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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: SRI AMIT SHUKLA & SRI O.P. KANT&
PER AMIT SHUKLA, JUDICIAL MEMBER
The aforesaid appeals have been filed against final assessment order dt. 30.8.2010 and 25.10.2012, passed under section 143(3)/144C(13) for the quantum of assessment for the Assessment years (A.Y.) 2007–08 and 2008–09 respectively. Both the assessment orders have been passed in pursuance of the directions given by the Dispute Resolution Panel (DRP) vide order dated 16.6.2010 and 28.8.2012, for the A.Y. 2007–08 and 2008–09 respectively.
ITA 5091/Del/10 AY 2007-08 ITA 6416/Del/2012 AY 2008-09 M/s Eni India Ltd., New Delhi 2. At the outset the Ld. counsel for the assessee submitted that in both the years the issues involved are same arising out of identical set of facts. He pointed out that in both the years against the draft assessment order, the assessee had filed detailed objections and submissions before the Ld.DRP, however, in both the years the Ld.DRP without considering the assessee’s objections and explanations as well as most of the grounds taken in form number 35A, has not properly adjudicated any of the issues. To prove his point he also drew our attention to the directions of the DRP as contained in the order for the in A.Y. 2007–08 and submitted that they have simply held that the expenses disallowed by the A.O. are correct. There is no finding or reasoning on the various grounds of objections raised qua the various disallowances of expenditure. In the assessment year 2008–09 also, the DRP again did not give any reasoning or finding on various objections relating to disallowances made by the A.O. In pursuance of such a non speaking order, the final assessment order has been passed which has led to great hardship, injustice, to the assessee. Therefore, he submitted that either the final assessment order passed in pursuance of DRP’s order should be cancelled; or alternatively the matter should be restored back to the file of the DRP to pass a well reasoned order after considering assessee’s objections.
On the other hand Ld.CIT, D.R. submitted that the A.O. in the impugned assessment order has given a detailed reasoning while making the disallowance and therefore, such an order should be upheld.
ITA 5091/Del/10 AY 2007-08 ITA 6416/Del/2012 AY 2008-09 M/s Eni India Ltd., New Delhi
After considering the aforesaid preliminary objections as raised by the learned counsel and also on perusal of the orders of the DRP in both the years, we find that the Ld.DRP has not ascribed any reasons on the grounds on which the assessee’s objections have been dismissed summarily, while upholding the order of the A.O. This is evident from the following conclusion of the DRP in the assessment year 2007–08 which reads as under: “4. During the relevant A.Y. expenses of Rs.74,57,505/- which head wise breakup is as follows. Sl.No. License and subscription Amount – Rs. 1. License and subscription 95,520/- 2. Audit fee 2,032,563 3. Professional service fee 348,841 4. Fee for attending seminar, 3,228,064 conference etc.
5. Hospitality and catering 57,630 6. ROC filing fee 5,000 7. Payment of interest 683,010 8. Fringe Benefit Tax 1,006,777 claimed by the assessee were disallowed by the AO on the ground that the production has not commenced. Assessee has furnished submission in support of grounds of objections. However, after going through the order of AO, submission of the assessee and material available on record, we are of the opinion that the expenses of Rs.74,57,505/- were correctly disallowed and hence we do not find any infirmity in the order of the AO.”
ITA 5091/Del/10 AY 2007-08 ITA 6416/Del/2012 AY 2008-09 M/s Eni India Ltd., New Delhi 4.1. From the above observation it can be seen that, neither the DRP has considered assessee’s objections properly nor has given any proper reasons for sustaining the A.O’s draft assessment order. Similar observations and finding has been perpetuated in the assessment year 2008–09 also. Such kind of callous attitude in passing the order by such a high quasi- judicial authority is not appreciated, because while disposing of a lis, it is obligatory on the part of the quasi-judicial authority to ascribe proper reasoning as to why the contention/ objections of the appellant are not sustainable. We, therefore, in the interest of justice are of the opinion that the grounds and issues which have been raised before us in both the years, should be remitted back to the file of the Ld.DRP to pass a speaking and well reasoned order on the various objections raised by the assessee on disallowances made by the A.O. The Ld.DRP before passing any order shall provide reasonable and adequate opportunity of hearing to the assessee to represent it's case. We order accordingly.
In the result both the appeals of the assessee are set aside to the file of the DRP to be decided afresh in accordance with law.
In the result both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the Open Court on 20th March, 2017.