Sh. Prem Chand Agarwal, Firozabad V. I.T.O.-5(3), Firozabad

CO 19/AGR/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7533 (ITAT-AGRA)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2000-2001
• Appeal Filed On: 16-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Reopening of assessment; Gift; Competent authority; Reason to believe; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 340/AGRA/2011 ASSTT. YEAR : 2000-01 INCOME-TAX OFFICER, VS. SHRI PREM CHAND AGARWAL, 5(3), FIROZABAD. 37, PURANI MANDI, FIROZABAD. (PAN : ABDPA 7677 B) C.O. NO. 19/AGRA/2012 (IN ITA NO. 340/AGRA/2011) ASSTT. YEAR : 2000-01 SHRI PREM CHAND AGARWAL, VS. INCOME-TAX OFFICER, 37, PURANI MANDI, FIROZABAD. 5(3), FIROZABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI A.K. SHARMA, JR. D.R. ASSESSEE BY : SHRI SAHIB P. SATSANGEE, C.A. DATE OF HEARING : 26.07.2012 DATE OF PRONOUNCEMENT OF ORDER : 01.08.2012 ORDER PER BHAVNESH SAINI, J.M.: THE DEPARTMENTAL APPEAL AND THE CROSS-OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-II, AGRA DATED 19.0 5.2011 FOR THE ASSESSMENT YEAR 2000-2001. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR T HE ASSESSEE DID NOT PRESS THE ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 2 CROSS-OBJECTION AND SEEKS PERMISSION TO WITHDRAW TH E SAME. THE CROSS-OBJECTION OF THE ASSESSEE IS, ACCORDINGLY, DISMISSED AS WITHDRAW N. 3. IN THE DEPARTMENTAL APPEAL, THE REVENUE CHALLENG ED THE ORDER OF THE LD. CIT(A) IN QUASHING THE RE-ASSESSMENT PROCEEDINGS U/ S. 147/148 OF THE IT ACT. THE FACTS OF THE CASE ARE THAT THE ASSESSEE CHALLENGED THE RE-ASSESSMENT PROCEEDINGS BEFORE THE LD. CIT(A). AS PER AO, INFORMATION WAS R ECEIVED FROM THE ADDL. DIT (INV.), AGRA THAT ONE SHRI SANJAY MOHAN AGARWAL, R/ O 4674, SHORA KOTHI, PAHARGANJ, NEW DELHI WAS INVOLVED IN GIVING BOGUS G IFTS IN LIEU OF CASH FROM THE BENEFICIARIES. AS PER THE AO THE ADDL. DIT(INV.) AL SO FOUND IN HIS ENQUIRIES THAT THERE WERE NO GENUINE GIFTS/LOANS ISSUED THROUGH TH E BANK ACCOUNTS OF SHRI SANJAY MOHAN AGARWAL. THE BENEFICIARIES HAVE TAKEN ENTRY B Y PAYING IN CASH AN AMOUNT EQUIVALENT TO THE DRAFT/CHEQUE AMOUNT AND CERTAIN P REMIUM ON THAT. THE BROKER ON RECEIPT OF CASH FROM THE BENEFICIARIES DEPOSITED TH E SAME IN HIS BANK ACCOUNTS AND THEN ISSUED DRAFTS/CHEQUES TO THE BENEFICIARIES. IT IS FURTHER MENTIONED BY THE AO THAT DURING THE INQUIRY PROCEEDINGS ALL THE BENEFIC IARIES HAVE SURRENDERED THE AMOUNT OF ALLEGED GIFTS TO BE TAXED AS INCOME FROM OTHER SOURCES AND ASSESSEE IS ONE OF THEM. AS PER THE AO, SHRI SANJAY MOHAN AGARW AL HAD MADE GIFT TO THE ASSESSEE THROUGH DD NO. 814803 & 814804 OF RS. 5 LA CS EACH ON 30.11.99 WHICH WAS CREDITED IN OBC BANK, FIROZABAD. ON RECEIPT OF THIS INFORMATION, THE AO WROTE A LETTER DATED 14.02.2006 TO THE ASSESSEE ASK ING AS TO WHETHER RS. 10 LACS ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 3 HAS BEEN REFLECTED IN HIS RETURN FILED WITH THE DEP ARTMENT AS UNEXPLAINED INCOME. IT WAS ALSO PROPOSED BY THE AO THAT IF NOT EXPLAINED I N THE RETURN OF INCOME THEN WHY ACTION U/S 147 SHOULD NOT BE TAKEN. THE ASSESSEE DI D NOT FILE ANY REPLY TO THIS LETTER OF THE AO. THEREAFTER, NOTICE U/S 148 OF THE ACT WA S ISSUED TO THE ASSESSEE ON 23.03.2007 AFTER TAKING THE APPROVAL OF THE ADDL. C IT, RANGE-5, FIROZABAD. IN RESPONSE TO THE NOTICE U/S 148, IT WAS SUBMITTED BE FORE THE AO BY LD. COUNSEL FOR ASSESSEE ON 16.11.2007 THAT THE RETURN FILED ON 04. 12.2000 SHOWING INCOME OF RS. 1,06,320/- MAY BE TREATED AS HAVING BEEN FILED IN R ESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT. IT WAS ALSO STATED BEFORE THE AO THAT T HE ASSESSEE HAD RECEIVED ONLY ONE GIFT OF RS. 5 LACS VIDE DD NO. 814804 DATED 30.11.2 004 AND NOT OF RS. 10 LACS AS ALLEGED BY THE AO. THE AO ALSO ASKED TO PRODUCE THE DONOR AND DONEE AND IT WAS STATED BEFORE THE AO THAT THE DONOR HAD ALREADY EXP IRED. AS PER THE AO COPY OF GIFT DEED AND AFFIDAVIT OF THE DONOR WERE FILED. HO WEVER, AS PER THE AO NO OCCASION FOR THE GIFT AND RELATION WITH THE DONOR C OULD BE ESTABLISHED BY THE ASSESSEE. THEREFORE, THE AO HELD THE GIFTS AS BOGUS AND MADE THE IMPUGNED ADDITION OF RS. 10 LACS. 3.1 THE ASSESSEE FILED WRITTEN SUBMISSIONS BEFORE T HE LD. CIT(A), WHICH IS INCORPORATED IN THE APPELLATE ORDER CHALLENGING THE REASSESSMENT PROCEEDINGS, IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THAT INFORMATI ON WAS RECEIVED IN THE OFFICE OF ADDL. CIT, RANGE-5, FIROZABAD FROM THE OFFICE OF AD DL. DIT (INV.), AGRA REGARDING ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 4 THE GIFTS. IT WAS ADVISED TO THE AO TO INITIATE ACT ION U/S. 148 OF THE IT ACT. EXCEPT THIS VAGUE INFORMATION, NO MATERIAL, WHATSOEVER, WA S AVAILABLE ON RECORD. THE AO DIRECTED SANTOSH KUMAR, PEON TO SEARCH OUT THE CASE RECORD OF THE ASSESSEE, BUT HE HAS SUBMITTED HIS REPORT THAT AFTER BEST EFFORTS, T HE FILE IS NOT TRACEABLE. THE AO, THEREFORE, INFORMED THE ADDL. CIT RANGE-5, FIROZABA D THAT DESPITE BEST EFFORTS, THE CASE RECORD OF THE ASSESSEE IS NOT TRACEABLE. THERE FORE, FOR WANT OF RETURNS ETC., NECESSARY PROPOSAL FOR REOPENING OF ASSESSMENT COUL D NOT BE FORWARDED. THE ADDL. CIT, RANGE-5, FIROZABAD, THEREAFTER VIDE HIS LETTER DATED 21.03.2006 DIRECTED THE AO TO SEND NECESSARY PROPOSAL IN PROPER FORM FOR SA NCTION TO ISSUE NOTICE U/S. 148. THEREAFTER, NOTHING HAPPENED, BUT THE AO ISSUED LET TERS TO THE ASSESSEE ASKING INFORMATION ABOUT THE GIFTS FOR ASSESSMENT YEAR UND ER APPEAL, BUT IT WAS NOT CLARIFIED UNDER WHICH PROVISIONS THOSE LETTERS WERE ISSUED TO THE ASSESSEE. THEREAFTER, PROPOSAL WAS SENT WHICH WAS NOT TAKEN C ARE OF AND FRESH PROPOSAL WAS ISSUED, ON WHICH APPROVAL WAS GRANTED FOR INITIATIN G RE-ASSESSMENT PROCEEDINGS. THE ASSESSEE, THEREFORE, SUBMITTED THAT THE REASONS WITH REGARD TO ESCAPEMENT OF INCOME WERE RECORDED WITHOUT GOING THROUGH THE CASE RECORD OF THE ASSESSEE. THERE WAS NO MATERIAL AVAILABLE ON RECORD HAVING LIVE LIN K OR NEXUS WITH THE FORMATION OF BELIEF BY THE AO. RE-ASSESSMENT PROCEEDINGS WERE IN ITIATED TO VERIFY THE GENUINENESS OF THE CREDITS AND SANCTION WAS GRANTED BY THE ADDL. CIT WITHOUT APPLICATION OF MIND. THE ASSESSEE ALSO EXPLAINED TH AT AFFIDAVIT OF THE DONOR AND OTHER RECORDS WERE PRODUCED BEFORE THE AO ALONG WIT H CERTIFICATE OF BANKER OF THE ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 5 DONEE TO ESTABLISH THE GENUINENESS OF THE GIFT. THE ASSESSEE ALSO RELIED UPON SEVERAL DECISIONS IN SUPPORT OF THE CONTENTION THAT THE RE- ASSESSMENT PROCEEDING IS VOID AB INITIO AND SHOULD BE QUASHED IN THE FACTS AND CIRCUMSTANC ES OF THE CASE. THE LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO ON THE SUBMISSIONS OF THE ASSESSEE, WHICH IS ALSO REPRODUCED IN THE APPELLATE ORDER. THE LD. CIT(A), CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL ON RECORD, QUASHED THE REASSESSMENT PROCEEDINGS AND ALLOWED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN APPELLATE ORDER IN PARAS 2.3 TO PARA 4 ARE REPRODUC ED AS UNDER : 2.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER, WR ITTEN SUBMISSION OF THE LD. AR. AND REMAND REPORT OF AO. I HAVE ALSO GONE THROUGH THE CASE RECORDS AND IT IS NOTICED THAT A L ETTER DATED 01.03.2006 WAS WRITTEN BY THE ADDL. CIT, RANGE-5, FIROZABAD DI RECTING THE AO TO TAKE NECESSARY ACTION U/S 148 OF THE ACT. THE LETTE R WRITTEN BY THE ADDL. CIT, RANGE-5, FIROZABAD IS REPRODUCED AS UNDE R: INFORMATION RECEIVED FORM ADDL. DIT (INV.) THAT TH E FOLLOWING PERSONS HAS BEEN RECEIVED GIFT ON THE DATE MENTIONE D AGAINST THEIR NAME. YOU ARE DIRECTED TO TAKE NECESSARY ACTION U/S 148 OF THE ACT. S.NO. NAME & ADDRESS GIFT AMOUNT DATE 1. PREM CHAND AGARWAL, 37, PURANI MANDI, FIROZABAD 5,00,000 30.11.1999 2. PREM CHAND AGARWAL, 37, PURANI MANDI, FIROZABAD 5,00,000 30.11.1999 THERE IS A NOTING ON THIS LETTER WHICH IS SIGNED BY SHRI SANTOSH KUMAR ON 17.03.2006 STATING THAT AFTER BEST OF EFFORTS FI LE IS NOT TRACEABLE. AFTER THE AO THIS HAS WRITTEN A LETTER DATED 17.03. 2006 TO THE ADDL. CIT, RANGE-5, FIROZABAD, THE CONTENTS OF LETTER ARE REPRODUCED AS UNDER: ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 6 KINDLY REFER TO YOUR LETTER F.NO. FICTITIOUS LTCG/ ADL.CIT/R- 5/FZD/05-06 DATED 01.03.2006 FOR TAKING ACTION U/S 148 OF THE IT ACT, 1961 ON ACCOUNT OF GIFTS RECEIVED BY THE ASSESSEE M ENTIONED THEREIN. IN SPITE OF MY BEST EFFORTS THE RETURN OF SHRI PREM CHAND AGARWAL & SHRI RAJESH KUMAR AGARWAL FOR AY. 2000-01 COULD NOT BE TRACED OUT. AS THE MATTER PERTAINING TO AY. 2000-01, YOUR APPRO VAL/SANCTION IS REQUIRED IN BOTH THE CASES FOR INITIATION OF ACTION U/S 148. FOR WANT OF RETURNS NECESSARY PROPOSAL AS REQUIRED COULD NOT BE FORWARDED TO YOU AND THEREFORE, I MAY KINDLY BE DIR ECTED ACCORDINGLY. ON RECEIPT OF THIS LETTER THE ADDL. CIT, RANGE-5, F IROZABAD VIDE HIS LETTER DATED 21.03.2006 WROTE TO THE AO STATING THA T IN THIS CONNECTION, YOU ARE DIRECTED TO SEND NECESSARY PROP OSAL IN PROPER FORM FOR SANCTION OF ISSUING NOTICE U/S 148 OF THE ACT. THEREAFTER, THE AO HAS WRITTEN A LETTER DATED 14.02.2006 TO THE ASS ESSEE ASKING HIM AS TO WHETHER THE GIFTS OF RS. 10 LACS HAS BEEN REFLEC TED IN THE RETURN FILED OR NOT. THE AO FURTHER ASKED THE ASSESSEE TO FURNISH THE COPY OF RETURN FILED ALONGWITH ANNEXURES OF RETURN AND ACKN OWLEDGEMENT OF THE SAME. IT WAS ALSO PROPOSED BY THE AO THAT IF TH E GIFT WAS NOT REFLECTED IN THE RETURN FILED THEN AS TO WHY THE AC TION U/S 147148 SHOULD NOT BE TAKEN. ANOTHER LETTER DATED 07.04.200 6 WAS WRITTEN BY THE AO TO ASSESSEE ASKING ABOUT THE GIFTS ON THE FO LLOWING POINTS: (I) WHETHER YOU ARE ASSESSED TO TAX/PAN (II) IF YOU HAVE FILED AN INCOME-TAX RETURN, PLEASE FURN ISH THE PHOTOCOPY OF THE ACKNOWLEDGEMENT ALONGWITH THE ANNEXURES FILED WITH THE INCOME-TAX RETURN. (III) IF YOUR ASSESSMENT FOR AY. 2000-01 HAS BEEN COMPLET ED, PLEASE FURNISH A PHOTOCOPY OF THE SAME. FROM THE RECORDS IT IS SEEN THAT A LETTER DATED 19. 03.2007 HAS BEEN WRITTEN TO AO FROM THE OFFICE OF ADDL. CIT, RANGE-5 , FIROZABAD STATING THAT THE PROPOSAL SUBMITTED BY HIM IS RETUR NED IN ORIGINAL AND TO SUBMIT FRESH PROPOSAL AS DISCUSSED WITH THE ADDL . CIT, RANGE-5, FIROZABAD. THIS LETTER HAS BEEN RECEIVED IN THE AO S OFFICE ON ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 7 21.03.2007 AS PER NOTING ON THIS LETTER. HOWEVER, T HE APPROVAL FOR INITIATION OF ISSUING NOTICE U/S 148 HAS BEEN ACCOR DED BY THE ADDL. CIT, RANGE-5, FIROZABAD ON 19.03.2007 BY STATING TH AT YES, I AM SATISFIED AND ACCORDINGLY NOTICE U/S 148 WAS ISSUE D ON 23.03.2007. FROM THE FOREGOING, IT IS VERY CLEAR THAT THE CASE RECORDS OF THE ASSESSEE FOR THE AY. 2000-01 WERE NOT IN THE POSSES SION OF THE AO. IN THE LETTER WRITTEN TO THE AO BY THE ADDL. CIT ON 01 .03.2006 IT IS SIMPLY STATED THAT INFORMATION HAS BEEN RECEIVED FR OM THE ADDL. DIT (INV.), AGRA THAT SOME OF THE PERSONS AS MENTIONED IN THE LETTER HAVE RECEIVED GIFTS WHEREIN THE NAME OF THE APPELLANT IS ALSO MENTIONED. AS PER THIS LETTER AO HAS BEEN DIRECTED TO TAKE NECESS ARY ACTION U/S 148 OF THE ACT. IT IS NOT CLEAR EVEN AFTER GOING THROUGH T HE RECORDS AS TO WHICH INFORMATION WAS AVAILABLE AT THE TIME OF INITIATION OF PROCEEDING U/S 147/148 OF THE ACT WITH THE AO TO FORM A BELIEF THA T THE GIFT RECEIVED BY THE ASSESSEE WAS NOT GENUINE. THE AO HAD WRITTEN TWO LETTERS DATED 14.02.2006 & 07.04.2006 ASKING THE ASSESSEE TO GIVE ASSESSMENT PARTICULARS AND DETAILS OF THE GIFTS. THESE TWO LET TERS WRITTEN BY THE AO ARE NOT ISSUED UNDER ANY PROVISION OF THE ACT AND I AGREE WITH THE LD. AR THAT THE ASSESSEE WAS LEGALLY REQUIRED TO RESPON D TO THEM. IF THE AO WANTED TO GATHER SOME INFORMATION FROM THE ASSES SEE THEN HE SHOULD HAVE RESORTED TO PROVISIONS OF SEC. 133 (6) OF THE ACT AFTER TAKING APPROVAL FROM THE COMPETENT AUTHORITY. THE R EASON RECORDED FOR ISSUING OF NOTICE U/S 148 ARE REPRODUCED AS UNDER: SHRI SANJAY MOHAN AGARWAL R/O. DELHI HAD MADE GIF T TO SHRI PREM CHAND AGRAWAL, 37, PURANI MANDI, FIROZABAD THROUGH DD NO. 814803 AND 814804 ON 30.11.1999 AMOUNTING TO RS. 5, 00,000/- EACH. THESE DDS DEPOSITED IN HIS ACCOUNT NO. 4391 IN OBC, FIROZABAD RELEVANT TO ASSTT. YEAR 2000-2001. THE ASSESSEE WAS REQUIRED TO GIVE PROPER JUSTIFICATION ON THE FOLLOWING POINTS VIDE T HIS OFFICE LETTER DATED 14.02.2006 AND 07.04.2006. 1. GENUINENESS OF THE TRANSACTION. 2. CREDITWORTHINESS OF THE GIFT. 3. IDENTITY OF THE DONORS THE ASSESSEE WAS ALSO REQUIRED TO FURNISH TO FURNIS H HIS PAN NO. AND RELEVANT PAPERS FILED ALONGWITH THE RETURN FOR ASST T. YEAR 2000-2001. THE ASSESSEE FAILED TO COMPLY BOTH THE LETTERS REFE RRED ABOVE. IT IS THE ONUS LIES UPON THE ASSESSEE TO JUSTIFY THE GIFTS ON THE ABOVE POINTS. THUS, I HAVE REASON TO BELIEVE THAT THE INCOME OF R S. 10,00,000/- HAS ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 8 ESCAPED ASSESSMENT FOR ASSESSMENT YEAR 2000-2001 WI THIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT, 1961. I ISSUED NOTICE U/S 148 WITHIN THE PROVISION OF SECTION 151 (2) OF THE I.T. ACT, 1961. A BARE READING OF THE REASON RECORDED CLEARLY REVEA LS THAT THERE WAS NO MATERIAL/INFORMATION AVAILABLE WITH THE AO C OME TO A GENUINE BELIEF THAT INCOME CHARGEABLE HAS ESCAPED ASSESSMEN T. INFACT THE AO HAD BEEN TRYING TO SOLICIT THE INFORMATION FROM THE ASSESSEE ABOUT THE GENUINENESS OF THE GIFTS. THE AO HAD NO CREDIBLE IN FORMATION TO COME TO A TENTATIVE FINDING THAT GIFT CLAIMED TO HAVE BE EN RECEIVED BY THE ASSESSEE IS BOGUS. AFTER GOING THROUGH THE FACTS OF THE CASE, I AM OF THE OPINION THAT THERE WAS NO SPECIFIC, RELIABLE AND DEFINITE M ATERIAL AVAILABLE WITH THE AO TO INITIATE REASSESSMENT PROCEEDINGS. NO COG ENT MATERIAL HAS BEEN RELIED UPON BY THE AO TO COME TO A TENTATIVE C ONCLUSION THAT THE AMOUNT RECEIVED BY THE ASSESSEE WAS UNEXPLAINED. IT IS WELL SETTLED POSITION OF LAW THAT NOT ANY AND EVERY MATERIAL, HO WSOEVER VAGUE AND INDEFINITE OR DISTANT WOULD WARRANT FORMATION OF TH E BELIEF RELATING TO ESCAPEMENT OF INCOME FROM ASSESSMENT. IN THE CASE O F GANGA SARAN & SONS (P) LTD. VS. ITO 130 ITR 1 (SC) THE APEX COURT HELD THAT BELIEF OF THE ASSESSING AUTHORITY IS MANDATORY IN RESPECT OF ESCAPEMENT OF INCOME. THE BELIEF ENTERTAINED BY THE AO MUST NOT B E ARBITRARY OR IRRATIONAL. IT MUST BE REASONABLE. IN OTHER WORDS, IT MUST BE BASED ON REASONS WHICH ARE RELEVANT AND MATERIAL. IN THE APP ELLANTS CASE THE APPELLANT HAS ACTED MERELY ON THE BASIS OF INFORMAT ION RECEIVED FROM INVESTIGATION WING WHICH IS VAGUE AND NON-SPECIFIC. EVEN THE ADDL. COMMISSIONER OF INCOME-TAX, RANGE-5, FIROZABAD WHO HAS GIVEN APPROVAL FOR ISSUING NOTICE U/S 148 WHILE RECORDING HIS SATISFACTION HAS SIMPLY WRITTEN YES, I AM SATISFIED. INSPECTORS R EPORT AS MENTIONED BY THE AO IN THE ORDER IT SEEMS WAS NOT IN THE POSS ESSION OF THE AO AT THE TIME OF RECORDING OF REASONS FOR REOPENING THE ASSESSMENT OTHERWISE IT SHOULD HAVE FOUND A MENTION IN THE REA SONS RECORDED. IN VIEW OF THE FOREGOING DISCUSSION, I AM OF THE OPINI ON THAT THE REASONS RECORDED BY THE AO FOR TAKING ACTION U/S 147 R.W.S. 148 ARE NOT VALID TO JUSTIFY THE INITIATION OF REASSESSMENT PROCEEDIN GS. THE AO AHS ALSO MENTIONED INCOME-TAX INSPECTORS RE PORT WHICH IS REPRODUCED IN THE BODY OF ASSESSMENT ORDER FOR COMING TO THE CONCLUSION THAT THE GIFTS RECEIVED BY THE ASSESSEE WERE NOT GENUINE. THE LD. AR VIDE HIS WRITTEN SUBMISSION WITH REGARD TO INSPECTORS REPORT SUBMITTED AS UNDER: ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 9 3.2. SIR, AT PAGE 2 OF THE ORDER, THE LEARNED AO H AD DISCUSSED ABOUT SOME REPORT BY THE INSPECTOR OF THE OFFICE. THIS RE PORT WAS NEVER CONFRONTED TO THE APPELLANT. SIR, IN FACT, NO SUCH ENQUIRY WAS EVER CONFRONTED IN THE CASE OF THE APPELLANT AT ANY TIME BY THE ITI OF INCOME-TAX OFFICE, WORD 5(3), FIROZABAD. WHAT HAS H APPENED THAT AN ENQUIRY WAS GOT CONDUCTED BY THE INCOME-TAX OFFICER , 5(2), FIROZABAD THROUGH ITI MOHD. ZAKI KHAN IN THE CASE OF VIJAY KUMAR RANIWALA. THE ITI GAVE HIS REPORT IN THE CASE OF VIJAY KUMAR RANIWALA. AND THAT REPORT HAS BEEN REPRODUCED HEREBY THE LEAR NED AO JUST TO SUBSTANTIATE HIS ACTION OF MAKING THE AD DITION. SIR, BY FILING THE PHOTOCOPY OF THE ASSESSMENT ORDER FOR ASSESSMEN T YEAR 1994-95 AND 2000-01 OF THE DONOR, THE ALLEGED REPORT OF THE ITI IS PROVED AS BASELESS AND FAR AWAY FROM TRUTH. SIR, FROM THE ASS ESSMENT ORDER FOR ASSESSMENT YEAR 2000-01 ITSELF, IT IS SEEN THAT THE DONOR WAS HAVING NUMBER OF PROPERTIES, FLAT AT NAINITAL, FLAT AT DWA RKA, SHOP AT SUSHANT LOK. HE WAS HAVING CARS ALSO. CASH OF RS. 5,000/- W AS DEPOSITED BY THE DONOR ONLY ON 30/11/1999, THE DATE OF INSURANCE OF DRAFT IN QUESTION. SIR, THE CREDITWORTHINESS OF THE DONOR HA D ALREADY BEEN EXPLAINED TO YOU IN APPEAL NO. CIT(A)-II/AGRA/179 A ND THE SAME ARGUMENT WAS ACCEPTED BY YOUR HONOR AND ADDITION SO MADE WAS DELETED. IN THE REMAND REPORT SENT BY THE AO, REGARDING CONT ENTION OF THE LD. AR THE AO HAS SIMPLY STATED AS UNDER: PARA 3.2. THE CONTENT OF SUB-PARA 3.2 OF THE PARA 3 OF THE ASSESSEE IS NOT ACCEPTED AND FACTS MENTIONED BY THE AO IN ASSES SMENT ORDER AT PAGE NO. 2 IS JUSTIFIED AND ACCORDING TO LAW. FORM THE ABOVE FACTS, IT IS VERY CLEAR THAT THIS EN QUIRY WAS NOT CONDUCTED BY THE AO BEFORE INITIATION OF PROCEEDING S U/S 147/148 OF THE ACT OTHERWISE IT SHOULD HAVE FOUND MENTION IN T HE REASONS RECORDED, THEREFORE, I HOLD THAT THERE WAS NO INFOR MATION/MATERIAL AVAILABLE WITH THE AO TO JUSTIFY THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND ISSUANCE OF NOTICE U/S 148 OF THE AC T. ACCORDINGLY I QUASH THE REASSESSMENT ORDER FRAMED BY THE AO. GROU NDS ARE ALLOWED. 3. AS THE ASSESSMENT FRAMED BY THE AO HAS BEEN ANNU LLED BY THE UNDERSIGNED, HENCE IT IS NOT CONSIDERED NECESSARY T O ADJUDICATE OTHER GROUNDS OF APPEAL RAISED BY THE APPELLANT. ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 10 4. IN THE RESULT, APPEAL IS ALLOWED. 4. THE LD. DR MERELY RELIED UPON THE ORDER OF THE A O. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISS IONS MADE BEFORE THE LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. THE LD. CIT(A), CONSIDERING THE MATERIAL BEFORE HIM AND SUBMISSIONS OF THE ASSESSEE SPECIFICALLY FOUND THAT IT IS THE ADDL. CIT, RANGE-5, FIROZABAD WHO HAS DIRECTED THE AO TO INITIATE ACTIO N U/S. 148 OF THE ACT, DESPITE THE FACT THAT THE CASE RECORD WITH THE ASSESSING OFFICE R WAS NOT TRACEABLE. THE ADDL. CIT WAS INSISTING FOR REOPENING OF THE ASSESSMENT. THUS, THE AO DID NOT HAVE ANY OCCASION TO GO THROUGH THE RECORD OF THE CASE AND F URTHER NO SPECIFIC INFORMATION WAS AVAILABLE WITH THE AO TO FORM HIS BELIEF THAT T HE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE AO, THEREAFTER, ASKED THE A SSESSEE TO PRODUCE THE DETAILS OF THE GIFT PRIOR TO REOPENING OF THE ASSESSMENT. T HUS, IN THE ABSENCE OF ANY REPLY, THE AO WANTED TO MAKE ROVING ENQUIRY WITH REGARD TO THE GIFTS AND ISSUED NOTICE U/S. 148. IT WOULD, THEREFORE, CLEARLY SHOW THAT TH ERE WAS NO MATERIAL INFORMATION AVAILABLE WITH THE AO TO COME TO A GENUINE BELIEF T HAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN FACT, THE AO WANTED TO G ET INFORMATION FROM THE ASSESSEE HIMSELF REGARDING THE GIFTS. THUS, THERE W AS NO SPECIFIC, RELIABLE AND DEFINITE MATERIAL AVAILABLE WITH THE AO TO INITIATE RE-ASSESSMENT PROCEEDINGS. SUCH ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 11 A COURSE ADOPTED BY THE AO AT THE INSTANCE OF ADDL. CIT IS CLEARLY UNJUSTIFIED UNDER LAW. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ATUL JAIN, 229 ITR 383 HELD THAT REOPENING ON THE BASIS OF VAGUE INFORMATI ON WITHOUT RECORDING REASONS AS REQUIRED BY SECTION 148 WAS INVALID. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SMT. PARAMJIT KAUR, 311 ITR 38 HELD THAT THE AO CANNOT ACT ON THE BASIS OF WHIMS AND FANCY AND THE EXISTENCE OF MATER IAL MUST BE REAL. WHATEVER VAGUE INFORMATION WAS WITH THE AO, THE SAME WAS NOT VERIFIED BY THE AO BEFORE RECORDING THE REASONS FOR REOPENING OF THE ASSESSME NT. HONBLE SUPREME COURT IN THE CASE OF CIT VS. GREEN WORLD CORPORATION, 314 IT R 81 HELD THAT ORDER PASSED BY THE ASSESSING OFFICER AT THE DICTATES OF COMMISS IONER NULLITY NOTICE FOR RE- ASSESSMENT ASSESSMENT ORDER HELD TO BE NULLITY. THERE WAS NO MATERIAL WITH THE AO TO PRIMA FACIE PROVE THAT THERE IS ESCAPEMENT OF INCOME. THE AO MERELY ON THE DICTATES OF ADDL. CIT PRESUMED THAT INCOME CHARGEAB LE TO TAX HAS ESCAPED ASSESSMENT AND INITIATED THE PROCEEDINGS U/S. 147 O F THE ACT FOR THE PURPOSE OF MAKING ROVING AND FISHING ENQUIRY, WHICH IS NOT PER MISSIBLE IN THE PROCEEDINGS U/S. 148 OF THE IT ACT. THE AO, THEREFORE, ACTED ONLY ON THE BASIS OF SUSPICION AND IT COULD NOT BE SAID THAT IT WAS BASED ON THE BELIEF T HAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THE AO HAD TO ACT ON HIS OW N ON THE BASIS OF THE MATERIAL BEFORE HIM ON REASON TO BELIEVE AND NOT ON THE REAS ON TO SUSPECT OR AT THE DICTATES OF THE SR. OFFICERS. THE LD. CIT(A), THEREFORE, ON PROPER APPRECIATION OF FACTS AND MATERIAL ON RECORD, RIGHTLY QUASHED THE RE-ASSESSME NT PROCEEDINGS. THE LD. DR ITA NO. 340/AGRA/2011 & C.O. NO. 19/AGRA/2012 12 MERELY RELIED UPON THE ORDER OF THE AO AND HAS NOT POINTED OUT ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). WE, THEREFORE, DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. THE SAME IS, ACCORDINGLY, DISMISSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY