Sham Sunder, 62-Rose Enclave,, Ludhiana v. ITO,, Ludhiana

ITA 271/CHANDI/2010 | 2006-2007
Pronouncement Date: 31-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 27121514 RSA 2010
Assessee PAN AJOPS4543F
Bench Chandigarh
Appeal Number ITA 271/CHANDI/2010
Duration Of Justice 10 month(s) 13 day(s)
Appellant Sham Sunder, 62-Rose Enclave,, Ludhiana
Respondent ITO,, Ludhiana
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 31-01-2011
Date Of Final Hearing 24-01-2011
Next Hearing Date 24-01-2011
Assessment Year 2006-2007
Appeal Filed On 17-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 271/CHD/2010 ASSESSMENT YEAR:2006-07 SHRI SHAM SUNDER VS. THE ITO WARD III(3) LUDHIANA LUDHIANA PAN NO. AJOPS4543F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAM SUNDER RESPONDENT BY: SMT. JAISHREE SHARMA ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A)-I LUDHIANA RELATING TO ASSESSMENT YEAR 2006 AGAINST THE ORDER PASSED UNDER SECTION 144 OF THE I.T. ACT 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING INVOCATI ON OF PROVISIONS OF SECTION 144 OF THE INCOME TAX ACT 19 61 BY ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS ON RECORD. 2. THAT THE LD. CIT(A) HAS FURTHER GROSSLY ERRED BOTH IN LAW AND ON FACTS IN DECLINING TO ADMIT APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES. 2 3. THAT THE LD. CIT(A) HAS FURTHER WRONGLY ERRED IN SUSTAINING APPLICATION OF RATE OF PROFIT @ 8% ON TO TAL OCTROI COLLECTION WITHOUT DEDUCTING THERE FROM THE CONTRACT MONEY PAID TO THE MUNICIPAL COMMITTEE JAGRAON. 4. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING COMPUTATION OF INCOME MADE BY THE ASSESSING OFFICER AT RS. 27 33 090/- WHEN IT WAS PER-SE AND FACTUALLY ERRONEOUS AS PER FACTS / INFORMATION ALREADY ON REC ORD. 5. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THAT THE APPELLANT WAS LIABLE TO GET HIS ACCOUNTS AUDITE D AS PER PROVISIONS OF SECTION 44AB OF THE INCOME TAX AC T 1961 WITHOUT APPRECIATING THAT IT WAS SIMPLY COLLEC TION CONTRACT AS IN BETWEEN PRINCIPAL AND AN AGENT. 6. THAT THE LD. CIT(A) HAS FURTHER ERRED BOTH IN LAW A ND FACTS IN UPHOLDING CHARGING OF INTEREST U/S 234A AN D 234B OF THE INCOME TAX ACT. 3. THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE VID E GROUND NOS 1 &2 IS AGAINST THE EX-PARTE ASSESSMENT MADE BY THE ASSE SSING OFFICER AND DENIAL OF ADMISSION OF ADDITIONAL EVIDENCE FURNISHE D BEFORE THE CIT(A) UNDER THE PROVISIONS OF RULE 46A OF THE I.T. RULES. THE ASSESSEE VIDE GROUND NOS. 3 TO 6 HAS RAISED THE ISSUE AGAINST THE MERIT OF THE ADDITIONS. 4. WE WILL FIRST DEAL WITH THE PRELIMINARY ISSUE RA ISED IN THE PRESENT APPEAL BY THE ASSESSEE. THE ASSESSING OFFICER HAD S ELECTED THE CASE FOR SCRUTINY AND SEVERAL NOTICES WERE ISSUED FOR ATTEND ANCE OF THE ASSESSEE ALONG WITH QUESTIONNAIRE. HOWEVER THE SAID NOTIC ES WERE NOT COMPLIED WITH AND A SHOW CASE NOTICE WAS ISSUED TO THE ASSES SEE FOR APPEARANCE ON 3 27.3.2006. THE COUNSEL FOR THE ASSESSEE FILED REPL Y TO THE SHOW CAUSE NOTICE ON THE DATE OF HEARING AND IT WAS INTIAMTED THAT THE ASSESSEE HAD SHIFTED HIS RESIDENCE TO A NEW ADDRESS. NO INFORMAT ION WAS FURNISHED IN RESPECT OF THE EARLIER QUESTIONNAIRE ISSUED U/S 142 OF THE INCOME TAX ACT. THE ASSESSEE THROUGH ITS COUNSEL ATTENDED THE PROCE EDINGS AND SOUGHT ADJOURNMENT ON VARIOUS DATES BUT IN THE ABSENCE OF THE REQUISITE INFORMATION BEING NOT FILED THE ASSESSING OFFICER COMPLETED THE ASSESSMENT EX-PARTE U/S 144 OF THE INCOME TAX ACT. IN THE APPELLATE PROCEEDINGS ANOTHER COUNSEL APPEARED BEFORE THE CIT (A) AND FILED AN APPLICATION U/S 46A OF THE I.T. RULES FOR ADMISSION OF ADDITIONAL EVIDENCE. THE MAIN REASON FOR NON COMPLIANCE BEFORE THE ASSES SING OFFICER WAS EXPLAINED TO BE NON COOPERATIVE ATTITUDE OF THE AR OF THE ASSESSEE BEFORE THE ASSESSING OFFICER. THE CIT(A) FORWARDED THE SA ID APPLICATION TO THE ASSESSING OFFICER WHO VIDE HIS REPORT DATED 9.9.200 9 PRAYED THAT THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE UNDER RULE 46A NOT TO BE ACCEPTED AS DESPITE SEVERAL OPPORTUNITIES FORWARDED TO THE ASSESSEE THE SAID EVIDENCE WAS NOT FURNISHED DURING THE COURSE O F ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS NOT PREVENTED BY ANY SUFFICIENT CAUSE FROM PRODUCIN G EVIDENCE WHICH WERE CALLED UPON BY HIM TO BE SO PRODUCED. THE CIT (A) WAS OF THE VIEW THAT THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSES SEE DOES NOT MERIT TO BE ACCEPTED AS THE CASE OF THE ASSESSEE DID NOT FALL I N ANY OF THE EXCEPTIONS PROVIDED IN RULE 46A OF THE I.T. RULES. THE CIT(A) FURTHER HELD THAT THE ALLEGATIONS AGAINST THE AUTHORIZED REPRESENTATIVE W ERE TOTALLY UNSUBSTANTIATED. THE CIT(A) REJECTED THE APPLICATI ON MOVED BY THE ASSESSEE AND DID NOT TAKE ON RECORD THE ADDITIONAL EVIDENCE FIELD FOR THE FIRST TIME BEFORE HIM AND DECIDED THE APPEAL ON THE MERITS OF THE ADDITION. 4 THE ASSESSEE IS AGGRIEVED AND HAS RAISED GROUND NOS . 1 & 2 IN RESPECT THEREOF. 5. THE ASSESSEE APPEARED IN PERSON AND SUBMITTED TH AT HE WAS PREVENTED FROM FURNISHING THE EVIDENCE BEFORE THE A SSESSING OFFICER AS HIS COUNSEL APPEARING BEFORE THE ASSESSING OFFICER HAD FAILED TO FURNISH THE SAID EVIDENCE AND AS SUCH THE APPLICATION WAS M OVED BEFORE THE CIT(A) FOR THE ADMISSION OF THE ADDITIONAL EVIDENCE WHICH WAS SUMMARILY REJECTED BY THE CIT(A). THE LD. DR FOR TH E REVENUE STRESSED THAT SUFFICIENT OPPORTUNITY WAS AFFORDED TO THE ASS ESSEE AND HE FAILED TO COMPLY WITH THE AFORESAID OPPORTUNITY AND AS SUCH T HERE IS NO MERIT IN THE PRESENT GROUND OF APPEAL RAISED BY THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. IN THE FACTS OF THE PRESENT CASE BEFORE US THE ASSESSING O FFICER HAD AFFORDED VARIOUS OPPORTUNITIES OF HEARING TO THE ASSESSEE AN D THE COUNSEL FOR THE ASSESSEE APPEARED OF AND ON BEFORE THE ASSESSING OF FICER AND SOUGHT ADJOURNMENTS. THE INITIAL NOTICES OF HEARING WERE CLAIMED TO HAVE NOT BEEN RECEIVED DUE TO CHANGE IN ADDRESS OF THE ASSES SEE. IN THE ABSENCE OF NECESSARY INFORMATION / EVIDENCE BEING FURNISHED BE FORE THE ASSESSING OFFICER THE ASSESSMENT WAS COMPLETED EX-PARTE U/S 144 OF THE INCOME TAX ACT BY THE ASSESSING OFFICER. IN THE APPELLATE PROCEEDINGS THE ASSESSEE MOVED AN APPLICATION UNDER RULE 46A OF THE I.T. RULES FOR THE ADMISSION OF ADDITIONAL EVIDENCE WHICH IT CLAIMS WA S NOT FURNISHED BEFORE THE ASSESSING OFFICER DUE TO NON COOPERATIVE ATTITU DE OF THE EARLIER COUNSEL OF THE ASSESSEE. THE APPEAL WAS FURNISHED BEFORE THE CIT(A) UNDER THE PROVISIONS OF SECTION 246A OF THE ACT AND IN LINE WITH THE PROVISIONS OF SECTION 249 OF THE ACT WHICH PRESCRIB ES THE FORM OF APPEAL 5 AND THE PERIOD OF LIMITATION WITHIN SUCH APPEAL IS TO BE FILED BEFORE THE CIT(A). THE PROCEDURE TO BE FOLLOWED BY THE CIT(A ) IN APPELLATE PROCEEDINGS IS PROVIDED IN SECTION 250 OF THE INCO ME TAX ACT. U/S 250(1) OF THE ACT THE CIT(A) HAS TO FIX THE DATE AND PLACE FOR HEARING THE APPEAL FOR WHICH A NOTICE IS TO BE GIVEN BOTH T O THE ASSESSEE AND ASSESSING OFFICER AGAINST WHOSE ORDER THE SAID APPE AL IS PREFERRED. BOTH THE ASSESSEE AND THE ASSESSING OFFICER EITHER IN PE RSON OR THROUGH AN AUTHORIZED REPRESENTATIVE HAVE RIGHT TO BE HEARD ON THE FIXED DATE OF HEARING OF THE SAID APPEAL U/S 250(2) OF THE ACT. U/S 250(4) OF THE ACT CIT(A) IS EMPOWERED TO MAKE ANY SUCH FURTHER ENQUIR Y AS HE THINKS FIT OR HE MAY DIRECT THE ASSESSING OFFICER TO MAKE FURTHER ENQUIRES AND REPORT THE RESULT OF THE SAID ENQUIRY TO THE CIT(A). UND ER SECTION 250(5) OF THE ACT THE CIT(A) MAY ALLOW THE ASSESSEE TO GO IN TO AND ADDRESS ANY ADDITIONAL GROUND OF APPEAL WHICH IS NOT SPECIFIED IN THE GROUND OF APPEAL ON HIS [CIT(A)] SATISFACTION THAT THE OMISS ION OF THE SAID GROUND FROM THE FORM OF APPEAL WAS NOT WILLFUL OR UNREASON ABLE. THE ORDER OF THE CIT(A) DISPOSING OF THE APPEAL SHALL BE IN WRITING AND THE POINT FOR DETERMINATION THE DECISION AND THE REASONS FOR THE DECISION SHALL BE STATED BY THE CIT(A) UNDER THE PROVISIONS OF SECTION 250(6 ) OF THE ACT. IT IS FURTHER PROVIDED THAT ON DISPOSAL OF THE APPEAL TH E CIT(A) SHALL COMMUNICATE THE ORDER PASSED BY HIM TO THE ASSESSEE AND THE CHIEF COMMISSIONER OR COMMISSIONER AS PER SECTION 250(7) OF THE ACT IN DISPOSING OF THE APPEAL THE CIT(A) IS EMPOWERED U/ S 251(1) OF THE ACT TO EITHER CONFIRM REDUCE ENHANCE OR ANNUL THE SAM E IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT AND IN APPEAL AGAINST THE O RDER IMPOSING PENALTY THE CIT(A) HAS THE POWER TO CONFIRM OR CANCEL SUCH ORDER OR VARY IT EITHER TO ENHANCE OR REDUCE THE PENALTY. IN ANY CASE THE CIT(A) MAY PASS SUCH ORDER IN THE APPEAL AS HE THINKS FIT. UNDER SECTIO N 251(2) OF THE ACT THE 6 CIT(A) SHALL NOT ENHANCE ANY ASSESSMENT OR A PENALT Y OR REDUCE THE AMOUNT OF REFUND UNLESS A REASONABLE OPPORTUNITY OF SHOW CAUSE HAS BEEN AFFORDED TO THE ASSESSEE AGAINST SUCH ENHANCEMENT OR REDUCTION. AS PER EXPLANATION U/S 251(2) OF THE ACT THE CIT(A) IS FU RTHER EMPOWERED WHILE DISPOSING OF AN APPEAL TO CONSIDER AND DECIDE THE M ATTER ARISING OUT OF PROCEEDING IN WHICH THE ORDER AGAINST APPEAL WAS PA SSED NOTWITHSTANDING THAT SUCH MATTER WAS NOT RAISED BEFORE THE CIT(A) B Y THE ASSESSEE. SUCH POWERS OF THE CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ARE CO- TERMINUS WITH THE POWERS OF ASSESSING OFFICER AS TH E POWER TO MAKE FURTHER ENQUIRIES HAS BEEN ENSHRINED UPON HIM. 7. UNDER THE PROVISIONS OF RULE 46A OF THE I.T. RUL ES THE ASSESSEE IS ENTITLED TO PRODUCE ALL SUCH ADDITIONAL EVIDENCES WHICH WAS NOT PRODUCED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CIRCUMSTANCES ENSHRINED IN SUB CLAUSE (A) TO (D) UNDER RULE 46A ( 1) OF THE I.T. RULES. THE ADDITIONAL EVIDENCE CAN BE FURNISHED BEFORE THE CIT(A) WHERE (A) THE ASSESSING OFFICER HAD REFUSED TO ADMIT THE EVIDENCE OR (B) WHERE THE ASSESSEE WAS PREVENTED BY A SUFFICIENT CASE FROM PR ODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSIN G OFFICER; OR C) WHERE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUS E FROM PRODUCING ANY EVIDENCE BEFORE THE ASSESSING OFFICER WHICH WAS RE LEVANT TO ANY GROUND OF APPEAL; OR D) WHERE THE ASSESSING OFFICER HAS M ADE THE ORDER WITHOUT GIVING A SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE REPRESENTING TO ANY GROUND OF APPEAL. UNDER RULE 46A(2) OF THE I.T. RULES IT IS PROVIDED THAT NO EVIDENCE SHALL BE ADM ITTED UNDER SUB RULE (1) UNLESS THE CIT(A) RECORDS IN WRITING THE REASONS FO R ITS ADMISSION AND UNDER SUB RULE (3) THE CIT(A) SHALL NOT TAKE INTO RECORD ANY EVIDENCE ADDUCED UNDER SUB RULE (1) UNLESS THE ASSESSING OFF ICER HAS BEEN ALLOWED 7 A REASONABLE OPPORTUNITY TO EXAMINE THE SAID EVIDEN CE OR DOCUMENT OR CROSS EXAMINE THE WITNESS PRODUCED BY THE ASSESSEE OR PRODUCE ANY EVIDENCE/DOCUMENT/WITNESS IN REBUTTAL OF THE ADDITI ONAL EVIDENCE PRODUCED BY THE ASSESSEE. UNDER SUB RULE (4) IT I S PROVIDED THAT THE CIT(A) IS NOT EMPOWERED TO DIRECT THE ASSESSEE FOR PRODUCTION OF ANY DOCUMENT OR OF ANY WITNESS TO ENABLE HIM TO DISPOSE OF THE APPEAL. 8. THE ASSESSEE BEFORE US UNDER THE PROVISIONS OF RULE 46A OF THE I.T. RULES HAD MOVED AN APPLICATION FOR ADMISSION OF THE ADDITIONAL EVIDENCE BEFORE THE CIT(A). THE REASON FOR NON FURNISHING O F THE SAID EVIDENCE BEFORE THE ASSESSING OFFICER WAS STATED BY THE ASSE SSEE TO BE NON COOPERATIVE ATTITUDE OF HIS EARLIER COUNSEL APPEARI NG BEFORE THE ASSESSING OFFICER. IN THE APPELLATE PROCEEDING THE ASSESSEE HAD ENGAGED ANOTHER COUNSEL WHO HAD MOVED THE SAID APPLICATION FOR ADMI SSION OF ADDITIONAL EVIDENCE. THE SAID APPLICATION HAS BEEN REJECTED BY THE CIT(A) AFTER OBTAINING A REPORT FROM THE ASSESSING OFFICER WHO HAD EMPHASIZED THAT OPPORTUNITY WAS GIVEN TO THE ASSESSEE DURING THE AS SESSMENT PROCEEDINGS WHICH WAS NOT AVAILED UPON BY THE ASSESSEE. WE FIN D NO MERIT IN SUCH REJECTION OF THE APPLICATION MOVED FOR ADMISSION OF ADDITIONAL EVIDENCE. THE ASSESSEE WAS PREVENTED BY A SUFFICIENT CAUSE FR OM NON FURNISHING THE SAID EVIDENCE BEFORE THE ASSESSING OFFICER AND IN V IEW OF THE POWERS ENSHRINED IN THE CIT(A) WE FIND NO JUSTIFICATION I N THE ORDER OF THE CIT(A) IN REJECTING THE APPLICATION OF THE ASSESSEE FOR ADMISSION OF THE ADDITIONAL EVIDENCE MOVED UNDER THE PROVISIONS OF R ULE 46-A OF THE I.T. RULES. ACCORDINGLY WE REMIT THE ISSUE BACK TO THE CIT(A) TO ADMIT THE ADDITIONAL EVIDENCE AND DECIDE THE ISSUE ON MERITS AFTER OBTAINING A REPORT FROM THE ASSESSING OFFICER IN RESPECT OF SUCH ADDIT IONAL EVIDENCE AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE 8 MATTER IS SET ASIDE TO THE FILE OF CIT(A). THE GRO UND NOS. 1 & 2 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. IN VIEW OF OUR SAID DECISION OF SETTING ASIDE THE MATTER TO THE CIT(A) TO DECIDE DE NOVO AFTER ADMITTING ADDITIONAL EVIDENCE FURNISHED BY THE ASSE SSEE WE DO NOT ADDRESS THE ISSUE RAISED BY ASSESSEE AGAINST THE ME RITS OF THE ADDITION RAISED VIDE GROUND NOS. 3 TO 6. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF JANUARY 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST JANUARY 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR