M/s. Towa Sales Corporation, New Delhi V. ACIT, New Delhi

MA 52/DEL/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4479 (ITAT-DELHI)
• Duration Of Justice: 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 22-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: RAJESH ARORA
• Keywords: Additional evidence; Assessment record; Bonafide mistake

Judgement Text

M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 1/8 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH H BEFORE SHRI K. G. BANSAL, ACCOUTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER M.A. NO.52/DEL/2010 AND ITA NO. 4157 /DEL/2009 (ASSESSMENT YEAR 2005-06) M/S. TOWA SALES CORPORATION, VS. ACIT, CIRCLE 22(1) , 223, OKHLA INDUSTRIAL ESTATE, NEW DELHI. NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAAFT5520A APPELLANT BY: SHRI RAJESH ARORA, CA RESPONDENT BY: SMT. ANUSHA KHURANA, SR. DR ORDER PER GEORGE MATHAN, JM: 1. MISCELLANEOUS APPLICATION 52/DEL/2010 IS A MISCELLANEOUS APPLICATION FILED AGAINST THE ORDER O F THE TRIBUNAL DATED 16.02.2010 IN I.T.A. NO. 4157/DEL/20 09. SHRI RAJESH ARORA, CA REPRESENTED FOR THE ASSESSEE AND SMT. ANUSHA KHURANA, SR. DR REPRESENTED FOR THE REVENUE. 2. IT WAS SUBMITTED BY THE LD. A.R. THAT THE ASSESS EE WAS INTIMATED THAT THE APPEAL WAS FIXED BEFORE THE F BENCH OF THE TRIBUNAL AND THE ASSESSEE WAS ALSO SERVED WI TH A NOTICE ACCORDINGLY. HOWEVER, THE TRANSFER OF FILE FROM M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 2/8 F BENCH TO H BENCH WENT UNNOTICED BY THE LD. A. R. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD APPEARE D ON 16.02.2010 BEFORE THE F BENCH AND AS IT WAS NOTIC ED THAT THE F BENCH WAS NOT FUNCTIONING, HE HAD LOST TRACK OF THE FACT THAT THE APPEAL WAS TRANSFERRED TO H BENCH AND HAD NOT REPRESENTED THE APPEAL. IT WAS THE SUBMISSION THAT IT WAS BONA FIDE AND UNINTENTIONAL MISTAKE AND THE ORDER OF THE TRIBUNAL DATED 16.02.2 010 MAY BE RECALLED. 3. IT MAY ALSO BE MENTIONED HERE THAT THE BONA FIDE OF THE LD. A.R. IS NOT DOUBTED ESPECIALLY IN VIEW OF THE F ACT THAT THE MISTAKE AFTER BEING NOTICED ON 17.02.2010, THE LD. A.R. HAD APPEARED BEFORE THE BENCH AND HAD REPRESENTED THE MISTAKE, WHICH HAD BEEN COMMITTED O N 16.02.2010. HOWEVER, AS THE ORDER HAD ALREADY BEEN PASSED, THE BENCH HAD REFUSED TO ENTERTAIN THE CLAI M OF THE LD. A.R. AND HAD ADVISED THE LD. A.R. TO FILE T HE MISCELLANEOUS APPLICATION. IN THESE CIRCUMSTANCES, THE BONA FIDES OF THE ASSESSEE IS ACCEPTED AND THE ORDE R OF THE TRIBUNAL IN I.T.A. NO. 4157/DEL/2009 DATED 16.02.2010 STANDS RECALLED. 4. AT THE TIME OF HEARING OF THE MISCELLANEOUS APPL ICATION IT WAS ALSO SUBMITTED BY THE LD. A.R. THAT IN THE A PPEAL ITSELF, THE ASSESSEE HAS CHALLENGED THE ACTION OF L D. CIT(A) IN NOT ENTERTAINING THE ADDITIONAL EVIDENCES AS M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 3/8 PRODUCED BY THE ASSESSEE BY INVOKING THE PROVISIONS OF RULE 46A OF THE I.T. RULES 1962. IT WAS THE SUBMIS SION THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A .O. HAD ASKED THE ASSESSEE VIDE NOTICE DATED 17.09.2007 TO SUBMIT THE COPIES OF THE LEDGER ACCOUNT OF VARIOUS PARTIES FOR THE FINANCIAL YEAR 2005-06 AND 2004-05 DULY CONFIRMED BY THE PARTIES ALONG WITH THEIR INCOME TA X PARTICULARS. IT WAS THE SUBMISSION THAT AS THERE W AS SUBSTANTIAL NUMBER OF PARTIES AND THE DETAILS WERE CALLED FOR FROM THE ASSESSEE FOR TWO FINANCIAL YEARS, THE ASSESSEE HAD REQUESTED THE PARTIES TO GIVE THE DETA ILS BUT THE SAME HAD NOT COME BY THE TIME THE ASSESSMENT WA S COMPLETED ON 16.11.2010. IT WAS THE SUBMISSION THA T IN 2 MONTHS TIME, THE ASSESSEE WAS UNABLE TO PRODUCE T HE DETAILS, AS THE PARTIES HAD NOT RETURNED THE DULY CONFIRMED ACCOUNTS STATEMENT ALONG WITH THEIR INCOM E TAX PARTICULARS. IT WAS THE SUBMISSION THAT IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE HAD PRODUCED ALL THE DETAILS. HOWEVER THE LD. CIT(A) HAD REJECTED THE ADMISSION OF ADDITIONAL EVIDENCE HOLDING THAT IT WAS NOT COVERED BY THE EXCEPTIONAL CLAUSES UNDER RULE 46A OF THE I T RULES . IT WAS FURTHER SUBMITTED BY THE LD. A.R. THAT THE NAME S AND ADDRESSES OF ALL THE PARTIES HAD BEEN PROVIDED TO THE LD. A.O. ON 17.07.2007 ITSELF AND IT WAS ONLY VIDE A M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 4/8 QUESTIONNAIRE DATED 17.09.2007, THE A.O. HAD ASKED FOR THE CONFIRMATION FROM THE PARTIES ALONG WITH THEIR INCOME TAX PARTICULARS. IT WAS THE SUBMISSION THAT THE EVIDENCES AS CALLED FOR BY THE A.O. WAS NOT WITHIN THE CONTROL OF THE ASSESSEE AND THE EVIDENCES WERE EXCLUSIVELY IN THE CONTROL OF THE PARTIES FROM WHOM THE CONFIRMATION AND THE INCOME TAX PARTICULARS WERE REQUIRED TO BE PRODUCED AND NON PRODUCTION OF THE S AME BEFORE THE A.O. BUT PRODUCTION BEFORE THE CIT(A) WA S LIABLE TO BE ACCEPTED AND THE ASSESSEE SHOULD BE HE LD TO HAVE BEEN PREVENTED BY SUFFICIENT CAUSE FROM PRODUC ING THE EVIDENCE WHICH HE HAS CALLED UPON TO PRODUCE BY THE A.O. HE FURTHER DREW OUR ATTENTION TO PAGES 53 -293 OF THE PAPER BOOK FILED BEFORE US WHICH WAS THE ADDITIONAL EVIDENCE WHICH WAS PRAYED FOR ADMISSION UNDER RULE 46A OF THE I T RULES. IT WAS THE SUBMIS SION THAT HE HAD NO OBJECTION TO THE ISSUES IN THE APPEA L BEING RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDI CATION AFTER ADMISSION OF ADDITIONAL EVIDENCES. 5. IN REPLY THE LD. D.R. SUBMITTED THAT TWO MONTHS TIME HAD BEEN GIVEN TO THE ASSESSEE TO PRODUCE THE DETAI LS. IT WAS THE FURTHER SUBMISSION THAT THE CIT(A) HAD ALSO IN HIS ORDER SPECIFICALLY BROUGHT OUT THAT MANY OF THE PARTIES WERE FROM DELHI AND THE ADJOURNMENT SOUGHT BY THE LD. A.R. IN THE CASE OF ASSESSMENT PROCEEDINGS HAD M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 5/8 BEEN GRANTED AND THE ADDITIONAL EVIDENCES PRODUCED NOW SHOULD NOT BE ADMITTED. IT WAS THE FURTHER SUBMISSION THAT THE CIT(A) IN PAGE 23 OF HIS ORDER HAS CATEGORICALLY GIVEN A FINDING THAT THE CONTENTION O F THE ASSESSEE THAT THE A.O. WAS INFORMED THAT THE PARTIE S WERE NOT IN THEIR CONTROL AND THAT THEY WERE IN THE PROCESS OF COLLECTING THE INFORMATION IS NOT BORN F ROM THE PERUSAL OF THE ASSESSMENT RECORD NOR DID THE ASSESSMENT RECORD SUGGESTS THAT THE A.O. WAS EVER INFORMED OF ANY SUCH CONTENTION. SHE VEHEMENTLY SUPPORTED THE ORDER OF THE A.O. AND THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE ORDER OF THE AUTHORITIES BELOW. A PERUSAL OF THE ORDER OF CIT(A) IN PAGE 23 PARA 15, CLEARLY SHOWS THAT THE ASSESSEE HAD PROVIDED THE DE TAILS INITIALLY CALLED BY THE A.O. IT IS FURTHER NOTICED THAT IT IS ONLY VIDE QUESTIONNAIRE DATED 17.09.2007, THE A.O. HAD CALLED FOR THE CONFIRMATION AND THE INCOME TAX PARTICULARS OF EACH OF THE PARTIES. IT IS ALSO NOT ICED THAT THE ASSESSMENT HAD BEEN COMPLETED ON 16.11.2007. I T IS FURTHER NOTICED THAT NUMBER OF PARTIES IS THIS CASE IS MORE THAN 30. IT IS ALSO NOTICED THAT THE ASSESSEE HAS WITH DUE DILIGENCE REQUESTED THE PARTIES TO PROVIDE THE CONFIRMATION. THE FACT THAT THE EVIDENCES DID NOT REACH THE ASSESSEE BEFORE THE COMPLETION OF THE ASSESSMEN T IS M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 6/8 EVIDENT FROM THE EVIDENCES BEING PRODUCED AND WHICH WAS PRODUCED BEFORE THE LD. CIT(A). THE ASSESSMENT IS FOR THE PURPOSE OF ASSESSING THE CORRECT INCOME OF THE ASSESSEE. THE ASSESSEE HAD FILED HIS RETURN OF INC OME AS EARLY AS ON 29.10.2005. IT IS NOTICED THAT THE ASS ESSMENT PROCEEDINGS HAD BEEN STARTED WITH THE ISSUANCE OF N OTICE U/S 143(2) WHICH IN ANY CASE WOULD HAVE TO BE WITHI N 12 MONTHS FROM THE DATE OF FILING THE RETURN. THUS IT CAN SAFELY BE ASSUMED THAT THE ASSESSMENT PROCESS START ED IN OCTOBER 2006. IN FEB 2007 THE A.O. HAD FOR THE FIR ST TIME RAISED THE ISSUE WITH REGARD TO THE ADVANCE FR OM THE CUSTOMERS WHEREIN THE COMPLETE POSTAL ADDRESS O F THE PARTIES HAS BEEN CALLED FOR. THE ASSESSEE HAS GIVEN THE PART OF THE DETAILS THOUGH IT IS NOTICED THAT T HE DETAILS WERE IN RESPECT OF THE ADVANCE FROM THE CUSTOMERS F OR AMOUNTS EXCEEDING RS.1 LACS. IT IS AFTER THIS THAT THE A.O. HAS ASKED FOR THE CONFIRMATION FROM THE PARTIE S ALONG WITH THEIR INCOME TAX PARTICULARS AND WITHIN TWO MONTHS THE A.O. HAS COMPLETED THE ASSESSMENT. THE DETAILS BEING THE CONFIRMATION FORM THE PARTIES ALO NG WITH THEIR INCOME TAX PARTICULARS, OBVIOUSLY IS NOT WITHIN THE KNOWLEDGE OF THE ASSESSEE OR THE CONTROL OF THE ASSESSEE. IT IS NOT AS IF THE ASSESSEE HAS FAI LED TO PRODUCE THE EVIDENCES, IT IS ALSO NOTICED THAT THE ASSESSEE HAS DULY PRODUCED THE EVIDENCES. IN THESE M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 7/8 CIRCUMSTANCES, THE POWER OF CIT(A) IS CO-TERMINUS W ITH THAT THE A.O. AND THE LD. CIT(A) COULD CALL FOR A REMAND REPORT FROM THE A.O. ON THE BASIS OF EVIDENC ES WHICH WERE PRODUCED BEFORE HIM FOR THE FIRST TIME U NDER EXCEPTIONAL CIRCUMSTANCES. IT IS ALSO NOTICED THAT THE FACTS IN THE ASSESSEES CASE CLEARLY SHOWS THAT THE ASSESSEES CASE FALLS WITHIN THE EXCEPTIONS PROVIDE D IN RULE 46A(1)(B) OF I T RULES. IN THESE CIRCUMSTANCE S, WE ARE OF THE VIEW THAT THE ADDITIONAL EVIDENCES AS PRODUCED BEFORE THE CIT(A) IS LIABLE TO BE ADMITTED UNDER RULE 46A AND THE ORDER OF LD. CIT(A) ON THIS ISSUE STANDS MODIFIED. AS WE HAVE HELD THAT THE EVIDENCES PRODUCED BY THE ASSESSEE IS COVERED UNDER RULE 46A(1)(B) OF THE I T. RULES AND AS IT IS NOTIC ED THAT THE EVIDENCES HAVE NOT BEEN CONSIDERED BY ANY OF TH E LOWER AUTHORITIES AND THESE EVIDENCES HAVE A DIRECT BEARING TO THE ISSUE IN THE APPEAL, THE ISSUES IN T HIS APPEAL ARE RESTORED TO THE FILE OF THE LD. CIT(A) F OR RE- ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE ITS CASE AND AFTER GRAN TING THE A.O. ADEQUATE OPPORTUNITY TO PROVIDE REMAND REP ORT ON THE FRESH EVIDENCES AS SUBMITTED BY THE ASSESSEE . IN THESE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IN THESE CIRCUMS TANCES, M.A.52/DEL/2010 AND I.T.A. NO.4157 /DEL/2009 8/8 THE MISCELLANEOUS APPLICATION IS ALLOWED AND THE AP PEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 7. IN THE RESULT THE ASSESSEES MISCELLANEOUS APPLI CATION NO.52/DEL/2010 IS ALLOWED AND THE ASSESSEES APPEAL IN I.T.A. NO. 4157/DEL/2009 IS ALLOWED FOR STATISTICAL PURPOSES. 8. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 05 TH MARCH 2010. SD./- SD./- (K. G. BANSAL) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:05 TH MAR., 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI