ITO, New Delhi V. M/s Gitika Marwah, New Delhi

ITA 743/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3702 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 18-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANEESH BAHUGUNA SENIOR
• Assessee Lawyers: NAVNEET JERATH
• Keywords: Opportunity of being heard; Additional evidence; Set aside
• Section: 271(1)(c); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.743/DEL/2010 (ASSESSMENT YEAR : 2005-06) ITO, WARD 46 (4), VS. MS. GITIKA MARWAH, NEW DELHI. 10/56, PUNJABI BAGH, NEW DELHI. (PAN : AAFPM6464R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NAVNEET JERATH, CA REVENUE BY : SHRI MANEESH BAHUGUNA, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THE IS THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT (APPEALS)-XXX, NEW DELHI DATED 9.12.2009 FOR THE AS SESSMENT YEAR 2005- 06. THE GROUND TAKEN BY THE REVENUE READ AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN:- 1. DELETING THE ADDITION OF RS.7,50,000/- WITHOUT A NY CORROBORATING EVIDENCE TO SUBSTANTIATE THE AIR DATA OF A.Y. 2005-06 IN RESPECT OF THE ASSESSEE; 2. ACCEPTING THE ASSESSEE'S CONTENTION THAT RS.2,50 ,000/- ONLY WAS INVESTED TO PURCHASE RBI BONDS AND NOT RS.7,50,000/- MORE SO THE DOCUMENTARY EVIDENCE ON RECORD DOES NOT PROVE THE SAME. ITA NO.743/DEL/2010 2 3. ALLOWING THE ASSESSEE TO PRODUCE ANY EVIDENCE BE FORE HER WHICH IS IN VIOLATION OF RULE 46A(I) OF THE LT. RUL ES, 1962, MORE SO WHEN THE CASE DOES NOT FALL ANY OF TH E FOUR EXCEPTIONS PROVIDED IN THE SAID RULE AND MOREOVER T HE ASSESSEE HERSELF ACCEPTS THE RECEIPTS OF NOTICES SE NT BY THE ASSESSING OFFICER BUT NOT COMPLYING WITH THE SAME WITHOUT ANY BONAFIDE REASON FOR DOING SO; 4. ADMITTING THE EVIDENCE PRODUCED BY THE ASSESSEE WITHOUT RECORDING THE REASONS IN WRITING FOR DOING SO WHICH IS IN VIOLATION OF RULE 46A(2) OF THE I.T. RULE, 1962. 2. WHILE PLEADING ON BEHALF OF THE REVENUE THE LEAR NED DR SUBMITTED THAT INFORMATION WAS RECEIVED THAT ASSESSEE HAD MAD E INVESTMENT IN THE RESERVE BANK OF INDIA (RBI) BOND AMOUNTING TO RS.7, 50,000/- DURING THE FINANCIAL YEAR 2004-05 RELEVANT TO ASSESSMENT YEAR 2005-06. A NOTICE U/S 142(1) OF INCOME-TAX ACT (HEREINAFTER REFERRED TO THE ACT) WAS ISSUED TO THE ASSESSEE TO FILE TRUE AND CORRECT RETURN OF INCOME. THE ASSESSEE DID NOT RESPOND TO THIS NOTICE. THE ASSESSEE WAS ISSUED A SHOW-CAUSE NOTICE ON 5.12.2007 AT THE ADDRESS AT 10/56, WEST PUNJABI BAG H, NEW DELHI AND THE COMPLIANCE WAS DUE ON 13.12.2007 TO EXPLAIN THE INV ESTMENT OF RS.7,50,000/- MADE IN THE BOND OF RBI. ON THIS DAT E ALSO, NO COMPLIANCE WAS MADE. THE ASSESSING OFFICER COMPLETED THE ASSE SSMENT U/S 144 OF THE ACT AND ASSESSED THE INCOME AT RS.7,50,000/- AND IN ITIATED PENALTY PROCEEDINGS U/S 271(1)(C) AND 271(1)(B). 3. ASSESSEE FILED THE APPEAL BEFORE THE CIT (A) AND BEFORE HIM, SHE DISCLOSED THAT SHE IS AN INCOME-TAX ASSESSEE AND HE R PAN NUMBER IS ITA NO.743/DEL/2010 3 AAFPM6464R. SHE HAS ALSO STATED THAT SHE HAS INVES TED ONLY RS.2,50,000/- ON 19.4.2004 VIDE CHEQUE NO.558301 FROM HER SAVING BANK ACCOUNT NO.2019128 WITH UNION BANK OF INDIA, PUNJABI BAGH, NEW DELHI. SHE ALSO ADMITTED THAT THE NON-COMPLIANCE OF NOTICE U/S 142( 1) WAS INADVERTENT AND UNINTENTIONAL. CIT (APPEALS) GRANTED THE RELIEF TO THE ASSESSEE BY OBSERVING AS UNDER :- 5. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A PPELLANT AND I FIND THAT THE ASSESSMENT HAS BEEN MADE BY THE AO DUE TO A MISUNDERSTANDING THAT THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME AND THAT THE INVESTMENT MADE BY THE ASSESSEE WAS UNEXPLAINED. HOWEVER, THE ASSESSEE HAS EXPLAINED BE FORE ME THAT SHE HAS BEEN REGULARLY FILING HER RETURN OF IN COME AND THE INVESTMENT OF RS.2,50,000/- ONLY WAS MADE BY HER FO R PURCHASE OF BONDS OF RESERVE BANK OF INDIA. AS THE INVESTMEN T OF RS.7,50,000/- WAS NEVER MADE BY THE APPELLANT AND T HE INVESTMENT OF RS.2,50,000/- MADE BY HER STANDS EXPL AINED NOW THE ADDITION MADE BY THE AO IS DELETED. 4. LEARNED DR SUBMITTED THAT ASSESSEE DID NOT COMPL Y WITH THE NOTICE ISSUED U/S 142(1), THEREFORE, THE ASSESSMENT MADE U /S 144 OF THE ACT WAS AS PER LAW. THE NOTICE WAS ISSUED AT THE CORRECT ADDR ESS, THEREFORE, THE NON- COMPLIANCE CANNOT BE TREATED AS INADVERTENT AND UNI NTENTIONAL. FURTHER, HE PLEADED THAT THE CIT (A) GRANTED THE RELIEF WITHOUT GOING INTO THE CORRECT FACTS OF THE CASE. THIS RELIEF WAS GRANTED BY ADMI TTING THE ADDITIONAL EVIDENCE, WHICH WAS OPPOSED BY THE ASSESSING OFFICE R IN THE REMAND REPORT. IN THE REMAND REPORT, THE ASSESSING OFFICER HAS SUB MITTED AS UNDER :- THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 144 ON 27.12.2007 MAKING AN ADDITION OF RS.7,50,000/- ON T HE BASIS OF ITA NO.743/DEL/2010 4 INFORMATION RECEIVED FROM CIT (CIB), DELHI AND THE MATERIAL AVAILABLE ON RECORD. THE ORDER WAS PASSED BY THE AO U/S 144 OF THE I.T. ACT. DESPITE SUFFICIENT OPPORTUNITIES BEING PROVIDED BY THE A.O, THE ASSESSEE DID NOT APPEAR BEFORE THE AO ON TIME AND H ENCE TAKING INTO CONSIDERATION THE TIME BARRING NATURE OF THE P ROCEEDINGS, THE AO LEFT WITH NO ALTERNATIVE BUT TO PASS THE ORD ER U/S 144. IT MAY ALSO BE MENTIONED THAT AS PER RULE 46 A OF T HE I.T. RULES, 1962, THE ASSESSEE IS NOT ENTITLED TO PRODUC E BEFORE THE CIT (A) ANY EVIDENCE OTHER THAN THE EVIDENCE PRODUC ED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS EXCEPT WHERE THE AO EITHER REFUSED TO ADMIT EVIDENCE OR WHERE HE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE CAL LED FOR OR WHERE THE ORDER WAS PASSED BY AO WITHOUT GIVING SUF FICIENT OPPORTUNITY. AS SUFFICIENT OPPORTUNITIES WERE PROVIDED TO THE AS SESSEE, SHE MAY KINDLY NOT BE ALLOWED TO PRODUCE ADDITIONAL EVI DENCE AT THIS STAGE. THEREFORE, THE ORDER OF CIT (A) IS NOT AS PER LAW. THERE IS A CLEAR VIOLATION OF RULE 46A OF INCOME-TAX RULES, 1962. HE FURTHER SUBMITTED THAT THE CIT (A) HAS ACCEPTED ASSESSEES PLEA THAT THE INVESTMEN T WAS MADE IN THE RBI BOND TO RS.2,50,000/- BY CHEQUE NO.558301 DATED 19. 4.2004 ISSUED FROM THE SAVING BANK ACCOUNT OF THE ASSESSEE KEPT WITH THE U NION BANK OF INDIA, PUNJABI BAGH, NEW DELHI BUT THE STATEMENT OF THE HO LDING WHICH IS AVAILABLE AT PAGE 17 OF THE PAPER-BOOK SHOWS THAT THE INVESTM ENT WAS MADE OF RS.2,50,000/-, RS.1,00,000/- AND RS.1,50,000/- ON 2 8.9.2004 ITSELF WHICH FALLS IN FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2005-06. HE SUBMITTED THAT AS PER THE STATEMENT OF HOLDING, THERE WAS MOR E INVESTMENT IN THE NAME ITA NO.743/DEL/2010 5 OF ASSESSEE. THE SAME FACTS HAVE NOT BEEN CONSIDER ED BY THE CIT (A) BEFORE GRANTING THE RELIEF TO THE ASSESSEE. 5. LEARNED AR FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT (A) AND PLEADED TO SUSTAIN THE SAME. 6. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE A SSESSING OFFICER RECEIVED INFORMATION THAT ASSESSEE HAS INVESTED RS. 7,50,000/- IN THE BONDS OF RBI DURING THE FINANCIAL YEAR 2004-05 RELEVANT TO A SSESSMENT YEAR 2005-06. THE ASSESSING OFFICER ISSUED NOTICE U/S 142(1) OF T HE ACT AT THE ADDRESS AT 10/56, WEST PUNJABI BAGH, NEW DELHI. THIS NOTICE W AS NOT RECEIVED BACK UNDELIVERED. THE ASSESSEE DID NOT COMPLY WHICH SHE HAS ADMITTED BEFORE THE CIT (A) THAT THE NON-COMPLIANCE OF NOTICE U/S 142(1 ) WAS INADVERTENT AND UNINTENTIONAL. IN SUCH A SITUATION, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ASSESSMENT U/S 144 OF THE ACT. THE ASSE SSING OFFICER HAD RIGHTLY OPPOSED TO ADMIT THE ADDITIONAL EVIDENCE FI LED BEFORE CIT (A). THE ORDER OF THE CIT (A) IS ALSO NOT IN CONSISTENT WITH THE FACTS AVAILABLE IN THE PAPERS SUBMITTED BEFORE HER. AS PER THE RBIS STAT EMENT OF HOLDING WHICH GIVES THE DETAILS OF THE BONDS HELD IN THE BOND LED GER ACCOUNT OF THE ASSESSEE AS INVESTED IS AS UNDER : TRANSACTION NATURE OF DUE DATE OF AMOUNT BALANCE I NITIALS 04.08.2003 INVESTMENT 04.08.2008 1,00,000 1,00,000 28.09.2004 PURCHASE 21.04.2009 2,50,000 2,50,000 28.09.2004 PURCHASE 24.11.2008 1,00,000 1,00,000 28.09.2004 PURCHASE 23.10.2008 1,50,000 1,50,000 ACCOUNT BALANCE 6,00,000 ITA NO.743/DEL/2010 6 CIT (A) ACCEPTED THE ASSESSEES CONTENTION THAT INV ESTMENT HAS BEEN MADE ONLY OF RS.2,50,000/- ON 19.4.2004 FROM THE BANK AC COUNT HELD BY THE ASSESSEE WITH UNION BANK OF INDIA. IT IS ALSO EVI DENT FROM PAGE 25 WHICH IS COPY OF THE SAVING ACCOUNT OF THE ASSESSEE OF UNION BANK OF INDIA THAT THE AMOUNT WAS DEBITED ON 20.4.2004. HOWEVER, THERE IS A DISCREPANCY ON THE FACTS AVAILABLE IN THE BOND LEDGER ACCOUNT OF THE A SSESSEE WITH THE RBI WHERE INVESTMENT OF RS.2,50,000/- HAD BEEN SHOWN ON 28.9. 2004. FURTHER THE STATEMENT ALSO SHOWS THAT THERE WAS MORE INVESTMENT DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2005-06 WHICH HAS NOT BEEN EVEN CONSIDERED BY THE CIT (A). CONSIDERING ALL THESE F ACTS, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE CORRECT FACTS REQUIRED TO BE BROUGHT ON RECORD, THEREFORE, WE SET ASIDE THE ISSUE TO THE FI LE OF THE ASSESSING OFFICER WITH THE DIRECTION TO DECIDE DE NOVO AFTER PROVIDIN G OF AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THE 2 ND DAY OF JULY, 2010. SD/- SD/- (I.P. BANSAL) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 2 ND DAY OF JULY, 2010/TS ITA NO.743/DEL/2010 7 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. CIT(A)-XXX, NEW DELHI. 5. DR, ITAT. ASSTT.REGISTRAR ITAT, NEW DELHI.