITH A DIRECTION TO SEND THE NOTICES AT THE CORRECT ADDRESS AND DECIDE THE ISSUE ON MERITS. 2.5 THEREAFTER, IN THE SECOND ROUND OF APPELLAT E PROCEEDINGS BEFORE THE LD. CIT (A), THE ASSESSEE FILED AN APPLI CATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962 DATED FEBRUARY 24 , 2015 FOR FURNISHING ADDITIONAL EVIDENCES I.E. AUDITED FINANC IAL STATEMENTS, TAX AUDIT REPORT, FORM 3CEB, TRANSFER PRICING DOCUM ENTATION, COMPUTATION OF INCOME BASIS AUDITED FINANCIAL STATE MENTS. THE LD. CIT (A), ON RECEIPT OF APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, REQUISITIONED A REMAND REPORT FROM THE AS SESSING OFFICER. THE ASSESSING OFFICER OBJECTED TO ADMISSION OF THE ADDITIONAL EVIDENCE. SUBSEQUENTLY, THE ASSESSEE COMPANY FILED ANOTHER REQUEST LETTER DATED MARCH 24, 2015 FOR ADMISSION O F ADDITIONAL EVIDENCES. THEREAFTER, THE LD. CIT(A) VIDE LETTER D ATED JUNE 03, 2015 DIRECTED THE ASSESSING OFFICER TO REFER THE MA TTER TO THE TRANSFER PRICING OFFICER (TPO) FOR THE REASON THAT THE ASSESSEE WAS 5 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT FOLLOWING PROFIT SPLIT METHOD AND, ACCORDINGLY, THE ASSESSING OFFICER SHOULD HAVE REFERRED THE MATTER TO THE TPO. THEREAFTER, THE LD. CIT (A) WAS TRANSFERRED AND HIS SUCCESSOR TOOK O VER THE CASE WHO PASSED THE IMPUGNED APPELLATE ORDER DATED JULY 2 0,2016 AND DISMISSED THE APPEAL HOLDING AS UNDER: ON14.07.2016 THE APPEAL WAS HEARD AND IT WAS COMMUNICATED TO THE APPELLANT THAT THE AUDITED FINA NCIALS UNDER COMPANY LAW, THE TAX AUDIT REPORT U/S 44AB AN D THE TRANSFER PRICING AUDIT REPORT U/S 92E WERE OBTAINED MUCH AFTER THE PASSING OF ASSESSMENT ORDER AND THEREFORE IT IS AN EVIDENCE CREATED AFTER THE COMPLETION OF ASSESSMENT PROCEEDINGS. UNDER RULE 46A THE APPELLANT CAN FURNI SH ADDITIONAL EVIDENCE WHICH HE COULD NOT FURNISH DURI NG ASSESSMENT PROCEEDINGS, IF ITS CASE FALLS UNDER ONE OR MORE OF THE FOUR CONDITIONS MENTIONED IN MILE 46A. THE ADDI TIONAL EVIDENCE DOES NOT MEAN THE NEW EVIDENCE CREATED AFT ER THE CONCLUSION OF ASSESSMENT PROCEEDINGS. IN VIEW OF TH E SAME AND THE OBJECTIONS RAISED BY THE ASSESSING OFFICER VIDE 6 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT REMAND REPORT DATED 10.03.2015, THE THREE AUDIT REP ORTS (SUPRA) ARE NOT ADMITTED AS ADDITIONAL EVIDENCE. IN MY VIEW THIS CASE DOES NOT REQUIRE A REFER ENCE TO T.O.O AS IT WAS A NO ACCOUNTS CASE. THEREFORE TH IS ORDER IS BEING PASSED WITHOUT SUCH REPORT AS THE UNDERSIGNED DOES NOT AGREE WITH THE DIRECTIONS GIVEN BY THE PREDECES SOR. 2.6 NOW, THE ASSESSEE IS BEFORE THE TRIBUNAL CH ALLENGING THE ORDER OF THE LD. CIT (A) WHEREIN HE HAS REFUSED TO ADMIT ADDITIONAL EVIDENCE. THE GROUNDS RAISED BY THE ASSE SSEE ARE AS UNDER: 1. ON THE FACTS IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN NOT ADMITTING ADDITION AL EVIDENCE I.E., AUDITED ACCOUNTS, TAX AUDIT REPORT, ACCOUNTANTS CERTIFICATE IN FORM 3CEB, TRANSFER PRI CING DOCUMENTATION AND COMPUTATION OF INCOME: 1.1 WITHOUT APPRECIATING THAT THE SAME CONSTITUTES MATERIAL EVIDENCE NECESSARY TO EXAMINE THE CLAIM OF THE ASSESSE AND ADJUDICATE THE SAME ON MERIT; 1.2 WITHOUT APPRECIATING THAT IN TERMS OF RULE 46A OF T HE INCOME TAX RULES, 1962 (RULES), THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EV IDENCE TO THE ASSESSING OFFICER; 7 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT 1.3 WITHOUT APPRECIATING THAT THE ADDITIONAL EVIDENCE SHOULD BE CONSIDERED IN THE INTEREST OF JUSTICE; 1.4 BY OBSERVING THAT ADDITIONAL EVIDENCE DOES NOT ME AN THE NEW EVIDENCE CREATED AFTER THE CONCLUSION OF ASSESSMENT PROCEEDINGS; 1.5 WITHOUT APPRECIATING THAT ACTION BY HIS PREDECESSO R OF SEEKING OF THE REMAND REPORT FROM THE LD. AO RESULT S IN ADMISSION OF THE EVIDENCE. 2. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LD. CIT(A) HAS ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, ERRED IN NOT ALLOWING THE DEPRECIATION CLAIM O F INR 3,70,41,482 AS PER TAX AUDIT REPORT 2.1 BY OBSERVING THAT REVISED CLAIM OF DEPRECIATIO N IS NOT PERMISSIBLE WITHOUT FILING A REVISED RETURN OF INCOME; 2.2 BY IGNORING THE PROVISIONS OF THE INCOME TAX ACT, 1961 (ACT) THAT CLAIM OF DEPRECIATION HAS TO BE MANDATORILY ALLOWED WHETHER OR NOT CLAIMED BY THE ASSESSEE. 3. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, T HE LD. CIT (A) HAS ON THE FACTS IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, ERRED IN NOT ALLOWING THE DEPRECIATION CLAIM O F INR 2,54,10,470 AS CLAIMED IN THE ORIGINAL RETURN OF IN COME. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, T HE LD. CIT (A) ERRED IN CONFIRMING THE ADDITION OF INR 58,66,8 90 MADE BY THE ASSESSING OFFICER BY HOLDING THAT ITS INTERN ATIONAL 8 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT TRANSACTIONS PERTAINING TO PROVISION OF INTERNET CO NNECTIVITY AND RELATED SERVICES DO NOT SATISFY THE ARMS LENGT H PRINCIPLE ENVISAGED UNDER THE ACT AND IN DOING SO, THE LD. CIT(A) HAS GROSSLY ERRED IN AGREEING WITH AND UPHOL DING LD. AOS ACTION OF 4.1 APPLYING THE MARK-UP OF 12% WITHOUT BRINGIN G ON RECORD THE BASIS THEREOF WHICH IS HIGHLY EXCESSIVE; 4.2 DISREGARDING THE ARMS LENGTH PRICE (ALP) AS DETERMINED BY THE APPELLANT IN THE TRANSFER PRICING (TP) DOCUMENTATION MAINTAINED BY IT IN TERMS OF SECTION 92D OF THE ACT READ WITH RULE 10 D OF THE RULES; 4.3 NOT GIVING THE BASIS FOR APPLYING THE PART ICULAR METHOD AS PRESCRIBED UNDER SECTION 92 C(I) OF THE ACT; 4.4 NOT APPRECIATING THAT NONE OF THE CONDITI ONS SET OUT IN SECTION 920(3) OF THE ACT ARE SATISFIED IN THE P RESENT CASE. 5. WITHOUT PREJUDICE TO THE ABOVE GROUNDS AND WITHOUT ACCEPTING THE ADDITIONS, THE LD. CIT(A) HAS ERRED I N NOT ALLOWING DEDUCTION UNDER SECTION 80-LA(2A) OF THE A CT FROM THE GROSS TOTAL INCOME (AS ASSESSED). 6. ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO ERRED IN CHARGING INTEREST UNDER SECTION 234B OF THE ACT. 7. ON THE FACTS IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. AO ERRED IN INITIATING PENALTY PROC EEDINGS UNDER SECTION 27I(1)(C) OF THE ACT. THAT THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 9 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT THAT THE APPELLANT RESERVES ITS RIGHT T O ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OF APPEAL EITHER BEFOR E OR AT THE TIME OF HEARING OF THIS APPEAL. 3.0 THE LD. AUTHORIZED REPRESENTATIVE (AR) SUBMITTED TH AT ADDITIONAL EVIDENCE SHOULD BE ADMITTED AS IT IS IMP ERATIVE TO ARRIVE AT CORRECT INCOME OF THE ASSESSEE. IT WAS SUBMITTED THAT DURING THE SECOND ROUND OF PROCEEDINGS BEFORE THE LD. CIT (A), THE ASSESSEE HAD SOUGHT TO FILE ADDITIONAL EVIDENCES VIDE COMMUN ICATION DATED 24.02.2015 EXPLAINING WHY THE ACCOUNTS OF THE ASSESS EE COULD NOT BE SUBMITTED EARLIER. IT WAS SUBMITTED THAT VIDE TH IS LETTER DATED THE ASSESSEE HAD SOUGHT TO FURNISH ADDITIONAL EVIDE NCES VIZ. AUDITED FINANCIAL STATEMENTS, TAX AUDIT REPORT, FOR M 3CEB, TRANSFER PRICING DOCUMENTATION, COMPUTATION OF INCO ME BASED ON THE FINANCIAL STATEMENTS ETC. IT WAS FURTHER SUBMITT ED THAT THE LD. CIT (A), ON RECEIPT OF SUCH APPLICATION FOR FILING OF ADDITIONAL EVIDENCE, HAD CALLED FOR A REMAND REPORT FROM THE A SSESSING OFFICER. THE LD. AUTHORIZED REPRESENTATIVE ALSO SUB MITTED THAT THE REMAND REPORT WAS SUBMITTED BY THE ASSESSING OFFICER . IT WAS SUBMITTED THAT, THEREAFTER, THE LD. CIT (A) DIRECTE D THE ASSESSING OFFICER TO MAKE A REFERENCE TO THE TRANSFER PRICING OFFICER (TPO). 10 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT HOWEVER, THERE WAS A CHANGE IN THE INCUMBENT TO THE OFFICE OF THE LD. CIT (A) WHO REFUSED TO ACCEPT HIS PREDECESSORS DIRECTIONS OF MAKING A REFERENCE TO THE TPO AND, THUS, THE ADDITI ONAL EVIDENCES FILED BY THE ASSESSEE WERE REFUSED TO BE ADMITTED B Y OBSERVING THAT SINCE THE NEW EVIDENCES WERE CREATED AFTER THE CONCL USION OF THE ASSESSMENT PROCEEDINGS AND SINCE IT WAS A NO ACCOUNT S CASE, A REFERENCE TO THE TPO ALSO WAS NOT REQUIRED. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAD A SU FFICIENT CAUSE IN NOT FILING THESE DOCUMENTS EARLIER. HE SUBMITTED THAT THE ASSESSEE HAD ALSO FILED AN APPLICATION WITH THE COMP ANY LAW BOARD ON 15 TH MARCH, 2011 REQUESTING COMPOUNDING OF OFFENCES UNDER THE COMPANIES ACT, 1956 FOR NOT FILING THE AU DITED ANNUAL ACCOUNTS WHEREIN IT HAD BEEN SUBMITTED THAT THE REAS ON FOR THE DELAY WERE BEYOND THE CONTROL OF THE COMPANY AS THE RE WAS A CHANGE IN THE MANAGEMENT STRUCTURE OF THE COMPANY F ROM TIME TO TIME AND THERE WAS NO PERSON TO TAKE CHARGE OF THE L EGAL COMPLIANCES BEFORE THE VARIOUS AUTHORITIES. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT EVEN THE COMPANY LAW B OARD VIDE ORDER DATED 07.09.2011 HAD ACCEPTED THE ASSESEES C ONTENTION AND 11 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT HAD COMPOUNDED THE OFFENCES. THE LD. AUTHORIZED REP RESENTATIVE SUBMITTED THAT ASSESSEE HAD SUFFICIENT CAUSE IN TER MS OF CLAUSES (B) AND (C) OF RULE-46A OF THE INCOME TAX RULES, 1962 A ND, THEREFORE, THE ASSESSEE SHOULD BE ALLOWED TO FURNISH ADDITIONA L EVIDENCES AND THE MATTER MAY BE SENT BACK TO THE ASSESSING OFFICE R FOR FRESH CONSIDERATION TO ARRIVE AT THE CORRECT INCOME OF TH E ASSESSEE BASED ON THE AUDITED FINANCIAL STATEMENTS, TAX AUDIT REPO RT, FORM 3CEB ETC. FILED BY THE ASSESSEE. 4.0 IN RESPONSE, THE LD. SR. DEPARTMENTAL REPRESEN TATIVE (DR) OPPOSED THE ASSESSEES PRAYER FOR ADMITTING AD DITIONAL EVIDENCE AND SUBMITTED THAT SUFFICIENT TIME HAD EAR LIER BEEN GIVEN BY THE ASSESSING OFFICER TO THE ASSESSEE FOR FURNIS HING OF THE DOCUMENTS AS WAS EVIDENT FROM PARA-11 OF THE ASSESSM ENT ORDER AS WELL AS PARA-6 OF THE ORDER OF THE LD. CIT (A). IT W AS SUBMITTED THAT THE AUDIT REPORT WAS FINALIZED AFTER THE COMPLETION OF ASSESSMENT PROCEEDINGS AND, THUS, IT WAS AN EVIDENCE CREATED AF TER THE CONCLUSION OF THE ASSESSMENT PROCEEDINGS AND, THERE FORE, THE LD. CIT (A) WAS CORRECT IN REFUSING TO ADMIT SUCH ADDITI ONAL EVIDENCES. 12 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND H AVE ALSO PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED TH AT THE ASSESSEE DID NOT FILE AUDITED FINANCIAL STATEMENTS ALONG WITH AUDIT REPORT EITHER AT THE TIME OF FILING OF RETURN OR DURING TH E COURSE OF ASSESSMENT PROCEEDINGS. IN THIS REGARD, IT IS THE A SSESSEES CONTENTION THAT THE SAME COULD NOT BE DONE BECAUSE OF THE SOME CHANGES IN THE MANAGEMENT. THE BONA FIDE OF THE ASSESSEE IS LENT CREDENCE BY THE FACT THAT THE ASSESSEE HAD ALSO MOV ED AN APPLICATION BEFORE THE COMPANY LAW BOARD FOR COMPOUN DING OF OFFENCES REQUESTING COMPOUNDING FOR NOT FILING THE AUDITED ANNUAL ACCOUNTS. IT IS ALSO OF FACT ON RECORD THAT THE COM PANY LAW BOARD, VIDE ORDER DATED 07.09.2011, COMPOUNDED THE SAID OF FENCE. ALSO, IT IS TRITE THAT AN ASSESSEE WOULD NOT STAND TO GAIN BY DELAYING THE FINALIZATION OF FINANCIAL STATEMENTS. ON THE FACTUA L MATRIX, IT CAN BE SAFELY INFERRED THAT THE FAILURE TO SUBMIT AUDITED ACCOUNTS AND THE AUDIT REPORT DURING THE COURSE OF ASSESSMENT PROCEE DINGS WAS ENTIRELY OUT OF CONTROL OF THE ASSESSEE COMPANY. W E ALSO NOTE THAT THE CORRECT INCOME OF THE ASSESSEE CAN BE DETERMINE D ONLY ON THE BASIS OF THE AUDITED FINANCIAL RESULTS AND, THEREFO RE, IT WOULD BE 13 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT INCORRECT TO SHUT OUT AN ASSESSEE IN THE PROCESS OF ADMINISTRATION OF JUSTICE FROM LEADING EVIDENCE TO PROVE ITS CASE. THE EARLIER INABILITY TO LEAD EVIDENCE SHOULD NOT BE HELD AGAIN ST THE ASSESSEE UNLESS IT IS KNOWN TO BE INCORRECT OR SUGGESTED TO BE INCORRECT OR THERE WAS EVIDENCE TO SUSPECT THAT THE EVIDENCE WAS FABRICATED. IN THE PRESENT CASE NO SUCH ADVERSE INFERENCE HAS BEEN DRAWN BY THE LD. CIT (A). WE ALSO NOTE THAT THE CBDT INSTRUCTION NO.14 (XL-35) DATED 11 TH APRIL, 1955 HAS DIRECTED THAT ONE OF THE DUTIES O F THE OFFICERS OF THE DEPARTMENT IS TO ASSIST THE TAX PAY ERS IN A REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIMI NG AND SECURING RELIEFS. WE ALSO NOTE THAT THERE IS NO PROHIBITION FOR ADMITTING THE ADDITIONAL EVIDENCE AT THE APPELLATE STAGE, THOUGH, THE SAME MAY PERTAIN TO A PERIOD AFTER COMPLETION OF THE ASSESSM ENT PROCEEDINGS AND THE ONLY CONDITION IS THAT THE REVENUE SHOULD N OT BE PREJUDICED AND THAT THE ASSESSING OFFICER SHOULD BE GIVEN A REASONABLE OPPORTUNITY TO REBUT THE ADDITIONAL EVID ENCE. FOR THIS, WE PLACE RELIANCE ON THE JUDGMENT OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. GANI BHAI WAHAB BHAI REPORTED IN [1998] 232 ITR 900 (MP). THUS, IT IS OUR CONSIDERED OPINION THAT 14 ITA NO.5165/DEL/2016 GLOBAL ONE INDIA PVT. LTD. VS. DCIT SINCE THE AUDITED FINANCIAL STATEMENTS AND AUDITED REPORT COULD NOT BE FILED DURING THE COURSE OF ASSESSMENT PROCEEDING S DUE TO FACTORS ENTIRELY BEYOND THE CONTROL OF THE ASSESSEE, IN THE INTEREST OF SUBSTANTIAL JUSTICE, THE ASSESSING OFFICER SHOULD DE-NOVO MAKE THE ASSESSMENT AFTER DULY CONSIDERING THE AUDITED FINAN CIAL STATEMENTS AND THE AUDIT REPORT OF THE ASSESSEE AND AFTER GIVI NG PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. IT IS DIRECTED ACCORDINGLY. 6.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSES SEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30/09/2020. SD/- SD/ - (G.S.PANNU) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL MEMBER DATED: 30/09/2020 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI