Niranjan Ojha, New Delhi V. ITO, New Delhi

ITA 5470/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3937 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 03-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: K K AGGARWAL
• Keywords: Additional evidence; Assessment record
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A NO. 5470/DEL/10 ASSTT. YEAR 2006-07 NIRANJAN OJHA, 1/7116,, SHIV MARG, SHIVAJI PARK, SHAHDARA NEW DELHI 110 032 AAAPO6060E VS. ITO WARD 34(2) NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.K. AGGARWAL, CA RESPONDENT BY: SHRI KISHORE B, SR. DR ORDER PER RAJPAL YADAV, JM: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A) DATED 11 TH AUGUST, 2010 PASSED FOR ASSTT. YEAR 2006-07. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 2 RULE 8 OF ITAT RULES. THEY ARE DESCRIPTIVE AND ARGU MENTATIVE IN NATURE. THE ASSESSEE HAS RAISED TWO FOLD OF GRIEVAN CE . IN THE FIRST FOLD, HE PLEADED THAT LD. CIT(A) HAS ERRED IN NOT P ERMITTING HIM TO ADDUCE ADDITIONAL EVIDENCE UNDER RULE 46A OF THE IN COME TAX RULES 1962. IN THE SECOND FOLD, HE PLEADED THAT LD. CIT(A )HAS ERRED IN CONFIRMING THE ADDITION OF ` 9,15,364/- WHICH HAS BEEN ADDED BY THE AO WITH THE AID OF SECTION 68 OF THE INCOME TAX ACT 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED HIS RETURN OF INCOME ON 16.11.2006 DECLARING AN INCOME OF ` 1,01,130/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSE SSMENT AND A NOTICE U/S 143 (2) WAS ISSUED AND SERVED UPON THE A SSESSEE. IN RESPONSE TO THE NOTICE, ASSESSEE APPEARED BEFORE TH E AO AND SUBMITTED REQUISITE DETAILS. DURING THE COURSE OF A SSESSMENT PROCEEDING, IT REVEALED TO THE AO THAT ASSESSEE AND HIS HUF ARE MAINTAINING VARIOUS ACCOUNTS WHERE CASH WAS DEPOSIT ED DURING THE YEAR. HE MADE A REFERENCE TO ACCOUNT NO. 29246 WHER E A SUM OF ` 1,54,500/- WAS DEPOSITED SIMILARLY ACCOUNT NO. 3347 4 WHERE SUM OF RS. 75,000/- WAS DEPOSITED AND ACCOUNT NO. 36939 WH ERE SUM OF ` 2 LACS WAS DEPOSITED. THE ACCOUNT NO. 29246 PERTAINS TO HIS WIFE AND ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 3 ACCOUNT NO. 33474 PERTAINS TO HIS HUF. HE HAS RETUR NED THE AMOUNT IN BOTH THE ACCOUNTS AND AO DID NOT MAKE ANY ADDITI ON. HOWEVER, THE AMOUNT OF ` 2 LAC DEPOSITED IN ACCOUNT NO. 36939 WAS NOT RETUR NED AND IT REMAINED UNEXPLAINED. ACCORDINGLY, THE AO M ADE ADDITION OF THIS AMOUNT. THE AO APART FROM THIS ENTRY, FOUND VA RIOUS CLEARING ENTRIES IN THE ACCOUNTS TOTALLING TO ` 5,01,064/-. ACCORDING TO THE AO, ASSESSEE FAILED TO EXPLAIN THESE ENTRIES. HE ALSO N OTICED CASH DEPOSIT OF ` 2,64,300/- AND THIS AMOUNT HAS ALSO BEEN ADDED. IN THIS WAY, A SUM OF ` 9,15,364/- HAS BEEN ADDED. 3. ACCORDING TO THE ASSESSEE, HE HAS FILED VARIOUS DETAILS BEFORE THE AO FOR RECONCILING THE ENTRIES AVAILABLE IN THE BANK ACCOUNT AS WELL AS IN HIS BOOKS OF ACCOUNTS. BUT AO FAILED TO APPR ECIATE THOSE MATERIAL . THE AO INITIATED THE INQUIRY AT THE FAG END AND DID NOT GRANT SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSES. THE ASSESSEE SPECIFICALLY POINTED OUT THIS ASPECT TO THE LD. CIT (A) AND FILED AN APPLICATION WITH PERMISSION TO LEAD ADDITIONAL EVID ENCE BUT LD. CIT(A) REJECTED THE APPLICATION SUBMITTED BY THE ASSESSEE. ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 4 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE PLACED O N RECORD COPIES OF THE ORDER SHEET ENTRY MADE BY THE AO ALOG NWITH THE AFFIDAVIT OF THE ASSESSEE. HE PLACED ON RECORD COPY OF THE AP PLICATION FILED BEFORE THE LD. CIT(A) FOR PERMISSION TO ADDUCE ADDI TIONAL EVIDENCE AND COPIES OF THE DOCUMENTS SOUGHT TO BE PRODUCED A S ADDITIONAL EVIDENCE. ON THE STRENGTH OF ORDER SHEET ENTRIES, R ECORDED BY THE AO AND AVAILABLE AT PAGE 85 OF THE PAPER BOOK, HE POIN TED OUT THAT AO EFFECTIVELY STARTED THE INQUIRY IN THE MONTH OF AUG UST, 2008 AND PASSED THE ASSTT. ORDER IN THE MONTH OF DECEMBER. T HE LAST DATE MENTIONED BY THE AO IS 3 RD NOVEMBER 2008. ACCORDING TO THE ASSESSEE, ON THIS DATE, HE WAS NOT PRESENT BEFORE T HE AO. HIS SIGNATURES ARE NOT AVAILABLE ON THE ORDER SHEET AND AO HAS RECORDED THAT HE WAS PRESENT ON THAT DAY. THE AO HAS ALSO RE CORDED THAT ASSESSEE REFUSED TO SIGN THE ORDER SHEET. THE LD. C OUNSEL FOR THE ASSESSEE CONTENDED THAT ASSESSEE FULFIL INGREDIENTS OF CONDITIONS ENUMERATED IN CLAUSES A TO D OF SUB RULE I OF RULE 46A AND, THEREFORE, LD. CIT(A) OUGHT TO HAVE PERMITTED THE ASSESSEE TO LEAD ADDITIONAL EVIDENCE. HE PRAYED THAT ADDITIONAL EVIDENCE BE TAK EN ON RECORD AND ISSUES BE REMITTED TO THE FILE OF AO FOR READJUDIIC ATION. LD. DR ON THE OTHER HAND, RELIED UPON THE ORDERS OF REVENUE AUTHO RITY BELOW. HE ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 5 SUBMITTED THAT ASSESSEE WAS GIVEN SUFFICIENT OPPORT UNITY AND, THEREFORE, HIS CASE DOES NOT FALL WITHIN THE AMBIT OF CLAUSES A TO D OF RULE 46A. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF THE ORDER SHEE T ENTRIES AVAILABLE ON PAGES NO. 85-86 OF THE PAPER BOOK, IT REVEALED T HAT FRESH NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE ON 24 TH JANUARY, 2008 MEANING THEREBY THE PROCEEDING HAS BEEN COMMENCED FOR COLLE CTING THE EVIDENCE ETC. BY THE AO AFTER THIS DATE. THERE MIGH T HAVE BEEN SERVICE OF A NOTICE U/S 143(2) BUT THE PROCEEDING W AS NOT TAKEN UP BY THE AO. THE NEXT DATE IS 24 TH FEBRUARY, 2008. ON THIS DATE, BRIEF HISTORY WAS DISCUSSED AND ASSESSEE WAS DIRECTED TO PRODUCE CERTAIN EVIDENCES. THE DATE WAS GIVEN 24 TH APRIL, 2008 AND ASSESSEE HAS SUBMITTED THE DOCUMENT CALLED FOR BY THE AO. HE WAS DIRECTED TO PRODUCE FURTHER EVIDENCE AND HEARING WAS ADJOURNED TO 26 TH JUNE, 2008. IT APPEARS THAT ASSESSEE DID NOT APPEAR ON TH IS DATE AND LD. AO ISSUED FRESH NOTICE. THEREAFTER, PROCEEDING WAS TAKEN FOR TWO DAYS AND ASSESSMENT ORDER HAS BEEN FRAMED. THE ASSE SSEE HAS FILED NUMBER OF DOCUMENTS BEFORE THE AO INCLUDING BANK ST ATEMENT, ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 6 CONFIRMATIONS, COPY OF THE INCOME TAX RETURN ETC. H E SOUGHT TO FILE CONFIRMATION FROM THE VARIOUS CREDITORS, CASH FLOW STATEMENT ETC. BEFORE LD. CIT(A). BUT LD. CIT(A) DID NOT ENTERTAIN HIS APPLICATION AND HAS CONFIRMED THE ADDITION BY OBSERVING AS UNDER :- 7. DETERMINATION : AFTER PERUSAL OF THE ADDITIONAL DETAILS. I AM OF TH E VIEW THAT NO NEW MATERIAL EVIDENCE HAS BEEN ADDUCED BY THE APPELLANT OVER & A BOVE WHAT HAS BEEN HELD AS UNEXPLAINED BY THE ASSESSING OFFICER. 7.1. THE DETAILS FILED DO NOT CARRY ANY SUPPORTING / EVIDENTIARY VALUE. THE ASSESSEE IS WITHOUT MEANS & IS INVOLVED IN A RING O F TRANSACTIONS & CONFRONTED BY THE REVENUE, HE HAD NO DEFENCE. THE A DDITIONAL EVIDENCE SUBMITTED IS ONLY A DEVICE TO JUSTIFY THE UNACCOUNTED NATURE OF TRANSACTIONS MADE BY THE APPELLANT WITHOU T ANY OSTENSIBLE & THEREFORE, THE ADDITIONS MADE BY THE ASSESSING OF FICER ARE SUSTAINED IN TOTO. 7.2. THE VARIOUS SUBMISSIONS MADE BY THE APPELLANT HAVE BEEN EXAMINED & PLACE ON RECORD. ALL THE EVIDENCES SUBMI TTED BY THE APPELLANT HAVE BEEN MARKED TO THE ASSESSING OFFICER VIDE THIS OFFICE LETTER DATED 8.10.2009. THE ASSESSING OFFICER VIDE HIS LETTER DATED 15.02.2010 STATED AS UNDER : IN THIS REGARD, IT IS SUBMITTED THAT AFTER PERUSAL OF THE ASSESSMENT RECORD, IN THE LIGHT OF ABOVE MENTIONED LETTER HE HAS NO OBJECTION IN THE ADMISSION OF ADDITIONAL EVI DENCES BEFORE THE LD. CIT(A)-XXVII. 7.3. HOWEVER, I DO NOT FIND MERIT IN THE ADDITIONAL EVIDENCE PRODUCE BEFORE ME AS THEY WERE NOT ORIGINALLY ADDUCED BEFOR E THE ASSESSING OFFICER. THE COUNSEL FOR THE APPELLANT SHRI B.B. GA RG WHO INITIALLY APPEARED & FILED WRITTEN SUBMISSIONS WITHDREW HIMSE LF VIDE HIS LETTER DATED 4.8.2010. 7.4. IN THE LIGHT OF THE DETAILED FINDINGS GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, THE ADDITIONS MADE STAND SUST AINED. THE ASSESSEE APPELLANT HAS NOT ADDUCED ANY EVIDENCE WHA TSOEVER AT THE TIME OF SCRUTINY PRODUCING & THE PRESENT EFFORT OF APPELLANT TO PUSH IN ADDITIONAL EVIDENCE IS WITHOUT MERIT. A PLE THORA OF RING ENTRIES ARE RESORTED TO BY THE APPELLANT FOR WHICH THE EXPLANATIONS ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 7 OFFERED BY THE APPELLANT HAVE NO PROPER SOURCE OR J USTIFICATION & THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDIT IONS WHICH ARE CONFIRMED. 6. WITH REGARD TO THE ADDITION OF ` 2,25,000/-, IT WAS CONTENDED BY THE ASSESSEE THAT THIS SUM WAS ADVANCED TO SMT. PRE ETI GUPTA ON 1 ST JUNE, 2005 VIDE CHEQUE NO. 18159 DRAWN ON SAVING BA NK ACCOUNT NO. 22530 CANARA BANK, ROHTASH NAGAR, NEW DELHI. TH E SOURCE OF ADVANCE WAS ` 75,000/- TRANSFERRED FROM SAVING BANK ACCOUNT 3347 4 WITH CANARA BANK OF NIRANJAN OJHA (HUF) FROM SAVIN G BANK ACCOUNT NO. 29246 WITH CANARA BANK OF SMT. ANANDI SHARMA. THIS ADVANCE WAS RECEIVED BACK BY THE ASSESSEE VIDE CHEQUE NO. 5 02803 DRAWN ON SAVING BANK ACCOUNT WITH ICICI BANK, DEFENCE COL ONY, NEW DELHI. THE ASSESSEE HAS FILED CONFIRMATION FROM SMT . PREETI GUPTA COPY OF HER SAVING BANK ACCOUNT EXHIBITING THE CLEA RANCE OF BOTH THE CHEQUES, HER INCOME TAX RETURN. THIS ASPECT WAS HIG HLIGHTED BEFORE THE LD. CIT(A) AND ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE LD. REVENUE AUTHORITIES HAVE FAILED TO CONSIDER THIS AS PECT. HE ALSO POINTED OUT THAT ASSESSEE HAS A COMPLETE EXPLANATIO N WITH REGARD TO OTHER ADDITIONS CONSIDERED BY THE AO. ON DUE CONSID ERATION OF THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT AS SESSEE WAS NOT GIVEN SUFFICIENT TIME TO EXPLAIN HIS POSITION BY TH E AO. HE HAS ISSUED ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 8 NOTICE U/S 143(2) BEFORE NOVEMBER, 2007 BUT DID NOT COMMENCE HIS REGULAR PROCEEDING UPTO FEBRUARY 2008. APART FORM T HIS, SUB RULE 4 OF 46A CONTEMPLATES THAT EVEN IF CONDITIONS ENUMERATED IN SUB RULE 1 ARE NOT AVAILABLE BUT LD. FIRST APPELLATE AUTHORITY FEL T THAT FOR ANY SUBSTANTIAL REASON, SOME EVIDENCE IS ESSENTIAL THEN HE CAN TAKE SUCH EVIDENCE ON RECORD FOR THE JUST DECISION OF THE APP EAL. ASSESSEE IS A SALARIED EMPLOYEE WHO IS WORKING AS AN ACCOUNTANT. HE MAY NOT BELONG TO A VERY ORGANISED SECTOR. LD. FIRST APPELL ATE AUTHORITY OUGHT TO HAVE CONSIDERED ALL THESE ASPECTS BEFORE REJECTI NG HIS APPLICATION FOR PERMISSION TO ADDUCE ADDITIONAL EVIDENCE. THE QUASI JUDICIAL AUTHORITIES ARE BEING RESPECTED NOT ON ACCOUNT OF T HEIR POWERS TO LEGALISE THE INJUSTICE ON TECHNICAL GROUND BUT BECA USE THEY ARE CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW THE APPLICATION OF ASSES SEE FOR PERMISSION TO ADDUCE ADDITIONAL EVIDENCE FILED BEFORE THE LD. CIT(A). WE SET ASIDE THE ORDERS OF REVENUE AUTHORITY BELOW AND RES TORE ALL THESE ISSUES TO THE FILE OF AO FOR READJUDICATION. THE AS SESSEE WILL BE AT LIBERTY TO FILE ANY OTHER EVIDENCE IN SUPPORT OF HI S EXPLANATION BEFORE THE AO. IT IS NEEDLESS TO SAY THAT ANY OBSERVATION MADE BY US WOULD NOT IMPAIR OR INJURE THE CASE OF AO. THEY WILL NOT CAUSE ANY PREJUDICE ITA NO. 5470/DEL/10 ASSTT. YEAR 2006-07 9 TO THE DEFENCE / EXPLANATION OF THE ASSESSEE. THE A O SHALL GRANT DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13.5.2011. SD/- SD/- [SHAMIM YAHYA] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13.5.2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT