Income Tax Appellate Tribunal - Delhi
Kiran Dutta, New Delhi vs Department Of Income Tax on 9 May, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH "D" NEW DELHI)
BEFORE SHRI R. P. TOLANI : JUDICIAL MEMBER
And
SHRI J.S. REDDY : ACCOUNTANT MEMBER
ITA Nos. 4749 & 4750 /Del/ 2012
Asstt. Yrs: 2005-06
Income Tax Officer, Vs. Mrs. Kiran Dutta,
Ward-46(1), New Delhi. A-1/101, Sahara Grace,
Behind Sahara Mills, Sector-28,
MG Road, Gurgaon
PAN: AJXPD 9476 H
(Appellant ) (Respondent)
Appellant By : Ms. Shumana Sen Sr. DR
Respondent By : Sanjoli Maheshwari &
Sh. Manoj Nagrath CAs
ORDER
PER R. P. TOLANI, J.M:
These are two Revenue's appeals - one against the order of CIT(A) granting relief in quantum appeal and the other against deletion of penalty levied u/s 271(1)(c) of the I.T. Act, 1961. Respective grounds are as under:
ITA no. 4749/Del/2012 (quantum appeal):
On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in
(i) Deleting the addition of Rs. 20,00,000/- made by the AO on account of unexplained investment in RBI bonds.2
(ii) Deleting the addition of Rs. 20,00,000/- on the basis of additional evidence filed by the assessee which was not produced during the assessment proceedings.
(iii) Deleting the addition of Rs. 20,00,000/- without giving the opportunity to the AO to examine/ verify the additional evidence produced at the stage of appellate proceedings, in contravention of Rule 46A of the Income Tax Rules.
ITA no. 4750/Del/2012 (Penalty appeal):
On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in
(i) Deleting the penalty u/s 271(1)(c) amounting to Rs.
6,44,028/- rightly imposed by the assessing officer for concealing particulars of income.
(ii) Deleting the penalty u/s 271(1)(c) of the I.T. Act, 1961 on the basis of relief given in the quantum appeal.
(iii) Deleting the penalty u/s 271(1)(c) of the I.T. Act, 1961 ignoring the facts that no opportunity was given to the A.O. to examine the additional evidences."
2. Brief facts are: The assessment was framed ex parte u/s 144/147 of the Act as the assessee did not respond to the notice and remained absent during the course of assessment proceedings. Consequently, an amount of Rs. 20,00,000/- invested in RBI bonds on the basis of information received from AIR data was made. Aggrieved assessee preferred first appeal. Since no documents were filed during the course of assessment proceedings, assessee filed additional evidence which has been relied by CIT(A) in his order. The relief has been given by CIT(A) by following observations:
"The counsel of the appellant also explained the facts regarding the investment of Rs. 20,00,000/- and also the source of such investment along with necessary documentary evidence. The 3 gross taxable income of husband of appellant Shri Kapil Dutta was Rs. 35,73,866/- for AY 2005-06.
It was explained before me that the husband of the appellant Sh. Kapil Dev Dutta had withdrawn an amount of Rs. 20,00,000/- from his saving bank account maintained with ABN Amro Bank bearing account no. Saving A/c No. 117728 on 25th May 2004 vide cheque no. 303185 and made the investment of the impugned sum of Rs. 20,00,000/- into RBI Bonds through Stock Holding Corporation of India Limited on 25th May 2004. In the said investment Sh. Kapil Dev Dutta included the name of his wife Smt. Kiran Dutta the appellant, a joint holder.
The above investment was made Sh. Kapil Dev Dutta from out of the saving made from the income that he had earned during the year under appeal. The copy of the relevant part of the bank statement, the copy of the return of income and the copy of the RBI Bonds, all pertaining to Sh. Kapil Dutta were produced before me and copies filed with the submissions made.
I have carefully examined the case after hearing the learned counsel of the appellant and after examination of the order of assessment. I am the view that since the investment of Rs. 20,00,000/- made into RBI Bonds by the appellant was a mater of fact not so made by the appellant but this investment was made by the husband of the appellant, I thus hold that he addition of the sum of Rs. 20,00,000/- made into the income of the appellant is directed to be deleted. The appellant gets full relief on this ground."
3. Ld. DR contends that in CIT(A)'s order neither there is any reference to application for additional evidence nor any finding about admission of additional evidence filed by the assessee. Further, additional evidence sought to be admitted by the assessee has not been forwarded to the assessing officer. Thus no opportunity of hearing has been given to assessing officer who passed the ex parte assessment order without any co-opeation from the 4 assessee. Reliance is placed on Hon'ble Delhi High court judgment in the case of Manish Build Well 245 CTR 397 (Del.) for the proposition that the ingredients of Rule 46A are to be properly followed before admission of any additional evidence. Therefore, the order of CIT(A) may be reversed.
4. Ld. Counsel for the assessee, on the other hand, contends that various documents were furnished on the inquiries of ld. CIT(A) who after careful consideration thereof has verified from the bank a/c and documents that the amount of Rs. 20,00,000/- was invested in RBI bonds by the husband of the assessee Shri Kapil Dev Dutta in joint name of his wife. Therefore, there is no question of any undisclosed cash credit as made out by the assessing officer. The assessee could not respond to the assessing officer's notices as they were sent on a wrong address, which resulted in ex parte assessment for no fault of the assessee. CIT(A)'s order is relied on.
5. We have considered the rival contentions and gone through the relevant material available on record. It is undisputed fact that the assessment has been framed ex parte and no documents were filed before assessing officer. All the documents were filed before CIT(A) by way of additional evidence and there is no finding about the documents have been called by the CIT(A) in exercise of his powers to make further inquiries or by way of additional evidence. It appears that the ex parte assessment resulted as the notices were not received by assessee. Hon'ble Delhi High Court in the case of Manish Build Well (supra) has emphasized the importance of compliance to ingredients of Rule 46A. Respectfully following the Hon'ble Delhi High Court judgment and looking at the ex parte assessment, we are inclined to set aside the issue back to the file of 5 assessing officer to verify all the documents and frame the assessment de novo after affording the assessee adequate opportunity of being heard and allow to file documents in support of her contentions.
5. Since we have set aside the quantum appeal, the penalty appeal as a consequence is also set aside back to the file of assessing officer to proceed with the same in accordance with law after framing the assessment.
6. In the result, both the revenue's appeals are allowed for statistical purposes.
Order pronounced in open court on 09 /05/ 2013.
Sd/- Sd/-
(J.S. REDDY ) (R.P. TOLANI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated the 9th day of May, 2013
*MP*
Copy forwarded to
1. APPELLANT
2. RESPONDENT
3. CIT
4. CIT (A)
5. CIT (ITAT), New Delhi.