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IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "C" New Delhi
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
AND
MS. SUCHITRA KAMBLE, JUDICIAL MEMBER
../ .I.T.A No.5139/Del/2015
Š Š/Assessment Year:2011-12
Mohd. Gulzar ITO
T-444, Gali Pahar Wali, Vs. Ward 63(3)
Ahata Kidara, Sadar Bazar, New Delhi.
Delhi.
Appellant Â/Respondent
PAN No. AGUPG8688A
&
.I.T.A No.5001/Del/2015
../
Š Š/Assessment Year:2011-12
ITO Mohd. Gulzar
Ward 63(3) Vs. T-444, Gali Pahar Wali,
New Delhi. Ahata Kidara, Sadar Bazar,
Delhi.
Appellant Â/Respondent
PAN No. AGUPG8688A
Ö /Revenue by Shri S.N. Meena, Sr. DR
Šå /Assessee by Sh. Salil Kapoor, Advocate
Sh. Sumit Lalchandani, Adv.
Ms. Sona Advocate
/ Date of hearing:
27.11.2019
/Pronouncement on 28.11.2019
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/O R D E R
PER N.K. BILLAIYA, A.M.
1. These are cross appeals by the Revenue and the Assessee preferred
against the very same order of the Ld. CIT (Appeals)-20, New Delhi dated
25.05.2015 pertaining to AY 2011-12. Both these appeals were heard
together and are disposed of by this common order for the sake of
convenience.
2. We will first take up the Revenue's appeal in ITA No.
5001/Del/2015 on the following grounds:
1. "The Ld. CIT(A) has erred in reducing the gross profit rate
from 2% to 1.5%.
2. The Ld. CIT(A) has erred in reducing the disallowance of
expenses from 20% to 10%.
3. The Ld. CIT(A) has erred in reducing the addition on account
of unloading charges to 50% of total claim i.e. (50% of Rs.
11,02,626/-).
4. The Ld. CIT(A) has erred in reducing addition on account of
salary expenses from 50% to 25% of total claim.
That the Appellant craves leave to add, amend or modify the
ground(s) of appeal at any time."
3. We have heard the learned CIT (D.R.), who has pointed out the tax
effect involved in this appeal, is below monetary limit prescribed by the
CBDT. We find that the CBDT vide Circular No.17/2019 dated 8th August
2019 [F.No.279/ Misc.142/ 2007-ITJ (Pt)] by amending para 3 of CBDT
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Circular No.3/2018 dated 11.07.2018 has enhanced the monetary limit
for filing of appeal before Tribunal to Rs.50 lakhs and has also removed
the anomaly in para 5 of said Circular No. 3/2018. We find that the
present case does not fall within the exceptions clause 10 of said CBDT
Circular No. 3/2018. Therefore, the present appeal is not maintainable as
per above Circular No. 17/2019, hence dismissed. This Circular is
applicable to all pending appeals as clarified by CBDT letter dated
20.08.2019 [F. No. 279/Misc./M-93/2018-ITJ] and in the light of
judgment of Hon`ble Supreme Court in the case of Pr. CIT, Jaipur v.
Meenakshi Modi SLP (Civil) Diary No. 25076 of 2019-dated 16.08.2019
wherein the Hon`ble Supreme Court has dismissed the appeal of
Revenue, as tax involved was less than Rs. 2 Crores. However, the
Revenue is at liberty to approach to this Tribunal for recalling this order,
if it is comes to the notice of the AO that the tax effect is more than the
monetary limit provided under above Circular or the appeals is fall within
ambit of the exceptions provided under the said Circular.
4. In the result, appeal of the Revenue stands dismissed.
5. Now we will take up assessee's appeal in ITA No. 5139/Del/2015.
Though the assessee has raised 12 substantive grounds of appeal the sum
and substance of the grievance of the assessee is that due to reasons
beyond the control the assessee could not furnish the necessary
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documentary evidences before the AO and the AO framed the assessment
ex parte u/s 144 of the Act.
6. Before us, the application under Rule 29 of the ITAT Rules for
admission of additional evidence has been filed by which the assessee
explained that before the assessment proceedings could start the Counsel
Shri Subhash Gupta, Advocate died. Subsequent to the death of Shri
Subhash Gupta his son Chartered Accountant Sh. Sitish Gupta took over
the charge but could not attend the assessment proceedings due to lack
of concentration on account of his father's death.
7. The assessee strongly contends that the additional evidences now
furnished are necessary for proper appreciation of the issue under appeal
and for substantial justice.
8. The DR strongly opposed to the admission of the additional
evidences. It is the say of the DR that sufficient opportunities were given
by the AO and the CIT(A) but the assessee did not avail those
opportunities and now filing fresh evidences which should not be
accepted.
9. We have given a thoughtful consideration to the rival contentions
and have carefully perused the application made under Rule 29 of the
ITAT Rules. The undisputed fact is that the discretion lies with the
Tribunal to admit additional evidence in the interest of justice. It is also
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not in dispute that Rule 29 of the ITAT Rules is aking to order 41 Rule
27(1) of the CPC. Our view is fortified by the decision of the Hon'ble
High Court of Delhi in the case of CIT vs. Text Hundred India Pvt. Limited
351 ITR 57 the relevant observations of the Hon'ble Delhi High Court read
as under:
"13. The aforesaid case law clearly lays down a neat principle
of law that discretion lies with the Tribunal to admit
additional evidence in the interest of justice once the Tribunal
affirms the opinion that doing so would be necessary for
proper adjudication of the matter. This can be done even
when application is filed by one of the parties to the appeal
and it need not to be a suo moto action of the Tribunal. The
aforesaid rule is made enabling the Tribunal to admit the
addtional evidence in its discretion if the Tribunal holds the
view that such additional evidence would be necessary to do
substantial justice in the matter. It is well-settled that the
procedure is handmade of justice and justice should not be
allowed to be choked only because of some inadvertent error
or omission on the part of one of the parties to lead evidence
at the appropriate stage. Once it is found that the party
intending to lead evidence before the Tribunal for the first
time was prevented by sufficient cause to lead such an
evidence and that this evidence would have material bearing
on the issue which needs to be decided by the Tribunal and
ends of justice demand admission of such an evidence, the
Tribunal can pass an order to that effect.
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14. The next question which arises for consideration is as to
whether the exercise of discretion in the instant case
permitting the additional evidence by the Tribunal, is
apposite? It is undisputed that Rule 29 of the Rules is akin to
Order 41 Rule 27(1) of the Code of Civil Procedure. The true
test in this behalf, as laid down by the Courts, is whether the
Appellate Court is able to pronounce judgment on the
materials before it without taking into consideration the
additional evidence sought to be adduced. The legitimate
occasion, therefore, for exercise of discretion under this rule
is not before the Appellate Court hears and examines the case
before it, but arises when on examining the evidence as it
stands, some inherent lacuna or defect becomes apparent to
the Appellate Court coming in its way to pronounce judgment,
the expression `to enable it to pronounce judgment' can be
invoked. Reference is not to pronounce any judgment or
judgment in a particular way, but is to pronounce its judgment
satisfactory to the mind of Court delivering it. The provision
does not apply where with existing evidence on record the
Appellate Court can pronounce a satisfactory judgment. It is
also apparent that the requirement of the Court to enable it
to pronounce judgment cannot refer to pronouncement of
judgment in one way or the other but is only to the extent
whether satisfactory pronouncement of judgment on the basis
of material on record is possible. In Arjan Singh vs. Kartar
Singh AIR 1951 SC 193, while interpreting the provisions of
Order 41 Rule 27, the court remarked as follows: -
"The legitimate occasion for the application of Order
41, rule 27 is when on examining the evidence as it
stands, some inherent lacuna or defect becomes
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apparent, not where a discovery is made, outside the
court of fresh evidence and the application is made to
impart it. The true test, therefore, is whether the
Appellate Court is able to pronounce judgment on the
materials before it without taking into consideration
the additional evidence sought o be adduced."
[Emphasis supplied]
[See also Netha Singh v. Financial Commissioner AIR
1976 SC 1053]
15. In the present case the reason which was given by the
assessee in support of its plea for admission of additional
evidence was that the assessee could not produce these
records before the lower authorities due to non-retrievability
of e-mail on the date because of technological difficulties.
This reason was specifically mentioned in the application filed.
No reply to this application was filed refuting this averment,
though the departmental representative had opposed the
admission of the additional evidence. The ground pleaded by
the assessee was not confronted. In this backdrop, the
Tribunal looked into the entire matter and arrived at a
conclusion that the additional evidence was necessary for
deciding the issue at hand. It is, thus, clear that the Tribunal
found the requirement of the said evidence for proper
adjudication of the matter and in the interest of substantial
cause. Rule 29 of the Income-tax (Appellate Tribunal) Rules
categorically permits the Tribunal to allow such documents to
be produced for any substantial cause. Once the Tribunal has
predicated its decision on that basis, we do not find any
reason to interfere with the same. As a result, the questions
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of law are answered in favour of the assessee and against the
Revenue resulting into dismissal of these appeals. No costs."
10. As mentioned elsewhere with the demise of the Counsel of the
assessee the assessee could not be represented properly either before
the Assessing Officer or before the CIT(A). In the interest of justice, the
additional evidences are admitted.
11. The additional evidences contained documents establishing that
the appellant is only an agent of Allana Group. In our considered
opinion, these documents need thorough investigation/verification at the
assessment stage. We, accordingly, restore the entire issues to the files
of the AO. The assessee directed to furnish all these evidences before
the AO and the AO is directed to examine the same and decide the issues
afresh, after affording reasonable and fair opportunity of being heard to
the assessee.
12. In the result, the appeal filed by the assessee is treated to be
allowed for statistical purposes.
The order pronounced in the open court on 28.11.2019
Sd/- Sd/-
(SUCHITRA KAMBLE) (N.K. BILLAIYA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 28th November, 2019
*Kavita Arora, Sr. PS
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Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard
file of ITAT.
By order
Assistant Registrar, ITAT: Delhi Benches-Delhi
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