Sh. Vijay Kumar Babbar, Jalandhar V. The Dy. Commissioner of Income-tax, Jalandhar

ITA 702/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8854 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR TARUNDEEP KAUR
• Assessee Lawyers: J S BHASIN
• Keywords: Depreciation; Opportunity of being heard
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.702(ASR)/2014 ASSESSMENT YEAR:2008-09 PAN: ADAPB6889K SH. VIJAY KUMAR BABBAR, VS. DY. COMMR. OF INCOME T AX, PROP. M/S. AUTOSONS INTERNATIONAL, CIRCLE-III, JAL ANDHAR. CHEEMA NAGAR, MITHAPUR, JALANDHDAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN, ADVOCATE RESPONDENT BY: DR. TARUNDEEP KAUR, DR DATE OF HEARING: 26/11/2015 DATE OF PRONOUNCEMENT: 23/02/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2008-09, AGAINST THE ORDER DATED 05.09.2014, PASSED BY THE L D. CIT(A). THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LD. CIT(A) MISDIRECTED HIMSELF ON FACT AND ON LAW, TO REJECT THE ASSESSEES CONTENTION THAT THE ASSESSME NT ORDER, PASSED UNDER DIRECTIONS OF THE ADDL. CIT GIVEN U/S 144A. PREJUDICIAL TO ASSESSEE, WITHOUT GRANTING A HEARI NG TO THE ASSESSEE, WAS VOID AB INITIO. 2. THAT THE LD. CIT(A) ALSO ERRED IN CONFIRMING THE DISALLOWANCE OF LOSS OF RS.10,69,016/- INCURRED ON A/C OF FLUCTU ATION IN THE RATE OF FOREIGN EXCHANGE (US DOLLARS) WITHOUT P ROPERLY APPRECIATING THE FACTS OF THE CASE AND N TOTAL DISR EGARD TO EXPLANATION AND EVIDENCE FILED IN SUPPORT THEREOF. HE ALSO ERRED IN ENHANCING THE LOSS BY RS.2,444/- TO RS.10, 71,460/- WITHOUT NOTICE. ITA NO.702(ASR)/2014 2 3. THE ADDITION OF RS.44,374/- MADE BY WAY OF DISA LLOWANCE OUT OF FOREIGN TRAVELING, WRONGLY DEBITED UNDER A W RONG HEAD, OUGHT TO HAVE BEEN DELETED BY THE LD. CIT(A), BUT W RONGLY CONFIRMED BY HIM. 4. FURTHER ADDITION OF RS.23,177/- OUT OF VEHICLE M AINTENANCE AND DEPRECIATION, AS MADE BY THE AO, HAS ALSO BEEN WRONGLY CONFIRMED BY THE LD. CIT(A). 2. APROPOS GROUND NO.1, THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN REJECTING THE SUBMISSION OF T HE ASSESSEE, THAT THE ASSESSMENT ORDER, PASSED UNDER DIRECTIONS OF THE A DDL. CIT GIVEN UNDER SECTION 144A OF THE ACT, WHICH WERE PREJUDICIAL TO THE ASSESSEE, WAS VOID AB INITIO, SUCH ORDER HAVING BEEN PASSED WITHOUT G RANTING ANY HEARING TO THE ASSESSEE, IN VIOLATION OF THE PROVISO TO SEC TION 144A OF THE ACT. 3. ON THE OTHER HAND, THE LD. DR HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER IN THIS REGARD, CONTENDING THAT THIS ISSUE WAS NOT RAISED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND THERE WAS NO MENTION IN THE ASSESSMENT ORDER OF ANY DIRECTIONS G IVEN BY THE ADDL. CIT, RANGE-III, JALANDHAR; THAT BEFORE THE LD. CIT(A) AL SO, THE ASSESSEE DID NOT PRODUCE ANY DOCUMENTARY EVIDENCE SUGGESTING ANY SP ECIFIC DIRECTIONS HAVING BEEN GIVEN BY THE ADDL. CIT, R-III, JALANDH AR; AND THAT, THEREFORE, THE LD. CIT(A) HAS CORRECTLY DELETED THE GROUNDS O F APPEAL RAISED BY THE ASSESSEE IN THIS REGARD. 4. IN THIS REGARD, IT IS SEEN THAT IN THE ASSESSMEN T ORDER, THE AO HAS SPECIFICALLY OBSERVED THAT: . DIRECTIONS U/S 144 A AS TO THE LINES ON WHICH INVESTIGATION CONNECTED WITH THE ASSESSMENT SHOULD BE MADE HAVE BEEN ISSUED BY THE ADDL. CIT, R-III, JALANDHAR IN THIS CASE. ITA NO.702(ASR)/2014 3 5. THE LD. CIT(A) REJECTED THE GROUND OF APPEAL RA ISED BY THE ASSESSEE IN THIS CONNECTION, OBSERVING AS FOLLOWS: 5.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSE SSEE FILED VIDE LETTER DATED 22.07.2014 CAREFULLY. IT HAS BEEN NOTI CED THAT THE ASSESSEE HAS NOT RAISED THIS ISSUE DURING ASSESSMEN T PROCEEDINGS THAT IS WHY THERE IS NO MENTION OF ANY DIRECTIONS G IVEN BY THE ADDL./JT. CIT, R-III, JALANDHAR IN THE ASSESSMENT O RDER. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS N OT PRODUCED ANY DOCUMENTARY EVIDENCE WHICH WILL SUGGEST THAT THE A DDL./JT. CIT, R- III, JALANDHAR HAS GIVEN ANY SPECIFIC DIRECTIONS WI TH REGARD TO ADDITIONS MADE. IN VIEW OF THESE FACTS AND IN THE C IRCUMSTANCES OF THE CASE AND MORE PARTICULARLY IN THE ABSENCE OF AN Y DOCUMENTARY EVIDENCE, THE GROUND NO.1 OF APPEAL TAKEN BY THE AS SESSEE IS DISMISSED. 6. THE ABOVE OBSERVATIONS OF THE LD. CIT(A) ARE O BVIOUSLY IN OBLIVION OF THE AFORESAID SPECIFIC OBSERVATION MADE BY THE A O IN THE ASSESSMENT ORDER. THUS, IT IS THE AOS OWN OBSERVATION THAT IN THIS CASE, DIRECTIONS U/S 144A OF THE ACT, WERE ISSUED BY THE ADDL. CIT, R-III, JALANDHAR, AS TO THE LINES ON WHICH INVESTIGATION CONNECTED WITH TH E ASSESSMENT SHOULD HAVE BEEN MADE. THAT BEING SO, THE PROVISO TO SECTI ON 144A OF THE ACT IMMEDIATELY COMES INTO PLAY. AS PER THIS PROVISO T O SECTION 144A: PROVIDED THAT NO DIRECTIONS WHICH ARE PREJUDICIA L TO THE ASSESSEE SHALL BE ISSUED BEFORE AN OPPORTUNITY IS GIVEN TO THE AS SESSEE TO BE HEARD. 7. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT NOW HERE HAS ANY OPPORTUNITY BEEN GRANTED TO THE ASSESSEE IN COMPLI ANCE OF THE AFORESAID PROVISO TO SECTION 144A OF THE ACT BEFORE THE ISSU ANCE OF DIRECTIONS WHICH WERE PREJUDICIAL TO THE ASSESSEE. IT REMAINS UNDISPUTED THAT IT WAS NOT THE ASSESSEE WHO HAD INVOKED THE JURISDICTION OF THE ADDL. CIT, R-III, JALANDHAR, UNDER SECTION 144A OF THE ACT. UNDER SEC TION 144A, A JOINT ITA NO.702(ASR)/2014 4 COMMISSIONER MAY, EITHER ON HIS OWN MOTION, OR ON A REFERENCE BEING MADE TO HIM BY THE AO, OR ON THE APPLICATION OF AN ASSESSEE, CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING IN WHICH AN AS SESSMENT IS PENDING AND, IF HE CONSIDERS THAT, HAVING REGARD TO THE NATURE OF THE CASE, OR THE AMOUNT INVOLVED, OR FOR ANY OTHER REAS ON, IT IS NECESSARY OR EXPEDIENT SO TO DO, HE MAY ISSUE SUCH DIRECTIONS AS HE THINKS FIT FOR THE GUIDANCE OF THE AO TO ENABLE HIM TO COMPLETE THE A SSESSMENT AND SUCH DIRECTIONS SHALL BE BINDING ON THE ASSESSING OFFICE R. SINCE IN THE PRESENT CASE, DIRECTIONS HAVE BEEN ISSUED BY THE ADDL. CIT, WHICH ARE BINDING IN NATURE, THE AOS INDEPENDENT VIEW IN THE MATTER OF INVESTIGATION EFFECTIVELY STANDS ECLIPSED THEREBY. ADDITION OF RS .10,69,016/- WAS MADE, DISALLOWING FOREIGN EXCHANGE FLUCTUATION GAIN , BASED ON THESE DIRECTIONS. EVEN THE LD. CIT(A) DOES NOT DENY THA T NO OPPORTUNITY OF BEING HEARD WAS AT ALL GRANTED TO THE ASSESSEE. 8. THAT BEING SO, IT WAS INCUMBENT ON THE LD. CIT(A ) TO DIRECT THE AO TO REDECIDE THE MATTER ON AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE QUA THE DIRECTIONS ISSUED U/S 144A OF THE ACT. THIS, HOWEVER, WAS NOT DONE, OBSERVING, ON THE CONTRARY, THAT THE ASSESSEE DID NOT RAISE THIS ISSUE DURING THE ASSESSMENT PROCEEDINGS AND TH AT EVEN IN THE APPELLATE PROCEEDINGS, NO MATERIAL WAS PRODUCED PRO VING THE ISSUANCE OF SUCH DIRECTIONS. NOW, THIS ACTION OF THE LD. CIT(A ) IS EVIDENTLY UNSUSTAINABLE IN LAW, IN VIEW OF THE CATEGORICAL O BSERVATION MADE BY THE AO IN THE ASSESSMENT ORDER AND DIRECTIONS HAVING IN FACT BEEN ISSUED IN ITA NO.702(ASR)/2014 5 THIS CASE. IT DOES NOT MATTER THAT THE ASSESSEE DID NOT RAISE THE ISSUE IN THE ASSESSMENT PROCEEDINGS. 9. ACCORDINGLY, THIS MATTER IS REMITTED TO THE FILE OF THE AO, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON AFFORDING DUE AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE IN COMPLIANC E OF THE PROVISIONS OF THE PROVISO TO SECTION 144A OF THE ACT. 10. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/02/2016 SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 23/02/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE:SH. VIJAY KUMAR BABBAR. JALANDHAR. 2. THE DCIT, CIRCLE-III, JALANDHAR. 3. THE CIT(A), JALANDHAR 4. THE CIT, JALANDHAR 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.