Shri Narendrabhai Prahladbhai Patel, Ahmedabad V. The Deputy Commissioner of Income Tax, Central Circle-1(4), Ahmedabad

ITSSA 203/AHD/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8883 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Keywords: Additional evidence; Rule 8D; Set aside
• Section: 142(1); 153A; 14A; 143(2); 139(1); 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ IT(SS)A NO. 203/AHD/2017 / ASSESSMENT YEAR: 2009-10 SHRI NARENDRABHAI PRAHLADBHAI PATEL 43, GIDC, PHASE-I NARODA, AHMEDABAD. PAN : AAVPP 9886 E VS DCIT, CENT.CIR.1(4) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI TUSHAR HEMANI, SR.DR WITH SHRI PARIMAL SINGH B. PARMAR REVENUE BY : SHRI S.S. SHUKLA, SR.DR / DATE OF HEARING : 09/08/2021 /DATE OF PRONOUNCEMENT : 11/08/2021 O R D E R PER RAJPAL YADAV, VICE-PRESIDENT: BY WAY OF PRESENT APPEAL, ASSESSEE CHALLENGES ORDER OF THE LD.COMMISSIONER IT (A)-5, AHMEDABAD DATED 28.02.2017 PASSED FOR THE ASSTT.YEAR 2009-10. 2. ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS; HOWE VER ISSUES FOR ADJUDICATION INVOLVED ONLY IN FIRST THREE GROUNDS. SO FAR AS GROUND NO.1 AND 2 REGARDING ADDITION OF RS.2.00 LAKHS TOWARDS U NDISCLOSED INCOME, IT(SS)A.NO.203/AHD/2017 - 2 - AND RS.5,83,565/- TOWARDS UNDISCLOSED INVESTMENT AR E CONCERNED, THE SAME ARE NOT PRESSED BY THE ASSESSEE FOR ADJUDICATI ON. THEREFORE, THE SAME STAND REJECTED. 3. NOW REMAIN ONLY GROUND NO.3 FOR ADJUDICATION. THE GROUND NO.3 READS AS UNDER: 3. THE LD.CIT(A) HAS ERRED BOTH IN LAW AND ON THE F ACTS OF THE CASE IN CONFIRMING THE ACTION OF THE AO OF HOLDING DISALLOW ANCE U/S.14A OF THE ACT TO BE RS.3,93,543/- INSTEAD OF ACTUAL DISALLOWA NCE OF RS.88,453/-. 4. THE FACTS OF THE CASE OF THE ASSESSEE IN NUTSHEL L ARE THAT THE ASSESSEE IS AN INDIVIDUAL, FILED RETURN OF INCOME UNDER SECT ION 139(1) OF THE ACT ON 2.12.2009 AND DECLARED TOTAL INCOME AT RS.17,51,273 /-. IN THE CASE OF THE ASSESSEE, A SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON 21.7.2011. THEREAFTER, PROCEEDINGS UNDER SECTION 1 53A OF THE ACT WAS INITIATED AND NOTICE UNDER SECTION 153A WAS ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE TO THAT NOTICE, THE ASSESSEE FILED RETURN UNDER SECTION 153A ON 30.10.2012 AND DECLARED TOTAL INCOM E AT RS.21,23,190/-. THEREAFTER, THE LD.AO ISSUED NOTICES UNDER SECTION 143(2) AND 142(1) AND SERVED UPON THE ASSESSEE. DURING THE ASSESSMENT PR OCEEDINGS, THE ASSESSEE NOTICED THAT THE ASSESSEE MADE DISALLOWANC E OF RS.3,93,543/- INSTEAD OF RS.88,453/-. IN OTHER WORDS, THE ASSESS EE MADE EXCESS DISALLOWANCE OF RS.1,62,207/- UNDER SECTION 14A OF THE ACT RESULTING EXCESS PAYMENT OF TAX BY RS.1,62,207/-, WHICH REQUI RES TO BE REFUNDED TO THE ASSESSEE. HOWEVER, THE SAME WAS NOT CONSIDERED BY THE LD.AO THOUGH THE ASSESSEE HAS FILED AN APPLICATION SHOWIN G CALCULATION OF ACTUAL DISALLOWANCE UNDER SECTION 14A ASSESSMENT AN D FINALIZED THE ASSESSMENT ACCEPTING RETURNED INCOME FILED UNDER SE CTION 153A OF THE IT(SS)A.NO.203/AHD/2017 - 3 - ACT AT RS.21,23,190/-. AGGRIEVED BY ORDER OF THE L D.AO IN NOT CONSIDERING THE APPLICATION OF THE ASSESSEE FOR REC TIFICATION OF EXCESS DISALLOWANCE UNDER SECTION 14A, THE ASSESSEE WENT B EFORE THE LD.FIRST APPELLATE AUTHORITY, WHO REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE IMPUGNED ISSUE WAS NOT ARISING OUT OF THE ASSESSMENT ORDER. THEREFORE, THE ASSESSEE IS NOW BEFORE THE TRIBUNAL. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS AS WERE MADE BEFORE THE LD.REVENUE AUTH ORITIES. HE HAS PLACED ON RECORD SOME EVIDENCES BEFORE US TO SUPPOR T HIS CLAIM THAT MISTAKEN CALCULATION OF DISALLOWANCE UNDER SECTION 14A HAS BEEN POINTED OUT TO BOTH THE AUTHORITIES, AND SOUGHT TO MAKE CHANGES ACCORDINGLY AND ALSO PRAYED FOR REFUND OF DUE CREDI T. ON THE OTHER HAND, THE LD.DR SUPPORTED ORDERS OF THE REVENUE AUT HORITIES. 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE RECORD CAREFULLY. THE CASE OF THE ASSESSEE IS THAT IN THE RETURN FILED UNDER SECTION 153A OF THE ACT, THE ASSESSEE HAS MADE EXCE SS DISALLOWANCE UNDER SECTION 14A AT RS.3,93,543/- INSTEAD OF ACTUA L DISALLOWANCE OF RS.88,453/- BY MISTAKE. DURING THE ASSESSMENT PROC EEDINGS, THE ASSESSEE HAS POINTED OUT THIS MISTAKE AND FILED AN APPLICATION ALONG WITH CALCULATION UNDER SECTION 14A READ WITH SECTION 8D OF THE ACT. HOWEVER, THE LD.AO DID NOT GO INTO THE DETAILS AND EVEN NOT MADE ANY DISCUSSION THEREOF, AND HE PASSED THE ASSESSMENT BY IGNORING THE DETAILS SUBMITTED BY THE ASSESSEE IN RESPECT OF DISALLOWANC E UNDER SECTION 14A. THE LD.AO OUGHT TO HAVE CONSIDERED THE APPLICATION OF THE ASSESSEE, AND AFTER GOING THROUGH SUCH, IF HE THINKS NO MERITS IN THE APPLICATION OF THE ASSESSEE, HE MAY REJECT THE SAME, OTHERWISE ALLOW T HE CLAIM OF THE IT(SS)A.NO.203/AHD/2017 - 4 - ASSESSEE. EVEN THE LD.CIT(A) DID NOT CONSIDER THE SAME AND SUMMARILY REJECTED THE CLAIM OF THE ASSESSEE FOR THE REASON T HAT THE ISSUE DID NOT ARISE OUT OF THE ASSESSMENT ORDER. THERE IS NO PRO HIBITION FOR THE LD.FIRST APPELLATE AUTHORITY TO DEBAR THE CLAIM OF THE ASSES SEE, WHEN ALL THE MATERIALS ARE PLACED BEFORE HIM BY THE ASSESSEE. W E ARE, THEREFORE OF THE VIEW THAT THIS NON-CONSIDERATION OF THE APPLICATION FILED BY THE ASSESSEE CANNOT BE JUSTIFIED, AS BOTH THE AUTHORITIES BELOW HAVE THE POWER TO UNDO ANY MISTAKE POINTED OUT BY THE ASSESSEE DURING THE ASSESSMENT IN ACCORDANCE WITH THE LAW. FURTHER, IT IS PERTINENT TO MENTION THAT THE AO HAS TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE ON THE BASIS OF RETURN FILED UNDER SECTION 153A OF THE ACT AFTER CONSIDERI NG THE SUBMISSION OF THE ASSESSEE MADE DURING THE HEARING BEFORE HIM. B UT HE FAILED TO DO SO. THEREFORE, WE SET ASIDE THE ORDERS OF BOTH THE AUTH ORITIES BELOW ON THIS ISSUE, AND RESTORE THE ISSUE BACK TO THE FILE OF TH E LD.AO FOR CONSIDERATION THE APPLICATION OF THE ASSESSEE AND THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN RESPECT OF CALCULATION OF DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OF THE ACT, AND THEREAFTER PASS A SPEA KING ORDER ON THE ISSUE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 11 TH AUGUST, 2021. SD/- (WASEEM AHMED) ACCOUNTANT MEMBER SD/- (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED, 11/08/2021