M/S. RITCO LEASING PVT. LTD.,DELHI vs. ITO, NEW DELHI

A perusal of the impugned order and the assessment order shows that the claim of the assessee was rejected by the tax authorities on the reasoning that the AR of the assessee in the order sheet entry dated 17.3.2015 agreed for taxing the agricultural income as income from other sources. The relevant extract of the order sheet has been reproduced in the impugned order by the CIT(A) at page 4 which is reproduced as under: “Sh. Prem Lamba CA the AR of the assessee company attended. The agricultural Income is treated as Income from other and necessary expenses for Sale etc. are being allowed against this income. The LTCG is being worked out on the basis of material on record. The case is discussed in Part.”

Perusal of the record shows that the assessee confronted with the assessment order challenged this conclusion stating that it is not necessary to own agricultural land but have agricultural income. The land had been leased from its own Director on which agricultural activity had been called on and further sold Mr. Prem Lamba, CA denied that he had agreed that agricultural income be treated an income from other sources. Relying upon letter dated 10.12.2016 filed before the CIT(A) it was submitted that the AR had stated that Assessing Officer had compelled him to sign the order sheet which he had never agreed to. This submission is found extracted at page 4 of the CIT(Appeal’s) order. Reliance was placed upon the decision of the Hon’ble Delhi High Court in the case of CIT(A) vs. Technologies Limited dated 20.6.2011 in for 2004-05 assessment year. However, the claim of the assessee was dismissed on the reasoning that his counsel had agreed to sign the order sheet itself.

At the time of hearing, no one was present on behalf of the assessee. Further considering the aforementioned peculiar facts and circumstances, the learned Sr. DR was required to defend the departmental decision. The learned Sr. DR submitted that the signature of the counsel in the order-sheet substantiates the fact that it has been agreed to by the counsel who had the authority as a power of attorney presumably was executed in his favour to contend the issue.

I have heard the submissions and perused the material on record. I find in the face of the continued objections of the assessee before the CIT(A) that the Assessing Officer compelled his counsel to sign the order sheet in the circumstances the tax authorities are not justified to refuse to look at the correct and true facts instead of insisting to stick to facts obtained by alleged compulsion. In the peculiar facts and circumstances I deem it proper to set aside the impugned order back to the file of the Assessing Officer to consider the full and proper facts. The duty of the tax authorities is not only to collect the correct and due taxes but also ensure that in the process no injustice is done. The occasion to pressurize and compel a counsel to contend a issue is not the way just and due taxes ought to be collected in case the Assessing Officer was of the view that the head had to be changed then he ought to have given a notice to the assessee and thereafter considering the explanation passed a reasoned and speaking order for his conclusion. The occasion to base his conclusion on the concession of a counsel is not the way the powers should have been exercised. The order was pronounced in the open court at the time of hearing itself.