Income Tax Appellate Tribunal - Delhi
Naveen Jain, Gurgaon vs Dcit, Gurgaon on 25 March, 2021
ITA No.-393/Del/2017.
Naveen Jain.
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: 'E': NEW DELHI)
(THROUGH VIDEO CONFERENCING)
BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
AND
SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER
ITA No:- 393/Del/2017
(Assessment Year: 2012-13)
Naveen Jain, DCIT,
Arjun Marg, DLF, Phase-1, Vs. Circle-3,
Gurgaon. Gurgaon.
APPELLANT RESPONDENT
PAN No: AEVPJ3841D
Assessee By : Shri Rajesh Jain, CA
Revenue By : Ms. Rakhi Vimal, Sr. DR
Per Anadee Nath Misshra, AM
(A) This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-1, Gurgaon, ["Ld. CIT(A)", for short], dated 15.12.2016. Grounds taken in this appeal of Assessee are as under:
"1.That on the facts and circumstances of the case and as per law, the learned C.I.T. (A) erred in upholding the assessment order passed by the DCIT Circle- 3, Gurgaon who was not having jurisdiction over the appellant, as he was Managing Director of NFT (India) Ltd, and was being assessed by the DCIT Circle-13(1) New Delhi in the past for several years. 1.1 That the learned CIT(A) did not appreciate that the appellant filed objections u/s 124 of the Act and challenged the jurisdiction of Assessing Officer of the Gurgaon but the Assessing Officer did not comply the Page 1 of 11 ITA No.-393/Del/2017.
Naveen Jain.
provision of section 124(3) of the Act and did not refer the dispute over jurisdiction to C.I.T. 1.2 That the learned CIT(A) erred in dismissing all legal contentions of the appellant raised before him arbitrarily and erred in upholding the addition of Rs. 23,06,002/- and validity of the illegal assessment order.
2. That the learned CIT(A) erred in upholding the addition of Rs. 23,06,002/- interallia on account of the alleged unexplained travelling expenses of Rs. 1,37,875/- and Credit Card Payment of Rs. 21,68,127/- arbitrarily on merit also and wrongly stated in the appellate Order that the appellant did not adduce any evidence.
3. That the appellant craves to add, amend or alter any of the grounds of the appeal."
(B) The assessee filed return of income showing income of Rs. 1,17,81,850/-. The case was selected for scrutiny assessment; and the assessment order was passed on 31.03.2015 wherein total income was assessed at Rs. 1,40,87,852/-(rounded off to Rs. 1,40,87,850/-). The additions made by the Assessing Officer ("AO", for short) included a sum of Rs. 21,68,127/- on account of Credit Card Payment and a sum of Rs. 1,37,875/- on account of payment made for hotal services. The assessee filed appeal before the Ld. CIT(A) vide impugned appellate order dated 15.12.2016. The Ld. CIT(A) dismissed the assessee's appeal and confirmed the additions made by the AO. (C) Aggrieved, the assessee is before us, in the present appeal during appellate proceedings. The assessee filed Paper Book containing the following particulars:
"1. Computation of Income for A.Y. 2012-13 along with Acknowledgment of filing return of A.Y. 2012-13.
2. Copy of First Notice u/s 143(2) dated 26th June 2014 served on the Appellant fixing the date of hearing as 7th July 2014.
3. Copy of Letter dated 7th July 2014 objecting the jurisdiction of Assessing Officer u/s 120 of the Act as the Appellant being Managing Director of the Company was assessed with along with Company M/s NTF (India) Pvt. Ltd.Page 2 of 11
ITA No.-393/Del/2017.
Naveen Jain.
with D.C.I.T., Circle 13(1), New Delhi, duly Acknowledgment No. 673070714003890.
4. Copy of second letter dated 15th December, 2014, duly Acknowledgment No. 673151214017982, requesting for transfer of assessment record to DCIT 13(1), New Delhi.
5. Copy of Notice u/s 142(1) dated 2nd December 2014 requiring the Appellant for furnishing copy of Assessment Orders of the Appellant for last three Assessment Years. The reply of the aforesaid Notice is available at Point No. 4.
6. Copy of Acknowledgment for filing return for A.Y. 2009-10 & 2010-11 and Assessment Orders A.Y. 2013-14, 2014-15, 2016-17 & 2017-18 passed by DCIT, Circle 13(1), New Delhi.
7. Copy of Submissions filed before CIT(A), Gurgaon.
8. Copy of Application filed Under Rule 46A of Income Tax Rules before CIT(A) and details of Travelling Expenses incurred through credit card by the Appellant, duly accounted for Company M/s NTF (India) Pvt. Ltd., along with confirmation of Company.
9. Copy of Remand Report on Appellate submissions and Additional Evidences Under Rule 46A by Assessing Officer.
10. Copy of Rejoinder to the Remand Report of Assessing Officer along with Notification dated 15th November, 2014 issued by CBDT regarding jurisdiction of different Assessing Officers."
(C.1) During the appellate proceedings, the assessee also submitted a brief synopsis. Relevant portion of this synopsis is reproduced as under:
The appellant, an individual and Managing director of NTF( India) Private Limited, 4812/24, Ansari Road Daryaganj New Delhi, filed Income Tax Return declaring total income of Rs.1,17,81,850/- which has been assessed at Rs.1,40,87,852/- after making addition or Rs.23,06,002/-inter alia on account of the alleged unexplained travelling expenses of Rs.1,37,875/- and Credit Card payment of Rs.21,68,127/- under section 144 of the Act, by the Assessing Officer, Ward 13(1), who was not having jurisdiction over the assessee.
The appellant, Managing Director, of NTF(India) Private Limited Company was assessed by the same Assessing Officer having jurisdiction over the said Company as per notification issued by CBDT in accordance with section 120 of the Act. The appellant has been assessed in New Delhi for the last several years and as such, the appellant filed objection before the Assessing Officer immediately on receipt of Statutory Notice u/s 143(2) of the Act, as per section 124(3) of the Act, stating that the appellant is assessed with Deputy Commissioner of Income Tax Circle 13(1), New Delhi, vide Letter dated 07.07.2014 objecting the jurisdiction of the Page 3 of 11 ITA No.-393/Del/2017.
Naveen Jain.
Assessing Officer Gurgaon. Paper Book Page No. 4The Appellant vide Letter dated 15.12.2014, Paper Book Page No. 5 again requested the Assessing Officer for transfer of Assessment Record to his jurisdictional Assessing Officer DCIT 13(1), New Delhi.
Copy of acknowledgements for preceding years and Assessment Orders passed u/s 143(3) of the Act for the Assessment Year 2014-15 dated 30.11.2016, Assessment Year 2016-17 dated 15.12.2018, Assessment Year 2017-18 dated 28.06.2019, passed by Assessing Officer Circle 18(2) New Delhi available on Page No. 7 to 18 of Paper Book.
Learned C1T(A) obtained Remand Report from the Assessing Officer and the Assessing Officer objected on the submission of additional evidence on merit. In the rejoinder, the appellant again submitted to CIT(A) to quash the Order as the provision of Section 124(3) of the Act have not been compiled by the Assessing Officer and pass the Assessment Order u/s 144 of the Act in contravention to the notification issued by CBDT and the law. The appellant also submitted, "without prejudice to the legal contention" that the addition made by the Assessing Officer, otherwise also should be deleted as the appellant incurred Travelling Expenses & other expenses on credit card on behalf of the NFT (India) Ltd., in which he is M.D. and Company claimed the said expenses in Profit & Loss account necessary evidence(s) were submitted but the C.I.T.(A) did not adjudicate the contentions on merit and arbitrarily dismissed the appeal. REMAND REPORT--PB 30-34 , 25- 29 , CONFIRMATION OF COMPANY"
(C.2) A Synopsis was also submitted from the assessee's side in a tabular form giving details, assessment year wise, the details of filing of return; and date of assessment order; which is reproduced below:
SL Assessment Year Date of Filing / Date AO Jurisdiction of Assessment 1 2009-2010 14.03.2011 U/S 143/3/Circle 13(1) New DO Delhi 2 2010-2011 14.03.2011 DO DO 3 2013-2014 11.03.2016 Assessment U/s 143(3) New Delhi Circle 13(1) 4 2014-2015 Assessment U/s 143(3) ACIT Circle 18(2) New Delhi Dated 30.11.2016 5 2016-2017 Assessment U/s 143(3) DO DO Dated 15.12.2016 6 2017-2016 DO DO DO Page 4 of 11 ITA No.-393/Del/2017.
Naveen Jain.
(D) The learned Senior Departmental Representative ("Ld. Sr. DR") filed written submissions, wherein reliance were placed on the following case laws:
1. PCIT vs Mega Corporation Ltd ITA No. 128/2016
2. Abhishek Jain Vs ITO [2018] 94 taxmann.com 355(Delhi), [2013] 94 taxmann.com 355 (Delhi)
3. Commissioner of Income-tax, Delhi-XVI v. S.S. Ahluwalia [2014] 46 taxmann.com 169 (Delhi)
4. Deluxe Enterprises v. Income Tax Officer, Ward-1, Solan (H.P.) [2017] 88 taxmann.com 771 (Chandigarh-Trib.) (E) At the time of hearing before us, the Learned Authorized Representative ("Ld. AR", for short) for the assessee submitted that the regular jurisdiction of the assessee was with ACIT, Circle-13(1), New Delhi, and the Assessment Order passed by the DCIT, Circle-3, Gurgaon was without jurisdiction. He further drew our attention to the synopsis [referred to in foregoing paragraph (C.2) of this order] wherein the details have been furnished, year wise, showing date of filing of return/ date of assessment in the jurisdiction of ACIT, Circle 13(1), New Delhi, for Assessment Years 2009-10, 2010-
11, 2013-14,2014-15, 2016-17,2017-16. He also drew our attention to letter dated 7th July, 2014 filed by the assessee before DCIT, Circle -3, Gurgaon objecting to jurisdiction assumed by him and requesting to transfer the case of the assessee to the concerned Page 5 of 11 ITA No.-393/Del/2017.
Naveen Jain.
Assessing Officer, i.e. ACIT, Circle-13(1), New Delhi. He drew our attention also to the fact that the aforesaid letter dated 07th July, 2014 was filed immediately after notice under Section 143(2) of the Income Tax Act, 1961 ("I.T. Act", for short) dated 26-June- 14 served by the assessee, which, he contended, was the first notice of hearing served on the assessee by DCIT Circle-3, Gurgaon. He contended that the DCIT, Circle-3, Gurgaon should not have proceeded to complete the assessment without deciding the objection to his jurisdiction, which was raised by the assessee vide aforesaid letter dated 07th July, 2014; and once again by a second letter dated 15th December, 2014. Thus, it was his contention that the Assessment Order passed by DCIT, Cirle-3, Gurgaon, was without jurisdiction. Coming to the impugned appellate order dated 15.12.2016 of Ld. CIT(A), the Ld. AR for the assessee contended that the Ld. CIT(A) erred not only in upholding jurisdiction of DCIT, Circle-3, Gurgaon; but also further erred in not deciding the merits of the additions in spite of detailed written submissions made before the Ld. CIT(A). In this connection, he drew our attention to copy of Application filed Under Rule 46A of Income Tax Rules before CIT(A). He also drew our attention to Copy of Remand Report on Appellate submissions and Additional Evidences Under Rule 46A submitted to the Ld. CIT(A) by Assessing Officer. He further drew our attention to copy of Rejoinder of the assessee to the Remand Report of Assessing Officer (along with Notification dated 15th November, 2014 issued by CBDT regarding jurisdiction of different Assessing Officers) submitted by the assessee to Ld. CIT(A). The Ld. AR for assessee contended, in view of the foregoing, that the observation of the Ld. CIT(A), at para 3.8 of impugned appellate order dated 15.12.2016 that the Page 6 of 11 ITA No.-393/Del/2017.
Naveen Jain.
appellant had not filed any written submissions on the issue of disallowances/ additions made by the AO; is factually wrong.
(E.1) The Ld. Sr. DR relied on the case laws in the cases of PCIT vs Mega Corporation Ltd (supra), Abhishek Jain Vs ITO (Supra), Commissioner of Income-tax, Delhi-XVI v. S.S. Ahluwalia (supra), Deluxe Enterprises v. Income Tax Officer (supra). In reply, the Ld. AR for the assessee submitted that the dispute regarding jurisdiction of DCIT, Circle-3, Gurgaon was not being pressed. However, he submitted that the dispute regarding merits of the additions be set aside to the AO for fresh order, after providing reasonable opportunity to the assessee to make submissions on merits of the additions. He supported his submissions on the ground that the merits of the additions not being considered and adjudicated by the Ld. CIT(A) either before DCIT, Circle-3, Gurgaon or before Ld. CIT(A).
(F) We have heard both sides. We have perused the materials available on record. We have considered the judicial proceedings brought to our notice. It is not in dispute that the assessee's return for Assessment Years 2009-10, 2010-11, 2013-14,2014-15, 2016-17,2017-16 were filed by the assessee in the jurisdiction of ACIT, Circle 13(1), New Delhi. These Assessment Years include periods before Assessment Year 2012-13 (to which present appeal pertains) as well as, after Assessment Year 2012-13. It is also not in dispute that the Assessment Orders for Assessment Year 2009-10, 2014-15 and Page 7 of 11 ITA No.-393/Del/2017.
Naveen Jain.
2016-17 (which pertains to both before and after Assessment Year 2012-13) under Section 143(3) of I.T. Act after due scrutiny were passed by ACIT, Circle 13(1), New Delhi. In view of these facts, we are of the view that the dispute raised by the assessee, regarding jurisdiction of DCIT, Circle-3, Gurgaon should have first been decided by DCIT, Circle-3, Gurgaon; before he proceeded to pass the Assessment Order. The assumption of jurisdiction by DCIT, Circle-3, Gurgaon in AY 2012-13 is not free from doubt in the light of the undisputed fact that jurisdiction in other years was exercised by ACIT, Circle-13(1), New Delhi. Moreover, from perusal of the Paper Book filed by the assessee, it is obvious that the assessee had filed details before the Ld. CIT(A) on merits of the additions made by the Assessing Officer, alongwith supporting evidence. It is also clear that the Ld. CIT(A) had obtained Remand Report from the Assessing Officer and further that the assessee had submitted Rejoinder to the Remand Report of the Assessing Officer. In view of the foregoing, it is obvious that the Ld. CIT(A) was in error in making observation at para 3.8 of his impugned appellate order dated 15.12.2016 that the appellant had not filed any written submissions on the issue of disallowances/ additions made by the AO.
(F.1) We are of the view that the assessee had a legitimate expectation from the DCIT, Circle-3, Gurgaon, that the objection raised against the jurisdiction assumed by DCIT, Circle-3, Gurgaon will first be decided by the DCIT, Circle -3, Gurgaon, before he would proceed to make assessment. When the jurisdiction exercised by DCIT, Circle-3, Gurgaon, is not free from doubt; the jurisdiction of Ld. CIT(Appeals)-1, Gurgaon, who Page 8 of 11 ITA No.-393/Del/2017.
Naveen Jain.
passed the impugned appellate order against which assessee has filed the present appeal, is also not free from doubt; because jurisdiction of CIT(Appeals) is related to jurisdiction of the Assessing Officer. We are also of the view that the Ld. CIT(A) was in error in disregarding the submissions made by the assessee on mertis of the additions made in the assessment order; and in wrongly observing that the assessee had not filed any written submissions on the issue of disallowances / additions made by the Assessing Officer. In view of the foregoing, we are setting aside all the disputes raised in the present appeal before us, to the file of the Assessing Officer with the direction to pass fresh assessment order as per law. We direct the Assessing Officer to first decide the dispute raised by the assessee regarding the jurisdiction assumed by the DCIT, Circle-3, Gurgaon. We further direct that the fresh assessment order be passed by the Assessing Officer exercising proper jurisdiction over the assessee; on the merits of the additions, after providing reasonable opportunity to the assessee. (G) This appeal is disposed off with aforesaid directions. For statistical purposes this appeal is partly allowed.
Order pronounced in the Open Court on 25/03/2021.
Sd/- Sd/- (SUDHANSHU SRIVASTAVA) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25/03/2021 (Pooja) Page 9 of 11 ITA No.-393/Del/2017. Naveen Jain. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Page 10 of 11 ITA No.-393/Del/2017. Naveen Jain. Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order Page 11 of 11