The ITO, Ward-8(1), Ahmedabad V. Saptagiri Cargo Movers Pvt.Ltd., Ahmedabad

ITA 605/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0991 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDHAN
• Keywords: Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 605/AHD/2012 / ASSESSMENT YEAR : 2008-09 INCOME-TAX OFFICER, WARD 8(1), AHMEDABAD VS SAPTAGIRI CARGO MOVERS PVT LTD, B-504, TULIP CITADEL, B/H. SHREYAS TEKRA, AMBAWADI, AHMEDABAD-380015 PAN : AALCS 0316 H / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI K. MADHUSUDHAN, SR DR ASSESSEE BY : NONE / DATE OF HEARING : 25/07/2016 / DATE OF PRONOUNCEMENT: 28/07/2016 / O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD DATED 19.12.2011 FOR ASSESSMENT YEAR 2008-09. 2. IN THIS CASE, NOTICES FIXING THE DATE OF HEARING WERE ISSUED TO THE ASSESSEE FOR A COUPLE OF TIMES WHICH WERE RETURNED UNSERVED. LASTLY, THE NOTICE OF HEARING, FIXING THE DATE OF HEARING ON 25 .07.2016, WAS SERVED THROUGH AFFIXTURE BY THE INCOME-TAX OFFICER, WARD-4 (1)(1), AHMEDABAD. HOWEVER, WHEN THE CASE WAS CALLED FOR HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE AND NEITHER ANY ADJOURNMENT APPLICA TION WAS FILED. THEREFORE, WE PROCEEDED TO HEAR THE APPEAL EX-PARTE QUA THE RESPONDENT-ASSESSEE AND TO DECIDE THE APPEAL AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE DEPARTMENTAL REPRESENTATIVE AND THE MATERIAL AVAILABLE ON RECORD. ITA NO. 605/AHD/2012 ITO VS. SAPTAGIRI CARGO MOVERS PVT LTD AY : 2008-09 2 3. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL READ AS UNDER:- 1) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN ADMITTING ADDITIONAL E VIDENCE IN VIOLATION OF RULE 46A. 2) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALL OWANCE TO RS.24,63,700/- AS AGAINST RS.25,05,513/- MADE BY TH E ASSESSING OFFICER U/S. 40(A)(IA) OF THE ACT. 3) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALL OWANCE OF UNVERIFIABLE EXPENSES TO RS.3,27,970/- AS AGAINST RS.9,19,569/- MADE BY THE ASSESSING OFFICER. 4) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALL OWANCE TO RS.1,200/- AS AGAINST RS.54,208/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNPAID EXPENSES. 5) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALL OWANCE TO RS.2,01,945/- AS AGAINST RS.2,60,047/- MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF WEIGHT & RATE. 6) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE DISALL OWANCE TO RS.93,216/- AS AGAINST RS. 1,18,384/- MADE BY THE ASSESSING OFFICER U/S.40A(3) OF THE ACT. 7) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.24,05,900/- MADE BY THE ASSESSING OFFICER U/S.68 OF THE ACT. 8) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 9) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME- TAX (APPEALS)-XIV, AHMEDABAD MAY BE SET-A-SIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 4. BRIEFLY STATED, THE FACTS GIVING RISE TO THIS A PPEAL ARE THAT THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143 (2) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS SER VED ON THE ASSESSEE. THE ASSESSING OFFICER FINALIZED THE ASSESSMENT BY ASSES SING TAXABLE INCOME AT RS. 60,40,730/- AS AGAINST THE RETURNED INCOME OF ( -) RS.6,24,051/- BY MAKING ITA NO. 605/AHD/2012 ITO VS. SAPTAGIRI CARGO MOVERS PVT LTD AY : 2008-09 3 ADDITIONS/DISALLOWANCE U/S 40(A)(IA), 40A(3), 68 AN D ALSO ON ACCOUNT OF UNVERIFIABLE EXPENSES, UNPAID EXPENSES, DIFFERENCE IN WEIGHT & RATE ETC. 5. BEING AGGRIEVED BY THE ABOVE ASSESSMENT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO PARTLY ALLOWED T HE APPEAL OF THE ASSESSEE. FROM THE IMPUGNED ORDER, WE OBSERVE THAT THE LD. CI T(A) ADMITTED ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WITH AN A PPLICATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962 AND AFTER DUE CON SIDERATION OF ADDITIONAL EVIDENCE, THE LD. CIT(A) PARTLY ALLOWED ALL GROUNDS RAISED BY THE ASSESSEE, EXCEPT THE ADDITION MADE U/S 68 WHICH WAS COMPLETEL Y DELETED. 6. NOW, AGGRIEVED BY THE AFORESAID ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 7. THE LD. DR CONTENDED THAT THE ADDITIONAL EVIDENC E UNDER RULE 46A OF THE INCOME-TAX RULES CANNOT BE ADMITTED UNTIL AND U NLESS THE ASSESSEE SATISFY THE CONDITIONS LAID DOWN IN THE SAID RULE. THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO SUBSTANTIATE ITS CLAIM BUT THE ASSESSEE FAILED TO M AKE COMPLIANCE. EVEN THE ASSESSEE FAILED TO PRODUCE COMPLETE VOUCHERS, BILLS FOR VERIFICATIONS DURING THE REMAND PROCEEDINGS. IN SPITE OF ISSUING REPEATE D NOTICES OF HEARING AND EVEN AFTER THE AFFIXTURE BY INSPECTOR, THE ASSESSEE DID NOT CARE TO ATTEND THE PROCEEDINGS BEFORE ITAT. ON MERIT, THE LD. DR CONT ENDED THAT THE ORDER OF THE LD. CIT(A) WAS NOT JUSTIFIED AS IT WAS PASSED B Y ADMITTING ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A. 8. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. WE FIND THAT ADMITTEDLY THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON ADMISSIBILITY OF ADDITIONAL EVIDENCE. TH E ASSESSING OFFICER OBJECTED THE ADMISSIBILITY OF ADDITIONAL EVIDENCE D URING THE APPELLATE STAGE ITA NO. 605/AHD/2012 ITO VS. SAPTAGIRI CARGO MOVERS PVT LTD AY : 2008-09 4 AS ALSO DURING THE REMAND REPORT PROCEEDINGS THE AS SESSEE FAILED TO PRODUCE THE COMPLETE BILLS, VOUCHERS AND RELEVANT INFORMATI ON BEFORE THE ASSESSING OFFICER AS ELABORATED BY THE ASSESSING OFFICER IN H IS LETTERS DATED 11.08.2011, 10.10.2011 AND 21.11.2011. AFTER CONSIDERING THE S UBMISSIONS OF BOTH THE SIDES, THE LD. CIT(A) FINALLY HELD THAT THE ASSESSE E WAS PREVENTED BY SUFFICIENT CAUSE AND COULD NOT PRODUCE REQUIRED EVI DENCE BEFORE THE ASSESSING OFFICER AND HE ADMITTED ADDITIONAL EVIDEN CE FILED BY THE ASSESSEE. AT THIS POINT, WE FIND IT APPROPRIATE AND WORTHY TO FOLLOW THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CA SE OF COMMISSIONER OF INCOME TAX V/S MANISH BUILD WELL (P) LTD., REPORTED IN 204 TAXMAN 106 (DEL), WHEREIN THEIR LORDSHIPS HELD THAT ONCE THE A SSESSEE INVOKES RULE 46A OF THE RULES AND PRAYS FOR ADDITIONAL EVIDENCE BEFO RE THE LD. CIT(A), THEN THE PROCEDURE PRESCRIBED IN THE SAID RULE HAS TO SC RUPULOUSLY FOLLOWED. THE OPERATIVE PARAGRAPH OF ABOVE JUDGMENT IS REPRODUCED AS UNDER:- '24. IN THE PRESENT CASE, THE CIT (A) HAS OBSERVED T HAT THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED BECAUSE THE ASSESSEE WA S PREVENTED BY ADDUCING THEM BEFORE THE ASSESSING OFFICER. THIS OBSERVATION TAKES CARE OF CLAUSE (C) OF SUB-RULE (1) OF RULE 46A. THE OBSERVATION OF THE CIT (A) ALSO TAKES CARE OF SUB-RULE (2) UNDER WHICH HE IS REQUIRED TO RECORD HI S REASONS FOR ADMITTING THE ADDITIONAL EVIDENCE. THUS, THE REQUIREMENT OF S UB-RULES (1) AND (2) OF RULE 46A HAVE BEEN COMPLIED WITH. HOWEVER, SUB-RULE (3) WHICH INTERDICTS THE CIT (A) FROM TAKING INTO ACCOUNT ANY EVIDENCE PR ODUCED FOR THE FIRST TIME BEFORE HIM UNLESS THE ASSESSING OFFICER HAS HAD A REASONABLE OPPORTUNITY OF EXAMINING THE EVIDENCE AND REBUT THE SAME, HAS NOT BEEN COMPLIED WITH. THERE IS NOTHING IN THE ORDER OF THE CIT (A) 8 ITA NO. 4758/DEL/2011 TO SHOW THAT THE ASSESSING OFFICER WAS CONFRONTED WITH THE CONFIRMATION LETTERS RECEIVED BY THE ASSESSEE FROM THE CUSTOMERS WHO PAID THE AMOUNTS BY CHEQUES AND ASKED FOR COMMENTS. THUS, TH E END RESULT HAS BEEN THAT ADDITIONAL EVIDENCE WAS ADMITTED AND ACCEPTED AS GENUINE WITHOUT THE ASSESSING OFFICER FURNISHING HIS COMMENTS AND WITHOU T VERIFICATION. SINCE THIS IS AN INDISPENSABLE REQUIREMENT, WE ARE OF THE VIEW THAT THE TRIBUNAL OUGHT TO HAVE RESTORED THE MATTER TO THE CIT (A) WIT H THE DIRECTION TO HIM TO COMPLY WITH SUB-RULE (3) OF RULE 46A. IN OUR OPINION AND WITH RESPECT, THE ERROR COMMITTED BY THE TRIBUNAL IS THAT IT PROCEEDE D TO MIX UP THE POWERS OF THE CIT (A) UNDER SUB SECTION (4) OF SECTION 250 WITH THE POWERS VESTED IN HIM UNDER RULE 46A. THE TRIBUNAL SEEMS TO HAVE OVERL OOKED SUB-RULE(4) OF RULE 46A WHICH ITSELF TAKES NOTE OF THE DISTINCTION BETWEEN THE POWERS ITA NO. 605/AHD/2012 ITO VS. SAPTAGIRI CARGO MOVERS PVT LTD AY : 2008-09 5 CONFERRED BY THE CIT (A) UNDER THE STATUTE WHILE DIS POSING OF THE ASSESSEE'S APPEAL AND THE POWERS CONFERRED UPON HIM UNDER RULE 46A. THE TRIBUNAL ERRED IN ITS INTERPRETATION OF THE PROVISIONS OF RU LE 46A VIS-A-VIS SECTION 250(4). ITS VIEW THAT SINCE IN ANY CASE THE CIT (A) , BY VIRTUE OF HIS CONTERMINOUS POWERS OVER THE ASSESSMENT ORDER, WAS EMPOWERED TO CALL FOR ANY DOCUMENT OR MAKE ANY FURTHER ENQUIRY AS HE THIN KS FIT, THERE WAS NO VIOLATION OF RULE 46A IS ERRONEOUS. THE TRIBUNAL APP EARS TO HAVE NOT APPRECIATED THE DISTINCTION BETWEEN THE TWO PROVISI ONS. IF THE VIEW OF THE TRIBUNAL IS ACCEPTED, IT WOULD MAKE RULE 46A OTIOSE AND IT WOULD OPEN UP THE POSSIBILITY OF THE ASSESSEES' CONTENDING THAT A NY ADDITIONAL EVIDENCE SOUGHT TO BE INTRODUCED BY THEM BEFORE THE CIT (A) C ANNOT BE SUBJECTED TO THE CONDITIONS PRESCRIBED IN RULE 46A BECAUSE-IN ANY CASE THE CIT (A) IS VESTED WITH CONTERMINOUS POWERS OVER THE ASSESSMENT ORDERS OR POWERS OF INDEPENDENT ENQUIRY UNDER SUB-SECTION (4) OF SECTIO N 250. THAT IS A CONSEQUENCE WHICH CANNOT AT ALL BE COUNTENANCED.' 8.1 WE FIND THAT, IN THE PRESENT CASE ALSO, THE LD . CIT(A) CALLED FOR THE REMAND REPORT. THE ASSESSING OFFICER SUBMITTED HIS REMAND REPORT OBJECTING TO THE ADMISSION OF ADDITIONAL EVIDENCE F OR THE REASONS STATED THEREIN AND LD. CIT(A) AFTER RECORDING THE REASONS ADMITTED ADDITIONAL EVIDENCE. BUT FROM THE IMPUGNED ORDER, WE OBSERVE T HAT THE LD. CIT(A) DID NOT PROVIDE AN OPPORTUNITY TO EXAMINE OR REBUT THE ADDITIONAL EVIDENCE AS PER RULE 46A TO THE ASSESSING OFFICER. ACCORDINGLY, WE HOLD THAT THE LD. CIT(A) DID NOT FOLLOW THE RELEVANT STATUTORY PROVIS ION WHILE CONSIDERING THE ADDITIONAL EVIDENCE PRODUCED BEFORE HIM, THEREFORE, WE FIND IT APPROPRIATE TO RESTORE THE MATTER BACK TO THE LD. CIT(A) WITH A DIRECTION THAT THE LD. CIT(A) SHALL FOLLOW THE PROCEDURE LAID DOWN IN RULE 46A OF THE RULES AND ALSO THE DIRECTIONS OF HON'BLE JURISDICTIONAL HIGH C OURT OF DELHI IN THE CASE OF MANISH BUILD WELL (P) LTD. (SUPRA) FOR CONSIDERI NG ADDITIONAL EVIDENCE AND DECIDING THE APPEAL AFRESH. THE LD. CIT(A) SHAL L ALSO COMPLY THE STATUTORY PROCEDURAL REQUIREMENTS AND PROVIDE AN OP PORTUNITY OF HEARING TO THE ASSESSEE WHILE DECIDING THE APPEAL AFRESH. IN VIEW OF ABOVE, THE GROUND NO.1 OF THE REVENUE IS ALLOWED WITH THE DIRECTION T O THE LD. CIT(A) AS INDICATED ABOVE. ITA NO. 605/AHD/2012 ITO VS. SAPTAGIRI CARGO MOVERS PVT LTD AY : 2008-09 6 8.2 AS WE HAVE ARRIVED AT A CONCLUSION THAT THE LD . CIT(A) HAS NOT FOLLOWED THE PROCEDURE PROVIDED IN RULE 46A OF THE RULES FOR CONSIDERATION OF ADDITIONAL EVIDENCE AND HAVE RESTORED THE ISSUE TO THE FILE OF THE LD. CIT(A), WE DO NOT FIND IT APPROPRIATE TO DECIDE GRO UND NOS. 2 TO 7 ON MERITS. CONSEQUENTLY, THESE GROUNDS OF THE REVENUE NEED NO ADJUDICATION AT THIS STAGE, THEREFORE, WE DISMISS THE SAME. 8.3 BEFORE, WE PART WITH THE ORDER; WE ALSO FIND CO NSIDERABLE MERIT IN IMPOSING PENALTY FOR ASSESSEES CASUAL AND NON-COOP ERATIVE APPROACH IN THE TAX PROCEEDINGS. THEREFORE, A COST OF RS.10,000/- (RS. TEN THOUSAND ONLY) IS IMPOSED ON THE ASSESSEE WHICH IS TO BE PAID IN ACCO RDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE COURT ON 28 TH JULY, 2016 AT AHMEDABAD. SD/- SD/- (R.P. TOLANI) JUDICIAL MEMBER (AMARJIT SINGH) ACCOUNTANT MEMBER AHMEDABAD; DATED 28/07/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD