ITO WARD 2, NAMAKKAL V. SRI K RAJENDRAN, NAMAKKAL

ITA 590/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5931 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 19-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: T S LAKSHMIVENKATARAMAN
• Keywords: Opportunity of being heard
• Section: 40A(3); 143(1)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.590/CHNY/2018 / ASSESSMENT YEAR: 2014-15 THE INCOME TAX OFFICER, WARD 2, NAMAKKAL, NO. 138/3, LMR SHOPPING ARCADE, SALEM ROAD, NAMAKKAL. VS. SHRI K. RAJENDRAN, NO. 7/96-B, KANGANI THOTTAM, THAHATHIRPURAM, NAMAKKAL 637 018. [PAN: AGZPR0122R] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI B. SAGADEVAN, JCIT / RESPONDENT BY : SHRI T.S. LAKSHMI VENKATARAMAN, CA / DATE OF HEARING : 07.01.2019 /DATE OF PRONOUNCEMENT : 21.01.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), SALEM DATED 30.11.2017 RELEVANT TO THE ASSESSMENT YEAR 2014-15. BESIDES RAISING VARIOUS GROUNDS, THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE CASH PAYMENTS MADE FOR PURCHASES AS AGAINST THE PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT] R.W. RULE 6DD BY I.T. RULES BY THE ASSESSEE IS CORRECT AND I.T.A. NO. 590/CHNY/18 2 ALLOWED THE APPEAL AFTER CONSIDERING FRESH EVIDENCE VIOLATING RULE 46A OF THE I.T. RULES. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 ON 28.11.2014 ADMITTING INCOME OF .4,84,410/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE NOTICE UNDER SECTION 143(2) OF THE ACT DATED 28.08.2015 WAS DULY SERVED ON THE ASSESSEE ON 08.09.2015. AFTER VERIFICATION OF DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MADE CASH PAYMENTS EXCEEDING .20,000/- IN A SINGLE DAY TO THE PARTIES TO THE EXTENT OF .2,07,35,254/-, WHICH IS IN VIOLATION OF SECTION 40A(3) OF THE ACT. ACCORDINGLY, THE ASSESSEE WAS ASKED TO PRODUCE BANKS OF ACCOUNTS. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT. THUS, THE PAYMENT MADE IN CASH IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT AMOUNTING TO .2,07,35,254/- WAS BROUGHT TO TAX. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). BY CONSIDERING THE SUBMISSIONS, CONFIRMATION LETTERS FROM THE PARTIES WHO INSISTED FOR CASH PAYMENTS AND LEDGER EXTRACTS OF THE RESPECTIVE PARTIES, THE LD. CIT(A) ALLOWED THE GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE, I.T.A. NO. 590/CHNY/18 3 AGAINST WHICH, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE MADE PAYMENT IN CASH IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT AND MOREOVER, NO PROPER BOOKS OF ACCOUNTS WERE MAINTAINED AND PRODUCED BEFORE THE ASSESSING OFFICER. HOWEVER, DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE PRODUCED THE CONFIRMATION LETTERS FROM THE PARTIES WHOM INSISTED FOR CASH PAYMENTS AND LEDGER EXTRACT OF THE RESPECTIVE PARTIES AND BY CONSIDERING THE SAME, THE LD. CIT(A) ALLOWED THE GROUND RAISED BY THE ASSESSEE. HOWEVER, WHILE DOING SO, WE FIND THAT THE LD. CIT(A) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFICER ON THE FRESH MATERIALS TAKEN INTO CONSIDERATION, WHICH IS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ABOVE ISSUE AFRESH AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFICER AS WELL AS AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE FOR REBUTTAL. THUS, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 590/CHNY/18 4 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 21 ST JANUARY, 2019 IN CHENNAI. SD/ - SD/ - (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 21 .01.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.