ACIT, NEW DELHI vs. M/S. SMV AGENCIES PVT. LTD., NEW DELHI

The facts in brief of the case are that the assessee filed return of income declaring total income of Rs.54,34,458/- on 29/10/2005. Subsequently, on the basis of information received from the Director of Income-tax (Investigation), Nagpur, that certain incriminating documents related to the assessee were seized in the search action at the residence of Sh. Vaibhav Suryakant, Japuria indicating unaccounted cash receipt of Rs.2.62 crores. The Assessing Officer, after recording reasons to believe that there was escapement of income to the tune of Rs.2.62 crores, issued notice under section 148 of the Income-tax Act, 1961 (in short ‘the Act’). The reassessment proceedings were completed by the Assessing Officer on 28/03/2013 under section 147/143(3) of the Act after making addition of Rs. 2.62 crores to the returned income. Aggrieved, the assessee filed appeal before the learned Commissioner of Income-tax (Appeals) and challenged the reopening of the assessment on legal grounds as well as challenged the addition on merit. It was contended by the assessee that the seized paper on the basis of which, the assessment was reopened, pertained to M/s Jaipuria Infrastructure Developers Private Limited and not related to the assessee. The learned Commissioner of Income-tax (Appeals) upheld the legality of the reassessment proceedings, however, held that the seized documents did not pertain to the assessee and accordingly, he deleted the addition. Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds as reproduced above.

The learned Senior Departmental Representative submitted that in support of the claim that the seized paper under reference pertain to M/s Japuria Infrastructure Developers Ltd., the assessee only filed the certificate from the said concern before the Assessing Officer and no other evidence or documents establishing that the seized papers pertain Assessing Officer. Before the learned Commissioner of Income-tax (Appeals), the assessee filed other documents like building layout plan, land for residential flats, agreements of allotment/registered sale deed in respect of flats/shops and the learned Commissioner of Income-tax (Appeals) admitted those documents without providing any opportunity to the Assessing Officer to rebut the same. The learned Commissioner of Income-tax (Appeals) passed the impugned order relying on those documents. According to the Senior Departmental Representative that admitting of additional evidences amounted to violation of Rule 46A of the Income Tax Rules and, thus, requested the matter may be restored back to the file of learned Commissioner of Income-tax (Appeals) for allowing opportunity to the Assessing Officer to comment on the additional evidences.

On the other hand, the learned counsel of the assessee submitted that all the documents filed before the learned Commissioner of Income- tax (Appeals), were already filed before the Assessing Officer. In this reference, he drawn our attention to page 74 of the paper book. He submitted that no new additional evidences were filed before the learned Commissioner of Income-tax (Appeals) and, thus, there is no question of violation of rule 46A of the Income Tax Rules.

We have heard the rival submissions of the parties and perused the relevant material on record including the paper book of the assessee. From para 4.3.8 of the impugned order, we find that before the learned Commissioner of Income-tax (Appeals), the learned Authorized Representative of the assessee submitted following documents and claimed that those were filed before the Assessing Officer: i. Building layout plan duly certified M/s. Jaipuria Infrastructure Developers Pvt. Ltd. ii. Land for residential flat.

Whereas, the Assessing Officer in para-3.5 of his order has mentioned that except the certificate from Mr. Japuria Infrastructure Developers Private Limited, the assessee did not produce any evidence for establishing that details seized during the course of search action in reference did not belong to the assessee.

The learned Commissioner of Income-tax (Appeals) rejected the above contention of the Assessing Officer stating that it was not the correct statement of facts. However, we find that the learned Commissioner of Income-tax (Appeals) has not given any reasons as how it was not correct statement of facts. He neither brought on record any evidence in support that those documents were filed before the Assessing Officer nor confronted those documents to the Assessing Officer. Further, we find that before us the learned counsel of the assessee referred to the letter dated 25th of March 2013 of the Authorized Representative the assessee , which is claimed to have containing all the said documents and filed before the Assessing Officer. This letter is available on page 74 of the paper book. On perusal of the said letter, we find that it is not containing any evidence of acknowledgement of the letter by the Assessing Officer or his office and can’t prove conclusively that those documents were filed before the Assessing Officer. In such circumstances, following the principles of Natural Justice and Income-tax Rules, the learned Commissioner of Income-tax (Appeals) was required to direct the assessee for filing those documents as additional evidences and those documents should have been sent to the Assessing Officer for his comments, but he did not do so.

In view of above of facts, we feel it appropriate to restore the matter to the file of learned Commissioner of Income-tax (Appeals) to decide the issue afresh with the direction to consider the documents, which were not produced before the Assessing Office but filed by the assessee before him, in accordance with the Rule 46A of the Income-tax Rules, 1962 and accordingly, decide the issue of addition of Rs.2.62 crores in accordance with law.

In the result, the appeal is allowed for statistical purpose. The decision is pronounced in the open court on 18th January, 2017.