D.N. Valecha, Hisar V. ITO, Hisar

ITA 1098/DEL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5458 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-06-2017
• Assessment Year: 1997-1998
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: S KRISHNAN
• Keywords: Recovery proceedings
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT. DIVA SINGH , JUDICIAL MEMBER ITA NOS.-1097 & 1098/DEL/2017 ( ASSESSMENT YEARS: 1996-97 & 1997-98) D.N. VALECHA H.NO. 10, SECTOR 15A, HISAR AGPKW8945C VS ITO WARD-2 HISAR ASSESSEE BY SH. S. KRISHNAN, CA REVENUE BY MS. ASHIMA NEB, SR. DR ORDER THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E ASSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 27.12.2016 OF CIT(A)-ROHTAK PERTAING TO 1996-97 & 1997-98 ASSESSMENT YEARS. IT WAS A COMM ON STAND OF THE PARTIES THAT THE ISSUES RAISED IN THE PRESENT APPEALS ARE MORE O R LESS IDENTICAL ACCORDINGLY, THE ARGUMENTS ADVANCED IN ITA 1097/DEL/2017 WOULD ADDRE SS THE ISSUES OF ITA 1098/DEL/2017. 2. ACCORDINGLY GROUNDS FROM ITA NO. 1097/DEL/2017 A RE REPRODUCED HEREUNDER FOR READY REFERENCE: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN CONFIRMING THE FOLLOWING ACTIONS OF THE ASSESSING OFFICER: 1. IN REOPENING THE ASSESSMENT U/S 147 OF THE ACT W HICH WAS DEVOID OF JURISDICTION AND FALLACIOUS ON MERITS; 2. IN PASSING ORDER U/S 147/143(3) OF THE ACT AT IN COME OF RS. 3,72,600/- AGAINST RETURNED INCOME IN A SUM OF RS. 58,300/- AND HOLDING THAT THERE WAS SUCH ASSESSABLE INCOME. 3. IN MAKING AN ADDITION OF RS. 3,07,311/- BEING TH E AMOUNT OF ALLEGED EMBEZZLEMENT ON SURMISES AND CONJECTURES WI THOUT THERE BEING ANY MATERIAL OF ASSESSEE HAVING EARNED ANY SU CH INCOME. 4. IN MAKING AN ADDITION OF RS. 7,000/- BEING THE A MOUNT OF AGRICULTURAL INCOME TREATING THE SAME AS NORMAL INC OME. ALL THE ABOVE ACTIONS BEING ARBITRARY, ERRONEOUS AN D UNLAWFUL MUST BE QUASHED WITH DIRECTIONS FOR APPROPRIATE RELIEF. 3. ADDRESSING THE FIRST ISSUE THE LD.AR SOUGHT TO R AISE AN ARGUMENT STATING THAT THE MERE RECEIPT OF INFORMATION BY THE AO ITSE LF CANNOT LEAD TO THE FORMATION OF THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT AS THERE HAS TO BE AT LEAST SOME APPLICATION OF MIND BY THE AO. NO MATERIAL WA S REFERRED TO BY THE AO FROM DATE OF HEARING 17.04.2018 DATE OF PRONOUNCEMENT 26 .04.2018 ITA NOS. 10 97 & 1098/DEL/2017 2 THE FORMATION OF THE BELIEF. IT WAS HIS SUBMISSION THAT WHEREAS AS PER THE INFORMATION RECEIVED THE ASSESSEE WAS STATED TO HAV E EMBEZZLED A SPECIFIC AMOUNT AND ULTIMATELY IN TERMS OF THE ORDER OF THE SESSION COURT AS PER THE INSTRUCTIONS RECEIVED BY HIM ULTIMATELY THE AMOUNT HAS BEEN REDUCED TO ALMOST HALF OF THE ORIGINAL AMOUNT ALLEGED. IT WAS HIS SU BMISSION, IT HAS BEEN COMMUNICATED TO HIM THAT BY AN ORDER SOMETIME IN LA TE 2017 OR EARLY 2018 THAT THE AMOUNT HAS BEEN MUCH REDUCED THOUGH THE CONVICT ION PROBABLY REMAINS. ACCORDINGLY, IT WAS HIS SUBMISSION HOW CAN THE AO J USTIFY THE FORMATION OF BELIEF OF INCOME ESCAPING ASSESSMENT AS THE AMOUNT ITSELF REMAINS IN FLUX. 4. THE LD. SR. DR HEAVILY RELYING UPON THE CONSISTE NT ORDERS OF THE TAX AUTHORITIES SUBMITTED THAT INFORMATION WAS RECEIVED FROM THE COMPTROLLER CCS HAU, HISAR THAT THE ASSESSEE WHO WAS WORKING AS ASS ISTANT OF THE DEPARTMENT OF FORAGE HAU HISAR WAS SUSPECTED TO HAVE EMBEZZLED A SPECIFIC AMOUNT FROM 01.04.1994 TO JUNE, 2002 AND IN THE YEAR 1996-97 TH E AMOUNT WAS REPORTED AS 3,07,311/- FOR THE SPECIFIC YEAR. REFERRING TO REA SONS RECORDED IN PAPER BOOK PAGE 13 OF ITA 1098/DEL/2017 WHICH WAS MORE CLEARER IT WAS HER SUBMISSION CARRYING US THROUGH THE REASONS RECORDED THAT THERE WAS APPLICATION OF MIND BY THE AO IN THE FORMATION OF THE BELIEF, AS SUCH, THE SAID GROUND DESERVES TO BE DISMISSED. THE ABOVE ARGUMENTS WERE MADE IN THE BA CKGROUND WHERE THE LD. AR IN THE COURSE OF HIS ARGUMENTS ON GOING THROUGH THE RECORD HAD BEEN DIRECTED TO COME TO ANY OTHER RELEVANT FACT IN ORDER TO ASSA IL THE JURISDICTION AS FAR AS THE ASSUMPTION OF JURISDICTION ON THE BASIS OF REASONS RECORDED THE ASSUMPTION WAS FOUND TO BE VALID. THE ASSESSEE AS PER RECORD HAS NO CASE. THE ARGUMENTS THOUGH WERE ADVANCED BY THE LD. AR BUT HE HAD GIVEN THOSE UP STATING THAT IN FACT HE WOULD BE PRAYING FOR A REMAND FOR THE REASO NS TO BE ADDRESSED HEREINAFTER AND THE ABOVE ARGUMENTS HAVE BEEN NOTED AS THE LD. SR. DR HAD WANTED TO HIGHLIGHT THE ISSUE OF ASSUMPTION OF JURI SDICTION FOR THE SAKE OF COMPLETENESS. ACCORDINGLY, IN VIEW OF THE ABOVE ST ATED POSITIONS, THE GROUND NO. 1 OF THE ASSESSEE IS DISMISSED AND I FIND IN THE CA SE OF THE CONSISTENT MATERIAL AVAILABLE ON RECORD THAT THE AO WAS JUSTIFIED AND H AS ASSUMED JURISDICTION AFTER CARRYING OUT NECESSARY ENQUIRIES AND, WITH DUE APPL ICATION OF HIS MIND TO THE FACTS ON RECORD. IT IS SEEN FROM THE RECORD THAT THE ASS ESSEE OBJECTED TO THE JURISDICTION INITIALLY ON THE GROUND THAT THE ISSUE WAS SUBJUDICE AND THUS, THE ASSESSEE HAD NOT BEEN HELD GUILTY AND IN FACT BY AN ORDER DT. 13.03.2003 THE ITA NOS. 10 97 & 1098/DEL/2017 3 PROCEEDINGS OF THE ENQUIRY COMMITTING CONSTITUTED B Y THE HONBLE PUNJAB & HARYANA HIGH COURT, CHANDIGARH HAD BEEN STAYED BY T HE DISTRICT AND SESSION JUDGE, HISAR VIDE HIS ORDER DT. 13.03.2003, HOWEVER , IT WAS NOTED THAT THE STAY HAD BEEN VACATED BY THE HONBLE PUNJAB & HARYANA HI GH COURT, CHANDIGARH VIDE JUDGMENT DATED 12.09.2003. ACCORDINGLY, THE JURISD ICTION ISSUE CHALLENGED BY THE ASSESSEE IS DISMISSED. 5. ON FACTS IT IS SEEN THAT AT THE STAGE THE ASSESS MENT ORDER WAS PASSED I.E. ON 03.10.2004 THERE WAS NO ORDER OF DISTRICT & SESS ION JUDGE, HISAR AND IN FACT EVEN TILL THE PASSING OF THE IMPUGNED ORDER THE POS ITION WAS THE SAME. HOWEVER, TAKING NOTE OF THE INSTRUCTIONS RECEIVED BY THE LD. AR WHICH HAVE BEEN STATED IN THE OPEN COURT, WHEREIN, THE LD. AR HAS STATED THAT ULTIMATELY THE ASSESSEE HAS BEEN CONVICTED, HOWEVER, THE AMOUNT HAS BEEN REDUCE D TO HALF OF WHAT HAS BEEN CONSIDERED BY THE AO AS EMBEZZLED. IT IS ALSO BEEN HIS SUBMISSION THAT THERE IS A HUGE PRESUMPTION BY THE TAX AUTHORITIES THAT THE AMOUNT IS WITH THE ASSESSEE. IT WAS HIS SUBMISSION THAT THERE WOULD BE NECESSARI LY RECOVERY PROCEEDINGS ETC. BY EITHER WITHHOLDING OF ASSESSEES DUES IN THE FAC E OF THE DEPARTMENTAL ENQUIRY AND CONSIDERING THE FACT THAT THE DISTRICT & SESSIO N JUDGE HAS ALSO NOT GREED WITH THE TOTAL AMOUNT WHICH HAS BEEN HELD TO HAVE BEEN E MBEZZLED BY THE ASSESSEE THE ISSUE NEEDS TO BE ADDRESSED AND ADJUDICATED ON CORRECT FACTS. NO DOUBT IN THE FACTS OF THE PRESENT CASE THE ASSESSEE FOR WANT OF PROPER ADEQUATE LEGAL ADVICE HAS NOT PUT UP ITS CASE APPROPRIATELY, HOWEV ER, IN THE INTERESTS OF SUBSTANTIAL JUSTICE, THE DECISION SHOULD BE ON THE BASIS OF FULL FACTS AND EVIDENCES. ACCORDINGLY, IN VIEW OF THE ABSENCE OF THE CORRECT FACTS PRAYER FOR REMAND WAS MADE. 6. THE LD. SR. DR HAD NO OBJECTION IF FULL AND PROP ER FACTS ARE TAKEN INTO CONSIDERATION AS LONG AS THE JURISDICTION OF THE AO IS UPHELD. ACCORDINGLY, IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH IT IS DEEMED APPROPRIATE TO SET ASIDE THE ISSUES ON MERIT BACK TO THE FILE O F THE CIT(APPEALS) WITH THE DIRECTION TO PASS A SPEAKING ORDER DENOVO ADDRESSING THE ARGUMENTS OF THE ASSESSEE ON MERITS. THE JURISDICTIONAL ISSUE STAND S CONCLUDED AGAINST THE ASSESSEE AND THE FINALITY OF THE IMPUGNED ORDER ON THIS ASPECT REMAINS UNCHANGED. SAID ORDER WAS PRONOUNCED IN THE OPEN C OURT IN THE PRESENCE OF THE PARTIES AT THE TIME OF HEARING ITSELF. ITA NOS. 10 97 & 1098/DEL/2017 4 7. IN THE RESULT, THE ITA 1097/DEL/2017 IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. 8. IN ITA 1098/DEL/2017 ALSO THE ASSESSEE HAS CHALL ENGED THE ASSUMPTION OF JURISDICTION FOR THE REASONS SET OUT IN ITA 1097/DE L/2017 THE SAID GROUND IS DISMISSED. THE REMAINING ISSUE AGITATED ON MERITS IN GROUND NO. 2 AND 3 ARE RESTORED BACK TO THE CIT(A) WITH IDENTICAL DIRECTIO NS. 9. WHILE SO DIRECTING IT IS HOPED THAT THE ASSESSEE PARTICIPATES FULLY AND FAIRLY IN THE PROCEEDINGS BEFORE THE CIT(A) AND DOES NOT A BUSE THE TRUST REPOSED AS FAILING WHICH IT IS MADE CLEAR THAT THE CIT(A) WOUL D BE AT LIBERTY TO PASS AN ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 10. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 26/04/ 2018. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED: 26.04.2018 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 17.04.2018/25.4.18/26.4.18 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 26.4.18 KEPT FOR PRONOUNCEMENT ON 26.4.18 FILE SENT TO THE BENCH CLERK 26.4.18 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. ITA NOS. 10 97 & 1098/DEL/2017 5