Shri Ashok P.Patel, Ahmedabad V. The Income tax Officer,Ward-8(4), Ahmedabad

ITA 1073/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9378 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-08-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 08-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: J M SHAH
• Keywords: Set aside
• Section: 142(1); 143(1); 143(2); 148; 132

Judgement Text

IN THE INCOME_TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI H.L.KARWA AND SHRI D.C.AGRAWAL ITA NO.1073/AHD/2009 (ASSESSMENT YEAR : 2001-02 ) ASHOK P. PATEL B-42, SOHAM TOWERS SOMESHWAR-I, SATELITE , AHMEDABAD. VS. INCOME TAX OFFICER WARD 8(4) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.M.SHAH, A.R. RESPONDENT BY : SHRI M.C.PANDIT, D.R. ( (( ( )/ )/)/ )/ ORDER PER KARWA, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF CIT(A)-XIV, AHMEDABAD DATED 18.4.2009 RELATING TO A SSESSMENT YEAR 2001-02. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS: (1) INVALID & BAD NOTICE U/S 148: THE COMMISSIONER OF INCOMETAX (APPEALS) XIV AHMEDABAD ERRED IN NOT ACCEPTING THE CONTENTION THAT ISSUE OF NOT ICE IS BARED BY TIME. (2) INVALID & BAD ORDER: (A) THE CIT(A) ERRED IN NOT ACCEPTING THE CONTENTI ON THAT ORDER PASSED ON THE BASIS OF INFORMATION RECEIVED FROM ANOTHER AO, WITHOUT ALLOWING CROSS EXAMINATION IS INVALID & BAD IN LAW. THE CIT(A) ERRED IN STATING TH AT NO SUCH REQUEST WAS MADE BY APPELLANT BEFORE THE AO. THE APPELLANT SUBMITS THAT DURING EFFECTIVE HEARING ON LY OF 3/7/08 IT WAS DISCUSSED REGARDING NOT ONLY CROSS EXAMINATION BUT ALSO REGARDING ULTIMATE OUTCOME IN T HE CASE OF RAM RAO ADIK INSTITUTE. 2 (B) THE CIT(A) ERRED IN PASSING THE ORDER WITHOUT DEALING WITH THE CONTENTION THAT AO PASSED ORDER ON DIFFERENT FACTS THAN STATED IN REASONS FOR REOPENING IS INVALID & BAD IN LAW. (3) ON MERITS. (A) THE CIT(A) ERRED IN CONFIRMING ADDITION OF RS.3.30.0007- AS UNEXPLAINED PAYMENT OF CAPITATION FEES/DONATION. THE CIT(A) ERRED IN NOT CONSIDERING THE CONTENTION THA T APPELLANT HAS NOT MADE ANY SUCH PAYMENT EXCEPT TUITION FEES. (B) ALTERNATIVELY: THE CIT(A) ERRED HI NOT ACCEPTING THE ALTERNATIVE CONTENTION THAT THERE ARE MORE THAN ENOUGH WITH DRAW LS OVER/ABOVE RS. 190.000 FOR WHICH CREDIT IS GIVEN, TO COVER SAID ALMGED PAYMENT OF CAPITATION FEES/DONATION. (C) THE CIT(A) ERRED HI NOT ACCEPTING THE CONTENT ION THAT ORDER IS PASSED WITHOUT ALLOWING CROSS EXAMINATION OF PE RSON WHO CLAIMED TO HAVE RECEIVED THE AMOUNT AS CAPITATION FEES/DONATION. THE CIT(A) ERRED HI NOT ACCEPTING THE CONTENTION THAT, AO IS DUTY BOUND FOR INFORM THE OUT- CAME OF THE SUCH ALLEGED PAYMENTS IN THE HANDS OF INSTITUTE WHO CLAIMED TO HAVE RECEIVED THE SAME. (D) THE ACTION OF CIT(A) TO CONFIRM THE DISALLOWA NCE WITHOUT APPRECIATING FACTS & CASE LAWS HI ITS RIGHT PERSPE CTIVE IS UNJUSTIFIED & BAD HI LAW. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL AND ASSESSMENT YEAR INVOLVED IS 2001-02. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED THE RETURN O F INCOME DECLARING A TOTAL INCOME OF RS.3,44,440/- ON15.10.200 1. THE SAID RETURN WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, A NOTICE U/S 148 OF THE ACT WAS ISSUED ON 28.3.2008. A NOTICE U/S 143(2) WAS AL SO ISSUED ON 30.4.2008. SUBSEQUENTLY, A FRESH NOTICE U/S 142(1) WAS ISSUED ON 3 24.6.2008 REQUIRING THE ASSESSEE TO PRODUCE DETAILS AND D OCUMENTS. THE ASSESSING OFFICER OBSERVED THAT A SEARCH OPERATION U/S 132 OF THE ACT WAS CARRIED OUT BY THE INVESTIGATION WING PUNE OF THE DEP ARTMENT ON 20.7.2005 AT THE PREMISES OF M/S RAMA RAO ADIK EDUCATI ON SOCIETY, ADIK NAGAR, WORLI WHICH IS A PART OF D.Y. PATIL GROUP OF CA SES. DURING THE AFORESAID SEARCH OPERATION, IT WAS GATHERED THAT TOTAL AMOUNT OF RS.5,25,000/- WAS FOUND TO BE PAID BY THE ASSESSEE ON ACCOU NT OF ADMISSION OF HIS SON AKASH A. PATEL TOWARDS DONATION/CAPI TATION FEES. THIS INFORMATION WAS PASSED TO THE ASSESSING OFFICER. AFTER AFFO RDING SUFFICIENT OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE, THE ASSESSING OFFICER MADE THE ADDITION OF RS.3,30,000/- TO THE TOTAL INCOME OF THE ASSESSEE. ACCORDING TO ASSESSING OFFICER, OUT OF TOTAL PAYMENT IN RE SPECT OF DONATION/CAPITATION FEES OF RS.5,25,000/-, THE AMOUNT OF RS.1,95,000/- WAS EXPLAINED. THE BALANCE AMOUNT OF RS.3,30,000/- REM AINED UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS THE ASSESSEE COUL D NOT SUBSTANTIATE THE SOURCE OF THESE AMOUNTS. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION FOR THE REASONS GIVEN IN PARAGRAPH 4.2 OF THE IMPUGNED ORDER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO P ERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE VERY OUTSET, SHR I J.M.SHAH, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT PROVIDED THE MATERIAL/EVIDENCE GATHERED AGAINST T HE ASSESSEE DURING THE SEARCH OPERATION. HE FURTHER POINTED OUT THAT IN SP ITE OF REPEATED REQUESTS, THE ASSESSING OFFICER HAS NOT PROVIDED ANY OPPOR TUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE PARTY, NAMELY, M/S RAMA RAO ADIK EDUCATION SOCIETY WHICH IS STATED TO BE A PART OF D.Y. P ATIL GROUP OF CASES. AFTER CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE FIND SUBSTANCE IN THE ABOVE CONTENTION OF THE LEARNED COUNSEL FOR 4 THE ASSESSEE. THUS, IN THE INTEREST OF JUSTICE AND FAIR PLA Y, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO THE FI LE OF THE ASSESSING OFFICER WITH A DIRECTION TO PROVIDE MATERIAL/EVIDENCE GATHERED AGAINST THE ASSESSEE DURING THE COURSE OF SEARCH IN THE CASE OF M/S RAMA R AO ADIK EDUCATION SOCIETY. THE ASSESSING OFFICER IS ALSO DIRECTED TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE AFORESAID PARTY. THE ASSESSING OFFICER SHOULD PASS A SPEAKING ORDER IN ACCORDANCE W ITH LAW AFTER COMPLYING WITH THE ABOVE DIRECTIONS. 6. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21.8 .2009. SD/- (D.C.AGRAWAL) ACCOUNTANT MEMBER SD/- (H.L.KARWA) JUDICIAL MEMBER AHMEDABAD, DATED: 21.8.2009 PSP* COPY TO : (1) THE ASSESSEE (2) THE ASSESSING OFFICER (3) THE CIT(A) CONCERNED, (4) THE CIT, CONCERNED, (5) THE DR, ITAT, AHMEDABAD, (6) GUARD FILE. BY ORDER ASSTT. REGISTRAR / D EPUTY REGISTRAR ITAT, AHMEDABAD BENCHES AHMEDABAD.