Income Tax Appellate Tribunal - Delhi
Nasir Ali, New Delhi vs Addl. Cit, Range- 23, New Delhi on 25 May, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'E' : NEW DELHI)
BEFORE HON'BLE PRESIDENT, SHRI G.D. AGRAWAL
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.1285/Del./2018
(ASSESSMENT YEAR : 2011-12)
Shri Nasir Ali, vs. Addl.CIT, Range 23,
C/o Raj Kumar & Associates, New Delhi.
Chartered Accountants,
L - 7A (LGF), South Extn.Part 2,
New Delhi - 110 049.
(PAN : AEXPA4947B)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri Raj Kumar, FCA
Shri Sumit Goel, FCA
REVENUE BY : Shri B.R. Mishra, Senior DR
Date of Hearing : 21.05.2018
Date of Order : 25.05.2018
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
The appellant, Shri Nasir Ali (hereinafter referred to as 'the assessee') by filing the present appeal, sought to set aside the impugned order dated 30.01.2018 passed by Ld. CIT (Appeals)-31, New Delhi qua the assessment year 2011-12 on the grounds inter alia that :-
2 ITA No.1285/Del./2018
"1. That the Addl. CIT Range-23 New Delhi, since did not assume the jurisdiction legally validly, hence the impugned asstt. framed by Addl. CIT Range-23, New Delhi is illegal and without jurisdiction.
2. That under the facts and circumstances there is absolutely no legality and justification in disallowing the commission expenses of Rs.3,49,49,555/-.
3. That under the facts and circumstances the disallowance of Rs.2,69,900/- out of salary expenses is illegal, unwarranted and unsustainable in law as well as on merits.
4. That the Ld. CIT (A) erred in law as well as on merits in setting aside the issue of addition of Rs.69,7211- being the difference in income as per Form-26AS by directing the A.O. to verify/reconcile the figures of income for the difference of Rs.69,721/- as per form-26AS against directing to delete the addition of Rs.69,721/-."
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer made disallowance of Rs.3,49,49,555/- claimed by the assessee as commission expenses on the ground that the assessee has failed to prove not only the genuineness of the transaction but also failed to prove nexus of 3 ITA No.1285/Del./2018 payment made under the head 'commission' vis-à-vis sales made. AO further made disallowance of Rs.2,69,900/- out of the salary expenses claimed by the assessee to the tune of Rs.93,42,830/- on the ground that the salary payment shown to have been paid to Nazir Husain, Zafar Husain and Mehraj Jahan has actually not been paid by the assessee as they have not shown the salary amount in their ITR and computation of income. AO made addition of Rs.69,271/- on account of difference in the total business receipt shown in 26AS form as well as in its profit & loss account.
3. Assessee carried the matter by way of appeal before the ld. CIT (A) who has confirmed the addition of Rs.3,49,49,555/- and Rs.2,69,900/- and set aside the issue of addition of Rs.69,271/- to the AO to verify / reconcile the figures and grant appropriate relief by partly allowing the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.
4. Assessee by moving a separate application sought to raise additional grounds as under :-
"Addl. G.No.l (Taken as G.No.l in Form-36) That the Addl. CIT Range-23 New Delhi, since did not assume the jurisdiction legally validly, hence the impugned asstt. framed by Addl. CIT Range-23, New Delhi is illegal and without jurisdiction.
Addl. G. No.2 4 ITA No.1285/Del./2018 That under the facts and circumstances the Ld. CIT (A) erred in law as well as on merits in not admitting the additional evidences filed under Rule-46A."
on the ground that both the additional grounds sought to be raised are legal ones and go to the root of the case. Keeping in view the settled principle of law that the legal grounds can be entertained at any stage of the proceedings, the assessee is allowed to raise the additional grounds which are necessary for complete adjudication of the controversy at hand.
5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
6. Undisputedly, the assessee is a LIC agent who has claimed selling agency commission expenses paid to six parties, namely, M/s. Pioneer Securities Pvt. Ltd., Mrs. Manjula Ahluwalia, M/s. Kamal Sponge & Steel Power Ltd., Ms. Mehraj Jahan, Shri Nazir Hussain and M/s. Ali Trading Co., which has been disallowed on the failure of the assessee to produce evidence regarding the nature and extent of services rendered by selling agents.
7. It is the case of the assessee that he has not been given adequate opportunity of being heard by confronting with the 5 ITA No.1285/Del./2018 material relied upon by the AO/CIT (A) nor sufficient time has been given to the assessee to produce the confirmation and documents as to make payment of selling agency commission. AO in para 3.4 has categorically mentioned that since information called for was not coming forth even after issuance of notice u/s 133 (6) and summon u/s 131 of the Act for personal appearance of Manjula Ahluwalia, Kamal Sponge & Steel Power Ltd., Ms. Mehraj Jahan, Shri Nazir Hussain and Pioneer Securities Pvt. Ltd. He has proceeded to make the addition.
8. Assessee also challenged the jurisdictional issue by raising specific grounds which have not been adjudicated upon by the AO as well as ld. CIT (A).
9. So far as question of making addition of Rs.2,69,900/- on account of salary payment is concerned, the same has also been made by the AO without confronting the assessee with the material/ evidence relied upon by the AO viz. ITR and computation of income of Nazir Husain, Zafar Husain and Mehraj Jahan. So, being quasi-judicial authority, AO is under obligation to provide adequate opportunity of being heard to the assessee.
10. So far as question of making addition of Rs.69,721/- restored by ld. CIT (A) to AO is concerned, since the addition is on account 6 ITA No.1285/Del./2018 of difference in Form No.26AS and P&L account, the same is required to be settled by verification and reconciliation by the AO.
11. In the given circumstances, we are of the considered view that to meet with the ends of justice, it would be appropriate to restore the file back to the AO to decide afresh after providing adequate opportunity of being heard to the assessee. Hence impugned order passed by ld. CIT (A) is set aside and file is restored to the AO to decide afresh after providing an opportunity of being heard to the assessee. Consequently, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in open court on this 25th day of May, 2018.
Sd/- sd/-
(G.D. AGRAWAL) (KULDIP SINGH)
PRESIDENT JUDICIAL MEMBER
Dated the 25th day of May, 2018
TS
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-31, New Delhi.
5.CIT(ITAT), New Delhi. AR, ITAT
NEW DELHI.