Indian Delco Pvt. Ltd.,, New Delhi vs Department Of Income Tax

DCIT Vs. Indian Delco Pvt. Ltd., Cent, Circle - 22 B-11/45 , Mohan Cooperative Indl. Estate New Delhi Mathura Road, Badarpur Border Delhi PAN : AAACI1586N (Applicant) (Respondent)

ASSESSEE BY : Sh. R.I.S. Gill, DR REVENUE BY : Sh. Ashwani Tanga, FCA

Date of hearing : 18.03.2015 Date of pronouncement : .03.2015

ORDER PER C.M.GARG, JUDICIAL MEMBER :

This appeal has been preferred by the Revenue against the

order of the Commissioner of Income Tax (Appeals), New Delhi 2 ITA NO. 2363/ Del/2013

dated 11/02/2013 in appeal no. 125 / 11-12 / CIT(A) - III for A.Y.

2009- 10.

2. The revenue has raised following grounds in this appeal :-

"On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 83,71,53,585/- made by the A.O. on account of expenses claimed, but no details in support of its contention had been filed during the course of assessment proceedings.

2. On the facts and in the circumstances of the case, the CIT(A) has erred in violation of Rule 46A of the Income Tax Rules, 1962, by not following the decision of the Hon'ble High Court in the case of M/s Manish Buildwell Pvt. Ltd. 204 Taxman 106, wherein it was held by the Hon'ble jurisdictional High Court to give two stage opportunity under Rule 46A i.e. first before admission of additional evidence and second after admission of additional evidences."

3. Briefly, stated the facts giving rise to this appeal are that the

Assessing Officer completed the assessment u/s 144 of the Income

Tax Act, 1961 (for short the Act) by disallowing claimed expenses of

Rs. 83,71,53,585/- and added the same to the return income of the

assessee. The Assessing Officer noted that since the assessee did not

produce any details in support of expenses claimed in the return of

income therefore, he disallowed entire amount of expenses to the total

income of the assessee. Being aggrieved by the above assessment

order, the Assessee preferred an appeal before CIT(A) which was

allowed by passing the impugned order and the first appellate authority 3 ITA NO. 2363/ Del/2013

deleted the entire addition made by the AO. Now the aggrieved

revenue is before this Tribunal with the grounds as reproduced

hereinabove.

4. Apropos ground nos. 1 & 2 :- We have heard argument of both

the sides and carefully perused the relevant material available on

record before us. The Ld. Departmental Representative (DR)

submitted that the CIT(A) has erred in law and on facts in deleting the

impugned addition made by the AO on account of claimed expenses

as the AO made addition on justified ground as no details in supports

of expense claim and being filed by the assessee during the

assessment proceedings. Placing reliance on the decision of Hon'ble

High Court of Delhi in the case of M/s. Manish Build Well Pvt. Ltd.

(Supra), the Ld. DR submitted that the CIT(A) has erred in law in

admitting and considering additional evidence of the assessee under

Rule 46A of the Income Tax Rules, 1962. The Ld. DR further

submitted that impugned order may be set aside by restoring that of

the AO. Alternatively, the ld. DR submitted that if it is found just and

proper then the case may be restored to the file of either to the file of

AO or to the file of CIT(A) for afresh adjudication. 4 ITA NO. 2363/ Del/2013

5. Replying to the above, Ld. Counsel for the assessee vehemently

contended that the Assessing Officer do not provide due opportunity

of hearing for the assessee and the AO completed assessment u/s

144 of the Act in an arbitrarily manner by disallowing entire claim of

expenses. The Ld. Counsel of the assessee further pointed out that

since the assessee could not get an opportunity of being heard before

the AO and some relevant and necessary documents, evidence and

explanation, which could not be filed before the AO for sufficient

reason, therefore, the same were submitted before the CIT(A) as

additional evidences and the same was rightly admitted and

considered by the First Appellate Authority as per provisions of Rule

46A of the Rules. However, the Ld. Counsel of the assessee finally

submitted that if it is found just and proper then the case may be

restored to the file of AO for afresh adjudication and the assessee has

no serious objection to that.

6. On carefully consideration of above rival contention of both the

sides at the very outset, we note that the Assessing Officer completed

assessment proceedings ex partie u/s 144 of the Act and the assessee

was prevented by this reason in filing necessary and relevant

explanation, details and evidence before the AO. Hence, we further, 5 ITA NO. 2363/ Del/2013

hold that in this situation the assessee was having right to submit

additional evidence during First Appellate proceedings under Rule 46A

of the Rules. At the same time, we note that the CIT(A) called remand

report of the AO on the admissibility of additional evidence and the

Assessing Officer objected to the admission of additional evidence

without verifying, examining and commenting upon the merits of the

additional evidence. From the vigilant reading of the impugned order

we note that the CIT(A) rejected the objection of the AO and admitted

the additional evidence but the remand report of the AO was not called

and AO was not allowed to comment upon the merits of the additional

evidence. In this situation, it can safely be presumed that the CIT(A)

considered additional evidence in violation of Rule 46A of the Rules

and granted relief for the assessee.

7. On the basis of our foregoing discussions, we reach to a

conclusion that the authorities below did not adjudicated the case in a

proper manner and hence, assessment order as well as the impugned

order is not found to the sustainable and we set aside the same.

Further, we restored the entire case to the file of assessing officer for

framing of afresh denovo assessment after affording due opportunity

of hearing for the assessee and without being prejudiced from the 6 ITA NO. 2363/ Del/2013

earlier assessment and impugned order. Accordingly Ground no. 1

and 2 of the revenue are deemed to be allowed for statistical

purposes.

In the result appeal of the revenue is allowed as indicated above.

Order pronounced in open court on 20th March , 2015.

Sd/- Sd/- (R.S.SYAL) (C.M.Garg) Accountant Member Judicial Member

Dated 20th March, 2015 B.Rukhaiyar

Copy forwarded to 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), New Delhi.

By order

AR, ITAT N. Delhi 7 ITA NO. 2363/ Del/2013

Sl. Description Date No. 1. Date of dictation by the Author 18.03.2015

2. Draft placed before the Dictating 18.03.2015 Member

3. Draft placed before the Second Member

4. Draft approved by the Second Member

5. Date of approved order comes to the Sr. PS

6. Date of pronouncement of order 20.03.2015

7. Date of file sent to the Bench 20.03.2015 Clerk

8. Date on which file goes to the Head Clerk

9. Date of dispatch of order 8 ITA NO. 2363/ Del/2013