Rajesh Chauhan , Delhi V. ITO, Ward- 62(2), New Delhi

ITA 636/DEL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1500 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SHARMA
• Keywords: Depreciation; Application of stay; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY NEW DLEHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.636/DEL/2018 AND S.A. NO. 1087/DEL/2019 (IN ITA NO. 636/DEL/2018) ASSESSMENT YEAR: 2013-14 RAJESH CHAUHAN, VS. INCOME-TAX OFFICER, C-4/43, SECTOR-11, ROHINI, WARD 62(2), NEW DELHI DELHI-110 085 PAN ACDPS ACSPC 3798H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VISHAL KALRA, ADVOCATE RESPONDENT BY: MS. NIDHI SHARMA, SR. DR DATE OF HEARING:06/12/2019 DATE OF ORDER :06/12/2019 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 22/08/2017 PASSED IN A PPEAL NO. 10376/2016-17 BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-20, NEW DELHI (LD. CIT(A)), FOR ASSESSMENT YEAR 2013- 14, MR RAJESH CHAUHAN FILED THIS APPEAL ON SEVERAL GROUNDS INCLUD ING THE MAIN CONTENTION THAT EVEN IF THE APPEAL WAS TO BE DISPOS ED OF EX PARTE FOR WANT OF PROSECUTION, THE LD. CIT(A) SHOULD HAVE PAS SED A SPEAKING ORDER 2 ON MERITS DISPOSING OF ALL THE GROUNDS OF APPEAL. A SSESSEE ALSO FILED STAY APPLICATION TO STAY THE DEMAND PENDING DISPOSAL OF THE APPEAL. 2. AT THE OUTSET IT IS SUBMITTED BY BOTH THE SIDES THAT THE FACTS TO BE CONSIDERED FOR THE DISPOSAL OF THE STAY APPLICATION ARE THE SIMILAR TO DISPOSE OF THE APPEAL ITSELF AND THEREFORE, BOTH TH E STAY APPLICATION AND APPEAL MAY BE HEARD TOGETHER. CONSIDERING THE SAME, WE SHALL NOW PROCEED TO DISPOSE OF BY WAY OF THIS COMMON ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF CONTRACT AS A PROPRIETOR OF M/S CHAUHAN CONSTRUCTIONS AND DERIVING INCOME FROM BUSINESS, CA PITAL GAIN AND OTHER SOURCES. FOR THE ASSESSMENT YEAR 2013-14, HE FILED HIS RETURN OF INCOME ON 31/10/2013 DECLARING AN INCOME OF RS. 16,68,311/ -. ASSESSMENT WAS, HOWEVER, COMPLETE UNDER SECTION 143(3) OF THE INCOM E TAX ACT, 1961 (FOR SHORT THE ACT) AT RS. 1,47,63,590/-BY MAKING SEVE RAL ADDITIONS, NAMELY, DISALLOWANCE ON ACCOUNT OF WAGES AND OTHER EXPENSES AT 10%, ADDITION ON ACCOUNT OF UNSECURED LOAN, ADDITION ON ACCOUNT O F SHORT-TERM CAPITAL GAIN, DISALLOWANCE OF DEPRECIATION ON CAR, AND DISA LLOWANCE OF 1/5 OF TELEPHONE EXPENSES AND VEHICLE RUNNING AND MAINTENA NCE EXPENSES. 4. AGGRIEVED BY SUCH ADDITIONS, ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). IT COULD BE SEEN FROM THE ORDER OF THE LD. CIT(A) THAT SEVERAL OPPORTUNITIES WERE GRANTED TO THE ASSESSEE FOR ENTE RING APPEARANCE AND TO PROCEED WITH THE MATTER, BUT IN SPITE OF THE SAM E THE ASSESSEE FAILED TO COOPERATE WITH THE LD. CIT(A) TO DISPOSE OF THE MATTER ON MERITS. NOTING SO, LD. CIT(A) OBSERVED THAT IN SPITE OF THE FACT OF NON-CO- OPERATION BY THE ASSESSEE, HE CONSIDERED THE CASE O N MERITS AND BECAUSE 3 DESPITE THE NUMEROUS OPPORTUNITIES, ASSESSEE FAILED TO SUBSTANTIATE THE GROUNDS OF APPEAL AND THEREFORE, THERE WAS NO REASO N FOR THE LD. CIT(A) TO INTERFERE WITH THE ORDER OF THE ASSESSING OFFICE R. LD. CIT(A), THEREFORE, CONFIRMED THE ADDITIONS AND DISMISSED THE APPEAL. 5. AGGRIEVED BY SUCH AN ORDER OF THE LD. CIT(A), AS SESSEE FILED THIS APPEAL CHALLENGING THE ADDITIONS SEPARATELY BUT THE MAIN PLANK OF HIS CONTENTION IS THAT DESPITE THE FACT OF NON-APPEARAN CE OF THE ASSESSEE AND THAT THE LD. CIT(A) HAD TO DISPOSE OF THE APPEAL EX PARTE, IT IS INCUMBENT ON THE LD. CIT(A) TO PASS A SPEAKING ORDER ON MERIT S DISPOSING ALL THE GROUNDS OF APPEAL WITH REFERENCE TO THE MATERIAL AV AILABLE ON RECORD. LD. AR SUBMITTED THAT BECAUSE THE LD. CIT(A) PASSED A V ERY CRYPTIC ORDER, NO REASONS ARE AVAILABLE BEFORE THIS TRIBUNAL TO APPRE CIATE THE IMPUGNED ORDER ON MERITS. HE FURTHER SUBMITTED THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS READY AND WILLING TO COOPERATE WITH THE LD. CIT(A) FOR DISPOSAL OF THE MATTER ON MERITS. 6. PER CONTRA IT IS THE SUBMISSION OF THE LD. DR TH AT AS COULD BE SEEN FROM THE IMPUGNED ORDER, SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO PUT FORTH THEIR CONTENTIONS BEFORE THE LD. CIT(A), BUT WITHOUT ASSIGNING ANY VALID REASONS THE ASSESSEE FAILED TO COOPERATE WITH THE LD. CIT(A) AND, THEREFORE, IS NOT A FIT CASE TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO CONTEST THE MATTER BEFORE THE LD. CIT(A ). HE FURTHER SUBMITTED THAT DESPITE THE FACT OF THE ASSESSEE FAI LING TO COOPERATE WITH THE LD. CIT(A) AND NUMEROUS OPPORTUNITIES, LD. CIT( A) PROCEEDED TO DISPOSE OF THE MATTER ON MERITS AND CONSIDERING THE FACT THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE GROUNDS OF APPE AL, THERE WAS NO 4 REASON FOR THE LD. CIT(A) TO INTERFERE WITH THE ASS ESSMENT ORDER. SHE, THEREFORE, PRAYED TO DISMISS THE APPEAL AS WELL AS THE STAY APPLICATION. 7. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. THERE IS NO DISPUTE THAT BEFOR E THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THE DATA REGARDING THE GP/NP RATES, BOOKS OF ACCOUNTS, COMPLETE MUSTER ROLLS, CONFIRMAT ION OF THE PARTIES FROM WHOM UNSECURED LOANS WERE TAKEN ETC. LEARNED A SSESSING OFFICER BY COMPARING THE GP AND NP RATES OF THE CURRENT ASS ESSMENT YEAR WITH THOSE OF THE PREVIOUS ASSESSMENT YEAR THOUGHT IT FI T TO DISALLOW 10% OF EXPENSES UNDER THE HEADS PURCHASES, WAGES AND OTHER EXPENSES. THE OBSERVATIONS OF THE ASSESSING OFFICER ON THE ASPECT OF PURCHASES AND THE MUSTER ROLLS AND OTHER EXPENSES REQUIRES CONSIDERAT ION OF THE LD. CIT(A) WITH REFERENCE TO THE MATERIAL THAT WAS AVAILABLE O N RECORD. SO ALSO, ON THE OTHER ADDITIONS, THE LD. CIT(A) SHOULD HAVE GIV EN REASONS AS TO HOW AND WHY THE OBSERVATIONS OF THE ASSESSING OFFICER D ESERVE SUSTAINABILITY. IMPUGNED ORDER ON THESE ASPECTS IS VERY CRYPTIC INA SMUCH AS THE APPEAL IS DISPOSED OF BY THE LD. CIT(A) STATING THAT IN SP ITE OF NUMEROUS OPPORTUNITIES, THE ASSESSEE FAILED TO SUBSTANTIATE THE GROUNDS OF APPEAL AND THEREFORE THERE WAS NO REASON FOR HER TO INTERF ERE WITH THE ORDER OF ASSESSMENT. 8. IT IS THE SUBMISSION OF THE LD. AR THAT WHENEVER THE ADJOURNMENT APPLICATION WAS FILED, LD. CIT(A) CONSIDERED THE SA ME AND HAVING SATISFIED WITH THE REASONS, SHE GRANTED THE TIME AND THEREFOR E IT CANNOT BE SAID THAT THE ASSESSEE IS A TOTALLY NON-COOPERATIVE WITH THE LD. CIT(A) FOR DISPOSAL OF THE MATTER ON MERITS AND THERE ARE SUFF ICIENT REASON FOR THE ABSENCE OF THE ASSESSEE ON THE GIVEN DATES. 5 9. THOUGH THE REVENUE OPPOSED GRANTING ANOTHER OPPO RTUNITY TO THE ASSESSEE, THERE IS NO REASON AS TO HOW THE ASSESSEE STOOD TO GAIN BY ALLOWING THE APPEAL DISPOSED OF EX PARTE AND INVITI NG ADVERSE ORDER. UNLESS AND UNTIL THE RIGHTS OF THE PARTIES ARE CRYS TALLISED BY AFFLUX OF TIME, ALL THE ENDEAVOUR OF THE TAX FUNCTIONARIES WOULD BE TO DETERMINE THE JUST TAX LIABILITY BASING ON MATERIAL ON RECORD. WHEN TH E TECHNICALITIES ARE PITTED AGAINST THE DELIVERY OF SUBSTANTIAL JUSTICE, THE FORMER MUST GIVE WAY TO THE LATTER AND THE HIGHEST THAT WOULD HAPPEN BY AFFORDING AN OPPORTUNITY TO THE ASSESSEE WOULD BE THAT A CAUSE C OULD BE DECIDED ON MERITS. IT IS ALWAYS IN THE INTEREST OF JUSTICE. 10. WITH THIS VIEW OF THE MATTER, WE ARE OF THE CON SIDERED OPINION THAT TO SERVE THE ENDS OF JUSTICE, AN OPPORTUNITY C OULD BE GRANTED TO THE ASSESSEE TO SUBSTANTIATE HIS CASE BEFORE THE LD. CI T(A). HOWEVER, IN OUR ENDEAVOUR TO STRIKE A BALANCE BETWEEN THE REALISATI ON OF THE RIGHTS OF THE ASSESSEE AND THE NECESSITY TO EVINCE DUE DILIGENCE, IT IS JUST AND NECESSARY TO KEEP THE ASSESSEE TO CERTAIN TERMS LIK E PAYING COSTS TO THE REVENUE, TO SECURE HIS DUE DILIGENCE. 11. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDER AND REMAND THE MATTER TO THE FILE OF LD. CIT(A) TO DISPOSE OF THE MATTER AFRESH AFTER AFFORDING AN OPPORTUNITY TO THE ASSESSEE OF BEING H EARD, AND ALSO DIRECT THE ASSESSEE TO PAY COSTS OF RS. 5000/-TO THE REVEN UE. CONSEQUENT ON THE DISPOSAL OF THE APPEAL IN THE ABOVE WAY, THE ST AY APPLICATION BECOMES INFRUCTUOUS AND ACCORDINGLY IS LIABLE TO BE DISMISS ED. 6 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE AND STAY APPLICATION IS DISMISSED AS INFRUC TUOUS. PRONOUNCED IN OPEN COURT ONTHIS THE 6 TH DECEMBER, 2019. SD/- SD/- (G.S. PANNU) (K. NARASIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 06/12/2019 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI