SHRI PURUSHOTTAM DAYAL JAIN, KOTA V. INCOME TAX OFFICER, WARD-2-3, KOTA

ITA 630/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1263 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT DHK
• Assessee Lawyers: SHYAM BIHARI NATANI
• Keywords: Additional evidence; Corroborative evidences
• Section: 143(3); 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 630/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. SHRI PURUSHOTTAM DAYAL JAIN P.O. BAPAWAR, TEHSIL SANGOD, DISTRICT KOTA. CUKE VS. THE INCOME TAX OFFICER WARD 2(3), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABKPJ 0846 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHYAM BIHARI NATANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04.09.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 05/09/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 15 TH JANUARY, 2018 OF LD. CIT (A), KOTA FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED IN PASSING ORDER AGAINST THE PRINCIPLES OF NA TURAL JUSTICE AND EQUITY IN NOT PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED ASSESS ING OFFICER IN DETERMINING INCOME AT RS. 2,63,05,399/- AGAINST RET URNED INCOME OF RS. 4,99,520/-. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE FOLLOWING ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER BY PASSING EX-PARTE ORDER U/S 144 OF THE INCOME TAX ACT, 1961 WITHOUT PROVIDING ADEQUATE OPPORTUNITY :- 2 ITA NO. 630/JP/2018 SHRI PURUSHOTTAMDAYAL JAIN, KOTA. (I) ON ACCOUNT OF HAMMALI EXPENSES OF RS. 1,83,202/- (II) ON ACCOUNT OF INDIRECT EXPENSES OF RS. 49,701/- (III) ON ACCOUNT OF HOUSEHOLD EXPENSES OF RS. 40,020/- (IV) ON ACCOUNT OF AGRICULTURE CREDITORS OF RS. 1,62,27, 577/- (V) ON ACCOUNT OF CLAIM OF SALES OF RS. 59,81,896/- (VI) ON ACCOUNT OF UNSECURED LOAN OF RS. 33,22,928/- (VII) ON ACCOUNT OF DIFFERENCE IN SUNDRY CREDITORS OF RS. 555/- 4. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. THE ASSESSEE IS PROPRIETOR OF M/S. SHUBHAM TRADI NG CO. WHICH IS ENGAGED IN THE BUSINESS OF DEALER IN AGRICULTURE COMMODITIES. THE ASSESSEE FILED HIS RETURN OF INCOME ON 26.09.2009 DECLARING INCOME OF RS. 4,99,5 20/-. THE AO COMPLETED THE ASSESSMENT ON 19 TH DECEMBER, 2011 UNDER SECTION 144 OF THE IT ACT AT THE TOTAL INCOME OF RS. 2,63,05,399/-. THUS THE AO MADE VARI OUS DISALLOWANCES AND ADDITIONS ON ACCOUNT OF FREIGHT AND HAMMALI EXPENSES, INDIREC T EXPENSES, HOUSEHOLD EXPENSES, AGRICULTURE CREDITORS, CLAIM ON SALES AND UNSECURED LOANS. THE ASSESSEE FILED APPEAL BEFORE LD. CIT (A) AGAINST THE ASSESSM ENT ORDER PASSED UNDER SECTION 144 OF THE IT ACT. HOWEVER, NONE HAS APPEARED ON B EHALF OF THE ASSESSEE EVEN BEFORE THE LD. CIT (A) DUE TO THE REASON THAT THE A SSESSEE WAS IN POLICE CUSTODY. THE ASSESSEE FILED APPLICATION FOR RAISING ADDITIONAL G ROUND AS WELL AS ADDITIONAL EVIDENCE TO BE ADMITTED. THE LD. CIT (A) WHILE PASSING THE IMPUGNED ORDER HAS UPHELD THE DISALLOWANCES/ADDITIONS MADE BY THE AO ON THE GROUN D THAT THE ASSESSEE WAS RESPONSIBLE FOR PRESENTING DOCUMENTS IN SUPPORT OF THE CLAIM. HOWEVER, WHEN THE ASSESSEE DID NOT FILE ANY EVIDENCE BEFORE THE AO TH EN THE AO COULD NOT BE FAULTED FOR MAKING THE ADDITIONS/DISALLOWANCES. 3 ITA NO. 630/JP/2018 SHRI PURUSHOTTAMDAYAL JAIN, KOTA. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT SINCE THE ASSESSEE WAS IN JAIL FOR ABOUT 21 MONTHS, DURING THE COURSE OF ASSESSMENT ASSESSEE COULD NOT SUBMIT ANY DOCUMENT/INFORMATION OR EVIDENCE IN SUPP ORT OF THE VARIOUS CLAIMS MADE BY THE ASSESSEE. FURTHER, SINCE ALL THE BOOKS OF A CCOUNTS WERE SEIZED BY THE STATE AUTHORITIES WHICH WERE LYING IN THE POLICE CUSTODY, THEREFORE, THE ASSESSEE COULD NOT FURNISH ANY DOCUMENT/EVIDENCE BEFORE THE LD. CIT (A ). THE LD. A/R HAS REFERRED THE ORDER OF IMPOUNDING THE BOOKS AND OTHER RECORDS OF THE ASSESSEE AND SUBMITTED THAT THE RELEVANT DOCUMENTS COULD NOT BE FILED AS THE SA ME WERE IMPOUNDED BY THE STATE AUTHORITIES AND LYING IN THE POLICE CUSTODY. THE L D. A/R HAS FURTHER SUBMITTED THAT NOW THE ASSESSEE HAS COLLECTED ALL THE RELEVANT EVI DENCES FROM THE POLICE THROUGH COURT AND, THEREFORE, THESE EVIDENCES ARE REQUIRED TO BE CONSIDERED IN SUPPORT OF THE CLAIMS WHICH WERE DISALLOWED BY THE AO. THUS THE L D. A/R HAS SUBMITTED THAT THE APPLICATION FILED UNDER SECTION 29 OF THE ITAT RULE S FOR ADMITTING EVIDENCE MAY BE ALLOWED. THE LD. A/R HAS FURTHER SUBMITTED THAT TH E ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT IS ALSO BAD IN LAW AS THERE WAS NO SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT. HE HAS ALSO PRAYED THAT THE APPLICATION FILED BY THE ASSESSEE FOR ADMITTING ADDITIONAL GROUND MAY BE ALL OWED. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DECISION OF THE C OORDINATE BENCH OF THE TRIBUNAL DATED 31 ST MAY, 2018 IN CASE OF MAHENDRA KUMAR SETHIA VS. ITO IN ITA NO. 186/JP/2017. HENCE THE LD. A/R HAS SUBMITTED THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE GOES TO THE ROOT OF THE MATTER AND IS PURELY LEGAL IN NATURE. THEREFORE, THE SAME MAY BE ADMITTED FOR ADJUDICATION. 3.2. ON THE OTHER HAND, THE LD. D/R HAS VEHEMENTLY OBJECTED TO THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE AS WELL AS RAISING THE ADDITIONAL GROUND AT THIS 4 ITA NO. 630/JP/2018 SHRI PURUSHOTTAMDAYAL JAIN, KOTA. STAGE AND SUBMITTED THAT THE AO AS WELL AS THE LD. CIT (A) GRANTED SUFFICIENT OPPORTUNITY TO THE ASSESSEE BUT THE ASSESSEE DID NO T FILE ANY EVIDENCE IN SUPPORT OF THE CLAIM. FURTHER, WHEN THE ASSESSEE NEVER OBJECT ED TO THE NOTICE UNDER SECTION 143(2) EITHER BEFORE THE AO OR BEFORE THE LD. CIT ( A) THEN RAISING SUCH A GROUND AT THIS STAGE WITHOUT EXPLAINING THE SUFFICIENT REASON FOR NOT RAISING THE SAME BEFORE THE AUTHORITIES BELOW IS NOT PERMITTED. HE HAS REL IED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE ASSESSEE DID NOT APPEAR BE FORE THE AO IN THE ASSESSMENT PROCEEDINGS DUE TO THE REASON THAT THE ASSESSEE WAS IN THE POLICE CUSTODY FOR ABOUT TWO YEARS. THIS FACT IS NOT IN DISPUTE AND THE LD. CIT (A) HAS ALSO RECORDED THIS FACT. THUS THE AO PASSED THE ASSESSMENT ORDER EX PARTE UN DER SECTION 144 AND MADE VARIOUS DISALLOWANCES AND ADDITIONS WHICH ARE ABOUT RS. 2.58 CRORES. THOUGH THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER PASSED BY THE AO UNDER SECTION 144 BY FILING APPEAL BEFORE THE LD. CIT (A), HOWEVER, THE ASSESSEE DID NOT FILE ANY EVIDENCE IN SUPPORT OF THE CLAIM EVEN BEFORE THE LD. CIT (A) . THE ASSESSEE SUBMITTED BEFORE THE LD. CIT (A) THAT SINCE THE ASSESSEE WAS IN POLI CE CUSTODY AND ALL THE BOOKS OF ACCOUNTS AND OTHER RECORDS WERE IMPOUNDED BY THE GO VERNMENT AUTHORITIES AND LYING IN THE POLICE CUSTODY, THEREFORE, THE ASSESSE E WAS NOT ABLE TO PRODUCE THE RELEVANT EVIDENCE. NOW THE ASSESSEE HAS FILED AN AP PLICATION FOR ADMITTING ADDITIONAL EVIDENCE AS WELL AS AN APPLICATION FOR ADMITTING AD DITIONAL GROUND WHICH READS AS UNDER :- THE ASSESSMENT ORDER FRAMED UNDER SECTION 143(3) IS BAD IN LAW THERE BEING NO SERVICE OF NOTICE UNDER 143(2). 5 ITA NO. 630/JP/2018 SHRI PURUSHOTTAMDAYAL JAIN, KOTA. WE FIND THAT THE REVENUE HAS NOT DISPUTED THAT THE ASSESSEE WAS IN POLICE CUSTODY FOR ABOUT 21 MONTHS FROM 22 ND OCTOBER, 2011 ONWARDS AND FINALLY RELEASED ON BAIL ON 20 TH JULY, 2013. THUS, DURING THE ASSESSMENT PROCEEDIN GS, THE ASSESSEE WAS IN THE POLICE CUSTODY AND, THEREFORE, THE ASSESSEE COU LD NOT APPEAR BEFORE THE AO. THE ASSESSEE HAS EXPLAINED THE NON PRODUCTION OF SUPPOR TING EVIDENCE THAT THE ENTIRE BOOKS OF ACCOUNTS AND OTHER RECORDS WERE IN THE POL ICE CUSTODY AS IMPOUNDED BY THE GOVERNMENT AUTHORITIES. THUS WE FIND THAT THE ASS ESSEE WAS HAVING SUFFICIENT CAUSE FOR NOT APPEARING BEFORE THE AO AS WELL AS NO T PRODUCING THE EVIDENCE IN SUPPORT OF THE CLAIM. THE AO HAS MADE VARIOUS DISA LLOWANCES/ADDITIONS FOR WANT OF THE SUPPORTING EVIDENCE. ACCORDINGLY WE FIND THAT THE ASSESSEE HAS MADE OUT THE CASE OF SUFFICIENT CAUSE FOR NOT PRODUCING THE SUPP ORTING EVIDENCE. HENCE WE FIND MERIT IN THE APPLICATION FILED UNDER RULE 29 OF THE ITAT RULES FOR ADMITTING THE ADDITIONAL EVIDENCE AND ACCORDINGLY THE MATTER IS S ET ASIDE TO THE RECORD OF THE AO FOR EXAMINATION OF THE EVIDENCE/DOCUMENTS TO BE FIL ED BY THE ASSESSEE IN SUPPORT OF VARIOUS CLAIMS. 5. THE ASSESSEE HAS ALSO RAISED A GROUND CHALLENGIN G THE VALIDITY OF THE ORDER PASSED BY THE AO FOR WANT OF SERVICE OF NOTICE UNDE R SECTION 143(2). THOUGH THIS GROUND RAISED BY THE ASSESSEE INVOLVES ONLY A LEGAL ISSUE, HOWEVER, SINCE THE RELEVANT RECORD IS NOT BEFORE US AS THE ASSESSEE NE VER QUESTIONED THE SERVICE OF NOTICE UNDER SECTION 143(2) EITHER BEFORE THE AO OR BEFORE THE LD. CIT (A), THEREFORE, IN THE ABSENCE OF THE RELEVANT RECORD, THIS ISSUE C ANNOT BE ADJUDICATED CONCLUSIVELY. ACCORDINGLY IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, SINCE WE HAVE ALREADY SET ASIDE THE MATTER TO THE RECORD OF THE AO, THEREFORE , THIS ISSUE IS ALSO SET ASIDE TO THE 6 ITA NO. 630/JP/2018 SHRI PURUSHOTTAMDAYAL JAIN, KOTA. RECORD OF THE AO FOR CONSIDERATION AND ADJUDICATION OF THE SAME AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 05/09/ 2018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 05/09/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI PURUSHOTTAM DAYAL JAIN, KOTA . 2. THE RESPONDENT THE ITO WARD 2(3),KOTA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 630/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 7 ITA NO. 630/JP/2018 SHRI PURUSHOTTAMDAYAL JAIN, KOTA.