ITO, WD-59(1), KOLKATA, Kolkata V. George Thomas, Kolkata

ITA 1014/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1728 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Department
• Bench Allotted: SMC
• Next Hearing Date: 11-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 12-05-2016
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Opportunity of being heard; Additional evidence
• Section: 142(1); 148

Judgement Text

I.T.A. NO. 1014/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1014/KOL/ 2016 ASSESSMENT YEAR: 2008-2009 INCOME TAX OFFICER,................................ ..................................APPELLANT WARD-59(1), KOLKATA, 169, A.J.C. BOSE ROAD, KOLKATA-700 014 -VS.- GEORGE THOMAS,..................................... ...........................RESPONDENT 60, KARUMATH APPART, COIMBATORE-638 659, TAMILNADU, INDIA [PAN: AFEPT 0339 J] APPEARANCES BY: SHRI PINAKI MUKHERJEE, JCIT, D.R., FOR THE DEPARTME NT N O N E, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : MAY 11, 2017 DATE OF PRONOUNCING THE ORDER : MAY 19, 2017 O R D E R PER SHRI P.M. JAGTAP, A.M. .: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLKATA DATED 18.02.2016. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS A STAFF MEMBER OF ST. LAWRANCE HIGH SCHOOL. AS PER THE INFORMATION RECEIV ED BY THE ASSESSING OFFICER, THE ASESSEE HAD MADE CASH DEPOSITS OF RS.11,55,499/- IN HIS ACCOUNT WITH ICICI BANK AND HAD ALSO MADE INVESTMENT OF RS.20,00,000/- IN MUTUA L FUND AND EXPENDED A TOTAL SUM OF RS.2,21,370/- THROUGH HIS HDFC CREDIT CARD. SINC E NO RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE, A NO TICE UNDER SECTION 148 WAS ISSUED BY THE ASSESSING OFFICER, WHICH WAS SERVED ON 07.06.20 11 THROUGH AFFIXATION. THERE WAS, HOWEVER, NO COMPLIANCE ON THE PART OF THE ASSESSEE TO THE SAID NOTICE AS WELL AS THE SUBSEQUENT NOTICE ISSUED BY THE ASSESSING OFFICER U NDER SECTION 142(1) DURING THE I.T.A. NO. 1014/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 5 COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFF ICER, THEREFORE, WAS LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT EX-PARTE TO THE BEST OF HIS JUDGMENT. IN THE ASSESSMENT SO COMPLETED UNDER SECTION 144/147 VIDE AN ORDER DATED 30.12.2011, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.33,76,869/- AS UNDER:- (I) UNEXPLAINED INVESTMENT MADE IN MUTUAL FUND RS.20,00,000/- (II) CASH DEPOSITS WITH ICICI BANK RS.11,55,499/- (III) UNEXPLAINED EXPENDITURE INCURRED THROUGH HDFC CREDIT CARD RS. 2,21,499/- 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 144/147, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AND THE MATERI AL BROUGHT ON RECORD, THE LD. CIT(APPEALS) DELETED THE ADDITIONS OF RS.20,00,000/ - AND RS.11,55,499/- MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE ON ACCOUNT OF UNEXPLAINED INVESTMENT MADE IN MUTUAL FUND AND UNEXPLAINED CASH DEPOSITS WITH ICICI BANK RESPECTIVELY FOR THE FOLLOWING REASONS GIVEN IN PAR AGRAPH NO. 7 OF HIS IMPUGNED ORDER:- 7. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , SUBMISSIONS OF ASSESSEE AND HIS AR AND THE INFORMATION PROVIDED BY CA LCUTTA PROVINCE OF THE SOCIETY OF JESUS. THERE APPEARS TO BE SOME IRREGU LARITY IN THE HANDLING OF FUNDS OF ST. LAWRENCE HIGH SCHOOL. ASSESSEE HAS SUBMIT TED THAT HE WAS USED BY THE MANAGEMENT OF THE SCHOOL IN THESE FINANCIAL IRR EGULARITIES. HE WAS NOT FULLY AWARE OF THE IMPLICATIONS OF THESE FINANCIA L TRANSACTIONS AND HAD ONLY ACTED AT THE BEHEST OF THE MANAGEMENT OF THE SCHOO L. ON THE OTHER HAND THE CALCUTTA PROVINCE OF THE SOCIETY OF JESUS HAS INFO RMED THAT SRI GEORGE THOMAS HAD COMMITTED SOME IRREGULARITY BUT ULTIMATELY HE WAS MADE TO RETURN THE MONEY TO ST. LAWRENCE HIGH SCHOOL. IT IS VE RY DIFFICULT AT THIS STAGE TO ASCERTAIN WHO IS AT FAULT. WHETHER IT IS SR I GEORGE THOMAS OR THE MANAGEMENT OF ST. LAWRENCE HIGH SCHOOL. HOWEVER, ONE THING IS CERTAIN THAT MONEY BELONG TO ST. LAWRANCE HIGH SCHOOL WHICH MAY HAD BEEN TEMPORARILY DIVERTED BUT ULTIMATELY IT HAS GONE BACK TO ST. LAWRENCE HIGH SCHOOL. THERE IS NOTHING ON RECORD TO SUGGEST THAT SHRI GEROGE THOMAS HAS IN ANY MANNER BEING ABLE TO FULLY SIPHON OF OR UTILI ZED THIS MONEY. HENCE NO INCOME APPEARS TO HAVE ACCRUED IN THE HANDS OF SRI GEO RGE THOMAS. IN THEIR REPLY DATED 26.01.2016, CALCUTTA PROVINCE OF THE SOC IETY OF JESUS HAS INFORMED THAT NOTICE U/S 148 WAS ISSUED TO ST. LAWRE NCE HIGH SCHOOL AND I.T.A. NO. 1014/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 5 ORDER HAS BEEN PASSED IN THAT CASE. THUS ANY IRREGULAR ITY REGARDING THE SOURCE OF CASH DEPOSIT OR ANY OTHER DEPOSIT HAS TO BE LOOKED INTO IN THE HANDS OF ST. LAWRENCE HIGH SCHOOL. SO FAR AS EXPENDITU RE TO CREDIT CARD IS CONCERNED, IT IS NOT CLEAR AS TO WHO WAS THE ACTUAL B ENEFICIARY. UNDER THE CIRCUMSTANCES, IT IS PRESUMED THAT SRI GEORGE THOMAS HAD SPENT THE AMOUNT ON HIS PERSONAL EXPENSES AND THESE COULD NOT HAVE BEE N REFUNDED TO THE ST. LAWRENCE HIGH SCHOOL. HENCE THIS EXPENDITURE OF RS.2,2 1,370/- IS TREATED AS INCOME OF THE ASSESSEE AND ADDITION TO THIS EXTENT IS CONFIRMED. HOWEVER, BALANCE ADDITION OF RS.31,55,499/- IS DELETED FOR T HE REASON MENTIONED ABOVE. HENCE, ADDITION OF RS.2,21,370/- ONLY IS SUS TAINED. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS :- (1) THE LD. CIT (A) HAS ERRED IN ADMITTING AND ACTIN G UPON ADDITIONAL EVIDENCE IN THE FORM OF REPLY RECEIVED FROM CALCUTTA PROVINCE OF SOCIETY OF JESUS & ALSO ON SOME DOCUMENTS WHICH WERE PURPORTED TO HAVE BEEN SUBMITTED TO A.O. AT THE STAGE OF STAY PETI TION FOR COLLECTION OF DEMAND I.E. AFTER THE COMPLETION OF THE ASSESSMEN T PROCEEDINGS. THEREFORE, AS PER LAW ALL THESE CONSTITUTED FRESH EVID ENCE. (2) THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS NOT JUSTIFIED IN GIVING RELIEF OF RS.31,55,499/- BY HOLDING THAT SINCE THE MONEY BELONGED TO ST. LAWRENCE SCHOOL MANAGEMENT AND THIS WAS RETURNED TO THE SCHOOL NO ADDITION WAS CALLED FOR WI THOUT INDEPENDENTLY VERIFYING THE SOURCE OF MONEY AT THE HAN DS OF THE ASSESSEE BY CHECKING/ VERIFYING THE BANK ACCOUNT DETA ILS OF THE ASSESSEE IN WHICH THE DEPOSITS HAVE BEEN MADE/ FROM WHIC H THE INVESTMENTS ARE STATED TO HAVE BEEN MADE. (3) THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN ALLOWING SUCH RELIEF WITHOUT VERIFYING FROM THE ACCOUNTS OF THE SCHOOL AS TO HOW THE MONEY HAD BEEN ACCOUNTED FOR IN IT S BOOKS OF ACCOUNTS AND HOW THE SAME HAD BEEN CONSIDERED FOR COM PUTING TOTAL INCOME OF THE SCHOOL. 5. AT THE TIME OF HEARING FIXED IN THIS CASE ON 11. 05.2017, NONE APPEARED ON BEHALF OF THE ASSESSEE. EVEN THERE WAS NO APPEARANCE ON BE HALF OF THE ASSESSEE AT THE TIME OF HEARING FIXED IN THIS CASE EARLIER ON 29.09.2016, 3 0.11.2016, 11.01.2017 AND 23.02.2017. KEEPING IN VIEW THIS NON-COMPLIANCE ON THE PART OF THE ASSESSEE, THIS APPEAL OF THE I.T.A. NO. 1014/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 5 REVENUE IS BEING DISPOSED OF EX-PARTE QUA THE RESPONDENT-ASSESSMENT AFTER HEARING THE ARGUMENTS OF THE LD. D.R. AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE LD. D.R., RELIEF HAS BEEN GIVEN BY THE LD. CIT(APPEALS) TO THE ASSESSEE BY DELETING THE ADDITIONS OF RS.20,00,000/ - AND RS.11,55,499/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT MADE IN MUTUAL FUNDS AND UNEXPLAINED CASH DEPOSITS WITH ICICI BANK RESPECTIV ELY BY RELYING ON THE CORRESPONDENCE MADE WITH CALCUTTA PROVINCE OF THE S OCIETY OF JESUS, WHO RUNS ST. LAWRANCE HIGH SCHOOL WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO VERIFY THE SAME. AS POINTED OUT BY HIM IN THIS REGARD, THE SAID CORRESPONDENCE WAS NOT EVEN AVAILABLE WHEN THE ASSESSMENT WAS FRAMED BY THE ASS ESSING OFFICER VIDE AN ORDER DATED 30.12.2011 PASSED UNDER SECTION 144/147. AFTER HAVI NG CONSIDERED THE ENTIRE MATERIAL AVAILABLE ON RECORD INCLUDING ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW, I FIND MERIT IN THE CONTENTION OF THE LD. D.R. ACCORDINGLY, I SE T ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THE ISSUES RAISED BY THE REVENUE IN THIS APPEAL AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING T HE SAME AFRESH AFTER VERIFYING THE ADDITIONAL EVIDENCE FILED BY THE ASSESESE FOR THE F IRST TIME BEFORE THE LD. CIT(APPEALS) IN THE FORM OF CORRESPONDENCE WITH CALCUTTA PROVINCE O F THE SOCIETY OF JESUS. NEEDLESS TO OBSERVE THAT THE ASSESSING OFFICER SHALL AFFORD PRO PER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 19, 2017. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 19 TH DAY OF MAY, 2017 COPIES TO : (1) INCOME TAX OFFICER, WARD-59(1), KOLKATA, 169, A.J.C. BOSE ROAD, KOLKATA-700 014 (2) SHRI GEORGE THOMAS, S. DASGUPTA & ASSOCIATES, CA, 1/D, RAM NARAYAN MOTILAL LANE, KOLKATA-700 014 I.T.A. NO. 1014/KOL./2016 ASSESSMENT YEAR: 2008-2009 PAGE 5 OF 5 (3) COMMISSIONER OF INCOME TAX (APPEALS)-18, KOLK ATA; (4) COMMISSIONER OF INCOME TAX ,KOLKAT A (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O. INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.