Income Tax Appellate Tribunal - Delhi
Ito, New Delhi vs Rambhu Kumar Raj, New Delhi on 9 January, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'SMC-II', NEW DELHI
BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER
ITA No.2525/Del/2016
Assessment Year : 2010-11
ITO, Ward- 40(1), Rambhu Kumar Raj,
New Delhi. Vs. KD-171, 2nd Floor,
Pitampur, New Delhi.
PAN : ADZPR 5266 R
(Appellant) (Respondent)
Appellant by Shri F.R. Meena, Sr.DR
Respondent by None
Date of hearing 10-11-2016
Date of pronouncement 09-01-2017
ORDER
PER DIVA SINGH, J.M. :
The present appeal has been filed by the Revenue assailing the correctness of the order dated 01.02.2016 of the CIT(A)-14, New Delhi, pertaining to 2010-11 assessment year on the following grounds :-
"On the facts and circumstances of the case and in law CIT(A) has erred in -
1. Deleting the penalty u/s 271E of IT Act imposed amounting to Rs. 13,05,000/- even after the assessee couldn't prove that the cheque of Rs. 30,00,000/- paid to M/s Aggarwal Corporation was actually a repayment of loan of three parties by submitting supporting documents/ledgers/confirmation from all the parties concerned.
2. Not asking for a remand report on the new facts, related to loan given by M/s Narendra Agencies to assessee during F.Y. 2006-07, presented before him during appellate proceedings, thereby not affording an opportunity to AO, verify the facts.
3. The appellant craves the right to add, alter or amend any ground of appeal before or during the course of the hearing of the appeal."
2. No one was present on behalf of the assessee at the time of hearing. However, on perusal of the material available on record it was submitted by the Ld.Sr.DR that due to the issue addressed in Ground No.2 the procedural lapse is evident from the record itself thus it can be decided without hearing the assessee. Referring to Ground No.2 it was submitted that the evidence taken into consideration by the CIT(A) has not been confronted to the Assessing Officer as would be evident from the conclusion drawn by the ld. CIT(A) on facts. Carrying us through the said finding it was his submission that the statements of the assessee in fact have been accepted blindly as neither the CIT(A) has cared to personally 2 ITA No.2525/Del/2016 carry out any verification and arrived at a finding nor has he recorded that he personally has seen the facts and evidences. Moreover, the evidences have not been confronted to the Assessing Officer also. The finding under is challenged reproduced hereunder :-
"On perusal of records it is observed that the Ld. AO has not brought anything on record to establish that the appellant repaid Rs.13,05,000/- to M/s Narender Agencies in cash. As per the above submissions of the Ld. AR the payments were made through cheques on which the provisions of section 271E are not attracted."
2.1. Ld. Sr. DR inviting attention to the order u/s 271E submitted that admittedly the assessee had paid in cash to M/s Narender Agencies an amount of Rs.13,05,000/-. Since the payment was made in cash the proceedings were initiated requiring the assessee to explain the same. Referring to the order it was submitted that the assessee was required to demonstrate that he was required to pay as alleged by it M/s Aggarwal Corporation Rs.30,00,000/- on behalf of the following three parties :-
On behalf of Narendra Agencies Rs.13,05,000/-
On behalf of R. K. Enterprises Rs. 9,95,000/-
On behalf of Aappico Group India Rs. 7,00,000/-
Total Rs.30,00,000/-
2.2. The assessee relied upon the entries in ledger account of these parties and the assessee claimed that these three parties were debtors of M/s Aggarwal Corporation. The factual evidences in support of the said submission it was submitted were reqried to be filed since as per the assessee these three entities were either debtors of M/s Aggarwal Corporation "either due to any sales" or by any "advance/loans made to these parties." Accordingly in order to ascertain genuineness of the claim, it was submitted summons were issued to these three entities by the AO and also to M/s Aggarwal Corporation. All these returned with the comment "no such person". Only in the case of M/s R. K. Enterprises a reply was received but even they failed to acknowledge any transaction with M/s Aggarwal Corporation. Accordingly, in these circumstances, it was submitted penalty of Rs.13,05,000/- was levied for transaction in violation of provisions of section 369T. The following conclusion arrived at by the Assessing Officer it was submitted has not been considered nor has it been addressed by the CIT(A), who has merely blindly accepted the assessee's version :-
"Hence, it is pertinent to mention that along with his reply dated 21.01.2014, the assessee submitted copy of account of M/s R.K. Enterprises and M/s Aappico Group India and credit balance as on 31.03.2009 against them were shown at Rs.9,95,000/- and Rs.7,00,000/-; respectively but as per details available on assessment records of the assessee for A.Y. 2009-10, these persons, what to say of any balances, have not been shown in either Annexure-'C' which contains 'Details of Un-Secured Loan as on 31st March 2009' or in Annexure- 'D' which contains 'Details of Sundry Creditors as on 31st March 2009'. All these facts show that the assessee has furnished a false submission in respect of amount due to M/s 3 ITA No.2525/Del/2016 R. K. Enterprises and M/s Aappico Group India, which, he claimed, was paid to M/s Aggarwal Corporation and he failed to submit correct address of M/s Aggarwal Corporation so as to enable the department to verify his claim of adjustment of loan taken from M/s Narendra Agencies towards payment to M/s Aggarwal Corporation as according to the assessee Narendra Agencies was having M/s Aggarwal Corporation as creditor in their books of accounts. This makes it clear that the assessee has come up with a concocted story regarding payment to M/s Aggarwal Corporation made on behalf of M/s Narendra Agencies.
From the above discussion, it is clear that assessee repaid loan of Rs.13,05,000/- otherwise than by account Payee cheque/draft. This transaction of Rs.13,05,000/- is in violation of the provisions of section 269T."
3. I have heard the submissions of the Ld.Sr.DR and perused the material available on record. On a reading of the impugned order, it is seen that the assessee has claimed that M/s Narender Agencies was repaid by way of an account payee cheque and there is no cash entry in the books of accounts. Considering the overall factual matrix I am of the view that on facts the submissions of the ld. Sr. DR that the CIT(A) has blindly accepted the assessee's version is found to be correct. Neither has the CIT(A) cared to himself peruse the record and arrive at a conclusion nor has he cared to remand the evidence if any to the AO. 3.1. The CIT(A) as a First Appellate Authority has all the powers as held by an Assessing Officer and the Act empowers him to call for, examine and decide the issue arising in the appeal on the basis of the evidence directed to be produced before him. However, the Ld.CIT(A) fails to record his personal satisfaction on the issue examined. In view of the above, the impugned order is set-aside and the issue is restored back to the file of the CIT(A) with a direction to re-consider it on the basis of facts and evidences and if necessary the assessee is permitted to file fresh evidences and the ld. CIT(A) after confronting the same to the Assessing Officer and obtaining a Remand Report is directed to pass a speaking order in accordance with law after giving the assessee an opportunity of being heard.
4. In the result, the appeal of the Revenue is allowed for statistical purposes.
The order is pronounced in the open court on 09th January, 2017.
Sd/- Sd/- Sd/-
SSDSSDSDSSSD
(A. N. MISHRA) (DIVA SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Sujeet/Amit Kumar
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR,
ITAT NEW DELHI