Shelendra Kumar Jain, Delhi v. Pr. CIT- 19, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: G: NEW DELHI) BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER & SHRI ANADEE NATH MISSHRA ACCOUNTANT ME MBER ITA NO:- 3179/DEL/2017 (ASSESSMENT YEAR: 2009-10) SHELENDRA KUMAR JAIN 76 - B DDA FLATS JHILMIL COLONY VIVEK VIHAR DELHI PAN-ADJPJ4984G VS PR. CIT - 19 D BLOCK FIRST FLOOR VIKAS BHAWAN I.P. ESTATE NEW DELHI APPELLANT RESPONDENT APPELLANT BY NONE RESPONDENT BY SHRI . S.S. RANA CIT (DR) ORDER PER ANADEE NATH MISSHRA AM [A]. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGA INST THE ORDER DATED 28.03.2017 PASSED BY LEARNED PR. COMMISSIONER OF IN COME TAX NEW DELHI [IN SHORT LD. PR. CIT] PERTAINING TO 2009-10 ASS ESSMENT YEAR. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- GROUND NO. 1 1.1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. PR. CIT DELHI-19 HAS ERRED IN PASSING AN ORDER U/S 263 OF T HE I.T. ACT 1961 AS THE PROCEEDINGS INITIATED U/S 263 ARE NOT VALID IN LAW. GROUND NO. 2 2.1 THE PR. CIT DELHI-19 HAD INITIATED REVISION PRO CEEDINGS IN ORDER TO CARRY OUT FISHING AND ROVING ENQUIRY IN THE MATTERS WHICH HAD ALREADY BEEN CONCLUDED AND WHICH WERE NOT PERMISSIBLE U/S 263 OF THE ACT. ITA NO:-3179/DEL/2017 PAGE | 2 2.2. THE ASSESSMENT ORDERS U/S 143 (3) AND U/S 147 COULD NOT BE CONSIDERED ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF THE REVENUE FOR THE FOLLOWING REASONS: 2.3 THE ASSESSING OFFICER HAD TAKEN THE POSSIBLE VI EWS AFTER APPLICATION OF MIND BUT PR. CIT DELHI-19 HAD NOT DEMONSTRATED HOW THE ORDERS PASSED BY THE ASSESSING OFFICER WERE NOT ONLY ERRONEOUS BUT A LSO PREJUDICIAL TO THE INTEREST OF THE REVENUE HENCE THE REVISION ORDER WA S BEYOND THE SCOPE OF SECTION 263 OF THE ACT AND HENCE NOT VALID AND UNSU STAINABLE IN LAW. 2.4 THOUGH LD. PR. CIT DELHI-19 WAS NOT SATISFIED W ITH THE SCOPE OF ENQUIRY CONDUCTED BY THE ASSESSING OFFICER BUT HE HIMSELF HAS NEITHER CONDUCTED ANY ENQUIRY NOR BROUGHT ON RECORD ANY CORROBORATIVE MATERIAL JUSTIFYING AND SHOWING THAT THE ASSESSING OFFICERS FINDINGS WERE ERRONEOUS. 2.5 THE ASSESSING OFFICER HAD PASSED THE ASSESSMENT ORDERS UNDER SECTION 143(3) AND FURTHER AFTER MAKING AN ADDITION U/S 147 ALSO WHICH A REASONABLE AND PRUDENT OFFICER HAD ALREADY COMPLETE D THE REQUISITE ENQUIRIES CORRECTLY APPRECIATED THE FACTS AND VERI FICATIONS AND HAD COME TO A REASONED CONCLUSION BEFORE PASSING THE ORDER. [B]. VIDE ASSESSMENT ORDER DATED 02.06.2014 PASSED U/S 143(3)/148 OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) INCO ME OF THE ASSESSEE WAS DETERMINED AT RS.30 82 340/-. THE ASSESSMENT ORDER WAS REVISED UNDER SECTION 263 OF THE ACT BY LEARNED PR. CIT VIDE IM PUGNED ORDER DATED 28.03.2017. THE RELEVANT PORTION OF THE AFORESAID I MPUGNED ORDER DATED 28.03.2017 OF THE LD. PR. CIT IS REPRODUCED AS UNDE R:- 1. THE CASE WAS COMPLETED U/S 143(3) ON 21.12.2011 AT A TOTAL INCOME OF RS. 27 32 280/- AGAINST THE RETURNED INCO ME OF RS. 25 79 054/- AFTER MAKING AN ADDITION OF RS. 2 58 30 3/- ON DISALLOWANCE OUT OF COMMUNICATION & TELEPHONE EXPEN SES BUSINESS PROMOTION DIWALI & POOJA EXPENSES AND STAFF WELFAR E EXPENSES. 2. THEREAFTER THE CASE WAS REOPENED U/S 148 AND THE ASSESSMENT / REASSESSMENT WAS COMPLETED U/S 147 AT TOTAL INCOME OF RS. 30 82 340/- AFTER MAKING ADDITION OF RS. 3 50 0 64/- (ON ACCOUNT ITA NO:-3179/DEL/2017 PAGE | 3 OF NON-DEDUCTION OF TAX AT SOURCE IN CASE OF FABRIC ATION CHARGES PAID TO 5 PARTIES AND NOT SHOWING FEES RECEIVED FOR PROF ESSIONAL/TECHNICAL SERVICES RS. 2 93 864/- AND 56 200/- RESPECTIVELY) ON 02.06.2014. 3. POST ASSESSMENT U/S 147 THE CASE WAS EXAMINED I N THE OFFICE OF PCIT-19 WHEREIN IT IS FOUND THAT SOME POINTS/ISS UES SHOULD HAVE BEEN EXAMINED / VERIFIED BY THE AO DURING THE PROCE EDINGS U/S 147 BUT HE FAILED TO DO SO. CONSEQUENTLY NOTICE U/S 263 WAS ISSUED TO THE ASSESSEE SHOW CAUSING ON POINTS / ISSUES WHICH ARE HEREUNDER:- TO SH. SHELENDRA KUMAR JAIN 76-B DDA FLATS JHILMIL COLONY VIVEK VIHAR DELHI-110095 SIR SUB: NOTICE U/S 263 OF THE I.T. ACT 1961 IN THE CA SE OF SH. SHELENDRA KUMAR JAIN (PAN: ADJPJ4984G) 76-B DDA F LATS JHILMIL COLONY VIVEK VIHAR DELHI-110095 A.Y. 200 9-10 REGARDING 1. YOUR CASE WAS COMPLETED U/S 143(3) ON 21.12.2011 AT A TOTAL INCOME OF RS. 27 32 280/- AGAINST THE RETURNED INCO ME OF RS. 25 79 054/- AFTER MARKING A TOTAL ADDITION OF RS. 2 58 303/- ON DISALLOWANCE OUT OF COMMUNICATION & TELEPHONE EXPEN SES BUSINESS PROMOTION DIWALI & POOJA EXPENSES AND STA FF WELFARE EXPENSES. 2. FROM PERUSAL OF ASSESSMENT RECORDS IT IS OBSERVED THAT DURING ASSESSMENT PROCEEDINGS SOME ISSUES REMAINED UNVERI FIED AND UN-ENQUIRED BY THE A.O. TO CLARIFY THESE ISSUES. AO HAD ISSUED NOTICE U/S 154/155 DATED 25.10.2012 WHICH WAS FOLLO WED BY REMINDER LETTER DATED 16.08.2013 FOR WHICH NO COMPL IANCE WAS MADE BY YOU. SUBSEQUENTLY THE CASE WAS REOPENED U/S 148 AND THE ASSESSMENT/ REASSESSMENT WAS COMPLETED U/S 147 AT TOTAL INCOME OF RS 30 82 340/- AFTER MAKING ADDITION OF R S. 3 50 064/- (ON ACCOUNT OF SHOWING FEES RECEIVED FOR PROFESSION AL/ TECHNICAL SERVICES RS.2 93 864/- AND 56 200/- RESPECTIVELY) O N 02.06.2014. 3. POST RE-ASSESSMENT U/S 147 THE CASE WAS EXAMINED I N THE OFFICE OF PCIT-19 WHEREIN IT IS FOUND THAT FOLLOWING POINT S SHOULD HAVE BEEN ASKED AND EXAMINED / VERIFIED BY THE AO DURING THE PROCEEDINGS U/S 147 BUT HE FAILED TO DO SO:- (I) YOU HAVE NOT FILED REPLY TO THE NOTICE ISSUED U/S 143(2)/142(1) ON 25.03.2014. SUBMIT YOUR REPLY WHY PENALTY U/S 271(1)(B) R.W.S. SECTION 274 OF THE I.T . ACT. ITA NO:-3179/DEL/2017 PAGE | 4 (II) SUBMIT THE REPLY FOR NON-DEDUCTION OF TDS FOR EXPEN SES ON OFFICE RENT AND JOB WORK CHARGES AMOUNTING TO RS . 5 40 000/- AND 3 03 542/- RESPECTIVELY. 4. IN VIEW OF THE ABOVE IT IS APPARENT THAT ASSESSMEN T IN THIS CASE HAS BEEN COMPLETED WITHOUT VERIFYING THE ABOVE ASPE CTS. IN OTHER WORDS THE ORDER OF THE AO UNDER DISCUSSION IS ERRO NEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 5. THE ABOVE ISSUES WERE REQUIRED TO BE EXAMINED BY TH E AO WHILE FINALIZING THE ASSESSMENT PROCEEDINGS. IN VIEW OF A BOVE YOU ARE SHOW CAUSED AS TO WHY THE ASSESSMENT ORDER MAY NOT BE TREATED AS ERRONEOUS IN SO FAR IT IS PREJUDICIAL TO THE INT EREST OF REVENUE UNDER THE PROVISIONS OF SECTION 263 OF THE I.T. ACT 1961. 6. IN CASE YOU HAVE ANYTHING TO SUBMIT IN THIS REGARD YOU MAY SUBMIT THE SAME EITHER PERSONALLY OR THROUGH YOUR A UTHORIZED REPRESENTATIVE IN THIS OFFICE ON 16.03.2017 AT 11.3 0 AM AT ROOM NO. D-106 FIRST FLOOR VIKAS BHAWAN I.P. ESTATE N EW DELHI- 110002 FAILING WHICH IT WOULD BE PRESUMED THAT YOU HAVE NOTHING TO SAY IN THE MATTER AND AN ORDER U/S 263 O F THE INCOME TAX ACT 1961 WILL BE PASSED ON THE BASIS OF MATERI AL AVAILABLE ON RECORD. 5. FROM THE REPLY FILED BY THE ASSESSEE IT IS SEE N THAT HE HAS ARGUED THAT TDS DEDUCTION WAS NOT WARRANTED FOR THE PAYMENT OF OFFI CE RENT BECAUSE THE PAYMENT VARIES BETWEEN RS. 2000/- TO RS. 9000/- P.M. SECOND LY ON THE ISSUE OF JOB WORK CHARGES HE HAS REPLIED THAT EACH JOB WORK HOARDING IS LESS THAN RS. 20 000/- WHICH IS BELOW THRESHOLD LIMIT OF TDS. HOWEVER HE C OULD NOT PROVIDED THE NAME OF EACH PARTY TO WHOM HE HAD MADE THE ABOVE PAYMENTS. IN VIEW OF THE ABOVE THE GENUINENESS OF THESE EXPE NSES HAS REMAINED UNVERIFIED. HOWEVER TAKING INTO ACCOUNT THE NATURE OF BUSINESS THE ASSESSEE IS UNDERTAKING IT IS SEEN THAT THE BACK OFFICE OF THE ASSESSEE IS LOCATED AT FAR OFF PLACES BEING SMALL VILLAGES. THE EXPENSES ON OFFICE RENT AND JOB WORK CHARGES CANNOT BE RULED OUT ENTIRELY. HOWEVER THE FACTS REM AIN THAT THE ASSESSEE COULD NOT PROVIDE THE NAMES OF PARTIES TO WHOM HE HAD MADE TH E PAYMENTS NEITHER DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) NOR DURING PR OCEEDINGS U/S 263. HENCE THE PLEA OF THE ASSESSEE THAT PROCEEDINGS U/S 263 SHOUL D NOT BE INITIATED IS REJECTED. [C] THIS PRESENT APPEAL HAS BEEN FILED BY THE ASSES SEE AGAINST THE AFORESAID IMPUGNED REVISION ORDER DATED 28.03.2017 OF THE LD. PR. CIT. AT THE TIME OF HEARING REVENUE WAS REPRESENTED BY SHR I. S.S. RANA CIT (DR). HOWEVER NONE WAS PRESENT FROM THE ASSESSEES SIDE. IN THE ABSENCE OF ANY ITA NO:-3179/DEL/2017 PAGE | 5 REPRESENTATION FROM ASSESSEES SIDE AT THE TIME OF HEARING BEFORE US WE HEARD THE LD. CIT (DR). THE LD. CIT (DR) RELIED UPO N THE AFORESAID IMPUGNED ORDER DATED 28.03.2017 OF THE LD. PR. CIT. HE ALSO RELIED ON THE PRECEDENTS IN THE CASES OF (I) ORDER DATED 29.11.20 17 OF HONBLE SUPREME COURT IN THE CASE OF DENIAL MERCHANTS PVT. LTD. VS. ITO (APPEAL NO. 2396/2017) II. MALABAR INDUSTRIAL CO. LTD. VS. CIT 243 ITR 83 (SC) (III) RAJMANDIR ESTATES (P.) LTD. VS. PCIT 386 ITR 162 (CA LCUTTA) IV. RAJMANDIR ESTATES (P.) LTD. VS. PCIT 245 TAXMAN 127 (SC). AF TER PERUSAL OF THE ORDER OF THE AO AND THE AFORESAID IMPUGNED ORDER DATED 28 .03.2017 OF THE LD. PR. CIT WE FIND THAT THE LD. PR. CIT HAS PASSED SP EAKING ORDER. RELEVANT PORTION OF THE IMPUGNED ORDER OF THE LD. PR. CIT HA D ALREADY BEEN REPRODUCED IN FOREGOING PARAGRAPH (B) OF THIS ORDER . WE FIND THAT THE LD. PR. CIT HAS GIVEN DETAILED REASONS FOR HIS DECISION IN THE AFORESAID IMPUGNED ORDER DATED 28.03.2017 OF LD. PR. CIT. DU RING APPELLATE PROCEEDINGS IN INCOME TAX APPELLATE TRIBUNAL (ITAT FOR SHORT) NO MATERIAL HAS BEEN BROUGHT FOR OUR CONSIDERATION TO PERSUADE US TO TAKE A VIEW DIFFERENT FROM THE VIEW TAKEN BY THE LD. PR. C IT IN THE IMPUGNED ORDER. THEREFORE AFTER HEARING THE LD. CIT (DR) AN D AFTER PERUSAL OF MATERIALS ON RECORD AND FURTHER IN VIEW OF THE FO REGOING DISCUSSION WE DECLINE TO INTERFERE WITH THE AFORESAID IMPUGNED AP PELLATE ORDER DATED 28.03.2017 OF LD. CIT(A). IN VIEW OF THE FOREGOING DISCUSSION THE APPEAL FILED BY ASSESSEE IS DISMISSED. ITA NO:-3179/DEL/2017 PAGE | 6 [D] BEFORE WE PART; WE EXPLICITLY CLARIFY THAT THE ASSESSEE WILL BE AT LIBERTY TO APPROACH ITAT FOR RESTORATION OF THE APP EAL IN ACCORDANCE WITH PROVISO TO RULE 24 OF INCOME TAX (APPELLATE TRIBUNA L) RULES 1963. IF THE ASSESSEE DOES APPROACH ITAT FOR RESTORATION OF THE APPEALS IN ITAT THE MATTER WILL BE CONSIDERED IN ACCORDANCE WITH LAW HA VING REGARD TO THE FACTS AND CIRCUMSTANCES. [E] IN THE RESULT APPEAL FILED BY ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/11 /2019. SD/- SD/- (AMIT SHUKLA) (ANADEE NAT H MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED: 20/11/2019 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO:-3179/DEL/2017 PAGE | 7 DRAFT DICTATED 14 .11 .2019 DRAFT PLACED BEFORE AUTHOR APPROVED DRAFT COMES TO THE SR.PS/PS ORDER SIGNED AND PRONOUNCED ON FILE SENT TO THE BENCH CLERK .11 .2019 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. DATE OF UPLOADING ON THE WEBSITE .11 .2019