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Income Tax Appellate Tribunal, DELHI BENCH: “G”, NEW DELHI
Before: SHRI BHAVNESH SAINI & SHRI O.P. KANT
ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 23/06/2017 passed by the Ld. Commissioner of Income-tax (Appeals)-31, New Delhi, [in short the Ld. CIT(A)] for assessment year 2012-13 raising following grounds: 1. The order passed by the Learned Commissioner of Income Tax (Appeals) ("Ld. CIT (A)") under Section 250(6) of the Act is bad in law and on the facts and circumstances of the case.
2. The Ld. CIT (A) has passed the order under Section 250(6) of the Act in patent violation of principles of natural justice in passing the order ex-parte.
3. The Ld. CIT (A) has erred in law and on the facts and circumstances of the case in upholding the order of the Learned Assessing Officer ("Ld. AO") in adding the amount of Share Application money/Share Premium amount received by the appellant to the income of the appellant under Section 68 of the Act as against treating the same as capital receipt as claimed by the appellant. 4. The above grounds of appeal
s are independent and without prejudice to one another.
5. The appellant may be allowed to add / withdraw or amend any ground of appeal at the time of hearing.
Briefly stated facts of the case are that the assessee company was engaged in the business of real estate including development of buildings. For the year under consideration, the assessee filed return of income on 29/09/2012 declaring total income of Rs.25,678/-. The case was selected for scrutiny and notice under section 143(2) of the Income-tax Act, 1961 (In short ‘the Act’) was issued and but remained non-complied. Subsequently, on one occasion, the authorised representative of the company appeared and filed part information. The Assessing Officer observed issuance of 1250 shares at face value of Rs. 10 and premium of Rs.39,990/- to three companies as under: Sl. Party’s Name No. of Fact Share Total amount No. share value per premium received allotted share per share 1. Dhanus 375 10 39990 150,00,000 Technologies Ltd. 2. Emporis Venture 375 10 39990 150,00,000/- India Ltd.
Aadhaar 500 10 39990 200,00,000 Venture India
Ltd. (formerly known as Prraneta Industries Ltd.) Total 1250 500,00,000 2.1 As the assessee failed to discharge its onus under section 68 of the Act for explaining the credit appearing in books of accounts in respect of the money received from the above three parties, the learned AO made the addition of Rs.5,00,00,000/- under section 68 of the Act. The Assessing Officer also made other additions/disallowances as mentioned in the assessment order. Aggrieved, the assessee filed appeal before the Ld. CIT(A), however no compliance was made by the assessee. The Ld. CIT(A) has noted that the assessee even did not file statement of facts before him. The Ld. CIT(A) has produced a table of non-compliance of dates of hearing by the assessee. In absence of any compliance on the part of the assessee, the Ld. CIT(A) passed the order on the basis of the material available on record and sustained the addition of Rs. 5 crore under section 68 of the Act. Aggrieved, the assessee has filed appeal before the Tribunal raising grounds as reproduced above.
3. At the outset before us, the Ld. counsel of the assessee drawn our attention to the application filed under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, seeking permission to file additional evidences in support of the appeal. The Ld. counsel submitted that the assessee wished to file copy of bank statements of the share applicant parties, copy of their financial statements etc as additional evidence, which the assessee could not file either before the Assessing Officer or before the Ld. CIT(A) and in absence of said documents the lower authorities, have treated the transaction as undisclosed income and added the complete amount of share application money to the income of the assessee. The Ld. counsel submitted that above documents were not traceable by the assessee during the assessment as well as appellate proceedings. He submitted that in the interest of justice the assessee should be allowed to file above additional evidences and requested that the matter maybe restored to the file of the Assessing Officer for deciding afresh in the light of the above evidences.
The Ld. DR opposed admitting of the additional evidences on the ground that the assessee did not make any compliance of the opportunities provided by the Assessing Officer as well as by the Ld. CIT(A) and therefore there is no infirmity in passing the ex party order by the Ld. CIT(A). In support of the contention, the learned DR relied on the decision dated 09/10/2018 of the Hon’ble High Court of the Gujarat in the case of PCIT Vs Ashokji Chanduji Thakor in R/Tax appeal number 1160 and 1161 of 2018.
We have heard the rival submission of the parties on the issue of admissibility of additional evidence under rule 29 of the ITAT rules. We find that in the instant case, the assessee has been provided ample opportunities by the Assessing Officer as well as by the Ld. CIT(A) to discharge its onus under section 68 of the Act in explaining the credits shown as received from the alleged share applicant companies, however the assessee has shown total disregard to the proceedings before the lower authorities. For ready reference, the table of dates of non- compliance produced by the Ld. CIT(A) in the impugned order, is reproduced as under:
Date of Date of Date of Remarks S. Notice Hearing Adjournme No. nt None attended nor any request for 1 25.07.2016 17.08.2016 — adjournment was made nor any submission was furnished 2 — 08.09.2016 24.10.2016 Adjourned on the request of the appellant 3 — 24.10.2016 04.11.2016 Adjourned on the request of the appellant 4 — 04.11.2016 18.11.2016 ~do~ None attended nor any request for 5 — 18.11.2016 — adjournment was made nor any submission was furnished 05.12.2016 20.12.2016 — Notice returned unserved 6 06.02.2017 Adjourned on the request of the 7 27.12.2016 12.01.2017 appellant. None attended nor any request for 8 — 06.02.2017 — adjournment was made nor any submission was furnished 23.02.2017 Adjourned on the request of the 9 09.02.2017 13.02.2017 appellant. None attended nor any request for adjournment was made nor any 10 — 23.02.2017 — submission was furnished adjournment was made nor any submission was furnished 25.04.2017 Adjourned on the request of the 11 15.03.2017 24.03.2017 appellant. None attended nor any request for 12 — 25.04.2017 — adjournment was made nor any submission was furnished 13 08.05.2017 12.05.2017 Notice returned unserved — Adjourned for the last time on the request of the appellant with the condition that no more adjournment may be asked for 14 22.05.2017 07.06.2017 20.06.2017 and failing the compliance the case may beifecided ex carte on the basis of material on record. None attended nor any request for 15 — 20.06.2017 — adjournment was made nor any submission was furnished
Before us, the assessee has sought to produce additional evidence making reference to Rule 29 of the ITAT Rules. For ready reference, the said rule is reproduced as under: “[Production of additional evidence before the Tribunal.
The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or , if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.]” 7. Thus, the above rule do not prescribe specifically for admitting the additional evidences produced suo motu by the assessee or the Revenue. But in the case of CIT Vs Text hundred India Private Limited reported in 351 ITR 57, the Hon’ble Delhi High Court has decided that discretion lies with the Tribunal to admit such evidences, if interest of Justice require so. The relevant finding of the Hon’ble Delhi High Court is reproduced as under:
13. The aforesaid case law clearly lays down a neat principle of law that discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter. This can be done even when application is filed by one of the parties to the appeal and it need not to be a suo motu action of the Tribunal. The aforesaid rule is made enabling the Tribunal to admit the additional evidence in its discretion if the Tribunal holds the view that such additional evidence would be necessary to do substantial justice in the matter. It is well-settled that the procedure is handmaid of justice and justice should not be allowed to be choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence at the appropriate stage. Once it is found that the party intending to lead evidence before the Tribunal for the first time was prevented by sufficient cause to lead such an evidence and that this evidence would have material bearing on the issue which needs to be decided by the Tribunal and ends of justice demand admission of such an evidence, the Tribunal can pass an order to that effect.
We find that in the instant case the documents in the form of bank statements of the creditors/share subscriber goes to the root of the subject matter to prove the genuineness of the transaction and creditworthiness of the share subscriber company, thus, respectfully, following the decision of the Hon’ble Delhi High Court in the case of Text Hundred India Private Limited (supra), we feel it appropriate to admit these evidence to extend the cause of the substantial justice.
However, we are of the opinion that the assessee has not complied to the various notices issued by the Ld. CIT(A). We can understand that the relevant document including banks statements or financial statements of the credits companies might not have been available with the assessee at relevant time of 1st appellate proceedings, but we do not find any reason as why no compliance of the proceeding before the first appellate authority have been made. No explanation has been furnished for such a non-compliant behaviour on the part of the assessee. This tendency of not complying before the lower authorities and seeking admission of the additional evidence at the stage of appellate proceeding before the Tribunal, cannot be treated as a healthy practice on the part of the assessee. We are also of the view that the Justice should not be denied to the assessee, just because of failure in not producing certain evidences during first appellate proceeding; however utter disregard to the proceeding also cannot be encouraged. The assessee has wasted time, energy and resources of the Ld. Assessing Officer as well as first appellate authority without any justified reasons. In view of the above facts and circumstances, we feel it appropriate to impose a cost of Rs.10,000/- (ie. Which is 0.02% of the addition-in- dispute), on the assessee with the direction to deposit the same
Income-tax Department within one month of receipt of this order and furnish necessary evidence in support of the deposit of the cost to the Assessing Officer.
As we have admitted additional evidences, the issue in dispute of addition under section 68 of the Act, is restored to the file of the Assessing Officer for deciding a fresh in accordance with law after affording adequate opportunity of being heard to the assessee. The assessee is directed to produce a copy of the documents in the form of additional evidences and copy of challan depositing the cost imposed before the ld. Assessing Officer within 60 days of receipt of this order.
In the result, the appeal of the assessee is accordingly allowed for statistical purposes.
Order is pronounced in the open court on 6th February, 2019.