M/s. Uday Edible Products Ltd., Delhi V. ITO, New Delhi

ITA 5600/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74314 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 06-03-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 05-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Period of limitation; Additional evidence; Reasonable cause; Time period of passing order
• Section: 144

Judgement Text

ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.5600/DEL/2012 ASSESSMENT YEAR : 2007-08 UDAY EDIBLE PRODUCTS LTD, VS INCOME T AX OFFICER, KD-20, WARD-18(2), PITAMPURA, DELHI. NEW DELHI. (PAN: AABCK6441P) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWA NI KUMAR RESPONDENT BY : SHRI SAMEER SHARMA, SR.DR O R D E R PER CHANDRAMOHAN GARG, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF COMMISSIONER OF INCOME TAX(A)-XXI, NEW DELHI DATED 31.07.2012 IN APPEAL NO. 116/09-10 FOR AY 2007-08. 2. THE ASSESSEE HAS RAISED TWO FOLD GROUNDS IN THIS APPEAL, FIRST, LEGAL GROUND CHALLENGING THE EX PARTE ASSESSMENT ORDER PA SSED U/S 144 OF THE ACT AND CHALLENGING THE REJECTION OF THE APPLICATION OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962. SECONDLY, THE ASSESSEE HAS CHALLENGED UPHOLDING THE ACTION OF THE LD. ASSESSING OFFICER IN DISALLOWING AND MAKING ADDITIO N ON VARIOUS OTHER SEVEN ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 2 ISSUES. AT THE OUTSET, WE TAKE LEGAL GROUNDS OF TH E ASSESSEE WHICH READ AS UNDER:- THAT THE ORDER DATED 31-07-2012 PASSED U/S 250 OF THE INCOME-TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) XXI, NEW DELHI IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LEARNED ASSESSING OFFICER TO COMPLETE/PASS THE ASSESSMENT U /S 144 OF THE INCOME TAX ACT, 1961 BY IGNORING THE FAC TUAL POSITION AND THE FACT THAT THE COMPANY DID NOT HAVE ANY ACCESS TO THE BOOKS AND RECORDS IN VIEW OF THEIR SE IZURE BY THE FINANCIAL INSTITUTIONS AND ACCORDINGLY THE O RDER DATED PASSED U/S 144 OF THE ACT IS BAD IN LAW IN AS MUCH AS THE APPELLANT COMPANY WAS PREVENTED BY SUFFICIEN T CAUSE FROM PRODUCING THE VARIOUS DETAILS OF THE VAR IOUS EXPENSES BEFORE THE LD ASSESSING OFFICER. (2) THAT THE ORDER DATED 31-07-2012 PASSED U/S 250 OF THE INCOME-TAX ACT, 1961 BY THE LEARNED COMMISSIONE R OF INCOME-TAX (APPEALS) XXI, NEW DELHI IS AGAINST L AW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUST IFIED IN REJECTING THE PLEA OF ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A HE INCOME-TAX RULES, 1962 PRODUCED BY THE APPELLANT COMPANY DURING THE COURSE OF THE APPELLAT E PROCEEDINGS. 3. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY PERUSED THE RECORD. THE LD. AR SUBMITTED THAT THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TAX(A) IS AGAINST LAW AND FA CTS INASMUCH AS THE COMMISSIONER OF INCOME TAX(A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER TO COMPLETE AND PASS ASSESSME NT ORDER U/S 144 OF THE ACT BY IGNORING THE FACTUAL POSITION AND THE FACT T HAT THE COMPANY DID NOT ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 3 HAVE ANY ACCESS TO THE BOOKS AND RECORDS IN VIEW OF THEIR SEIZURE BY THE FINANCIAL INSTITUTION AND ACCORDINGLY ASSESSMENT OR DER PASSED U/S 144 OF THE ACT WAS BAD IN LAW. THE AR FURTHER CONTENDED THAT SINCE THE ASSESSEE COMPANY WAS PREVENTED BY SUFFICIENT CAUSE FROM PROD UCING DETAILS OF VARIOUS EXPENSES BEFORE THE ASSESSING OFFICER BEYON D THE CONTROL OF THE ASSESSEE, THE ASSESSING OFFICER WAS NOT JUSTIFIED I N COMPLETING THE ASSESSMENT ORDER U/S 144 OF THE ACT. THE AR VEHEME NTLY CONTENDED THAT THE COMMISSIONER OF INCOME TAX(A) WAS ALSO NOT JUSTIFIE D IN REJECTING THE PLEA OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENC E UNDER RULE 46A OF THE INCOME TAX RULES SUBMITTED DURING THE COURSE OF FIR ST APPELLATE PROCEEDINGS BEFORE THE COMMISSIONER OF INCOME TAX(A). THE LD. AR HAS DRAWN OUR ATTENTION TOWARDS COPY OF APPLICATION FILED BY THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME TAX(A) UNDER RULE 46A OF THE RULES (PAPER BOOK PAGE NO. 1 TO 426) DATED 3.11.2000 WHICH COMPRISES PHOTOCOPY OF THE PANCHNAMA AND LETTER DATED 11.7.2009 ISSUED BY THE SBI, PHOTOCOPY OF THE FIR LODGED WITH JURISDICTIONAL POLICE STATION DATED 14.12.2009 AND OTHER DETAILS PERTAINING TO MANUFACTURING EXPENSES, ADMIN ISTRATIVE EXPENSES, SELLING EXPENSES, FINANCIAL EXPENSES, OTHER EXPENSE S AND DETAILS OF PURCHASES. ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 4 4. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT SIN CE THE ASSESSEE IS NOT COOPERATING DURING THE ASSESSMENT PROCEEDINGS AND N OT SUBMITTING THE REQUIRED DETAILS AND EVIDENCE TO SUPPORT ITS CLAIM, THE ASSESSING OFFICER HAS NO ALTERNATIVE BUT TO COMPLETE ASSESSMENT PROCEEDIN GS U/S 144 OF THE ACT TO ABIDE THE LIMITATION PERIOD PROVIDED FOR ASSESSMENT PROCEEDINGS UNDER THE PROVISIONS OF THE ACT. THE DR FURTHER CONTENDED TH AT AS PER RULE 46 OF THE INCOME TAX RULES, THE ASSESSEE IS PREVENTED TO FILE ANY ADDITIONAL EVIDENCE BEFORE THE COMMISSIONER OF INCOME TAX(A) EXCEPT UND ER CIRCUMSTANCES AS STIPULATED IN RULE 46A OF THE RULES. ALTERNATIVELY , THE DR SUBMITTED THAT IF IT IS FOUND JUST AND PROPER TO RESTORE THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR MAKING A FRESH ASSESSMENT, THE DEPARTMENT HAS N O SERIOUS OBJECTION IN THIS REGARD. 5. ON CAREFUL PERUSAL OF ASSESSMENT ORDER, WE OBSER VE THAT IN THE FIRST PARA OF THE ORDER, THE ASSESSING OFFICER HAD OBSERV ED THAT ON THE FINAL DATE OF HEARING I.E. 23.12.2009, NONE ATTENDED NOR ANY SUBM ISSIONS WERE FILED BEFORE THE UNDERSIGNED I.E. ASSESSING OFFICER. ON THESE OB SERVATIONS, THE LD. AR SUBMITTED THAT THE ASSESSEES COUNSEL ATTENDED THE ASSESSMENT PROCEEDINGS ON SOME DATES OF HEARING AND INFORMED THAT THE BOOK S AND RECORDS OF THE ASSESSEE HAVE BEEN SEIZED BY THE FINANCIAL INSTITUT ION, THEREFORE, THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING TH E DETAILS PERTAINING TO ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 5 THE VARIOUS CLAIMS OF EXPENSES BEFORE THE ASSESSING OFFICER. THIS EXPLANATION OF THE ASSESSEE SEEMS TO BE PROPER AND ACCEPTABLE IN THE LIGHT OF FIR DATED 14.12.2009 FILED WITH THE IN CHARGE, POLI CE STATION, KHUSKHERA, DISTT. ALWAR (RAJASTHAN) INFORMING THAT BESIDES OTH ER ARTICLES, COMPUTER DOCUMENTS PERTAINING TO SALES TAX AND INCOME TAX HA D BEEN STOLEN FROM THE FACTORY OFFICE PREMISES. THE SAME CAUSE HAS BEEN A LSO MENTIONED IN THE APPLICATION OF THE ASSESSEE FILED BEFORE THE COMMIS SIONER OF INCOME TAX(A) ON 3.11.2010 UNDER RULE 46A OF INCOME TAX RULES WHE REIN IT HAS BEEN MENTIONED THAT THE RECORDS AND THE BOOKS OF ACCOUNT S OF THE ASSESSEE COMPANY FOR THE AY UNDER CONSIDERATION WERE NOT IN ITS POSSESSION BECAUSE THE PREMISES OF THE ASSESSEE WAS SEIZED BY THE STAT E BANK OF INDIA AND AS SUCH THE INABILITY TO FILE THE SAME BEFORE THE ASSE SSING OFFICER WAS DUE TO A SUFFICIENT CAUSE AND THE ADMISSION OF ADDITIONAL EV IDENCE IS NOT GOING TO PREJUDICE THE INTEREST OF THE REVENUE IN ANY MANNER . THE APPLICATION OF THE ASSESSEE FILED UNDER RULE 46A OF THE RULES HAS BEEN REJECTED BY THE COMMISSIONER OF INCOME TAX(A) BY FOLLOWING DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TA X VS SUBBU SHASHANK REPORTED AT 327 ITR 577 (MADRAS) WHEREIN IT WAS HELD THAT THE DUTY IS CAST UPON THE ASSESSEE TO PRODUCE ALL EVIDE NCE, BOTH ORAL AND DOCUMENTARY, BEFORE THE ASSESSING OFFICER. THEIR L ORDSHIPS FURTHER HELD THAT ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 6 WHEN THE ASSESSEE IS NOT ABLE TO PRODUCE THE EVIDEN CE OR THE WITNESSES BEFORE THE ASSESSING OFFICER, THE COMMISSIONER OF INCOME T AX(A) HAS TO SATISFY HIMSELF ABOUT THE REASONABLE CAUSE SHOWN BY THE ASS ESSEE FOR NOT PRODUCING IT BEFORE THE ASSESSING OFFICER AND FOR PLACING IT BEFORE THE FIRST APPELLATE AUTHORITY FOR THE FIRST TIME. 6. IN THE PRESENT CASE, THE COMMISSIONER OF INCOME TAX(A) HAS NOT DISPUTED THE FACT THAT THE BOOKS OF ACCOUNTS AND OT HER RECORDS PERTAINING TO INCOME TAX AND SALES TAX WERE SEIZED BY SBI AND WHE N AFTER LEGAL ACTION, THE ASSESSEE TOOK OVER POSSESSION OF THE WORKING UNIT, THEN THE ASSESSEE FOUND THAT BESIDES OTHER VALUABLE ARTICLES, THE COMPUTER DOCUMENTS PERTAINING TO SALES TAX AND INCOME TAX HAD BEEN STOLEN AND THE AS SESSEE INFORMED LOCAL JURISDICTIONAL POLICE STATION IN THIS REGARD BY FIL ING AN APPLICATION ON 14.12.2009 (PB PAGE NO. 18 & 19). FROM PAPER BOOK PAGE NO. 20, WE ALSO OBSERVE THAT THE ASSESSEE FILED ANOTHER COMPLAINT O N 10.2.2010 TO IN CHARGE POLICE STATION, BHIWADI AGAINST ITS SECURITY AGENCY BRETTONWOOD FINLEASE PVT. LTD. STATING THAT THE COMPUTER, STATUTORY RECO RDS, ACCOUNTING RECORDS AND OTHER RELEVANT RECORD AND STOCK HAD BEEN TAKEN OUT AND MISSING FROM THE OFFICE PREMISES OF THE FACTORY OF THE ASSESSEE. IN THESE FACTS AND CIRCUMSTANCES, WE CLEARLY OBSERVE THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN FILING DETAILS, RECORDS AND BOO KS OF ACCOUNTS BEFORE THE ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 7 ASSESSING OFFICER WHICH WAS SUBMITTED BEFORE THE CO MMISSIONER OF INCOME TAX(A) DURING THE FIRST APPELLATE PROCEEDINGS WITH AN APPLICATION UNDER RULE 46A OF THE RULES BUT THE SAME WAS REJECTED BY THE C OMMISSIONER OF INCOME TAX(A) ON WRONG PREMISE. ON A CAREFUL READING OF T HE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME TAX VS SUBBU SHASHANK (SUPRA) AND OTHER RELEVANT DECISIONS IN TH E LIGHT OF PROVISIONS OF RULE 46A OF THE RULES, WE CLEARLY OBSERVE THAT THE COMMISSIONER OF INCOME TAX(A) MISUNDERSTOOD THE RATIO OF THESE DECISIONS A ND WE RESPECTFULLY HOLD THAT THE RATIO OF THIS DECISION OF HONBLE MADRAS H IGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS SUBBU SHASHANK (SUPRA ) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE IN FAVO UR OF THE ASSESSEE ON THE ISSUE OF ADMISSIBILITY OF ADDITIONAL EVIDENCE UNDER RULE 46A OF THE RULES. 7. IN VIEW OF FOREGOING DISCUSSION, WE ARE INCLINED TO HOLD THAT THE ASSESSING OFFICER DID NOT PROVIDE AN OPPORTUNITY OF HEARING FOR THE ASSESSEE AND THE ASSESSEE WAS PREVENTED BY SUFFICIENT AND RE ASONABLE CAUSE FROM FILING RELEVANT DETAILS, BOOKS AND OTHER RECORD BEF ORE THE ASSESSING OFFICER TO SUPPORT ITS CLAIM OF EXPENSES AND OTHER DEDUCTIO N. AT THE SAME TIME, WE ALSO HOLD THAT THE COMMISSIONER OF INCOME TAX(A) RE JECTED THE APPLICATION OF THE ASSESSEE FILED UNDER RULE 46A OF THE INCOME TAX RULES ON UNJUSTIFIED ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 8 AND INCORRECT GROUNDS AND OBSERVATIONS AND FINDINGS OF COMMISSIONER OF INCOME TAX(A) IN THIS REGARD ARE SET ASIDE. 8. SINCE THE ASSESSEE COULD NOT GET DUE OPPORTUNITY TO SUPPORT ITS CLAIM OF EXPENSES AND OTHER DEDUCTIONS BECAUSE THE ASSESS EE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING RELEVANT DETAILS, RECO RDS AND BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER AND THE SAME WAS AGAIN SUBMITTED BEFORE THE COMMISSIONER OF INCOME TAX(A) WITH AN APPLICATION U NDER RULE 46A OF THE INCOME TAX RULES WHICH WAS ALSO REJECTED BY THE COM MISSIONER OF INCOME TAX(A) ON UNJUSTIFIED REASONS AND GROUNDS. IN ABOV E SET OF FACTS AND CIRCUMSTANCES, WE FIND IT APPROPRIATE TO RESTORE TH E ENTIRE ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION AFRESH B Y AFFORDING DUE OPPORTUNITY OF HARING TO THE ASSESSEE. NEEDLESS TO SAY, THE ASSESSEE SHALL COOPERATE DURING THE ASSESSMENT PROCEEDINGS. ACCOR DINGLY, GROUND NO. 1 AND 2 OF THE ASSESSEE ARE ALLOWED IN THE MANNER AS INDICATED ABOVE. OTHER GROUNDS OF THE ASSESSEE VIZ. (3)(I) TO (VII) 9. SINCE WE HAVE RESTORED ALL ISSUES TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION, OTHER GROUNDS OF THE ASSESSEE D O NOT SURVIVE FOR ADJUDICATION AND WE DISMISS THE SAME WITHOUT GOING ON MERITS. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SPOSED OF IN THE MANNER AS INDICATED ABOVE AND DEEMED TO BE ALLOWED FOR STATIS TICAL PURPOSES. ITA NO. 5600/DEL/2012 ASSTT.YEAR: 2007-08 9 ORDER PRONOUNCED IN THE OPEN COURT ON 14.03.2014. SD/- SD/- (G.D. AGRAWAL) (CHANDRA MOHAN GARG) VICE PRESIDENT JUDICIAL MEMBER DT. 14TH MARCH 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR