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Income Tax Appellate Tribunal, DELHI BENCH “CH” NEW DELHI
Before: SHRI I.C. SUDHIR & SHRI PRASHANT MAHARISHI
ORDER
PER I.C. SUDHIR: JUDICIAL MEMBER The assessee has impugned the revisional order passed under sec. 263 of the Income-tax Act, 1961 on several grounds involving the sole issue regarding the validity of the order passed under sec. 263 of the Income-tax Act, 1961.
The assessee has also moved application for condonation of delay in filing the present appeal late by 15 days. It has been explained that the assessee had engaged Mr. Rakesh Kumar, learned CA to represent its case before the Learned CIT against the show-cause notice issued under sec. 263 2 of the Act. Once the proceedings before the Learned CIT was completed, he never guided the assessee about the remedy available to file appeal before the ITAT against the order passed under sec. 263 of the Act. Fortunately, the assessee met with some senior chartered accountant and came to know about the remedy available and he immediately acted upon and in this process delay of 15 days was caused which was beyond the power and control of the assessee due to above. The application is supported with affidavit of the assessee. Under these facts and circumstances, the Learned AR prayed for condonation for delay of 15 days in preferring the present appeal by the assessee before the ITAT.
The Learned CIT(DR) opposed the application with the submission that reasons shown for the delay was not sufficient and the assessee should have been vigilant about their rights and duties.
Considering the above submissions, we find that cause for the delay of 15 days in preferring the present appeal before the ITAT shown by the assessee was due to lack of proper advice from the learned Chartered Accountant who he had engaged to represent its case before the Learned CIT and when the assessee came to know about the remedy available against the order impugned from some other learned CA, he has filed the present appeal 3 within a reasonable time i.e. 15 days. The reasons shown by the assessee in our view is sufficient and it is an established proposition of law that due to fault on the part of the learned counsel or authorized representative, the assessee should not be allowed to suffer and that preference should be always given for disposal of the appeal on its merits instead of technicalities. We thus condone the delay of 15 days in filing the present appeal before the ITAT. The application in this regard is thus allowed. The parties are directed to advance their respective arguments on the appeal. 5. Heard and considered the arguments advanced by the parties in view of orders of the authorities below, material available on record and the decisions relied upon. 6. In support of the grounds, the Learned AR submitted that assessee, an individual, is having the following source of income: a) Proprietary business of trading of electronics parts and component under the name and style of M/s. Broadband Technologies; b) Partner in firm M/s. Om Sai Build; & c) Salary as a director from Sky-tech Towers India Pvt. Ltd.,
He submitted that the assessee had filed its return of income at Rs.4,02,710 which was processed under sec. 143(1) of the Act. Later on, notice under sec. 143(2) of the Act was issued on 29.9.2011 subsequently 4 time to time notices under sec. 143(2) and 142(1) of the Act were issued with questionnaire and the assessee had filed its replies and the authorized representative also attended the assessment proceedings. The Assessing Officer discussed assessee’s case with the authorized representative. All the details called for were furnished which also included books account along with vouchers. These were verified and found in order. The Assessing Officer thereafter framed the assessment under sec. 143(2) of the Act at the declared of Rs.4,02,710. The Learned AR pointed out that before issuance of notice under sec. 263 of the Act, the Assessing Officer had also issued notice under sec. 154 of the Act on 09.4.2014 proposing rectification of mistake regarding under assessment of salary income to the tune of Rs.51,000 being difference in salary income as offered in computation of income and as per Form 16. The Assessing Officer, however, being satisfied with the reply of the assessee dropped the proceedings initiated under sec. 154 of the Act vide order dated 03.06.2014 with this finding that the proceedings were not tenable. The Learned CIT, thereafter, issued show-cause notice under sec. 263 of the Act on 16.2.2015 alleging that the assessee had received a salary of Rs.1,19,000 whereas it had declared an amount of Rs.68,000 only on account of salary in its computation of income. The Assessing Officer had failed to investigate this issue and make necessary additions. It was alleged 5 further that the assessee had received Rs.4,29,415 as interest on capital from partnership firm M/s. Om Sai Buildwell but claimed and debited expenses of Rs.4,29,415 from the interest earned on capital resulting in nil amount being taxable. The Assessing Officer has failed to investigate this issue to make necessary addition. It was also alleged that as per bank statement of the assessee with Indian Overseas Bank, it was noticed that the customs duty was paid on 06.09.2009 whereas as per Form DVAT-16, no imports had been made during the quarter 01.04.2009 to 30.6.2009. It was thus alleged that the Assessing Officer has failed to investigate this issue to make necessary addition. The Learned AR submitted that assessee filed reply to the said show-cause notice but the Learned CIT was not satisfied and has set aside the matter on all the above three issues to the file of the Assessing Officer for reconsideration with this finding that the earlier assessment order was erroneous and prejudicial to the interest of the Revenue. The Learned AR contended that in the impugned order, the learned CIT has not given any finding on the issue pertaining to customs duty that the Assessing Officer on the earlier occasion had erred on this issue. The Learned CIT has simply set aside to the Assessing Officer to verify the contention of the assessee and to take decision as per the law on the issue pertaining to the customs duty. He submitted that the order under sec. 263 of the Act in this regard is also not 6 maintainable and placed reliance on the decision of Delhi Bench of the ITAT in the case of Indian Society of Cultural Co-operation & Friendship vs. CIT – (A.Y. 2005-06) dated 27.9.2013. The Learned AR contended that the impugned order is not maintainable since the Assessing Officer in the original assessment proceedings had raised several queries and questionnaire was issued to which the assessee replied time to time and after considering the same, the Assessing Officer had passed the Assessing Officer accepting the income declared in the return of income. In support, he referred page Nos. 11 to 45 of the paper book i.e. copies of replies dated 21.3.2013, 26.2.2013, 28.12.2012, 14.12.2012; return, computation and audited balance sheet. He contended that provisions under sec. 263 of the Act cannot be invoked on the basis that inquiry conducted by the Assessing Officer was not adequate. Even in its reply to the show-cause notice issued under sec. 263 of the Act, the assessee had made it clear that all the requisite details were furnished before the Assessing Officer during the course of assessment proceedings supported with the documents. Again, a detailed reply to the show-cause notice was submitted before the Learned CIT. He placed reliance on the following decisions: i) Electric Supply Co. Ltd., vs. CIT - 89 ITR 266; ii) CIT vs. Birla Gwalior Pvt. Ltd. - 57 ITR 521; iii) CIT vs. Excel Ind. Ltd. (SC) - 358 ITR 295; 7 iv ) CIT vs. Contimeters Electricals P. Ltd. - 317 ITR 249 (Del.); v ) CIT vs. Ashish Rajpal (2010) - 320 ITR 674 (Del.); & vi) CIT vs. Sunbeam Auto Ltd. - 332 ITR 167 (Del.) 8. Learned CIT(DR) on the other hand tried to justify the revisional order in question. He submitted that the Assessing Officer had not made any inquiry on the issues raised in the revisional order, hence, the assessment order was erroneous as well as prejudicial to the interest of the Revenue and thus the Learned CIT was justified in invoking the provisions under sec. 263 of the Act. He submitted that an inquiry which is just farce or mere pretence of inquiry, cannot be said to be an inquiry at all, much less an inquiry needed to reach the level of satisfaction of the Assessing Officer on the given issue. He placed reliance on the following decisions: i) NIIT vs. CIT (2015) – 60 Taxmann.com 313 (Del._-Trib.; ii) CIT vs. Contimeters Elec. (P) Ltd. (2009) – 317 ITR 249 (Del.); iii) Manohar Lal Sharma vs. The Principal Secretary & Ors. – Writ Petition (CRL) No. 120 of 2012 & Ors. – order dated 24.9.2014 (SC);
Considering the above submissions, we find that before the Assessing Officer during the course of original assessment proceedings, several queries in relation to the issues raised in the revisional proceedings were raised by the Assessing Officer by way of issuing questionnaire and queries time to time and even in the proceedings initiated under sec. 154 of the Act, which 8 was later on dropped, and the assessee had responded those queries by filing reply time to time supported with the details and documents. Copies of these replies filed before the Assessing Officer have been made available before the ITAT as page Nos. 11 to 25 of the paper book. The assessee had also furnished computation and audited balance sheet with the return made available at page Nos. 27 to 45 of the paper book. The Assessing Officer himself in the original assessment order has mentioned that the authorized representative of the assessee attended the assessment proceedings time to time and the case was discussed with him. The details called for were furnished which were placed on record after test check. The Assessing Officer has further mentioned that books of account along with vouchers were produced which were also test-checked. The Assessing Officer has stated further that necessary details with regard to income disclosed and exemption claimed were called for and the same were furnished and after verification on test check basis the same were found in order and apparently no discrepancy was noticed. Thus, it cannot be said that the Assessing Officer had not made any inquiry on the issues of salary, interest earned and on payment of customs duty. Merely because the Assessing Officer has passed a brief order without discussing the details of queries raised by him and the replies filed by the assessee thereto time to time, the same cannot be 9 said an erroneous as well as prejudicial to the interest of the Revenue to attract the provisions laid down under sec. 263 of the Act. We thus while setting aside the revisional order in question, restore the assessment order framed on 28.3.2013 as it is not a case where it can be said that the Assessing Officer had not conducted any inquiry on the issues raised in the impugned order to justify the action of the learned CIT. The grounds raising the issues of validity of the order passed under sec. 263 of the Act are thus allowed.