Income-tax Officer, Nanded V. Shri Narayan Pandurang Lute, Nanded

ITA 1021/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9697 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 11-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: S N DOSHI
• Keywords: Income from undisclosed sources
• Section: 143(3); 142(1); 68; 148

Judgement Text

N THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1021/PN/2011 (ASSTT. YEAR : 2005-06) INCOME-TAX OFFICER, APPELLANT WARD-3(1), PARMAR COMPLEX, BAFNA T-POINT, HYDERABAD ROAD, DIST : NANDED V. SHRI NARAYAN PANDURANG LUTE RESPONDENT AT/POST: ASARJAN DIST. NANDED PAN: ADGPL4959E ITA NO. 1022/PN/2011 (ASSTT. YEAR : 2005-06) INCOME-TAX OFFICER, APPELLANT WARD-3(1), PARMAR COMPLEX, BAFNA T-POINT, HYDERABAD ROAD, DIST : NANDED V. SHRI SHIVAJI PANDURANG LUTE RESPONDENT AT/POST: ASARJAN DIST. NANDED PAN : ADKPL9208Q ITA NO. 1023/PN/2011 (ASSTT. YEAR : 2 005-06) INCOME-TAX OFFICER, APPELLANT WARD-3(1), PARMAR COMPLEX, BAFNA T-POINT, HYDERABAD ROAD, DIST : NANDED V. SHRI PANDIT PANDURANG LUTE RESPONDENT AT/POST: ASARJAN DIST. NANDED PAN: ADGPL4960R APPELLANT BY : MS. ANN KAPTHUAMA RESPONDENT BY : SHRI S.N . DOSHI DATE OF HEARING : 6/9/12 DATE OF PRONOUNCEMENT : 12- 9-12 O R D E R 2 ITA NOS. 1021 TO 1023/PN/2011 NARAYAN PANDURANG LUTE ETC. A.Y. 2005-06 PER BENCH THIS BATCH OF THREE APPEALS ARE FILED BY THE REVEN UE CHALLENGING THE IMPUGNED ORDERS OF THE LD CIT(A), AURANGABAD DATED 23.5.2011 FOR THE A.Y. 2005-06. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS WHICH ARE COMMON IN ALL THESE APPEALS, READ AS UNDE R : 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE & IN THE LAWS, THE HONBLE CIT(A) HAS FAILED TO CONSIDER THE PROVISION OF SECTION 139(4), AS PER PROVISION, ANY PERSON WHO HA S NOT FURNISH RETURN OF INCOME U/S 139(1) OR WITHIN THE TIME LIMI T ALLOWED U/S 142(1), CAN FURNISH THE RETURN OF INCOME FOR ANY PR EVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, AO CAN ISSUE THE NOTIC E U/S 142(1) TO ANY ASSESSEE WHO HAS NOT FILED HIS RETURN OF INCOME . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT APPEAL IGNORED THE FACT THAT THE AO PROVED THE DOCU MENTS FURNISHED BY THE ASSESSEE ARE FABRICATED, THEN THE ONLY LOGIC AL CONCLUSION THAT CAN BE DRAWN IS THAT THE WHOLE TRANSACTION IS A SHA M TRANSACTION AND THE ASSESSEE TRIED TO INTRODUCED HIS UNDISCLOSE D INCOME AS AGRICULTURE INCOME RECEIVED FROM HIS FATHER. 2. THE FACTS WHICH REVEAL FROM THE RECORD ARE AS UN DER. THE ASSESSEES ARE THE INDIVIDUALS. ON THE BASIS OF THE INFORMAT ION RECEIVED AS PER AIR U/S 285BA OF THE ACT, THE A.O ISSUED NOTICES U/S. 1 42(1) TO THESE ASSESSEES CALLING FOR THE RETURN OF INCOME FOR A.Y. 2005-06. ALL THE ASSESSEES FILED THE RETURN OF INCOME ON 17.10.2007 DECLARING NIL TAXABLE INCOME AND DECLARED THE AGRICULTURAL INCOME. THE A .O. COMPLETED ASSESSMENT U/S. 143(3) BY MAKING THE ADDITIONS U/S. 68 IN ALL THESE ASSESSEES AS UNDER : NAME OF THE ASSESSEE ADDITIONS I) SHRI NARAYAN PANDURANG LUTE RS.10,00,000/- II) SHIVAJI PANDURANG LUTE RS.10,00,000/- III) PANDIT PANDURANG LUTE RS.10,00,000/- 3. THE A.O. EXAMINED S.B. A/C. OF ALL ASSESSEES MAI NTAINED WITH THE CENTRAL BANK OF INDIA, ASARJAN AND IT WAS NOTICED T HAT ALL THESE THREE ASSESSEES HAVE MADE THE CASH DEPOSITS IN THE SAID A CCOUNT BY THE TWO INSTALLMENTS OF RS. 5,00,000/- ON 15.6.2004 AND 1.1 1.2004 RESPECTIVELY. ALL THESE ASSESSEES ARE THE MEMBERS OF THE LUTE FAM ILY. THE ASSESSEES STATED THAT THEY HAVE RECEIVED THE AMOUNT FROM THEI R FATHER SHRI PANDURANG SADASHIV LUTE AND SUBMITTED THE PARTITION DEED DATED 3 ITA NOS. 1021 TO 1023/PN/2011 NARAYAN PANDURANG LUTE ETC. A.Y. 2005-06 15.4.2004 WHICH WAS IN MARATHI. THE A.O HAS REPRO DUCED THE TRANSLATION OF THE PARTITION DEED IN HIS ASSESSMENT ORDER. THE A.O DECLINED TO TAKE THE COGNIZANCE OF THE SAID PARTITION DEED BY GIVING REASON THAT THE SAID PARTITION DEED WAS NOT REGISTERED NOR IT WAS NOTARI ZED. THE A.O ALSO REJECTED THE CLAIM IN THE PARTITION DEED THAT SHRI PANDURANG S LUTE, FATHER OF THESE ASSESSEES WAS HAVING RS. 55,00,000/- AT HO ME IN CASH. THE A.O. MADE THE ADDITION OF RS. 10,00,000/- IN HANDS OF EACH ASSESSEE TO THE EXTENT OF CASH DEPOSITED IN THEIR BANK A/CS. A LL THE THREE ASSESSEES CHALLENGED THE ADDITION BEFORE THE LD CIT(A). THE ASSESSEES CHALLENGED THE ADDITION ON MERIT AS WELL AS BY RAISING THE LEG AL GROUND ON THE ISSUE OF NOTICE U/S. 142(1). SO FAR AS THE ISSUE ON THE MERIT IS CONCERNED, THE LD CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE CASH DEPOSITED IN THE BANK A/C. IS A SOURCE OUT OF AGRICULTURAL INCOM E AND CANNOT BE TREATED FROM THE UNDISCLOSED INCOME AS ADMITTEDLY NO OTHER ACTIVITIES OF THESE ASSESSEES ARE FOUND. THE OPERATIVE PART OF THE ORD ER OF THE LD CIT(A) IS AS UNDER : 8.1 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, ORDER OF THE A.O., SUBMISSIONS OF THE APPELLANT, REMAND REPORT OF THE AO, COMMENTS OF THE APPELLANT ON THE REMAND REPORT AND RELEVANT EVIDEN CE ON RECORD. IT IS OBSERVED THAT THE INFORMATION COLLECTED BY THE APPE LLANT ALSO DID NOT REVEAL ANY OTHER SOURCE OF INCOME OTHER THAN FROM AGRICULTURAL ACTIVITIES FOR THE APPELLANT AND HIS FAMILY. IT IS ALSO NOT D ISPUTED BY THE AO THAT THE APPELLANT AND HIS FAMILY ARE ENGAGED IN AGRICULTURA L ACTIVITIES. IT IS WORTHWHILE TO NOTE THE DECISION IN THE CASE OF ITO VS. SOU. SUSHMA PRAFULLA PATIL ITA NO. 1000/PN/2009 WHEREIN THE HO NABLE ITAT, PUNE HAS HELD THAT WHEN THE REVENUE AUTHORITIES HAVE NOT DIS PUTED THE AGRICULTURAL ACTIVITY CARRIED OUT BY THE ASSESSEE AND THERE IS N OTHING ON RECORD TO SUGGEST THAT THE ASSESSEE HAS ANY OTHER SOURCE OF I NCOME OTHER THAN THE AGRICULTURAL INCOME, IT IS BOUND THAT THE CASH DEPO SITED IN THE BANK IS SOURCES OUT OF AGRICULTURAL INCOME AND THE SAME C ANNOT BE TREATED AS INCOME FROM UNDISCLOSED SOURCES. THE DECISION IS D IRECTLY APPLICABLE TO THE CASE OF THE APPELLANT AS THE FACTS OF THE DECID ED CASE ARE SIMILAR TO THE FACTS OF THE APPELLANTS CASE. CONSIDERING THE ABOVE FACTS AND PARTICULARLY FOLLOWING THE JUDGEMENT OF THE HONABL E JURISDICTIONAL ITAT, THE CLAIM OF THE APPELLANT IS ACCEPTED. GROUND NO. 3 ALTERNATIVELY RAISED IS ALLOWED. 4 ITA NOS. 1021 TO 1023/PN/2011 NARAYAN PANDURANG LUTE ETC. A.Y. 2005-06 4. THE LD. CIT(A) ALSO HELD THAT THE NOTICES ISSUED U/S. 142(1) WERE INVALID. THE OPERATIVE PART OF THE FINDINGS OF THE LD CIT(A) WHICH ARE COMMON IN ALL THE CASES IS AS UNDER : 9.1 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ORDER OF THE A.O., SUBMISSIONS OF THE APPELLANT, ADDITIONAL INFO RMATION BY THE AO AND RELEVANT EVIDENCE ON RECORD. ON PERUSAL OF THE SAM E, IT IS OBSERVED THAT THE DECISION IN THE CASE LAW RELIED BY THE APPELLAN T IS SQUARELY APPLICABLE TO THE CASE OF THE APPELLANT. THE DECISION HAS HIG HLIGHTED THAT IN THE CASE WHERE NO VOLUNTARY VALID RETURN HAS BEEN FILED AND NO NOTICE U/S 142(1) HAS BEEN ISSUED BEFORE THE END OF THE ASSESS MENT YEAR, THE INCOME IN QUESTION BECOMES INCOME ESCAPING ASSESS MENT AND IN ORDER TO BRING SUCH INCOME TO TAX, NOTICE U/S 148 IS A MU ST. THE HONBLE ITAT, KOLKATA HAS HELD THAT THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 142(1) IS ONE YEAR FROM THE END OF THE ASSESSMENT YEAR. IN THE CASE OF THE APPELLANT, NO VALID RETURN OF INCOME IS FILED BY TH E APPELLANT, NOTICE U/S 142(1) IS ISSUED BEYOND THE PRESCRIBED TIME LIMIT A ND NO NOTICE U/S 148 HAS BEEN ISSUED. CONSIDERING THE ABOVE FACTS AND R ESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE ITAT, KOLKATA, THE NOTI CE ISSUED U/S 142(1) IS INVALID AND CONSEQUENTLY THE ASSESSMENT FRAMED THER ETO IS VOID AND BAD IN LAW. GROUND NO. 4 IS ALLOWED. NOW THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . SO FAR AS THE VALIDITY OF THE NOTICE ISSUED U/S. 142(1) IS CONCER NED, WE FIND THAT THE A.O ISSUED THE NOTICES TO THESE ASSESSEES ON 27.8.2007 CALLING FOR THE RETURNS OF INCOME FOR THE A.Y. 2005-06. IN THE CASE OF SH AH WALLACE & CO. LTD. (SUPRA), THE ITAT KOLKATA BENCH HAS CONSIDERED THE TIME LIMIT FOR THE ISSUING THE NOTICE U/S. 142(1) AND HELD THAT THE IS SUANCE OF NOTICE U/S. 142(1) AFTER THE END OF THE ASSESSMENT YEAR IN THE ABSENCE OF ANY RETURN BY THE ASSESSEE CANNOT GIVE RISE TO VALID PROCEEDIN GS UNDER THE ACT. IT IS FURTHER HELD THAT AFTER END OF THE ASSESSMENT YEAR, INCOME CAN BE ASSESSED ONLY AFTER THE ISSUANCE OF NOTICE U/S. 148 . WE FIND THAT ISSUE NO.1 IN THIS CASE IS DIRECTLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION IN THE CASE OF SHAW WALLACE & CO. LTD. (S UPRA). WE, ACCORDINGLY, CONFIRM THE ORDER OF LD CIT(A) ON THE ISSUE OF VALIDITY OF NOTICE U/S. 142(1) AND GROUND NO. 1 IS DISMISSED. 6. SO FAR AS GROUND NO. 2 IS CONCERNED, WE FIND THA T NOTHING HAS BEEN BROUGHT ON RECORD BY THE A.O TO SHOW THAT THESE ASS ESSEES WERE INDULGED 5 ITA NOS. 1021 TO 1023/PN/2011 NARAYAN PANDURANG LUTE ETC. A.Y. 2005-06 INTO SOME OTHER ACTIVITIES THAN AGRICULTURE. WE FU RTHER FIND IN THIS CASE THAT THE FATHER OF THESE ASSESSEES HAS CLAIMED THAT HE EFFECTED THE PARTITION AND DISTRIBUTED THE MONEY & ASSETS TO HI S CHILDREN. THE A.O. REJECTED THE CONTENTION OF THE ASSESSEES BY GIVING THE REASON THAT THE PARTITION DEED IS NOT REGISTERED. IN OUR OPINION, SHRI PANDURANG SADASHIV LUTE EFFECTED THE PARTITION BY CONVENTIONAL WAY. MOREOVER, WE FIND THAT IN THE PARTITION DEED, MORE NO DETAILS OF THE IMMO VABLE PROPERTIES ARE GIVEN, BUT ONLY GENERAL AVERMENT IS MADE WHICH IS I N THE NATURE OF MEMORANDUM OF PARTITION. WE ALSO FIND THAT THE LD C IT(A) HAS MADE CATEGORICAL OBSERVATION THAT THE A.O HAS NOT DISPUT ED THAT THESE ASSESSEES ARE ENGAGED IN AGRICULTURAL ACTIVITIES. IN OUR OPINION, THE VIEW TAKEN BY THE LD CIT(A) ON MERIT IS ALSO CORRECT AND WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD CIT(A) ON MERIT. ACCORDINGLY, GROUND NO. 2 IS DISMISSED. 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER 2012. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 12TH SEPTEMBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT, AURANGABAD 4. THE CIT(A), AURANAGABAD 5. THE D.R. A BENCH, PUNE 6. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE