M/s Swastik Industries, Kathua V. The Income Tax Officer, Kathua

ITA 771/ASR/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3723 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Bonafide belief; Additional evidence; Condonation of delay
• Section: 80IB; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI T.S.KAPOOR, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS. 771 & 772/ASR/2014 ASSESSMENT YEARS: 2009-10 & 2010-11 M/S SWASTIK INDUSTRIES, VS THE ITO, WARD 1(4), KATHUA, J&K KATHUA PAN NO. AAZFS7492R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.N. ARORA RESPONDENT BY : SHRI RAHUL DHAWAN DATE OF HEARING : 24.11.2016 DATE OF PRONOUNCEMENT : 30.11.2016 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS RELATING TO ASSESSMENT YEA RS 2009-10 HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDERS O F THE CIT(A) DATED 17.01.2014 AND 15.10.2014 RESPECTIVELY. FIRST WE T AKE UP THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10. 2 2. THIS APPEAL OF THE ASSESSEE IS TIME BARRED BY 26 9 DAYS. THE ASSESSEE HAS MOVED AN APPLICATION FOR CONDONATION OF DELAY W HEREIN IT HAS BEEN PLEADED THAT THE ASSESSEE HAD TIMELY SUBMITTED THE REQUIRED DOCUMENTS IN THE OFFICE OF HIS CHARTERED ACCOUNTANT SHRI AMIT KUMAR AND THAT THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT HIS CHARTERED ACCOUN TANT HAS PREFERRED THE APPEAL. HOWEVER, STAFF OF THE CHARTERED ACCOUNTANT DID NOT HANDOVER THE PAPERS TO THE CHARTERED ACCOUNTANT AND THE APPEAL W AS NOT FILED IN TIME. WHEN A NOTICE OF DEMAND WAS RECEIVED BY THE ASSESSE E HE APPROACHED THE CHARTERED ACCOUNTANT AND ONLY THEN HE CAME TO THE K NOW THAT THE APPEAL REMAINED TO BE FILED IN THIS CASE. THE APPLICATION HAS BEEN ACCOMPANIED WITH THE AFFIDAVIT OF THE CONCERNED CHARTERED ACCOUNTANT SHRI AMIT KUMAR S/O SHRI RAMESH CHANDRA RESIDENT OF PITAMPURA, DELHI WH EREIN THE AVERMENTS SO MADE BY THE ASSESSEE IN HIS APPLICATION HAVE BEEN A FFIRMED BY HIM. IT HAS BEEN ADMITTED BY THE SAID CHARTERED ACCOUNTANT IN H IS AFFIDAVIT THAT DUE TO NEGLIGENCE OF HIS STAFF, THE APPEAL COULD NOT BE FI LED IN TIME AND THAT THE FAULT IS NOT ATTRIBUTABLE ON THE PART OF THE ASSESSEE. C ONSIDERING THE ABOVE APPLICATION, WHICH IS DULY SUPPORTED BY THE AFFIDAV IT OF THE CONCERNED CHARTERED ACCOUNTANT, DELAY IN FILING OF THE PRESEN T APPEAL IS HEREBY CONDONED. 3. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 3 1. THAT THE ASSESSMENT ORDER AS WELL AS THE ORDER OF T HE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ARE BOTH A GAINST THE FACTS OF THE CASE AND UNTENABLE IN LAW. 2. THAT THE LD. COMMISSIONER OF, INCOME-TAX (APPEALS) HAS GROSSLY ERRED IN NOT ALLOWING DEDUCTION UNDER S ECTION 80IB OF THE INCOME-TAX ACT, 1961,AS CLAIMED AT RS. 35.49.070/-. THAT THE DEDUCTION AS CLAIMED SHOULD H AVE BEEN ALLOWED AS THE ASSESSEE FULFILLS ALL THE CONDITIONS LAID DOWN UNDER THE LAW. 3. THAT THE LD. CIT (APPEALS) SHOULD HAVE ALLOWED THE CLAIM ON ACCOUNT OF INTEREST PAID TO THE BANK AT RS . 82,07,960/-. THE LD. CIT(A) DID NOT APPRECIATE THAT THE ASSESSEE FIRM HAS UTILIZED THIS AMOUNT FOR THE BUSI NESS PURPOSES AND AS SUCH THE INTEREST PAID THEREON SHOU LD HAVE BEEN ALLOWED AS CLAIMED. EVEN OTHERWISE, THE ASSESS EE IS ENTITLED FOR DEDUCTION ON ACCOUNT OF ENHANCED INCOM E FOR THE SIMPLE REASON THAT ENHANCED INCOME IS ALSO ENTITLED FOR THE DEDUCTION UNDER SECTION 80IB OF THE INCOME-TAX ACT, 1961, AS IT HAS BEEN HELD BY ALL THE JUDICIAL AUTHORITIES . 4. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 237000/- ON ACCOUNT OF RENT PAI D .THE DEDUCTION ON ACCOUNT OF RENT PAID SHOULD HAVE BEEN ALLOWED. EVEN OTHERWISE, ON THE ENHANCED INCOME THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 801B OF THE IT ACT. 1961 . THE DEDUCTION U/S. 80IB MAY KINDLY BE ALLOWED ON THE IN COME FINALLY ASSESSED. 4 5. AGAIN, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.49,00,000/- ON ACCOUNT OF UNEXPLAINE D CREDITS. THIS ADDITION IS NOT AT ALL CALLED FOR AND THE SAME MAY BE DELETED. 6. FURTHER, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS. 10.86.933/-MADE BY THE AO ON ACCOUNT OF EXCISE DUTY REFUND. THE SAME SHOUL D HAVE BEEN ALLOWED IN VIEW OF THE JUDGMENT OF JURISDICTIO NAL HIGH COURT OF JAMMU & KASHMIR IN THE CASE OF M/S BALAJCC ALLOYS. 7. AGAIN, THE LD.CIT(A) HAS ERRED IN NOT ALLOWING DEDUCTION U/S 80IB OF THE IT ACT, 1961, ON THE AMOU NT OF INTEREST RECEIVED ON FDR BY OBSERVING THAT THE SAME CANNOT BE CONSTRUED AS INCOME DERIVED FROM MANUFACTURING A CTIVITY. IT IS PRAYED THAT THE SAME MAY BE TREATED AS INCOME DERIVED FROM INDUSTRIAL ACTIVITY. FURTHER, IT IS PRAYED THA T THE DEDUCTION U/S 80IB MAY KINDLY BE ALLOWED ON THE SAI D ENHANCE INCOME. 4. AT THE OUTSET, THE LD. AR OF THE ASSESSEE HAS S UBMITTED THAT ASSESSMENT ORDER IN THIS CASE HAS BEEN PASSED BY TH E ASSESSING OFFICER EX- PARTE OF THE ASSESSEE U/S 144 OF THE ACT. HE HAS SU BMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COUL D NOT PRODUCE THE REQUIRED DOCUMENTS AS THE MANAGING PARTNER OF THE A SSESSEE FIRM WAS NOT WELL AND THE CONCERNED ACCOUNTANT HAD LEFT THE JOB. THE ASSESSING OFFICER 5 THEREFORE, PASSED EX-PARTE ASSESSMENT PROCEEDINGS U /S 144 OF THE ACT AND MADE THE IMPUGNED ADDITIONS. 4.1 DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE THE LD. CIT(A), THE ASSESSEE SUBMITTED VARIOUS DOCUMENTS IN SUPPORT OF HIS CLAIM, HOWEVER, THE LD. CIT(A) REFUSED TO CONSIDER THE DOCUMENTS SUBMIT TED BY THE ASSESSEE. THE LD. COUNSEL HAS INVITED OUR ATTENTION TO PARA 5.5 O F THE IMPUGNED ORDER WHEREIN THE LD. CIT(A) HAS OBSERVED THAT THE ASSESS EE WAS REQUIRED TO SUBMIT THE REQUIRED DETAILS BEFORE THE ASSESSING OFFICER. SINCE THE ASSESSEE HAD FAILED TO DO SO, THE ADDITIONAL EVIDENCES AT APPELL ATE STAGE WERE REJECTED BY HIM. THE LD. COUNSEL INVITED OUR ATTENTION TO THE I MPUGNED ORDER AND THE DOCUMENTS RELIED UPON BY THE ASSESSEE BEFORE LD. CI T(A) IN SUPPORT OF HIS CLAIM AND HE SUBMITTED THAT THESE DOCUMENTS ARE VER Y MUCH NECESSARY FOR THE JUST DECISION OF THE CASE. HE HAS SUBMITTED THAT A SSESSEE MAY BE GIVEN OPPORTUNITY TO PROVE HIS CLAIM BEFORE THE ASSESSING OFFICER. 4.2 THE LD. DR ON THE OTHER HAND, HAS VEHEMENTLY CO NTESTED THE ABOVE CONTENTIONS OF THE LD. AR AND HAS STATED THAT ASSES SEE DURING ASSESSMENT PROCEEDINGS HAS FAILED TO ATTEND THE PROCEEDINGS AN D FURNISH THE REQUIRED DETAILS AS REQUIRED BY THE ASSESSING OFFICER. HE, THEREFORE, HAS CONTENDED THAT ASSESSEE AT THIS STAGE IS ESTOPPED FROM HIS O WN ACT AND CONDUCT TO PRODUCE ANY DOCUMENTS IN SUPPORT OF HIS CLAIM. 6 5. WE HAVE HEARD AND CONSIDERED THE RIVAL CONTENTIO NS. ADMITTEDLY, THE ASSESSMENT ORDER IN THIS CASE IS ON EX-PARTE ORDER PASSED U/S 144 OF THE ACT. A PERUSAL OF THE IMPUGNED ORDER OF CIT(A) REVEALS T HAT ASSESSEE IN SUPPORT OF HIS CLAIM HAS PRODUCED THE VARIOUS RELEVANT DOCU MENTS BUT THE LD. CIT(A) HAS REFUSED TO LOOK INTO THE DOCUMENTS AND AS SUCH CONFIRMED THE ADDITION SO MADE BY THE ASSESSING OFFICER. THE ASSESSEE HAD EXP LAINED HIS INABILITY TO PRODUCE THE RELEVANT DOCUMENTS BEFORE THE ASSESSING OFFICER AND ALSO FURNISHED THE RELEVANT DOCUMENTS TO THE CIT(A). IN OUR VIEW THE LD. CIT(A) WAS SUPPOSED TO LOOKED INTO THOSE DOCUMENTS. WHILE REFUSING TO TAKE INTO CONSIDERATION THE RELEVANT DOCUMENTS WHICH WERE VER Y MUCH NECESSARY FOR THE JUST DECISION OF THE CASE, LD. CIT(A) FAILED TO EXE RCISE HIS APPELLATE JURISDICTION U/S 250 OF THE ACT. A DUTY WAS CAST UP ON THE LD. CIT(A) TO ADMIT AND CONSIDER THE EVIDENCE PRODUCED BEFORE HIM BY TH E ASSESSEE. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT PRABHAVATI S .SHAH V. CIT [(1998) 231 ITR 1 (BOM.)] HAS HELD THAT POWERS CONFERRED ON THE FIRST APPELLATE AUTHORITY UNDER SUB-SECTION (4) OF SECTION 250 OF T HE ACT, BEING QUASI-JUDICIAL POWER, IT IS INCUMBENT ON HIM TO EXERCISE THE SAME, IF THE FACTS AND CIRCUMSTANCES JUSTIFY. EVEN OTHERWISE UNDER RULE 46A OF THE INCOME TAX RU LES, THE CIT(A) HAS BEEN GIVEN POWER TO CALL FOR PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF ANY WITNESSES TO ENABLE HIM TO DISPOSE OF THE APPEAL. T HERE IS NO DOUBT ABOUT THE LEGAL POSITION THAT IF ANY DOCUMENTS FURNISHED BY T HE ASSESSEE BEFORE THE 7 COMMISSIONER (APPEALS) IS IN THE NATURE OF CLINCHIN G EVIDENCE WHICH GOES TO HE ROOT OF THE CASE THEN IN THE INTEREST OF JUSTICE SUCH TYPES OF EVIDENCE SHOULD NOT BE REJECTED. THE DOCUMENTS RELIED UPON B Y THE ASSESSEE ARE VERY MUCH RELEVANT AND NECESSARY FOR JUST AND PROPER DEC ISION OF THE CASE. HENCE, WE SET ASIDE THE FINDINGS OF THE CIT(A) ON THIS ISS UE AND REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO MAKE THE ASSESSMENT AFRESH IN RELATION TO THE ISSUES REFERRE D TO IN THE ABOVE GROUNDS OF APPEAL AS PER LAW AFTER AFFORDING REASONABLE OPPORT UNITY TO THE ASSESSEE OF BEING HEARD AND SUBMIT THE NECESSARY DOCUMENTS ETC. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. NOW COMING TO THE ASSESSEES APPEAL IN ASSESSMEN T YEAR 2010-11. THE PRESENT APPEAL IS TIME BARRED BY LIMITATION OF 10 D AYS. THE ASSESSEE HAS MOVED AN APPLICATION FOR CONDONATION OF DELAY. CONS IDERING THE AVERMENTS MADE IN THE APPLICATION AND THE SHORTNESS OF THE PE RIOD OF DELAY, THE DELAY IN FILING THE PRESENT APPEAL IS HEREBY CONDONED. 9. THE LD. COUNSEL FOR THE ASSESSEE HAS BROUGHT OUR ATTENTION TO THE IMPUGNED ORDER OF CIT(A) AND HAS CONTENDED THAT FIR ST APPEAL OF THE ASSESSEE 8 WAS DISMISSED IN LIMINE BY THE CIT(A) VIDE IMPUNGED ORDER REJECTING THE APPLICATION FOR THE ASSESSEE FOR CONDONATION OF DE LAY. 10. THE LD. COUNSEL HAS STATED THAT THERE WAS A DEL AY OF 5 DAYS IN FILING THE APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) OUGHT T O HAVE CONDONED THE DELAY. CONSIDERING THE ABOVE SUBMISSIONS, WE ARE O F THE VIEW THAT THE INTEREST OF JUSTICE WILL BE WELL SERVED IF THE SHOR T DELAY OF FIVE DAYS IN FILING THE APPEAL BEFORE THE LD. CIT(A) IS CONDONED AND CI T(A) IS DIRECTED TO DECIDE THE APPEAL ON MERITS. WE ORDER ACCORDINGLY. NEEDLESS TO SAY THAT THE LD. CIT(A) WILL GIVE PROPER OPPORTUNITY TO THE ASSE SSEE TO PROVE ITS CASE AND THEN TO PASS A SPEAKING ORDER ON ALL THE GROUNDS / ISSUES RAISED BY THE ASSESSEE. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.11.2016. SD/- SD/- (T.S KAPOOR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH NOVEMBER, 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 9