THE ACIT,VAPI CIRCLE, VAPI vs. M/S. DAMAN HOSPITALITY PVT.LTD., NANI DAMAN

62-68 HTYA< 3dlail4 3feaut Wa =ryda, TRT IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH; SURAT s H w JJf, 7f4m H4t4 &a # 3 4 Hal, du 4aF4 # FH8T BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.PMEENA, ACCOUNTANT MEMBER Hder-d #_LITA No1859/AHDIZO12ISRT & CONo.190/AHDIZO12ISRI Dufu &ff Assessment Year: 2009-10 Asst. Commissioner of Income Tax, Vapi Circle, Vapi: Vs. MIs. Daman Hospitality Pvt: Ltd. 4O/A , Ghelwad Faliya , Dabhel, Nani Daman_ [PAN: AACCD 7948K] (9zeffiRespondentl Cross Objector) 4al (3reffereftlAppellant) 7nyrs, 34latrff 41 31 #/ Appellant by 9zeff 41 31 # /Respondent by TTars 41 7ru/Date of Hearing &yu1Tr 41 ar IDate of pronouncement Shri Prasenjeet Singh, CIT , DR Shri Yogesh Thar; CA 21-02-2018 22-02-2018 3cte0 LoRDER PER C MGARG_JUDICIAL_MEMBER:

This appeal by the Revenue as well as Cross objection of the assessee have been filed against the order of Commissioner of Income Tax (Appeals) , Valsad (CIT(A)' for short), dated 18.06.2012 for the 2 ITA No.1859/AHD/2012/SRT & CO. 190/AHD/2012 M/s: Daman Hospitality Pvt: Ltd: (A.Y: 2009-10) assessment year (AY) 2009-10 passed in the first Appeal No.CIT(AJNLS/454/2011-12_ 2 The relevant facts pertaining to these cases are that vide the Tribunal order dated 09.08.2016 allowed application of the assessee admitting the additional evidence filed by the assessee and in the same order the Tribunal remitted the said additional evidence to the Assessing Officer (AO) for his commentslreport after allowing opportunity of being heard for the assessee. On the directions of the Tribunal, the AO filed his report on 10.03.2017 which has taken on record_ REQUEST OF REVENUE FOR ADMISSION ON ADDITIONAL GRQUNDS: 3 We have heard the arguments of the both sides. On application of the Revenue seeking admission of additional grounds of appeal which read as follows: 1_ On the facts and circumstances of the case, the Id. CIT(A) has erred in admitting the fresh evidences filed by the assessee at Page No.87 to 354 of Paperbook-1, without affording the AO an opportunity to examine the additional evidences as per the provisions of Rule 46(3) of the I.T. Rules. 2 On the facts and circumstances of the case, the Id. CIT(A) has erred in recording the factually wrong statement in its order at Para 5.3 of Page 17 that the evidences in question were actually produced before the AO whereas the CIT(A) has himself admitted while ' referring to the submissions of the assessee at Para 9 of Page No.8 that the evidences in question were being filed before the Id. CITIA) for the first time. 3 ITA No.1859/AHD/2O12/SRT & CO. 190/AHD/2012 M/s: Daman Hospitality Pvt: Ltd. (A.Y: 2009-10) 3 The order of the Id. CIT(A) be set aside and the matter be restored back to the AO to re-examine fresh evidence in a comprehensive manner: 4 The Id: Departmental Representative (DR) submitted that while granting relief to the assessee the Id. CIT(A) has admitted considered additional evidence submitted by the assessee during first appellate proceedings, which was not submitted before the AO during assessment proceedings, in violation of Rule 46A of the Income Tax Rules, 1962 (for short 'the Rules'). Therefore, these legal grounds go to the root of the case and are necessary for proper adjudication of the appeal of the Revenue. The Id. Authorized Representative (AR) strongly opposed to the admission of additional grounds and submitted "a that at the time of filing of original appeal the Revenue has not raised such grounds, therefore, the Revenue cannot be allowed to raise the same before the Tribunal at this belated stage: 5_ On careful consideration of above rival submissions and on thoughtful perusal of the additional ground proposed for admission and consideration by the Revenue, we note that the Revenue wants to challenge the action of the Id. CIT(A); wherein he admitted additional evidence during the first appellate proceedings in violation of r. 46A of the Rules. These grounds are important and go to the roots of the dispute and the same can be decided on the basis of material already ITA No.1859/AHDP2O12/SRT & CO: 190/AHD/2012 M/s. Daman Hospitality Pvt. Ltd. (A.Y: 2009-10) on record without any extra document or record and these grounds are purely of legal in nature wherein the Revenue is seeking the Tribunal to adjudicate his objection to the admission and consideration of additional evidence in violation of relevant r 46A of the Rules_ Therefore, in our considered opinion, the grounds raised by the Revenue are of purely legal in nature, which can be adjudicated on the basis of material already available on record. Therefore , respectively following the ratio of the decision of Hon'ble Supreme Court in the case of National Thermal Power Corporation VS. CIT [1998] 229 ITR 383 (SC) additional grounds of the Revenue are admitted for adjudication. ADDITIONAL GRQUNDS 12 & 3: We have heard the arguments of the both sides, and carefully perused the relevant materials placed on the record of the Tribunal: The Id. CIT(A)-DR submitted that in the first appellate order the Id CIT(A) has erred in admitting the fresh evidence filed by the assessee (available at pgs. 87 to 354 of PB No.1 of the assessee) without affording the AO an opportunity to examine, verify and comment upon the additional evidence as per requirement of r 46A(3) of the Rules. The Id. CIT(A)-DR further submitted that the Id. CIT(A) has also erred in recording the factually wrong statement in its order at para 5.3 of pg: 17 5 ITA No.1859/AHD/2012/SRT & CO. 19O/AHD/2012 M/s: Daman Hospitality Pvt. Ltd. (A.Y: 2009-10) that the evidences in question were actually produced before the AO_ whereas the Id. CIT(A) has himself admitted the same while referring to the statements of the assessee at para 9 of pg: 8 wherein the assessee stated that the evidences in question were being filed before the first appellate authority for the first time. The Id. CIT(A)-DR contended that for this reason only the first appellate order may kindly be set aside and the matter be restored to back to the file of AO to verify and examine the additional evidence in comprehensive manner and to reframe assessment order denovo 7 Replying to the above, the Id: AR strongly opposed to the restoration of the case to the file of the AO. Alternatively, he submitted that if it is found just and proper to remit the case then it may be restored to the file of the AO with a direction that the assessee should be allowed due opportunity of hearing to explain his stand by way of all supporting documents and submissions. However, he could not controvert the fact that the documentary evidence placed at pgs. 87 to 357 of the assessee's PB it was considered by the Id. CIT(A) without affording the AO an opportunity to verify and examine the said additional evidence to comment and submit remand report thereon, as per requirement of r 46A(3) of the Rules. The Id. AR also could ITA No.1859/AHD/2O12/SRT & CO. 190/AHD/2012 M/s: Daman Hospitality Pvt: Ltd: (A.Y: 2009-10) controvert this fact that the observation of the Id. CIT(A) in para 5.3 at pg: 17 that the evidences in question were actually produced before the AO is clearly wrong and incorrect as the first appellate authority himself admitted the said evidences while referring to the submissions of the assessee in para 9 of pg: 8 that the evidence in question were filed before the Id. CIT(A) for the first time In this situation; we safely presume that the Id: CIT(A) has admitted additional evidence , which was not submitted to the AO during assessment proceedings, and the AO was not allowed to comment or to submit his remand report on said additional evidence by the Id. CIT(A): Therefore, it is clear that the Id. CIT(A) has admitted and considered the additional evidence in violation of provisions of r 46A of the Rules, while granting relief to the assessee therefore, impugned first appellate order cannot be held as sustainable and hence we set aside the same. 8 At this stage, we may point out that the additional evidence sought to be admitted by the assessee is relevant and we are of the prima facie view that these documents are necessary for just and proper disposal of case. However, as we have already noted above that the AO was not given opportunity to examine and verify the additional evidence therefore, allowing the alternate prayer of the ITA No.1859/AHD/2012/SRT & CO. 190/AHD/2012 MJs. Daman Hospitality Pvt: Ltd. (A.Y: 2009-10) assessee and to avoid multiplicity of proceedings we restore the case to the file of AO for framing of denovo assessment order as per provisions of the Act after affording due opportunity of hearing for the assessee The AO is directed to reframe assessment order without being prejudiced from the earlier assessment and first appellate order Accordingly, additional grounds 1, 2 & 3 of the Revenue are allowed and the case is restored to the file of AO to the assessment stage. 9 Since, by the earlier part of this order we have restored the case Tl 7715 to the file of AO, therefore, the other grounds of the Revenue on merits 737 EPprs57 as well as Cross Objection of the assessee have become infrctuous_ T We made it clear that the assessee will be at liberty to raise his cross objections before the AO at proper stage, therefore, the same is also restored to the file of AO 10_ In the result; the appeal of the Revenue and cross objection of the assessee are allowed for statistical purposes: Order pronounced in the open court on this day of 22nd February, 2018. Sdl- (311 Ha) (O.P.MEENA) Sdl- (H WH Taf) CM.GARG dur #qFWlAccountant Member 71f4r HcF4IJudicial Member Surat; faalia Dated 22nd February, 2018 EDN