Shri.Tobby Simon, Bangalore V. Deputy Commissioner of Income-Tax, Bangalore

ITA 763/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7674 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 04-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: G SRIDHAR SMT PADMA MEE
• Keywords: Earning of tax free income; Condonation of delay
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 763/BANG/2017 ASSESSMENT YEAR : 2011-12 SHRI TOBBY SIMON, 34, EMBASSY DIAMANTE, VITTAL MALLAYA ROAD, BANGALORE 560 001. PAN: AAOPS 8164P VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI G. SRIDHAR, ADVOCATE RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 17.08.2017 DATE OF PRONOUNCEMENT : 24.08.2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF THE LD. CIT(A)-7, BANGALORE DATED 14.07.2016 FOR ASSESSMENT YEAR 2011-12. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER DATED 14.07.2016, PASSED BY CIT (A) SU FFERS FROM COMPLETE NON-APPLICATION OF MIND IS OPPOSED TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. IT IS SUBMITTED THAT THE ASSESSING OFFICER CAN I NVOKE THE PROVISIONS OF SECTION 14A(2) AND SECTION 14A(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' FOR SHORT) ONLY IF HE IS NOT SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSE. IT IS SETTLED LAW THAT THE ASSESSING OFFICER HAS TO RE CORD REASONS IN WRITING AS WHY HE IS NOT ABLE TO ACCEPT THE ITA NO. 763/BANG/2017 PAGE 2 OF 5 REASONS GIVEN BY THE ASSESSE AND THEN PROCEED TO AP PLY THE PROVISIONS OF SECTION 14A OF THE ACT READ WITH RULE 8D. THE ONUS IS ON THE ASSESSING OFFICER TO SHOW WITH REASO NS AS TO WHY HE IS NOT SATISFIED WITH THE CLAIM OF THE ASSES SE. IN THE PRESENT CASE, NEITHER IN THE NOTICE UNDER SECTION 1 43(2) NOR IN THE ASSESSMENT ORDER DATED 27.03.2014, THE RESPO NDENT HAS GIVEN ANY REASON AS TO WHY THE REASONS GIVEN BY THE APPELLANT IS NOT SATISFACTORY. THIS ASPECT HAS NOT BEEN CONSIDERED BY THE CIT(A). 3. THE CIT APPEALS HAS ERRED IN MAKING AN ADDITION U/S 14A SOLELY RELYING UPON THE PROVISION OF RULE 8D OF THE ACT WHICH RULE IS APPLICABLE ONLY WHERE THE EXPENDITURE INCUR RED CANNOT BE BIFURCATED AS EXPENDITURE INCURRED FOR THE PURPO SE OF TAXABLE INCOME AND EXEMPT INCOME. IN CASE THE EXPEN DITURE INCURRED IS WHOLLY RELATED TO TAXABLE INCOME, THE S AID RULE IS NOT APPLICABLE, AS IS UPHELD BY ITAT AS WELL AS BY COURTS. 4. IT IS SETTLED LAW THAT THE EXPENDITURE INCURRED SHOULD HAVE A NEXUS WITH THE EARNING OF THE EXEMPT INCOME. IF S UCH NEXUS CANNOT BE ESTABLISHED, THEN THE PROVISIONS OF SECTION 14A (2) AND (3) READ WITH RULE 8D ARE NOT ATTRACTED . FURTHER, IF AN ASSESSE HAS NOT INCURRED ANY EXPENDITURE, THE N NO EXPENDITURE CAN BE DISALLOWED ON A NOTIONAL BASIS U NDER SECTION 14A. 5. THE APPELLANT CRAVES TO ADD, ALTER, AMEND OR TO DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEA RING OF THE APPEAL. 3. THIS APPEAL WAS FILED BY THE ASSESSEE AFTER A DELAY OF 204 DAYS. THE ASSESSEE HAS MOVED THE APPLICATION FOR CONDONATION OF DELAY ALONGWITH AN AFFIDAVIT OF THE ASSESSEE DATED 12.06.2017. PARA N OS. 1 TO 6 OF AFFIDAVIT ARE RELEVANT REGARDING THE REASONS FOR DELAY AND HE NCE THESE PARAS OF THE AFFIDAVIT ARE REPRODUCED HEREIN BELOW. 1. I STATE THAT I AM THE APPELLANT IN THE ABOVE APP EAL AND AS SUCH I AM AWARE OF THE FACTS OF THE CASE. THEREFORE , I AM COMPETENT TO SWEAR TO THE PRESENT AFFIDAVIT . 2. I STATE THAT FOR THE ASSESSMENT YEAR 2011 - 2012 , THE RESPONDENT RAISED A DEMAND FOR RS. 61,090/- DISALLO WING CERTAIN EXPENDITURE OF RS. 2,18,847/- UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 VIDE ASSESSMENT ORDER DATE D ITA NO. 763/BANG/2017 PAGE 3 OF 5 27.03.2014. THE SAID ASSESSMENT ORDER WAS CHALLEN GED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) - 7 , BENGALURU IN ITA NO. 263/CIT(A)-7/BR/2014-15. THE COMMISSIONER OF INCOME TAX (APPEALS) - 7, BENGALURU , BY HIS ORDER DATED 14.07.2016, DISMISSED THE APPEAL AN D UPHELD THE ASSESSMENT ORDER AND THE DEMAND PASSED B Y THE RESPONDENT . 3. I STATE THAT THE AFOREMENTIONED ORDER WAS COMMUN ICATED TO ME ON 14.07.2016. I STATE THAT MY INCOME TAX CAS ES WERE EARLIER HANDLED BY SRI S. PARTHASARATHI . DUE TO HIS ILL HEALTH HE HAD TO UNDERGO SURGERY AND I WAS CONSTRAINED TO ENGAGE THE SERVICES OF ANOTHER ADVOCATE. SINCE, MY PREVIOU S ADVOCATE WAS HOSPITALIZED, THERE WAS A DELAY IN OBT AINING THE DOCUMENTS FROM HIM. 4. I FURTHER STATE THAT MY SECRETARY WAS ASSISTING ME IN COORDINATING WITH MY EXTERNAL LEGAL ADVISORS/ADVOCA TES ON VARIOUS LEGAL ISSUES. I STATE THAT MY SECRETARY WAS ASSISTING ME IN THE AFOREMENTIONED INCOME TAX APPEAL AS WELL . 5. I STATE THAT IMMEDIATELY AFTER OBTAINING ALL THE DOCUMENTS RELATING TO THE AFOREMENTIONED INCOME TAX APPEAL FR OM MY EARLIER ADVOCATE, I HANDED OVER THE SAME TO MY SECRETARY AND INSTRUCTED HER TO HAND THEM OVER TO MY ADVOCATE . HOWEVER, THE SAID DOCUMENTS WERE MISPLACED AND IN T HE MEANWHILE, MY SECRETARY ALSO RESIGNED DUE TO PERSON AL REASONS. THEREFORE, IT TOOK CONSIDERABLE TIME TO LO CATE THE SAID DOCUMENTS AND PREFER AN APPEAL CHALLENGING THE ORDER DATED 14.07.2016, PASSED BY THE COMMISSIONER OF INC OME TAX (APPEALS) - 7, BANGALORE, IN ITA NO. 263/CIT(A) - 7/BR/2014-15. HENCE THE DELAY IN FILING THE ABOVE A PPEAL . 6. I STATE THAT THE REASONS STATED ABOVE ARE BONAFT DE. I STATE THAT I HAVE A GOOD CASE ON MERITS. I STATE THAT IRR EPARABLE LOSS AND INJURY WOULD BE CAUSED TO ME WERE THE ACCOMPANYING APPLICATION TO BE REJECTED. ON THE CON TRARY, NO LOSS AND INJURY WILL BE CAUSED TO RESPONDENT WERE T HE PRESENT APPLICATION TO BE ALLOWED AS PRAYED FOR. 4. IN THE COURSE OF HEARING OF THE APPEAL, THE AR OF T HE ASSESSEE WAS ASKED TO SHOW THE EVIDENCE REGARDING ILL HEALTH OF SHRI S . PARTHASARATHI DURING THE RELEVANT PERIOD I.E. FROM 14.07.2016 WHEN THE O RDER OF LD. CIT(A) WAS RECEIVED BY THE ASSESSEE AND TILL THE APPEAL IS FIL ED BY THE ASSESSEE ON 04.04.2017. IN REPLY, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT NO SUCH ITA NO. 763/BANG/2017 PAGE 4 OF 5 EVIDENCE IN THE FORM OF MEDICAL CERTIFICATE ETC IS AVAILABLE. THE LD. DR OF REVENUE SUBMITTED THAT NO CASE IS MADE OUT BY THE A SSESSEE FOR CONDONATION OF DELAY AND THEREFORE, THE DELAY SHOUL D NOT BE CONDONED. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND TH AT AS PER THE AFFIDAVIT OF THE ASSESSEE, IT IS NOT A DISPUTE THAT THE IMPUGNED ORDER OF CIT(A) DATED 14.07.2016 WAS COMMUNICATED TO HIM ON SAME DATE I.E . 14.07.2016. IT IS ALSO SEEN THAT ALONG WITH APPEAL MEMO AND FORM NO. 36, THE ASSESSEE HAS FILED THE COPY OF ORDER OF CIT(A) WHICH WAS VERY MU CH AVAILABLE WITH THE ASSESSEE EVEN AS PER AFFIDAVIT. THE ASSESSEE HAS F ILED FORM NO. 36 ALONG WITH STATEMENT OF FACTS AND GROUNDS OF APPEAL FILED BEFORE THE CIT(A) AND COPY OF ASSESSMENT ORDER. THIS IS A CASE OF THE AS SESSEE THAT THESE DOCUMENTS WERE NOT AVAILABLE WITH THE ASSESSEE DURI NG THE TIME WHEN THE APPEAL WAS REQUIRED TO BE FILED BEFORE THE TRIBUNAL . EVEN IF THE FORM NO. 35, STATEMENT OF FACTS AND GROUNDS OF APPEAL FILED BEFORE THE CIT(A) AND THE ASSESSMENT ORDER WAS NOT READILY AVAILABLE WITH THE ASSESSEE, THE SAME COULD HAVE BEEN OBTAINED FROM THE OFFICE OF CIT(A) WITHIN A VERY SHORT TIME AND THE APPEAL COULD HAVE BEEN FILED WITHIN TI ME BECAUSE 60 DAYS ARE AVAILABLE TO THE ASSESSEE FOR FILING THE APPEAL BEFORE THE TRIBUNAL AFTER RECEIPT OF ORDER OF CIT(A). UNDER THESE FACTS, I D O NOT FIND ANY MERIT IN THE APPLICATION FOR CONDONATION OF DELAY IN THE PRE SENT CASE AND HENCE, THE DELAY IN FILING IS NOT CONDONED. ACCORDINGLY, THE A PPEAL OF THE ASSESSEE IS ITA NO. 763/BANG/2017 PAGE 5 OF 5 DISMISSED UNADMITTED AND THEREFORE, NO DECISION IS CALLED FOR IN RESPECT OF VARIOUS GROUNDS RAISED BY THE ASSESSEE IN THIS APPE AL. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF AUGUST, 2017. SD/- (A.K. GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 24 TH AUGUST, 2017. / MS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.