M/s. STQL Integrated Solutions Private Limited, Pune V. Income tax Officer, Pune

ITA 594/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1040 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-12-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 10-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Principle of natural justice; TDS; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO. 594 /PUN/20 17 / ASSESSMENT YEAR : 2010 - 11 M/S. STQL INTEGRATED SOLUTIONS PRIVATE LIMITED. 103/203, RUTUJA RESIDENCY, BANER ROAD, AUNDH, PUNE - 411 007. PAN : AAJCS4936P ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 6(1), PUNE / RESPONDENT A SSESSEE BY : NONE REVENUE BY : SHRI S.P. WALIMBE / DATE OF HEARING : 21 . 1 2 .2020 / DATE OF PRONOUNCEMENT : 21 . 1 2 .2020 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS) - 8, PUNE DATED 29.12.2016 FOR THE ASSESSMENT YEAR 2010 - 11 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD: THE APPELLANT WOULD LIKE TO CHALLENGE THE IMPUGNED APPELLATE ORDER ON FOLLOWING GROUNDS OF APPEAL, WHICH ARE RAISED WITHOUT PREJUDICE TO EACH 2 ITA NO. 594 /PUN/20 17 A.Y. 2010 - 11 OTHER: 1 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW , THE LEARNED C. I. T. [A] HAS ERRED IN CONFIRMING THE ADDITION OF RS.24,87,483.00 MADE BY THE LEARNED ASSESSING OFFICER U/ S . 68 OF THE IT ACT EXCLUSIVEL Y ON ASSUMPTION/ PRESUMPTION BASIS AND IGNORING TH E FACTS AND CIRCUMSTANCES OF THE CASE. THE AFORESAID ADD ITION BEING ARBITRAR Y, PERVERSE, BASED ON SURMISES AND CONJECTURE THE LEARNED C. I .T .[A] OUGHT TO HAVE DELETED THE SAID ADDITION . THE IMPUGNED ADDITION M AY PLEASE BE DELETED. 2 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNE D C. I. T. [A] HAS ERRED IN CONFIRMING THE ADDITIONS OF RS.21,60,60 5.00 MADE BY DISALLOWANCES OF STATUTORY PAYMENT IN RESPECT OF SERVICE T AX PAYABLE, IGNORING FACTS AND CIRCUMSTANCES OF THE CASE. THE AFORESA ID ADDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES AND CONJECTUR E THE LEARNED C.I.T. [A] OUGHT TO HAVE DELETED THE SAID ADDITION. TH E IMPUGNED ADDITION MAY PLEASE BE DELETED. 3 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO HAS DISALLOWED EXPENSES SUCH AS RENT, ADVERTISEMENT AND LEGAL & PROFESSIO NAL FEES IGNORING THE FACTS AND CIRCUMSTANCES OF THE CASE. THE AFORESAID ADDITIONS BEING ARBITRARY, PERVERSE, BASED ON SURMISES AND CONJECTURE THE LEARNED CIT(A) OUGHT TO HAVE DELETED THE SAID ADDITIONS. THE IMPUGNED ADDITIONS MAY PLEASED BE DELETED. 4 . THE APPELLANT DENIED HIS LIABILITY TO PAY ANY INTEREST U/S.234B AND 234C OF THE I.T. ACT, 1961 AND HENCE, THE SAME MAY PLEASED BE DELETED. 5 . THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF APPE AL, IF DEEMED NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 2. AT THE TIME OF HEARING , NONE APPEARED ON BEHALF OF THE ASSESSEE. IT WAS FOUND THAT CONSISTENTLY, THERE WAS NO APPEARANCE FROM THE SIDE OF THE ASSESSEE AT THE GIVEN DATES OF HEARING. THE SU BMISSION OF THE LD. DR IS RECORDED AND THE CASE IS HEARD ON MERITS. 3. GROUND NO.1 PERTAINS TO THE ADDITION MADE U/S.68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 4. THE FACTS AS ENUMERATED AT PARA 7.2 OF THE CIT(APPEALS)S ORDER THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE BEFORE THE ASSESSING OFFICER OR DURING THE COURSE OF APPELLATE PROCEEDINGS TO CORROBORATE ASSESSEES STAND. THE ASSESSING OFFICER HAD CATEGORICALLY REQUESTED TO THE LD. AR OF THE ASSESSEE TO 3 ITA NO. 594 /PUN/20 17 A.Y. 2010 - 11 SUBMIT NAMES, ADDRESS AND PAN OF THE PARTIES REGARDING THE TRADE PAYABLES ALONG WITH CONFIRMATION LETTERS AND ALSO INFORMED HIM THAT THE SAME WILL BE DISALLOWED U/S.68 OF THE ACT, IF HE FAILS TO SUBMIT THE DETAILS. DESPITE SUCH CLEAR DIRECTIONS, THE ASSESSEE HAD ONLY FURNISHED THE NAMES OF PARTIES WITHOUT ANY FURTHER DETAILS AS CALLED FOR BY THE ASSESSING OFFICER. 5. THAT BEFORE THE LD. CIT(APPEALS ) ALSO, THE ASSESSEE WAS UNABLE TO FURNISH RELE VANT EVIDENCES, DOCUMENTS TO SUBSTANTIATE ITS CASE ON MERITS IN SPITE OF SEVERAL OPPORTUNITIES BEING GRANTED AS EVIDENT FROM THE ORDER OF THE LD. CIT(APPEALS). THE LD. CIT(APPEALS) HAD CONFIRMED THIS ADDITION ON THIS VERY BASIS THAT RELEVANT EVIDENCES, DOC UMENTS WERE NOT FILED AND THE LD. CIT(APPEALS) HAD DECIDED THE MATTER BASED ON MATERIALS AVAILABLE BEFORE HIM. THE ADDITION, THEREFORE, WAS CONFIRMED. 6. WE HAVE PERUSED THE RELEVANT DOCUMENTS ON RECORDS AVAILABLE BEFORE US AND IT IS NOTED THAT EVEN BEFOR E THE TRIBUNAL ALSO, ON THE GIVEN DATE S OF HEARING, THE ASSESSEE HAS EVADED THE PROCESS OF LAW BY NON APPEARANCE . HOWEVER, CONSIDERING THE FACT THAT INCOME TAX LEGISLATION S ARE WITHIN THE PURVIEW OF WELFARE LEGISLATION S AND THE TAX PAYER S INTEREST SHOULD BE PROTECTED, THEREFORE, WE ARE OF THE CONSIDERED VIEW, ONE FINAL OPPORTUNITY SHOULD BE PROVIDED TO THE ASSESSEE. IN VIEW THEREOF, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER BACK TO HIS FILE FOR RE - ADJUDICATION WHIL E COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. AT THE SAME TIME, WE DIRECT THE ASSESSEE T O FURNISH RELEVANT DETAILS/ EVIDENCES IN ORDER TO SUBSTANTIATE THEIR CASE ON MERITS. THUS, GROUND NO.1 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NO. 594 /PUN/20 17 A.Y. 2010 - 11 7. GROUND NO.2 PERTAINS TO THE ADDITION S MADE ON ACCOUNT OF STATUTORY PAYMENT IN RESPECT OF SERVICE TAX ETC. PAYABLE. 8. IT WAS OBSERVED BY THE ASSESSING OFFICER FROM THE AUDITORS REPORT THAT THE ASSESSEE HAS NOT BEEN REGULARLY DEPOSITING AMOU NTS PAYABLE ON ACCOUNT OF VAT, TDS AND SERVICE TAX WHICH HAVE BEEN OUTSTANDING FOR MORE THAN 6 MONTHS FROM THE DATE THEY BECAME PAYABLE. THE ASSESSEE HAS CLAIMED THAT THOUGH SUCH AMOUNTS ARE PAYABLE THEY DO NOT PERTAIN TO THE RELEVANT FY EXCEPT FOR RS.2,25 ,717/ - WHICH PERTAINS TO THE CURRENT YEAR AND HAS BEEN DISALLOWED IN THE COMPUTATION OF INCOME. HOWEVER, NO DETAILS/ EVIDENCES WHATSOEVER HAVE BEEN FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER OR BEFORE THE LD. CIT(APPEALS) IN SUPPORT OF ITS CLAIM THA T THE BALANCE AMOUNT PERTAIN S TO EARLIER YEARS. IN ABSENCE OF THESE EVIDENCES, THE LD. CIT(APPEALS) HAD UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 9. WE HAVE ALREADY MADE OUR OBSERVATION S WITH REGARD TO GROUND NO.1 IN THE AFORESAID PARAGRAPH ( PARA NO.6) AND THE SAME FINDINGS SHALL BE APPLICABLE FOR THIS GROUND ALSO SINCE THE LD. CIT(APPEALS) HAS UPHELD THE DISALLOWANCE FOR ABSENCE OF EVIDENCES WHICH THE ASSESSEE WAS SUPPOSED TO FILE BEFORE HIM . THUS, GROUND NO.2 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. GROUND NO.3 PERTAINS TO THE DISALLOWANCE ON CERTAIN EXPENSES ON ACCOUNT OF RENT, ADVERTISEMENT AND LEGAL & PROFESSIONAL FEES. 11. THE LD. CIT(APPEALS) AT PARA 9.2, 10.2 AND 11.2 RESPECTIVELY HAVE GIVEN HIS FINDI NGS ON THESE EXPENSES. WE FIND THAT REVENUE AUTHORITIES I.E. ASSESSING OFFICER AS WELL AS THE LD. CIT(APPEALS) HAS DISALLOWED THESE 5 ITA NO. 594 /PUN/20 17 A.Y. 2010 - 11 EXPENSES FOR WANT OF DETAILS/EVIDENCES WHICH WERE NOT FURNISHED BY THE ASSESSEE. THESE EXPENSES WERE CLAIMED BY THE ASSESSEE AND THE ONUS TO SUBSTANTIATE THESE EXPENSES IS ON THE ASSESSEE WHICH HE HAS NOT DISCHARGED. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND RESTORE THE SAME TO HIS FILE FOR RE - ADJUDICATION AND OUR FI NDINGS GIVEN IN RESPECT OF OTHER TWO GROUNDS SPECIFICALLY ENUMERATED AT PARA NO.6 & 9 OF THIS ORDER SHALL APPLY MUTATIS - MUTANDIS TO THIS GROUND ALSO . THUS, GROUND NO.3 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. THE ISSUE U/ S.234B & 234C OF THE ACT IS CONSEQUENTIAL TO THE ADDITIONS MADE BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT(APPEAL S ). SINCE, OTHER GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL IS RESTORED TO THE FILE OF THE LD. CIT(APPEALS), THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEAL) ON THIS ISSUE AND RESTORE THE SAME B ACK TO HIS FILE FOR RE - ADJUDICATION AS PER LAW ON THE ISSUE U/S.234 B & 234C OF THE ACT IN COMPLI ANCE WITH THE PRINCIPLES OF NATURAL JUSTICE. THUS, GROUND NO.4 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 21 ST DAY OF DECEMBER , 20 20 . SD/ - SD/ - R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 21 ST DECEMBER , 2020. SB 6 ITA NO. 594 /PUN/20 17 A.Y. 2010 - 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 8, PUNE. 4. THE PR. CIT - 3, PUNE. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. / BY ORDER, // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE . 7 ITA NO. 594 /PUN/20 17 A.Y. 2010 - 11 DATE 1 DRAFT DICTATED ON 21 . 12 .2020 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 21 .12 .2020 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER