Shri Ritesh Ajmera, Indore V. THE DCIT-3(1), Indore

CO 14/Ind/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8443 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS ASHIMA GUPTA
• Keywords: Unexplained investment; Question of law
• Section: 271(1)(c); 153A; 32; 132

Judgement Text

[ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.51/IND/2017 ASSESSMENT YEAR: 2008-09 DCIT - 3(1), INDORE / VS. M/S. SHRI RITESH AJMERA . 29-30, PALIWAL NAGAR, INDORE (REVENUE ) (APPELLANT) P.A. NO. ACSPA9865D C.O. NO.14/IND/2018 (ARISING OUT OF ITA NO.51/IND/2017) ASSESSMENT YEAR: 2008-09 M/S. SHRI RITESH AJMERA. 29-30, PALIWAL NAGAR, INDORE / VS. DCIT - 3(1), INDORE (REVENUE ) (APPELLANT) APPELLANT BY MRS. ASHIMA GUPTA, SR. D.R. RESPONDENT BY SHRI ANIL KAMAL GARG, A.R. DATE OF HEARING: 23.11.2018 DATE OF PRONOUNCEMENT: 03.01.2019 [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 2 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE REVENUE PERTAINING TO THE ASSESSMENT YEAR 2008-09 AND CROSS OBJECTION FILED BY T HE ASSESSEE AGAINST ORDER OF THE LD. CIT(A)-I, INDORE (M. P.) DATED 17.10.2016. BOTH REVENUE AND ASSESSEE HAVE CHALLENGED THE ORDER OF THE LD. CIT(A). THE ASSESSEE HAS CHALLENGED THE LEGALITY OF THE INITIATION OF PROCEEDIN GS AND THE PENALTY CONFIRMED IN RESPECT OF THE ADDITIONS SUS TAINED BY THE TRIBUNAL. SINCE THE ASSESSEE HAS CHALLENGED LEG ALITY OF THE PROCEEDINGS, WE DEEM IT PROPER TO ADJUDICATE CROSS OBJECTION FIRST ON THE ISSUE OF LEGALITY OF THE PROC EEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFT ER CALLED AS THE ACT). THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF CROSS OBJECTIONS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ACTION OF THE LEARNED CIT(A) GROSSLY ERRED, IN CONFIRMING THE PENALTY IMPOSED BY THE A.O. IS ILLEGAL IN AS MUCH A VAGUE AND CRYPT IC SHOW CAUSE NOTICE WAS ISSUED TO THE APPELLANT UNDER S.274 WITH OUT MAKING HIM AWARE OF THE SPECIFIC CHARGE LEVELLED AGAINST HIM. [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 3 2. (A)THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNE D CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT CONSIDERING THE MATERIAL FACT THAT THE APPELLANT HAD NEITHER CONCEALED NOR FURNIS HED IN ACCURATE PARTICULARS OF HIS INCOME FOR THE YEAR UNDER CONSID ERATION AND THEREFORE HE WAS NOT LIABLE FOR ANY PENALTY U/S 271 (1)(C) OF THE ACT. (B) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARN ED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT CONSIDERING THE MATERIAL FACT THAT PENALTY PROCEEDINGS ARE DIFFERENT FROM ASSESSM ENT PROCEEDINGS AND MERELY ON THE BASIS OF CERTAIN FINDING IN ASSES SMENT PROCEEDINGS, PENALTY U/S 271(1)(C) CANNOT BE IMPOSE D AUTOMATICALLY. 3.(A) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE PENALTY IMPOSED BY THE A.O. QUA THE AMOUNT OF CASH DEPOSITS AGGREGA TING TO RS.5,00,000/- MADE BY THE APPELLANT IN HIS BANK ACC OUNT. (B) THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE PENALTY IMPOSED BY THE A.O. QUA THE AMOUNT OF ALLEGED UNEXPLAINED INVESTMENT OF RS.25,50,000/- IN M/S. PHOENIX DEVCONS PVT. LTD. 4. THAT, THE CROSS OBJECTOR FURTHER CRAVES LEAVE TO ADD, ALTER AND/OR AMEND GROUND OF CROSS OBJECTIONS, AS AND WHEN CONSI DERED NECESSARY. 2. BRIEF FACTS ARE THAT SEARCH & SEIZURE OPERATION U/S 1 32 OF THE ACT WERE CONDUCTED AT VARIOUS PREMISES OF ASSES SEE SOCIETY PERSONS AND CONCERNS COMMONLY KNOWN AS M/S. SATELLITE GROUP ON 15.11.2009. A NOTICE U/S 153A O F THE ACT DATED 13.10.2010 WAS ISSUED AND SERVED UPON THE ASSESSEE REQUIRING THE ASSESSEE TO FILE RETURN OF INCO ME. IN RESPONSE THERETO, THE ASSESSEE SUBMITTED BEFORE THE A.O. THAT THE RETURN FILED ORIGINALLY MAY BE TREATED AS RET URN [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 4 FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT . THE A.O. THEREAFTER PROCEEDED TO MAKE ASSESSMENT AFTER CONSIDERING THE FACTS AND THE MATERIAL AVAILABLE ON RECORD . THE A.O. MADE TWO ADDITIONS IN RESPECT OF UNEXPLAINED CASH DEPOSITS IN UCO BANK OF RS.15 LAKHS, UNEXPLAINED INVESTMENT IN M/S. PHOENIX TECHNOLOGY OF RS.2,25,00,000/-. THE A.O. INITIATED THE PENALTY PROCEEDINGS SEPARATELY. IN QUANTUM PROCEEDINGS, THE MATTER WAS TRAVELLED UP TO THE STAGE OF THE TRIBUNAL AND IT IS REPORTED BY THE LD. CIT(A) THAT A SUM OF RS.1,90,00,000/- WAS DELETED OUT OF RS.2,15,50,000/- IN RESPECT OF THE UNEXPLAINED INVESTMENT. FURTHER, THE LD. CIT(A) DIRECTED THE A.O. TO RE-COMPUTE PENALTY ON AN AMOUNT OF RS.30,50,000/- SUSTAINED BY THE TRIBUNAL. 3. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. GROUND NO.1 & 2 ARE AGAINST THE LEGALITY OF NOTICE ISSUED U/S 271(1)(C) OF THE ACT. IT IS NOTI CED THAT THIS [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 5 GROUND WAS NOT TAKEN BEFORE THE LD. CIT(A). IT IS SU BMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THIS BEING T HE LEGAL GROUND, THE JUDGEMENT OF THE JURISDICTIONAL HIGH COU RT IN THE CASE OF PRINCIPAL CIT VS. KULWANT SINGH BHATIA IN IT A NO.9 OF 2018 DATED 9.5.2018 (M.P.) WAS NOT AVAILABLE AT THE TIME OF THE PROCEEDINGS BEFORE LD. CIT(A). HE FURT HER SUBMITTED THAT IN VIEW OF THE JUDGEMENT OF THE HON'B LE SUPREME COURT IN THE CASE OF NTPC VS. CIT (1998) 229 ITR 353 (SC) THE LEGAL GROUND CAN BE TAKEN UP AT ANY STAGE. LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE PEN ALTY ORDER. HE SUBMITTED THAT THE A.O. HAS NOT SPECIFIED THE CHARGE FOR WHICH THE PENALTY HAS BEEN LEVIED. 4. ON THE CONTRARY, LD. D.R. OPPOSED THE SUBMISSIONS OF THE ASSESSEE. HE SUBMITTED THAT THE A.O. HAS SPECIFI ED THE CHARGE IN THE ASSESSMENT ORDER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 6 OF THE AUTHORITIES BELOW. THE GRIEVANCE OF THE ASSESS EE IS THAT THE A.O. HAS NOT MADE ANY SPECIFIC CHARGE TO THE PENALTY BEING IMPOSED. WE HAVE GONE THROUGH THE RECO RDS. THESE GROUNDS WERE NOT RAISED BY THE ASSESSEE BEFORE LD. CIT(A). THE HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. TOLARAM HASSOMAL 298 ITR 22 (M.P.), WHEREIN TH E HON'BLE HIGH COURT HAS HELD AS UNDER: 8. IN VIEW OF THE FOREGOING DISCUSSION, WE DO NOT CONSIDER IT NECESSARY TO EXAMINE ANY OTHER ISSUES, I.E., THE QUESTIONS ALREADY FRAMED AND DECIDED BY THE TRIBUNAL THOUGH URGED BY LEARNED COUNSEL FOR THE REVENUE ON VARIOUS LEGAL GROUNDS WI TH REFERENCE TO DECIDED CASES OF THE SUPREME COURT AND THE HIGH COU RTS BY CONTENDING THAT NONE OF THEM ARE LEGALLY SUSTAINABL E AND HENCE, WE ANSWER ONLY ADDITIONAL QUESTION OF LAW FRAMED IN FA VOUR OF THE REVENUE AND AGAINST THE ASSESSEE (RESPONDENT). AS A RESULT, THE APPEAL SUCCEEDS AND IS HEREBY ALLOWED. THE IMPUGNE D ORDERS OF THE TRIBUNAL IS SET ASIDE, SO ALSO THAT OF THE COMMISSI ONER OF INCOME TAX (APPEALS) WHICH WAS THE SUBJECT MATTER OF APPEAL BE FORE THE TRIBUNAL IN AN APPEAL FILED BY THE ASSESSEE. INDEED, THIS B EING A CONSEQUENCE OF THE INDULGENCE GRANTED BY THE TRIBUN AL TO THE ASSESSEE IN PERMITTING THEM TO RAISE FOUR ADDITIONA L GROUNDS TO URGE THE SAME HAS TO BE GIVEN EFFECT TO. AS A CONSEQUEN CE, THE COMMISSIONER OF INCOME-TAX (APPEALS) IS NOW DIRECTE D TO DECIDE THE APPEAL FILED BY THE RESPONDENT (ASSESSEE) AFRESH ON THE MERITS INCLUDING ON THE FOUR ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. WE, HOWEVER, MAKE IT VERY CLEAR THAT THE COMMISSION ER OF INCOME- TAX (APPEALS) WOUILD NOT TAKE INTO CONSIDERATION AN Y OF THE FINDINGS AND THE OBSERVATIONS MADE BY THE TRIBUNAL ON ANY OF THE ISSUES RAISED BY THE ASSESSEE, NOR THE COMMISSIONER OF INC OME-TAX (APPEALS) WILL BE INFLUENCED BY ANY OF THEM. IN OT HER WORDS, THE COMMISSIONER OF INCOME-TAX (APPEALS) WILL DECIDE TH E APPEAL STRICTLY IN ACCORDANCE WITH LAW ON THE MERITS AS IF THERE IS NO FINDING ON ANY OF THE ISSUES EVER RECORDED BY THE TRIBUNAL BECAUSE ONCE WE SET [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 7 ASIDE THE ORDER OF THE TRIBUNAL, THEN SUCH ORDER IS REGARDED AS BEING NOT IN EXISTENCE AND CANNOT BE LOOKED INTO FOR ANY PURPOSE, NOR CAN BE RELIED ON OR REFERRED TO BY ANY AUTHORITY MUCH L ESS AN AUTHORITY SUBORDINATE TO THE TRIBUNAL. NEEDLESS TO OBSERVE, THE FOUR ADDITIONAL ISSUES URGED BY THE ASSESSEE WILL HAVE TO BE DECIDE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS) KEEPING IN VIE W THE LAW LAID DOWN BY THE SUPREME COURT AND THE HIGH COURTS IN SE VERAL CASES HOLDING THE FIELD IN THEIR RIGHT PERSPECTIVE. LET THIS BE DONE WITHIN SIX MONTHS BY THE COMMISSIONER OF INCOME-TAX (APPEA LS) FROM THE DATE OF APPEARANCE. PARTIES TO APPEAR BEFORE THE C OMMISSIONER OF INCOME-TAX (APPEALS) ON APRIL 3, 2006. 6. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, THE ADDITIONAL GROUND RAISED IN THE FORM OF LEGAL IN GROUND NOS.1 TO 2(B) OF THE ASSESSEE ARE RESTORED TO THE FIL E OF THE LD. CIT(A) FOR CONSIDERING THE SAME IN THE LIGHT OF THE JUDGEMENT OF THE HON'BLE M.P. HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. KULWANT SINGH BHATIA (SUPRA). 7. GROUND NOS.3(A) & 3(B) ARE IN RESPECT OF THE PENALT Y CONFIRMED BY THE LD. CIT(A). ALL THE CROSS OBJECTI ONS GOES TO THE ROUTE OF LEGALITY OF THE PENALTY AND HENCE, WE DEEM IT PROPER THAT THESE GROUNDS ARE ALSO RESTORED TO THE FIL E OF THE LD. CIT(A) TO DECIDE IT AFRESH. GROUND NOS.3(A) & 3( B) OF THE ASSESSEES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 8 8. GROUND NO.4 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 9. NOW WE TAKE UP THE REVENUES APPEAL. REVENUE HAS TAKEN UP THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) WAS JUSTIFIED IN PARTLY ALLOWING THE APPEAL OF THE ASSESSEE CONSIDERING THE APPELLATE ORDER OF HON'BLE ITAT. 2. WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE A.O. TO RE-COMPUTE T HE PENALTY ONLY ON THE AMOUNT OF RS.30,50,000/-, WHICH WAS CONFIRMED B Y THE HON'BLE ITAT, WHEREAS LD. CIT(A) HAS CONFIRMED THE ADDITION OF RS.2,15,50,000/- OUT OF ADDITION OF RS.2,25,00,000/ - AS UNEXPLAINED INVESTMENT AND CONFIRMED THE ADDITION O F RS.5,00,000/- OUT OF RS.15,00,000/- AS UNEXPLAINED CASH DEPOSITS IN UCO BANK. 3. THE APPELLANT RESERVES THE RIGHT TO ADD, AMEND OR A LTER THE GROUND OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 10. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAINS T DELETING THE PENALTY TO THE EXTENT OF ADDITION CONFIR MED BY THE TRIBUNAL AND DELETING REST OF THE PENALTY. 11. LD. D.R. SUPPORTED THE ORDERS OF THE A.O. AND SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DELET ING THE PENALTY. HE SUBMITTED THAT QUANTUM PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO DIFFERENT AND DISTINCT [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 9 PROCEEDINGS. LD. CIT(A) OUGHT TO HAVE CONFIRMED THE PENALTY. 12. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION HAS BEEN DELETED; THEREFOR E, THERE IS NO QUESTION OF LEVY OF PENALTY. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ADDITION ON WHICH PENALTY HAS BEEN LEV IED HAS ALREADY BEEN DELETED BY THE TRIBUNAL IN IT(SS)A NO. 190 TO 192/IND/2013 IN ASSESSEES OWN CASE, IN WHICH THE ADDITION OF RS.1,90,00,000/- WAS DELETED OUT OF THE T OTAL ADDITION OF RS.2,15,50,000/-. THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY CONFIRMED. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. [ITA 51/IND/2017 & CO 14/IND/2018] [SHRI RITESH AJMERA, INDORE] 10 14. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 03 . 01.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 03/01/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE