DCIT,, Chandigarh v. M/s Bansal Generation Ltd.,, Chandigarh

ITA 924/CHANDI/2010 | 2007-2008
Pronouncement Date: 31-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 92421514 RSA 2010
Assessee PAN AABCB8974E
Bench Chandigarh
Appeal Number ITA 924/CHANDI/2010
Duration Of Justice 7 month(s) 16 day(s)
Appellant DCIT,, Chandigarh
Respondent M/s Bansal Generation Ltd.,, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 31-01-2011
Date Of Final Hearing 25-01-2011
Next Hearing Date 25-01-2011
Assessment Year 2007-2008
Appeal Filed On 14-06-2010
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. 924/CHD/2010 ASSESSMENT YEAR: 2007-08 THE DCIT VS. M/S BANSAL GENERATION LIMITED CIRCLE 4(1) CHANDIGARH CHANDIGARH PAN NO. AABCB8974E & C.O. NO. 26/CHD/2010 (IN ITA NO. 924/CHD/2010) ASSESSMENT YEAR: 2007-08 M/S BANSAL GENERATION LIMITED VS. THE DCIT CHANDIGARH CIRCLE 4(1) CHANDIGARH PAN NO. AABCB8974E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL RESPONDENT BY: SHRI AJAY JAIN ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE REVENUE AND CROSS OBJECTION BY TH E ASSESSEE ARE AGAINST THE ORDER OF CIT(A) CHANDIGARH RELATING TO ASSESSMENT YEAR 2007- 08 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. BOTH THE APPEAL OF THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE 2 WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD . CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE WITHOUT SCRUTINIZING / VERIFYING THE BOOKS OF ACCOU NT IN A CASE WHEREIN THE ASSESSING OFFICER HAS SPECIFICAL LY MENTIONED THAT NO BOOKS OF ACCOUNT WERE PRODUCED FO R SCRUTINIZING / VERIFICATION. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN PASSING THE ORDER WITHOUT CALLI NG FOR A REMAND REPORT FROM THE ASSESSING OFFICER. 4. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED. 3. THE REVENUE IS AGGRIEVED BY THE ORDER OF CIT(A) IN ALLOWING RELIEF TO THE ASSESSEE WITHOUT VERIFICATION OF BOOKS OF AC COUNT WHICH WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER AND PASSING O F ORDER BY THE CIT(A) WITHOUT CALLING FOR REMAND REPORT FROM THE ASSESSIN G OFFICER IN RESPECT OF ADDITIONAL EVIDENCE FILED BY ASSESSEE IN APPEAL PRO CEEDINGS. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS CARRYING ON THE BUSINESS OF MANUFACTURING OF GENERATORS FROM ITS TW O UNITS ONE AT KURALI AND SECOND AT NATHU PLASI (BADDI). THE ASSESSEE HA D CLAIMED DEDUCTION U/S 80 IC OF THE ACT IN RESPECT OF THE PROFITS OF B ADDI UNIT. SURVEY U/S 3 133A OF THE INCOME TAX ACT WAS CONDUCTED AT THE BUS INESS PREMISES OF THE ASSESSEE ON 16.9.2009. DURING THE COURSE OF SURVEY PROCEEDINGS STATEMENT OF SHRI VINEET AGGARWAL CA WHO HAD AUDIT ED BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY AND ISSUED FORM NO. 3 CD W AS RECORDED ON OATH. HE STATED THAT HE WAS AUDITING THE ACCOUNTS OF THE ASSESSEE FOR ALL THE YEARS INCLUDING ASSESSMENT YEAR 2007-08. IN REPLY TO A SPECIFIC QUERY AS TO WHETHER THE ACCOUNTS FOR THE TWO UNITS AT KURALI AND BADDI WERE PRODUCED BEFORE HIM FOR AUDITING HE STATED ON OATH THAT NO SEPARATE BOOKS OF ACCOUNT FOR BADDI WERE PRODUCED BEFORE HIM FOR A UDIT AND ONLY CONSOLIDATED ACCOUNTS WERE PRODUCED FOR AUDIT PURPO SES. THE STATEMENT OF SHRI VINEET AGGARWAL CA RECORDED DURING THE COURSE OF SURVEY IS REPRODUCED IN PARA 3.1 AT PAGES 5 & 6 OF THE ASSESS MENT ORDER. THE COPY OF THE SAID STATEMENT IS ANNEXED AS ANNEXURE A TO THE ASSESSMENT ORDER. THE SAID STATEMENT OF THE CA WAS CONFRONTED TO SHRI PAWAN BANSAL ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY DURING THE CO URSE OF SURVEY PROCEEDINGS AND HIS STATEMENT WAS ALSO RECORDED. IN REPLY TO A SPECIFIC QUERY SHRI PAWAN BANSAL STATED THAT FORM NO. 10 CC B WAS NOT OBTAINED. THE EXTRACT OF STATEMENT OF SHRI PAWAN BANSAL IS RE PRODUCED IN PARA 3.2 AT PAGE 7 OF THE ASSESSMENT ORDER. HIS STATEMENT IS A NNEXED AS ANNEXURE B TO THE ASSESSMENT ORDER. AFTER SURVEY THE ASSESSE E FURNISHED A REPLY BEFORE THE ASSESSING OFFICER PARWANOO ON 24.9.2009 INCLUDING THERE WITH FORM NO. 10 CCB SIGNED BY ONE SHRI MANISH GUPTA CA WHO WAS ALSO APPEARING AS REPRESENTATIVE OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SHRI MANISH GUPTA WAS PART NER OF THE FIRM M/S BANSAL PAWAN & ASSOCIATES WHOSE ONE OF THE MAIN PA RTNER WAS SHRI PAWAN BANSAL THE DIRECTOR OF THE ASSESSEE COMPANY. IN THE CIRCUMSTANCES SUMMONS WERE ISSUED TO SHRI MANISH GUPTA CA ON 11. 12.2009 FOR APPEARANCE ON 17.12.2009 ON WHICH DATE HIS STATEME NT ON OATH WAS 4 RECORDED. HE POINTED OUT THE INFIRMITY IN WHAT WAS STATED IN FORM NO. 3 CB AND 3 CD ISSUED BY SHRI VINEET AGGARWAL AND FORM NO. 10CCB ISSUED BY HIM TO THE ASSESSEE COMPANY. HE WAS ALSO CONFRO NTED WITH THE FORM NO. 3 CD ISSUED BY SHRI VINEET AGGARWAL WHEREIN AG AINST COLUMN NO.26 THE CLAIM OF DEDUCTION UNDER CHEATER VI-A NO CLAIM OF ANY DEDUCTION WAS MADE AND WAS LEFT BLANK; THE REPLY TO WHICH WAS I HAVE NO IDEA. HE FURTHER STATED TO HAVE ONLY GONE THROUGH THE SEPARA TE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE BADDI UNIT AND NOT THE AUDIT REPORT. THE COPY OF THE STATEMENT OF SHRI MANISH GUPTA CA WAS A NNEXED AS ANNEXURE C TO THE ASSESSMENT ORDER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO SUBSTANTIATE ITS CLAIM U/ S 80-IC OF THE ACT. DESPITE SEVERAL OPPORTUNITIES ALLOWED TO THE ASSESS EE THE ASSESSING OFFICER AS PER PARA 4.1 AT PAGE 10 OF THE ASSESSMEN T ORDER OBSERVES THAT THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCO UNT FOR BOTH THE UNITS IN ORDER TO VERIFY THE GENUINENESS OF THE CLAIM MAD E U/S 80IC OF THE ACT AND THE ASSESSEE THOUGH SOUGHT ADJOURNMENTS AFTER A DJOURNMENT BUT NEITHER PRODUCED BOOKS OF ACCOUNT FOR VERIFICATION NOR PRODUCED BILLS AND VOUCHERS FOR THE PURCHASE OF PLANT AND MACHINERY OR DETAILS REQUISITIONED FOR. THE ASSESSING OFFICER FURTHER OBSERVED THAT AS THE BILLS FOR PURCHASE OF PLANT AND MACHINERY WERE NOT PRODUCED IT WAS NO T VERIFIABLE AS TO WHETHER THE ASSESSEE HAD INSTALLED OLD MACHINERY VA LUED MORE THAN 20% OF THE TOTAL MACHINERY INSTALLED AT THE BADDI UNIT AGA INST WHICH THE CLAIM OF DEDUCTION U/S 80IC WAS MADE. AS THE ASSESSEE FAILED TO PRODUCE THE REQUISITE DETAILS ON VARIOUS DATES OF HEARING SHOW CAUSE NOTICE WAS ISSUED ON 21.12.2009 UNDER WHICH THE ASSESSEE WAS SHOW CA USED AS TO WHY DEDUCTION U/S 80IC SHOULD NOT BE DISALLOWED. THE C ONTENTS OF THE SAID SHOW CAUSE NOTICE ARE REPRODUCED UNDER PARA 5.2 AT PAGES 10 11 & 12 OF THE ASSESSMENT ORDER. THE REPLY OF THE ASSESSEE IS REPRODUCED AT PAGES 12 5 TO 16 OF THE ASSESSMENT ORDER. THE ASSESSING OFFIC ER VIDE PARAS 6 AT PAGE 17 OF THE ASSESSMENT ORDER NOTES THE ASSESSEE TO HA VE INSERTED A LINE IN THE REPLY MOREOVER SEPARATE BOOKS OF ACCOUNT OF BOTH THE UNIT S ARE BEING PRODUCED BEFORE YOUR GOODSELF FOR YOUR KIND PERUSAL . . THE ASSESSING OFFICER THOUGH NOTED AS UNDER :- HOWEVER AFTER SEEKING AND OBTAINING SO MANY ADJOURNMENTS IN A TIME BARRING ASSESSMENT CASE THE ASSESSEE HAS NEVER PRODUCED THE BOOKS OF ACCOUNT BU T TO SAY OF SEPARATE BOOKS OF ACCOUNT OF BOTH THE UNI TS . 5. THE ASSESSEE FURNISHED ANOTHER REPLY EXPLAINING THE DISCREPANCY IN FORM NO. 3 CD AND FORM NO. 10CCB AND ALSO THE VARIO US STATEMENTS RECORDED WHICH ARE REPRODUCED AT PAGES 18 TO 22 OF THE ASSESSMENT ORDER. IN THE SAID STATEMENT AT PAGE 22 IT WAS SUBMITTED BY THE ASSESSEE THAT MAINTENANCE OF SEPARATE BOOKS OF ACCOUNT OF MORE TH AN ONE UNIT WAS NOT MANDATORY FOR CLAIMING DEDUCTION U/S 80IC OF THE AC T. WITH REGARD TO THE ORIGINAL BILLS OF PURCHASE OF PLANT AND MACHINERY O F BADDI UNIT IT WAS POINTED OUT THAT THE SAME WERE READY WITH THE ASSES SING OFFICER AS THESE WERE SEIZED DURING THE COURSE OF SURVEY CONDUCTED A T THE PREMISES OF THE ASSESSEE ON 16/17-9-2009. THE ASSESSING OFFICER VI DE PARA 8 AT PAGE 22 OF THE ASSESSMENT ORDER NOTES THAT THE CLAIM OF THE ASSESSEE THAT ORIGINAL BILLS OF PLANT AND MACHINERY OF BADDI UNIT WERE IMP OUNDED FROM THE BUSINESS PREMISES WAS NOT CORRECT AS THESE WERE NEI THER PRODUCED NOR IMPOUNDED. THE ASSESSING OFFICER IN THE ABOVESAID CIRCUMSTANCES DISALLOWED THE CLAIM OF DEDUCTION U/S 80IC OF THE A CT. 6. BEFORE THE CIT(A) THE ASSESSEE FURNISHED AN EXTE NSIVE REPLY WHICH IS REPRODUCED AT PAGES 7 TO 16 OF THE APPELLATE ORD ER AND VEHEMENTLY CLAIMED THAT THE BOOKS OF ACCOUNT ALONGWITH VOUCHER S WERE BROUGHT TO THE 6 OFFICE OF THE ASSESSING OFFICER AND THE ASSESSING O FFICER HAD NOT ASKED FOR BOOKS OF ACCOUNT BUT HAD ONLY TAKEN THE REPLIES ON RECORD. IT IS FURTHER STATED THAT THE ASSESSING OFFICER HAD FAILED TO EXA MINE THE BOOKS OF ACCOUNT AND IN CASE OF NON PRODUCTION OF THE SAID B OOKS OF ACCOUNT PROVISIONS OF SECTION 145(3) SHOULD HAVE BEEN INVOK ED AND APPLIED. THE ASSESSEE FURTHER STATES THAT THE COMPLETE BOOKS OF ACCOUNT ALONGWITH VOUCHERS WERE BEING PRODUCED BEFORE THE CIT(A) FOR VERIFICATION. THE CIT(A) VIDE PARA 20 OF THE APPELLATE ORDER OBSERVED THAT A) NO EFFORT WAS MADE DURING THE ASSESSMENT PROCEEDINGS FOR ALLOWING THE ASSESSEE TO CROSS EXAMINE SHRI VINEET AGGARWAL CA; (B) THE ASSESSIN G OFFICER HAD FAILED TO TAKE COGNIZANCE OF THE STATEMENT OF ANOTHER CA W HO CONFIRMED TO HAVE ISSUED FORM NO. 10 CCB FOR CLAIMING EXEMPTION U/S 8 0IC AFTER VERIFYING THE BOOKS OF ACCOUNT; (C) THE LATE FILING OF THE AU DIT REPORT WOULD NOT DISENTITLE THE ASSESSEE TO CLAIM OF THE DEDUCTION U /S 80IC OF THE ACT AND (D) DURING THE APPELLATE PROCEEDINGS APPELLANT PR ODUCED BEFORE ME DETAILS OF FIXED ASSETS CLEARLY DEPICTING DETAILS O F FIXED ASSETS EXISTING AT NATHUPLASSI. WHEN SURVEY HAD BEEN CONDUCTED AND A NUMBER OF PAPERS/DOCUMENTS SEIZED FROM BUSINESS PREMISES AS SESSING OFFICER SHOULD HAVE POINTED OUT SPECIFIC DEFECTS IN THE BOO KS OF ACCOUNT AND PAPER ISSUED DURING THE SURVEY RATHER THAN BUILDING THE E NTIRE CASE OF LATE FILING OF FORM 10 CCB. LASTLY THE CIT(A) WAS OF THE VI EW THAT AS SURVEY WAS CONDUCTED ALL THE ACTIVITIES THE ASSESSEE WERE IN THE KNOWLEDGE OF THE ASSESSING OFFICER AND IF THE DEDUCTION HAD TO BE DI SALLOWED IT SHOULD HAVE BEEN DONE ON MERITS INSTEAD OF PROCEDURAL LAPSES. IN VIEW OF THE ABOVSAID THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S 80IC OF THE ACT. 7 7. THE LD. DR FOR THE REVENUE STRESSED THAT IN THE ABSENCE OF THE BOOKS OF ACCOUNT BEING PRODUCED BEFORE THE ASSESSI NG OFFICER THERE IS NO JUSTIFICATION IN ALLOWING THE DEDUCTION CLAIMED U/S 80IC OF THE ACT. THE LD. DR FURTHER POINTED OUT THAT THE DOCUMENTS / BOO KS OF ACCOUNT IF ANY PRODUCED BEFORE THE CIT(A) WERE NOT BEFORE THE ASSE SSING OFFICER AND THE CIT(A) HAS FAILED TO ADJUDICATE ON THE ISSUE OF NON PRODUCTION OF BOOKS OF ACCOUNT AND NON PRODUCTION OF VOUCHERS EVIDENCING T HE PURCHASE OF MACHINERY. THE LD. DR FURTHER SUBMITTED THAT THE C IT(A) HAD FAILED TO CALL FOR ANY REMAND REPORT IN THIS REGARD AND AS SU CH THE ORDER OF THE CIT(A) WAS INFRUCTUOUS. THE LD. AR STRESSED THAT T HE ASSESSEE WAS MAINTAINING SEPARATE BOOKS OF ACCOUNT WHICH WERE PR ODUCED AND FURTHER DURING THE COURSE OF SURVEY THE VOUCHERS OF PURCHA SE OF MACHINERY WERE ALSO IMPOUNDED. THE LD. AR FAIRLY CONCEDED THAT TH E CIT(A) HAD FAILED TO CALL FOR A REMAND REPORT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. AS PER THE ASSESSING OFFICER THE ASSESSEE FAILED TO PRODUC E THE BOOKS OF ACCOUNT OF THE TWO UNITS. THE STATEMENT OF THE C.A. WHO HA D COMPLETED THE AUDIT AND ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY WA S RECORDED DURING THE COURSE OF SURVEY OPERATIONS AND CERTAIN INFIRMITIES WERE FOUND. THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN IT CASE AND PRO DUCE THE EVIDENCE OF FILING THE AUDIT REPORT IN CONNECTION WITH CLAIM OF DEDUCTION U/S 180 C OF THE ACT. THE SAID AUDIT REPORT WAS FURNISHED DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS AND VARIOUS SUBMISSIONS WERE MADE IN REPLY TO THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER. HOWEVER THE ASSESSING OFFICER DENIED THE DEDUCTION U/S 80IC OF THE ACT IN THE ABSENCE OF BOOKS OF ACCOUNT AND ALSO FOR THE NON PRODUCTION OF VOUCHERS EVIDENCING THE PURCHASE OF ASSETS DURING THE YEAR. IN APPEAL THE CIT(A) 8 ACCEPTED THE CLAIM OF THE ASSESSEE WITHOUT MEETING THE STAND OF THE ASSESSING OFFICER OF NON PRODUCTION OF BOOKS OF ACC OUNT. IN RESPECT OF NON PRODUCTION OF THE VOUCHERS DEPICTING PURCHASE O F FIXED ASSETS CERTAIN DETAILS WERE FURNISHED BEFORE THE CIT(A) WHICH WERE ADMITTED WITHOUT CONFRONTING THE SAME TO THE ASSESSING OFFICER. WE FIND THAT THE CIT(A) HAS FAILED TO COMPLY WITH THE PROVISIONS OF RULE 46 A OF I.T. RULES WHILE ADMITTING THE ADDITIONAL EVIDENCE IN THE CASE. THE CIT(A) HAS ALSO NOT CONFRONTED THE ASSESSING OFFICER TO COMMENT UPON TH E BOOKS OF ACCOUNT WHICH AS PER THE ASSESSING OFFICER WERE NOT PRODUCE D BEFORE HIM. 9. THE APPEAL IS FURNISHED BEFORE THE CIT(A) UNDER THE PROVISIONS OF SECTION 246A OF THE ACT AND IN LINE WITH THE PROVIS IONS OF SECTION 249 OF THE ACT WHICH PRESCRIBES THE FORM OF APPEAL 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 INCOME 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 TO THE ASSESSEE AND ASSESSING OFFICER AGAINST WHOSE ORDER THE SAID APPEAL IS PREFERRED. BOTH THE ASSESSEE AND THE ASS ESSING OFFICER EITHER IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE HAVE RIGHT TO BE HEARD ON THE FIXED DATE OF HEARING OF THE SAID APPEAL U/S 25 0(2) OF THE ACT. U/S 250(4) OF THE ACT CIT(A) IS EMPOWERED TO MAKE ANY SUCH FURTHER ENQUIRY AS HE THINKS FIT OR HE MAY DIRECT THE ASSESSING OFF ICER TO MAKE FURTHER ENQUIRES AND REPORT THE RESULT OF THE SAID ENQUIRY TO THE CIT(A). UNDER SECTION 250(5) OF THE ACT THE CIT(A) MAY ALLOW TH E ASSESSEE TO GO IN TO AND ADDRESS ANY ADDITIONAL GROUND OF APPEAL WHICH I S NOT SPECIFIED IN THE GROUND OF APPEAL ON HIS [CIT(A)] SATISFACTION THAT THE OMISSION OF THE SAID GROUND FROM THE FORM OF APPEAL WAS NOT WILLFUL OR UNREASONABLE. THE 9 ORDER OF THE CIT(A) DISPOSING OF THE APPEAL SHALL B E IN WRITING AND THE POINT FOR DETERMINATION THE DECISION AND THE REASO NS FOR THE DECISION SHALL BE STATED BY THE CIT(A) UNDER THE PROVISIONS OF SEC TION 250(6) OF THE ACT. IT IS FURTHER PROVIDED THAT ON DISPOSAL OF THE APPE AL THE 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 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. 10. UNDER THE PROVISIONS OF RULE 46A OF THE I.T. RU LES 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 10 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 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. 11. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT C ASE WE FIND THAT THE CIT(A) NOT TO HAVE COMPLIED WITH THE PROVISIONS REG ARDING THE ADMISSION OF ADDITIONAL EVIDENCE. WE ARE NOT IN CONFORMITY WITH THE OBSERVATION OF THE CIT(A) THAT THE ASSESSING OFFICER SHOULD HAVE P OINTED OUT SPECIFIC DEFECTS IN THE BOOKS OF ACCOUNT AND PAPERS SEIZED DURING THE SURVEY. THE BASIS FOR REJECTION OF THE CLAIM OF THE ASSESSEE BY THE ASSESSING OFFICER WAS ON PRODUCTION OF BOOKS OF ACCOUNT AND VARIOUS O THER INFIRMITIES POINTED OUT BY THE ASSESSING OFFICER WITH REGARD TO THE CLAIM OF DEDUCTION U/S 80IC OF THE ACT. THE CIT(A) HAS FAILED TO ADD RESS THE SAME AND 11 ALLOWED THE CLAIM OF ASSESSEE. THE BOOKS OF ACCOUN T HAVE NOT BEEN VERIFIED BY CIT(A) OR BY ASSESSING OFFICER IN REMAN D PROCEEDINGS. WE FIND THAT THE CIT(A) HAS FAILED TO CALL FOR ANY REM AND REPORT. HOWEVER IN THE INTEREST OF JUSTICE WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF THE CIT(A) TO REVISIT THE ISSUE AFTER CALLING FO R A REMAND REPORT AND ALSO AFTER DIRECTING THE ASSESSING OFFICER TO VERIF Y THE CLAIM OF THE ASSESSEE VIS-A-VIS BOOKS OF ACCOUNT MAINTAINED BY T HE ASSESSEE. THE CIT(A) SHALL CALL FOR THE REMAND REPORT FROM THE AS SESSING OFFICER IN THIS REGARD AND AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE DECIDE THE ISSUE DE NOVO. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS ALLOWED FOR STATISTICAL PURPOSES. 12. THE ASSESSEE HAS FILED THE CROSS OBJECTION AGAI NST THE JURISDICTION OF THE ACIT CIRCLE 4(1) CHANDIGARH IN FRAMING THE ASS ESSMENT U/S 143(3) OF THE ACT. 13. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME FOR THE PRECEDING YE AR I.E. 2006-07 WITH THE ACIT CIRCLE 4(1) CHANDIGARH. HOWEVER THE RE TURN OF INCOME RELATING TO THE YEAR UNDER APPEAL WAS E-FILED ON 22 .10.2007 WITH ACIT PARWANOO. THE ASSESSMENT PROCEEDINGS IN THE CASE WAS INITIATED BY ACIT PARWANOO AND WERE LATER COMPLETED BY ACIT CI RCLE 4(1) CHANDIGARH. THE GRIEVANCE OF THE ASSESSEE IS THAT ACIT CHANDIGARH HAD NO JURISDICTION TO COMPLETE THE ASSESSMENT. THE OPT ION TO FILE THE RETURN OF INCOME IS TO BE EXERCISED BY THE ASSESSEE IN THE FI RST YEAR OF ASSESSMENT IN CONNECTION WITH HIS PLACE OF BUSINESS AND IF THERE ARE MORE THAN ONE PLACE OF BUSINESS THEN THE PRINCIPLE PLACE OF BUSINESS O R PLACE OF RESIDENCE. ONCE THE RETURN OF INCOME HAS BEEN FILED BY THE ASS ESSEE IN LINE WITH ANY 12 OF THE ABOVE CONDITION THE CASE FALLS UNDER THE AM BIT OF SECTION 124 OF THE INCOME TAX ACT AND THE ASSESSEE IS REQUIRED TO CONT INUOUSLY FILE THE RETURN OF INCOME WITH THE SAME ASSESSING OFFICER WI TH WHOM THE FIRST RETURN OF INCOME WAS FILED. IN CASE OF CHANGE OF H IS PLACE OR BUSINESS OR RESIDENCE IF HE INTENDS TO CHANGE THE JURISDICTION THEN ASSESSEE IS REQUIRED TO FOLLOW THE PROCEDURE AS PER SECTION 139 A(5)(D) OF THE ACT. IN THE FACTS OF THE PRESENT CASE WE FIND NO SUCH PROC EDURE BEING FOLLOWED BY THE ASSESSEE. WE ARE IN CONFORMITY WITH THE ORDER OF THE CIT(A) THAT THE JURISDICTION OF THE ASSESSEE FALLS WITH ACIT CIRCL E 4(1)CHANDIGARH AND THERE IS NO INFIRMITY IN THE PRESENT ORDER PASSED. ACCORDINGLY THE CROSS OBJECTION RAISED BY THE ASSESSEE IS DISMISSED. 14. IN THE RESULT APPEAL OF THE REVENUE IS PARTLY A LLOWED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. 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