Rajesh Kumar, Gurgaon V. ITO WARD - 3(4), Gurgaon

ITA 7827/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5450 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 26-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Rectification of order; TDS
• Section: 143(3); 40(a)(ia); 251; 22; 154

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI (THROUGH VIRTUAL HEARING) BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO . 7827 /DEL/20 19 ASSESSMENT YEAR : 20 1 6 - 17 RAJESH KUMAR, C/O H.NO.651, FF, SEC.10A, NEAR MEENAKSHI PUBLIC SCHOOL, GURGAON, HARYANA. PAN: BGWPK8807L VS. ITO, WARD - 3(4), GURGAON. (APPELLANT ) (RESPONDENT) A SSESSEE BY : SHRI M.R. SAHU, CA RE VENUE BY : SHRI R AMESH KUMAR, SR. DR DATE OF HEARING : 2 4 . 0 8 . 20 21 DATE OF PRONOUNCEMENT : 22 . 0 9 . 20 21 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE EX PARTE ORDER DATED 30 TH APRIL, 2019 OF THE CIT(A) - 1, GURGAON, RELATING TO A.Y. 2013 - 14. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 2 9 TH SEPTEMBER, 2013, DECLARING TOTAL INCOME AT RS.11,79,430/ - . THE AO COMPLETED THE ASSESSMENT U/S 143(3) ON 18 TH MARCH, 2016 DETERMINING THE TOTAL INCOME AT RS.11,92,980/ - WHEREIN HE MADE AN ADDITION OF RS.13,550/ - BY RESTRICTING THE DEPRECIATION ON FURN ITURE AT 10% AS AGAINST 15% CLAIMED BY THE ITA NO. 7827 /DEL/20 19 2 ASSESSEE. SUBSEQUENTLY, THE AO NOTICED THAT THE ASSESSEE HAD NOT DEDUCTED TDS ON ACCOUNT OF RENT PAYMENT OF RS.24,38,520/ - IN RESPECT OF 14 SHOPS AS CLAIMED BY THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT. THE AO A CCORDINGLY ISSUED NOTICE U/S 154 OF THE IT ACT. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEEE, THE AO HELD THAT THE ASSESSEE IS LIABLE TO DEDUCT TDS ON THE RENT PAYMENT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE IN THE ORDER PASSED U/S 154 OF THE ACT. SINCE THE ASSESSEE DID NOT APPEAR BEFORE THE CIT(A), THE LD.CIT(A), IN THE EX PARTE ORDER PASSED BY HIM, UPHELD THE ACTION OF THE AO. 3. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISIN G THE FOLLOWING GROUNDS: - 1. LEGAL GROUND: AO HAD EXCEEDED HIS JURISDICTION IN EXERCISING HIS POWER UNDER SECTION 154 OF THE ACT: 1.1 THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AO HAS ERRED IN LAW AND ON FACTS BY DISALLOWING RENTAL EX PENSES ON ACCOUNT OF NON DEDUCTION OF TDS UNDER SECTION 40(A)(IA) THAT ISSUE IS NOT ONLY DEBATABLE BUT ALSO THAT MISTAKE HAS TO BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ACCORDINGLY RECTIFICATION ORDER UNDER SECTION 154 IS BAD IN LAW AND INVALID. 2.MERITS OF THE CASE: 2.1 THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AO HAS ERRED IN LAW AND ON FACTS BY NOT SPECIFYING ANY REASON AND BASIS TOWARDS REJECTION OF THE EXPLANATION AND DOCUMENTARY EVIDENCES PRODUCED BEFORE HIM TOWARDS NON APPLICABILITY OF TDS PROVISION ON RENTAL EXPENSES THUS ADDITION OF RS.24,38,520/ - IN THE RECTIFICATION ORDER PASSED UNDER SECTION 154 DESERVES TO BE DELETED IN FULL. 2.2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS BY DISMISSING THE APPEAL WITHOUT OFFERING ADEQUATE OPPORTUNITY OF HEARING AND WITHOUT ADJUDICATING THE MATTER ON MERIT BASIS. ITA NO. 7827 /DEL/20 19 3 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE HEARING OF THE APPEAL. 3.1 THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDITIONAL GROUNDS: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO ERRED IN DISALLOWING UNDER SECTION 40(A)(IA) THE ENTIRE AMOUNT OF RENT PAI D WITHOUT APPRECIATING THE FACT THAT AMENDMENT BROUGHT IN BY THE FINANCE (NO.2) ACT, 2014 W.E.F 1ST APRIL, 2015 IN SECTION 40(A)(IA) RESTRICTING DISALLOWANCE UP TO 30% IS APPLICABLE RETROSPECTIVELY HAVING REGARD TO THE RATIO OF THE DECISION OF HON'BLE DELH I TRIBUNAL IN THE CASE OF' MURADUL HAQUE VS. ITO (2020) 117 TAXMANN.COM 251 (DEL. TRIB)'. 4. THE LD. COUNSEL FOR THE ASSESSEE, REFERRING TO THE ADDITIONAL GROUND, SUBMITTED THAT THE SAME IS PURELY A LEGAL GROUND AND, THEREFORE, IN VIEW OF THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF NTPC VS. CIT, 229 ITR 383, THE SAME SHOULD BE ADMITTED. 5. AFTER HEARING BOTH THE SIDES, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 6. I HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERU SED THE RECORD. I FIND, THE AO, IN THE INSTANT CASE, INVOKED THE PROVISIONS OF SECTION 154 ON THE GROUND THAT THE ASSESSEE HAS NOT DEDUCTED TDS ON THE RENT PAYMENT OF RS.24,38,520/ - IN RESPECT OF 14 SHOPS AS CLAIMED BY THE ASSESSEE IN THE PROFIT & LOSS ACC OUNT. I FIND, THE LD.CIT(A) UPHELD THE ACTION OF THE AO SINCE THERE WAS NOBODY TO REPRESENT THE CASE DESPITE ISSUE OF NOTICE WHICH WAS DULY SERVED ON THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM I T PROPER TO RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) WITH A ITA NO. 7827 /DEL/20 19 4 DIRECTION TO GIVE ONE FINAL OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS CASE AND DECIDE THE ISSUE AS PER FACT AND LAW INCLUDING THE ADDITIONAL GROUND RAISED BEFORE THE TRIBUNAL . THE A SSESSEEE IS ALSO HEREBY DIRECTED TO APPEAR BEFORE THE CIT(A) AND SUBSTANTIATE HIS CASE WITHOUT SEEKING ANY ADJOURNMENT UNDER ANY PRETEXT FAILING WHICH THE LD.CIT(A) IS AT LIBERTY TO PASS APPROPRIATE ORDER AS PER LAW. I HOLD AND DIRECT ACCORDINGLY. THE GR OUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. TH E DECISION WAS PRONOUNCED IN THE OPEN COURT ON 22. 0 9 . 20 21 SD/ - ( R. K. PANDA ) ACCOUNTANT MEMBER DATED: 22 ND SEPTEMBER, 2021. DK COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI