Ms. Chander Mohan S/o Sh.Amir Chand, Panchkula V. Income Tax Officer Ward-3, Panchkula

ITA 596/CHANDI/2015

• Counselvise Citation: 59621514 RSA 2015
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 02-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUDERSHAN KUMAR
• Keywords: Retrospective amendment
• Section: 201(1); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 596/CHD/2015 ASSESSMENT YEAR: 2006-07 SH. CHANDER MOHAN, VS. THE ITO, WARD-3, S/O SH. AMIR CHAND, PANCHKULA PROP. AMIR CHAND CHANDER MOHAN, PANCHKULA PAN NO. AGZPM1538Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDERSHAN KUMAR RESPONDENT BY : SH. VIVEK NANGIA DATE OF HEARING : 30.09.2015 DATE OF PRONOUNCEMENT : 26.10.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), PANCHKULA DATED 10.4.2015 RELATING TO ASSESSMENT YE AR 2006-07. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE PROCEEDINGS U/S 147 / 148 OF THE INCOME TAX ACT ARE ILLEGAL, BAD IN LAW, ARBITRARY AND UNJU STIFIED. 2. THAT THE DISALLOWANCE OF RS. 135000 U/S 40(A)(IA ) READ WITH SECTION 194A ON ACCOUNT OF CREDIT OF INTE REST TO 2 SMT. JAMUNA DEVI ON 31.3.2006, AFTER HER DEATH IS ARBITRARY, UNJUSTIFIED, ILLEGAL AND BAD IN LAW. 3 THAT THE BENEFIT OF AMENDMENT OF SUB SEC.(1) OF SECITON 201 HAS BEEN WRONGLY DENIED BY THE LD. CIT( A), SIMPLY ON TECHNICAL GROUND, PARTICULARLY, WHEN THE APPELLANT FULFILLS ALL THE PRESCRIBED CONDITIONS AS LAID DOWN IN SEC. 201(1). 3. FIRSTLY, WE WILL TAKE UP GROUND NO.3 OF THE APPE AL. THE RELEVANT FACTS ARE THAT THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE FR OM THE INTEREST CREDITED TO THE ACCOUNT OF SMT. JAMUNA DEVI. SINCE NON DEDUCTION OF TDS ON THE INTEREST PAID U/S 194A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') WAS IN CONTRAVENTION TO THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, THE ASSESSING OFFICER DISALLOWED THE CREDIT OF RS. 1,35,000/- BY INVOKING THE PROVISIONS OF SECTION 194A OF THE ACT. 4. ON APPEAL, THE CIT(A) DISMISSED THE APPEAL OF TH E ASSESSEE, AND HENCE THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI SUDERS HAN KUMAR, LD. COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER OF THE CIT(A), WHEREIN THE SUBMISSIONS MADE ON BEHALF O THE ASSESSEE HAVE BEEN REPRODUCED. THE RELEVANT EXTRACT OF THE SUBMISSIONS AS APPEARING IN PARA 4 OF THE IMPUGNED ORDER ARE AS UNDER:- 3 THE APPELLANT FURTHER SUBMITTED THAT IT WOULD BE W ASTAGE OF TIME AND ENERGY IN EXECUTING A FUTILE EXERCISE AS NO LOS S OF REVENUE IN INCURRED IF THE TDS IS DEDUCTED LATER AND PAID IN T HE FINANCIAL YEAR THEN IT BECOMES AN ALLOWABLE EXPENDITURE IN TH E YEAR OF TD- MADE A:VJ DEPOSITED. SO, TTHE DEPARTMENT IS NOT GET TING ANYTHING BY INDULGING IN A FUTILE EXERCISE. THE APPELLANT AL SO SUBMITTED THAT THE FINANCE ACT, 2012 HAS MADE AMENDMENT TO SE CTION 40(A)(IA) BY INSERTION OF A PROVISO. THE AMENDME NT IS EFFECTIVE FROM 01.04.2013 APPLICABLE FROM A.Y. 2013-14 BUT I N VIEW OF DECISIONS OF HON'BLE SUPREME COURT IN THE CASES OF CIT VS. ALOM EXTRUSIONS LTD. [2009] 319 ITR 306 (SC) AND ALLIED MOTORS PVT LTD VS. CIT [1997] 139 CTR 364 (SC),THE CLAIM OF AS SESSEE THAT THE AMENDMENT BY OF DELETION HAD RETROSPECTIVE EFFE CT. THE APPELLANT FURTHER SUBMITTED THAT RETURN OF INCOME O F SMT. JAMUNA DEVI FOR A.Y, 2006-07 WAS FILED ON 08.09.2006 BY HE R LEGAL HEIR AND SHE HAD THE ONLY SOURCE OF INCOME BEING THE INT EREST INCOME OF RS.1,35,000/- RECEIVED FROM THE APPELLANT. SHE H AD NO TAX LIABILITY ACCRUED TO HER AS HER INCOME- WAS BELOW T HE TAXABLE INCOME. THE APPELLANT PRESUMED THAT SMT. JAMUNA DEV I HAD DISCHARGED HER ONUS OF PAYING ME DUE TAX ON THE RET URNED INCOME AND THEREFORE THE BENEFIT OF AMENDMENT WHICH IS APP LICABLE W.E.F. A.Y. 2013-14 MAY BE GIVEN TO THE APPELLANT RETROSPE CTIVELY. 5. IN OUR OPINION, THE ABOVE SUBMISSIONS OF THE ASS ESSEE ARE QUITE RELEVANT IN ORDER TO DECIDE THE ISSUE. WE FIND THAT THE ISSUE I S SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V ANSAL LANDMARK TOWNSHIP (P) LTD. IN ITA NO. 160 OF 2015, WHEREIN THE HON'BLE DELHI HIGH COURT, VIDE ITS ORDER DATED 26 .8.2015 HELD AS UNDER:- 5. THE OTHER ISSUE URGED BY THE REVENUE DURING TH E COURSE OF ARGUMENTS PERTAINS TO THE RETROSPECTIVITY OF THE SE COND PROVISO TO SECTION 40(A) (IA) OF ACT WHICH READS AS UNDER: PROVIDED FURTHER THAT WHERE AN ASSESSEE FAILS TO D EDUCT THE WHOLE OR ANY PART OF THE TAX IN ACCORDANCE WITH THE 4 PROVISIONS OF CHAPTER XVII-B ON ANY SUCH SUM BUT IS NOT DEEMED TO BE AN ASSESSEE IN DEFAULT UNDER THE FIRST PROVISO TO SUB-SECTION (1) OF SECTION 201, THEN, FOR THE PURPO SE OF THIS SUB-CLAUSE, IT SHALL BE DEEMED THAT THE ASSESSEE HA S DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISH ING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO 6. WHEN IT WAS POINTED OUT TO LEARNED COUNSEL FOR T HE APPELLANT THAT NO QUESTION AS SUCH HAS BEEN SOUGHT TO BE URGED BY THE REVENUE IN THE MEMORANDUM OF APPEAL, LEARNED COUNSEL STATED TH AT AN APPLICATION HAS BEEN FILED TO AMEND THE MEMORANDUM OF APPEAL TO INCLUDE SUCH A QUESTION AND THAT PERHAPS THE SAID A PPLICATION IS LYING UNDER OBJECTION. 7. NOTWITHSTANDING THE ABOVE, THE COURT HAS HEARD L EARNED COUNSEL FOR THE REVENUE ON THE ABOVE ISSUE AS WELL. ITA NO. 160 & 161/2015 PAGE 4 OF 10 8. IT IS SEEN THAT THE ISSUE IN THESE AYS ARISES I N THE CONTEXT OF THE DISALLOWANCE BY THE ASSESSING OFFICER OF THE PAYMEN T MADE BY THE RESPONDENT ASSESSEE TO ANSAL PROPERTIES AND INFRAST RUCTURE LTD. (APIL ) WHICH PAYMENT, ACCORDING TO THE REVENUE, OUGHT TO HAVE BEEN MADE ONLY AFTER DEDUCTING TAX AT SOURCE UNDER SECTION 194J OF THE ACT. BEFORE THE ITAT, IT WAS URGED BY THE ASSES SEE THAT IN VIEW OF THE INSERTION OF THE SECOND PROVISO TO SECTION 4 0(A) (IA) OF THE ACT, THE PAYMENT MADE COULD NOT HAVE BEEN DISALLOWE D. RELIANCE WAS PLACED ON THE DECISION OF THE AGRA BENCH OF ITA T IN ITA NO. 337/AGRA/2013 (RAJIV KUMAR AGARWAL V. ACIT) IN WHIC H IT WAS HELD THAT THE SECOND PROVISO TO SECTION 40 (A) (IA) OF T HE ACT IS DECLARATORY AND CURATIVE IN NATURE AND SHOULD BE GI VEN RETROSPECTIVE EFFECT FROM 1 ST APRIL 2005. 9. IT IS SEEN THAT THE SECOND PROVISO TO SECTION 40 (A) (IA) WAS INSERTED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1 ST APRIL 2013. THE EFFECT OF THE SAID PROVISO IS TO INTRODUCE A LE GAL FICTION WHERE AN ASSESSEE FAILS TO DEDUCT TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII B. WHERE SUCH ASSESSEE IS DEEMED NOT T O BE AN ASSESSEE IN DEFAULT IN TERMS OF THE FIRST PROVISO T O SUB-SECTION (1) OF 5 SECTION 201 OF THE ACT, ITA NO. 160 & 161/2015 PAGE 5 OF 10 THEN, IN SUCH EVENT, IT SHALL BE DEEMED THAT THE ASSESSE E HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISH ING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAI D PROVISO. 10. IT IS POINTED OUT BY LEARNED COUNSEL FOR THE RE VENUE THAT THE FIRST PROVISO TO SECTION 201 (1) OF THE ACT WAS INS ERTED WITH EFFECT FROM 1 ST JULY 2012. THE SAID PROVISO READS AS UNDE R: PROVIDED THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY, WHO FAILS TO DEDUCT THE WHOLE OR ANY PAR T OF THE TAX IN ACCORDANCE WITH THE PROVISIONS OF THIS CHAPT ER ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO TH E ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT- (I) HAS FU RNISHED HIS RETURN OF INCOME UNDER SECTION 139; (II) HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME; AND (III) HAS PAID THE TAX DUE ON THE INCOME DECLARED B Y HIM IN SUCH RETURN OF INCOME; AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFE CT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED. ITA N O. 160 & 161/2015 PAGE 6 OF 10 11. THE FIRST PROVISO TO SECTION 201 (1) OF THE ACT HAS BEEN INSERTED TO BENEFIT THE ASSESSEE. IT ALSO STATES THAT WHERE A PERSON FAILS TO DEDUCT TAX AT SOURCE ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SUCH PERSON S HALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF S UCH TAX IF SUCH RESIDENT HAS FURNISHED HIS RETURN OF INCOME UNDER S ECTION 139 OF THE ACT. NO DOUBT, THERE IS A MANDATORY REQUIREMENT UND ER SECTION 201 TO DEDUCT TAX AT SOURCE UNDER CERTAIN CONTINGENCIES , BUT THE INTENTION OF THE LEGISLATURE IS NOT TO TREAT THE AS SESSEE AS A PERSON IN DEFAULT SUBJECT TO THE FULFILMENT OF THE CONDITI ONS AS STIPULATED IN THE FIRST PROVISO TO SECTION 201(1). THE INSERTION OF THE SECOND PROVISO TO SECTION 40(A) (IA) ALSO REQUIRES TO BE V IEWED IN THE SAME MANNER. THIS AGAIN IS A PROVISO INTENDED TO BENEFIT THE ASSESSEE. THE EFFECT OF THE LEGAL FICTION CREATED THEREBY IS TO TREAT THE 6 ASSESSEE AS A PERSON NOT IN DEFAULT OF DEDUCTING TA X AT SOURCE UNDER CERTAIN CONTINGENCIES. 12. RELEVANT TO THE CASE IN HAND, WHAT IS COMMON TO BOTH THE PROVISOS TO SECTION 40 (A) (IA) AND SECTION 201 (1) OF THE ACT IS THAT THE AS LONG AS THE PAYEE/RESIDENT (WHICH IN THIS CA SE IS ALIP) HAS FILED ITS RETURN OF INCOME DISCLOSING THE PAYMENT R ECEIVED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HAS A LSO PAID TAX ON SUCH INCOME, THE ASSESSEE WOULD NOT BE TREATED AS A PERSON IN DEFAULT. AS FAR AS THE PRESENT CASE IS CONCERNED, I T IS NOT DISPUTED BY THE REVENUE THAT THE PAYEE HAS FILED RETURNS AND OFFERED THE SUM RECEIVED TO TAX. 13. TURNING TO THE DECISION OF THE AGRA BENCH OF IT AT IN RAJIV KUMAR AGARWAL V. ACIT (SUPRA ) , THE COURT FINDS TH AT IT HAS UNDERTAKEN A THOROUGH ANALYSIS OF THE SECOND PROVIS O TO SECTION 40 (A)(IA) OF THE ACT AND ALSO SOUGHT TO EXPLAIN THE R ATIONALE BEHIND ITS INSERTION. IN PARTICULAR, THE COURT WOULD LIKE TO R EFER TO PARA 9 OF THE SAID ORDER WHICH READS AS UNDER: ON A CONCEPTUAL NOTE, PRIMARY JUSTIFICATION FOR SU CH A DISALLOWANCE IS THAT SUCH A DENIAL OF DEDUCTION IS TO COMPENSATE FOR THE LOSS OF REVENUE BY CORRESPONDING INCOME NOT BEING TAKEN INTO ACCOUNT IN COMPUTATION OF TAXA BLE INCOME IN THE HANDS OF THE RECIPIENTS OF THE PAYMEN TS. SUCH A POLICY MOTIVATED DEDUCTION RESTRICTIONS SHOULD, THE REFORE, NOT COME INTO PLAY WHEN AN ASSESSEE IS ABLE TO ESTABLIS H THAT THERE IS NO ACTUAL LOSS OF REVENUE. THIS DISALLOWAN CE DOES DEINCENTIVIZE NOT DEDUCTING TAX AT SOURCE, WHEN SUC H TAX DEDUCTIONS ARE DUE, BUT, SO FAR AS THE LEGAL FRAMEW ORK IS CONCERNED, THIS PROVISION IS NOT FOR THE PURPOSE OF PENALIZING FOR THE TAX DEDUCTION AT SOURCE LAPSES. THERE ARE S EPARATE ITA NO. 160 & 161/2015 PAGE 8 OF 10 PENAL PROVISION S TO THAT EFFECT. DEINCENTIVIZING A LAPSE AND PUNISHING A LAPSE ARE TWO DIFFERENT THINGS AND HAVE DISTINCTLY DIFFERENT, AND SOMETIMES MUTUALLY EXCLUSIVE, CONNOTATIONS. WHEN WE APPRECIATE THE OBJECT OF SCHEME OF SECTION 40(A)(IA ), AS ON THE STATUTE, AND TO EXAMINE WHETHER OR NOT, ON A 'FAIR, JUST AND EQUITABLE' INTERPRETATION OF LAW- AS IS THE GUIDANC E FROM HON'BLE DELHI HIGH COURT ON INTERPRETATION OF THIS LEGAL 7 PROVISION, IN OUR HUMBLE UNDERSTANDING, IT COULD NO T BE AN 'INTENDED CONSEQUENCE' TO DISALLOW THE EXPENDITURE, DUE TO NON DEDUCTION OF TAX AT SOURCE, EVEN IN A SITUATION IN WHICH CORRESPONDING INCOME IS BROUGHT TO TAX IN THE HANDS OF THE RECIPIENT. THE SCHEME OF SECTION 40(A)(IA), AS WE S EE IT, IS AIMED AT ENSURING THAT AN EXPENDITURE SHOULD NOT BE ALLOWED AS DEDUCTION IN THE HANDS OF AN ASSESSEE IN A SITUA TION IN WHICH INCOME EMBEDDED IN SUCH EXPENDITURE HAS REMAI NED UNTAXED DUE TO TAX WITHHOLDING LAPSES BY THE ASSESS EE. IT IS NOT, IN OUR CONSIDERED VIEW, A PENALTY FOR TAX WITH HOLDING LAPSE BUT IT IS A SORT OF COMPENSATORY DEDUCTION RE STRICTION FOR AN INCOME GOING UNTAXED DUE TO TAX WITHHOLDING LAPSE. THE PENALTY FOR TAX WITHHOLDING LAPSE PER SE IS SEP ARATELY PROVIDED FOR IN SECTION 271 C, AND, SECTION 40(A)(I A) DOES NOT ADD TO THE SAME. THE PROVISIONS OF SECTION 40(A)(IA ), AS THEY EXISTED PRIOR TO INSERTION OF SECOND PROVISO THERET O, WENT MUCH BEYOND THE OBVIOUS INTENTIONS OF THE LAWMAKERS AND CREATED UNDUE HARDSHIPS EVEN IN CASES IN WHICH THE ASSESSEE'S TAX WITHHOLDING LAPSES DID NOT RESULT IN ANY LOSS T O THE ITA NO. 160 & 161/2015 PAGE 9 OF 10 EXCHEQUER. NOW THAT THE LEGISLATURE HAS BEEN COMPASSIONATE ENOUGH TO CURE T HESE SHORTCOMINGS OF PROVISION, AND THUS OBVIATE THE UNI NTENDED HARDSHIPS, SUCH AN AMENDMENT IN LAW, IN VIEW OF THE WELL SETTLED LEGAL POSITION TO THE EFFECT THAT A CURATIV E AMENDMENT TO AVOID UNINTENDED CONSEQUENCES IS TO BE TREATED A S RETROSPECTIVE IN NATURE EVEN THOUGH IT MAY NOT STAT E SO SPECIFICALLY, THE INSERTION OF SECOND PROVISO MUST BE GIVEN RETROSPECTIVE EFFECT FROM THE POINT OF TIME WHEN TH E RELATED LEGAL PROVISION WAS INTRODUCED. IN VIEW OF THESE DI SCUSSIONS, AS ALSO FOR THE DETAILED REASONS SET OUT EARLIER, W E CANNOT SUBSCRIBE TO THE VIEW THAT IT COULD HAVE BEEN AN 'I NTENDED CONSEQUENCE' TO PUNISH THE ASSESSEES FOR NON DEDUCT ION OF TAX AT SOURCE BY DECLINING THE DEDUCTION IN RESPECT OF RELATED PAYMENTS, EVEN WHEN THE CORRESPONDING INCOME IS DUL Y BROUGHT TO TAX. THAT WILL BE GOING MUCH BEYOND THE OBVIOUS INTENTION OF THE SECTION. ACCORDINGLY, WE HOLD THAT THE INSERTION OF SECOND PROVISO TO SECTION 40(A)(IA) IS DECLARATORY AND CURATIVE IN NATURE AND IT HAS RETRO SPECTIVE 8 EFFECT FROM 1ST APRIL, 2005, BEING THE DATE FROM WH ICH SUB CLAUSE (IA) OF SECTION 40(A) WAS INSERTED BY THE FI NANCE (NO. 2) ACT, 2004. 14. THE COURT IS OF THE VIEW THAT THE ABOVE REASON ING OF THE AGRA BENCH OF ITAT AS REGARDS THE RATIONALE BEHIND THE I NSERTION OF THE SECOND PROVISO TO SECTION 40(A) (IA) OF THE ACT AND ITS CONCLUSION THAT ITA NO. 160 & 161/2015 PAGE 10 OF 10 THE SAID PROVISO IS DECLARATORY AND CURATIVE AND HAS RETROSPECTIVE EFFE CT FROM 1ST APRIL 2005, MERITS ACCEPTANCE. 6. IN THE ABOVE CASE, THE HON'BLE HIGH COURT HAS H ELD THAT IN THE PROVISO TO SECTION 40(A)(IA) AND SECTION 201(1) OF THE ACT, ON E THING IS COMMON I.E. AS LONG AS THE PAYEE HAS FIELD ITS RETURN OF INCOME DI SCLOSING THE PAYMENTS RECEIVED BY AND IN WHICH INCOME DISCLOSING THE PAYMENT RECEI VED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HAS ALSO PAID TAX ON SUCH INCOME, THE ASSESSEE WOULD NOT BE TREATED AS A PERSON IN DEFAUL T. IN THE INSTANT CASE, NO TAX LIABILITY HAD ACCRUED TO SMT. JAMUNA DEVI (PAYEE) A S HER INCOME WAS BELOW THE TAXABLE INCOME. THUS, THE ASSESSEE PRESUMED THAT S MT. JAMUNA DEVI DISCHARGED HER ONUS OF PAYING THE DUE TAX IN THE RETURN OF INC OME AND THEREFORE, THE BENEFIT OF AMENDMENT WHICH IS APPLICABLE W.E.F. 1.4.2005 AS PER JUDGEMENT OF HON'BLE DELHI HIGH COURT REFERRED TO ABOVE, SHOULD BE GIVEN TO THE ASSESSEE RETROSPECTIVELY. IN VIEW OF THE SECOND PROVISO TO S ECTION 40(A)(IA) OF THE ACT AND THE FIRST PROVISO TO SECTION 201(1) OF THE ACT, THE ASSESSEE HAS FULFILLED ALL THE PRESCRIBED CONDITIONS AS LAID DOWN IN THE ABOVE PRO VISIONS OF THE ACT, THEREFORE, THERE IS NO JUSTIFICATION IN MAKING THE DISALLOWANC E OF RS. 1,35,000/- U/S 40(A)(IA) OF THE ACT. ACCORDINGLY, WE DELETE THE AD DITION AND ALLOW GROUND NOS. 2 & 3 OF THE APPEAL. 9 7. SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON MERITS, THEREFORE, WE DO NOT THINK IT NECESSARY TO DECIDE GROUND NO.1 OF THE APPEAL AS THE DISCUSSION ON THIS ISSUE WOULD BE OF ACADEMIC NATURE. 8. IN THE ABOVE TERMS, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/10/2015 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 26 TH OCTOBER, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR