TMI Blog2012 (8) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... k can repair, advance to staff and the subsidy of Rs.5.00 lakh received by the assessee - evidence was in possession of the assessee even at the time of assessment - matter restored to the file of the AO as these require examination of additional evidence - appeal is treated as partly allowed for statistical purposes. - ITA No.1181/Del/2010 - - - Dated:- 23-3-2012 - U B S Bedi, K G Bansal, JJ. For Appellant: Shri Sudhir K Sehgal, CA For Respondents: Mrs Reena S Puri, CIT, DR Shri C B Singh, Sr. DR ORDER Per: K G Bansal: The assessee has taken five substantive grounds in this appeal, which read as under:- 1. That the ld. CIT(Appeals) has erred in law facts in confirming the issuance of notice u/s 148 by the ld. AO. 2. That the ld. CIT(Appeals) has erred in law facts in confirming the addition of Rs.18,08,312.00 made by the ld. AO on wrong and untenable grounds being provision for milk can repair. The amount has already been shown income in the books in financial year 2004-05 relevant to assessment year 2005-06. 3. That the ld. CIT(Appeals) has erred in law facts in confirming the addition of Rs. 62,614/- being provision for bad doubtful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hyam Lal Gupta is under his treatment. The copy of the prescription is also enclosed along with various receipts of professional fees from him. The case of the ld. counsel is that the assessee should not suffer on account of omission on the part of its counsel. In this connection, reliance is placed on the decision of B Bench of Chandigarh Tribunal in the case of Himachal Pradesh Cricket Association, Una, in ITA Nos. 110 and 111/Ch./2004 dated 08.09.2004, a copy of which has been placed before us. This case involves condonation of delay of 524 days in filing the appeal. The gist of the decision is that the term sufficient cause is quite elastic so as to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice. Further, a litigant should not ordinarily suffer for the mistake of the counsel. The relevant paragraph nos. 12 and 13 of this decision are reproduced below:- 12. In addition to the affidavit filed by the Advocate, we have also referred to the various communications filed by the assessee with the revenue authorities. In regard to the Registration Certificate; the plea of the assessee was that the registration ought to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Incometax should have adopted a liberal view in the matter of condonation of delay in view of the affidavit of the assessee s Chartered Accountant as the said affidavit was categorical about the entrustment of the work to him by the assessee with the prescribed time for filing the appeal and the Chartered Accountant has stated that the delay had occurred in his office due to certain problems. Similar view has taken by the Delhi Bench in the case of Sudershan Auto General Finance Vs. CIT (supra), wherein it was held that the tax consultant of assessee having confirmed byway of affidavit that he was not aware of the provisions of law and did not advise the assessee properly could not be brushed aside. In the case of Collector. Land Acquisition Vs. Mst Katiji Others (supra), the Hon'ble Supreme Court has also held that sufficient cause is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice. 13. In this case, the appellant is a non-profit making Association established with the sole purpose of promoting the game of Cricket in Himachal Pradesh. The funds are being received from various sources an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Shyam Lal Gupta, who was looking after the tax matters, had been ailing for some time. This reason is supported by the affidavit of Shri Shyam Lal Gupta and other documents filed in respect of his treatment. We have already discussed the ratio of the case of Himachal Pradesh Cricket Association (supra). In the case of the Office of Chief Post Master General Others (supra), there was a delay of 427 days in filing appeal. The ld. counsel for the respondent contended that there was an inordinate delay and looking to the conduct of the petitioner, the delay should not be condoned. The Hon ble Court considered the case of Collector, Land Acquisition Another Vs. Mst. Katiji Others, (1987) 2 SCC 107, G. Ramedowda, Major Others Vs. Special Land Acquisition Officer, (1988) 2 SCC 142, State of Haryana Vs. Chandra Mani Others (1996) 3 SCC 132, State of Uttar Pradesh Others Vs. Harish Chandra Others (1996) 9 SCC 309, National Insurance Co. Ltd. Vs. Giga Ram And Others (2002) 10 SCC 176 and State of Nagaland Vs. Lipok Ao and Others, (2005) 3 SCC 752 . Thereafter, the court considered the affidavit which explained the reasons for delay. It is mentioned that even according t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng provision for unascertained liability was to be added in total income. (b) Perusal of schedule P of the administrative expenses revealed that the assessee had debited Rs.62,614/- as provision for bad and doubtful debts which was to be added in the taxable income. (c) In the statement of income, the assessee had set off Rs. 11,97,120/- against brought forward losses. Perusal of assessment records for the assessment year 2003-04 reveals that income was assessed at Rs.51,05,080/- under section 143(1) on 24.12.2003 and no loss was brought forward. Thus, set off of loss to the extent of Rs.11,97,120/- was irregular and not admissible. (d) The assessee received grant in aid of Rs.5,00,000/- at Bhiwani branch but credited the same direct in the balance sheet. Grant received by the assessee for meeting revenue expenses will be treated as revenue income. Thus, Rs.5,00,000/- was required to be credited in the P L account. 4.1 The case of the ld. counsel is that even if no submission was made before the ld. CIT(Appeals), yet he was obliged to pass a speaking order on merits. Further, the details in respect of all the points mentioned in the reasons is available on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of mere change of opinion , which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of change of opinion as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is tangible material to come to the conclusion that there is escapement of income from asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record does not preclude the jurisdiction of the AO to reopen the assessment provided the conditions mentioned in section 147 are satisfied. In this connection, she relied on the decision in the case of Honda Siel Power Products Ltd. Vs. Dy.CIT (2011) 197 Taxman 415 (Del) . Our attention has been drawn to the fact that the Hon ble Court took into account the provision contained in the Explanation to section 147 to the effect that mere production of books of account or other evidence is not sufficient. Therefore, just because material lies embedded in the evidence, which the AO could have uncovered but did not uncover, is not a good ground to deny or strike down a notice u/s 148. It is mentioned that this decision has been approved by Hon ble Supreme Court in SLP No. 19085/2011, reported in 2011-TIOL-72-SC-IT . Further, reliance is placed on the decision of E Bench of Delhi Tribunal in ITA No. 3190(Del)/2007 for assessment year 2004-05 in the case of Oriental Insurance Co. Ltd. Vs. ACIT dated 22.07.2011, a copy of which has been placed before us. In this case, the decision in the case of Honda Siel Power Products Ltd., has been followed and reopening of the assessment has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment u/s 147. This comes out clearly from the decision in the case of Honda Siel Power Products Ltd. (supra), which has been confirmed by the Hon ble Supreme Court. Therefore, it has to be seen in this case whether the disclosure was made properly in the course of assessment so that AO could compute the income correctly. This will necessitate the examination of various grounds for reopening. 5.2 The first issue is regarding provision for milk can repairs amounting to Rs.18,08,312/-. The assessee has placed a copy of this account before us, but admittedly this evidence was not there before the AO. It is now being produced as an additional evidence before us. The position in regard to administrative expenses of Rs.62,614/- is the same. The case of the ld. counsel in regard to brought forward loss is that the assessment could have been rectified u/s 154. However, we find that under clause (c)(iv) to Explanation 2, allowance of excessive loss or depreciation allowance or any other allowance amounts to a case in which income chargeable to tax is escaped assessment. Therefore, excess allowance of brought forward loss of Rs.11,97,120/- shows that income has escaped assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. counsel for the assessee. In order to support the case for admission, reliance is placed on the decision in the case of CIT Vs. Gani Bhai Wahab Bhai (1998) 232 ITR 900 . It has been mentioned on page no. 903 of the report that the order of the Tribunal does not speak about any additional evidence. Therefore, it is strange as to how the two questions have been framed which speak of the fresh evidence having been taken into consideration. Obviously, this case is not regarding entertainment of additional evidence and, therefore, does not advance the case of the assessee. Further, in the case of CIT Vs. Suretech Hospital and Research Centre Ltd. (2007) 293 ITR 53 (Bom.) , one of the questions before the court was in regard to admission of additional evidence by the Tribunal under Rule 29. The contention of the revenue was that the Tribunal was not justified in invoking rule 46A(4) of the Income-tax Rules and allowing additional evidence to be produced before the CIT(Appeals) for the first time. The mere fact that the evidence sought to be produced is vital and important, does not provide substantial cause to allow its admission at the appellate stage when the evidence was avail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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