Mahendra Kumar (HUF), CHENNAI V. ACIT, CHENNAI

ITA 930/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8638 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Principle of natural justice
• Section: 131

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.930/MDS/2015 ' #$' / ASSESSMENT YEAR : 2011-12 SHRI MAHENDRA KUMAR (HUF), SHRI T.N. SEETHARAMAN, ADVOCATE, #384 (OLD NO.196), LLOYDS ROAD, CHENNAI - 600 086. PAN : AAEHM 7660 N V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE XI PRESENTLY, THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 5, CHENNAI - 600 034. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI T.N. SEETHARAMAN, ADVOCATE ()&' * + / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT , # * -. / DATE OF HEARING : 15.06.2016 /0$ * -. / DATE OF PRONOUNCEMENT : 18.08.2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 5, CHENN AI, DATED 11.02.2016 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2. SHRI T.N. SEETHARAMAN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS WITH REGARD TO DISALLOWANCE OF COMMISSION PAID TO THE EXTENT OF ` 22,25,873/-. 2 I.T.A. NO.930/MDS/15 THE LD.COUNSEL SUBMITTED THAT THE ASSESSING OFFICER APPEARS TO HAVE RECORDED STATEMENTS UNDER SECTION 131 OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FROM THE PERSONS TO WHOM THE COMMISSION WAS PAID. HOWEVER, THE ASSESSING OFFICER HAS NOT F URNISHED THE COPIES OF THE STATEMENT TO THE ASSESSEE, THEREFORE, THE ASSESSEE HAD NO OCCASION TO RESPOND TO THE SO-CALLED STATEME NTS SAID TO BE RECORDED FROM THE COMMISSION AGENTS. WITHOUT FURNI SHING THE COPIES OF THE STATEMENTS SAID TO BE RECORDED FROM T HE RECIPIENTS OF THE COMMISSION, THE ASSESSING OFFICER CONCLUDED THA T THE RECIPIENTS OF THE COMMISSION HAVE NOT RENDERED ANY SERVICE, TH EREFORE, HE DISALLOWED THE PAYMENT OF COMMISSION TO THE EXTENT OF ` 22,25,873/- ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS TO B E GIVEN AN OPPORTUNITY TO GO THROUGH THE STATEMENTS SAID TO BE RECORDED FROM THE COMMISSION AGENTS AND OPPORTUNITY HAS TO BE GIV EN FOR CROSS- EXAMINATION. 3. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE WAS SHO WN THE STATEMENTS RECORDED BY THE ASSESSING OFFICER UNDER SECTION 131 OF THE ACT. SINCE THE ASSESSEE WAS AWARE OF THE STATE MENTS, ACCORDING TO THE LD. D.R., NOW THE ASSESSEE CANNOT CLAIM THAT THE STATEMENTS WERE NOT FURNISHED TO HIM. ON THE QUERY FROM THE 3 I.T.A. NO.930/MDS/15 BENCH, WHETHER THE STATEMENTS WERE FURNISHED TO THE ASSESSEE, THE LD. D.R. CLARIFIED THAT COPIES OF THE STATEMENTS WE RE NOT FURNISHED TO THE ASSESSEE, HOWEVER, IT WAS SHOWN TO THE ASSESSEE . REFERRING TO THE ASSESSMENT ORDER, THE LD. D.R. POINTED OUT THAT THE SO-CALLED RECIPIENTS OF THE COMMISSION COULD NOT EVEN FURNISH THE DETAILS OF THE MEDICINES THEY HAVE SUPPLIED. THEY COULD NOT F URNISH THE DETAILS OF THE CLIENTS TO WHOM THE ASSESSEE INTRODU CED AND OTHER DETAILS REGARDING THE SERVICES SAID TO BE RENDERED BY THEM. NONE OF THE AGENTS PROVIDED DEBIT NOTES OR EVIDENCE FOR HAV ING ACTUALLY RENDERED THE SERVICE. IN THE ABSENCE OF ANY MATERIA L, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY CONFIRME D THE ADDITION MADE BY THE ASSESSING OFFICER. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSING OFFI CER SUMMONED THE RECIPIENTS OF THE COMMISSION UNDER SECTION 131 OF THE ACT AND STATEMENTS WERE ALSO ADMITTEDLY RECORDED FROM THEM. THE ASSESSING OFFICER, IN FACT, PLACED RELIANCE ON THE STATEMENTS RECORDED FROM THE SO-CALLED COMMISSION AGENTS AND F OUND THAT THERE WAS NO EVIDENCE FOR THE SERVICES ACTUALLY REN DERED BY THEM. ADMITTEDLY, THE COPIES OF SO-CALLED STATEMENTS RECO RDED UNDER 4 I.T.A. NO.930/MDS/15 SECTION 131 OF THE ACT WERE NOT FURNISHED TO THE AS SESSEE. THE REVENUE CLAIMS THAT THE STATEMENTS WERE SHOWN TO TH E ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHE N THE ASSESSING OFFICER IS PLACING RELIANCE ON THE STATEMENTS RECOR DED UNDER SECTION 131 OF THE ACT, THE JUDICIAL PROPRIETY DEMANDS THAT COPIES OF THE STATEMENTS SHOULD BE SERVED ON THE ASSESSEE AND AN OPPORTUNITY SHOULD ALSO BE GIVEN TO CROSS-EXAMINE. SINCE SUCH AN EXERCISE WAS NOT DONE, THIS TRIBUNAL IS OF THE CONSIDERED OPINIO N THAT THERE WAS GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IN PLACING RELIANCE ON THE STATEMENTS RECORDED UNDER SECTION 131 OF THE AC T. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFTER FURNISHING THE COP IES OF THE STATEMENTS RECORDED UNDER SECTION 131 OF THE ACT AN D PROVIDING OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE SO -CALLED DEPONENTS. ACCORDINGLY, THE ORDERS OF THE AUTHORIT IES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL SER VE THE COPIES OF THE STATEMENTS RECORDED UNDER SECTION 131 OF THE AC T TO THE ASSESSEE AND ALSO GIVE OPPORTUNITY TO CROSS-EXAMINE THOSE PERSONS WHO WERE EXAMINED UNDER SECTION 131 OF THE ACT AND THEREAFTER 5 I.T.A. NO.930/MDS/15 DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTE R GIVING REASONABLE TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18 TH AUGUST, 2016 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 18 TH AUGUST, 2016. KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-5, CHENNAI 4. PRINCIPAL CIT-9, CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.