Sh. Rajeev Kumar Goyal, Agra V. I.T.O.-4(3), Agra

ITA 116/AGR/2012

• Counselvise Citation: 11620314 RSA 2012
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-06-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 21-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARSHAD; S D SHARMA
• Assessee Lawyers: ALOK FARSAIYA
• Keywords: Reopening of assessment; Reason to believe; Reassessment proceedings
• Section: 148; 144

Judgement Text

I.T.A. NO.: 116/AGRA/2012 ASSESSMENT YEAR: 2001-02 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA [CORAM : PRAMOD KUMAR AM AND JOGINDER SINGH] I.T.A. NO.:116/AGRA/2012 ASSESSMENT YEAR:2001-02 RAJEEV KUMAR GOYAL .APPELLANT PROP : LORD SHIVA INVESTMENTS 20A, JAI RAM BAGH, DAYALBAH, AGRA [PAN: ADIPG0770E] VS. INCOME TAX OFFICER WARD 4(3), AGRA .RESPONDENT APPEARANCES BY: ALOK FARSAIYA, FOR THE APPELLANT WASEEM ARSHAD AND S D SHARMA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING :JUNE 5, 2014 DATE OF PRONOUNCING THE ORDER :JUNE 6, 2014 ORDER PER PRAMOD KUMAR: 1. IT IS A RECALLED MATTER. THE APPEAL WAS ORIGINAL LY DISPOSED OFF EX PARTE QUA THE ASSESSEE, VIDE ORDER DATED 7 TH SEPTEMBER 2012. HOWEVER, SUBSEQUENTLY, THIS ORDER IS RECALLED, AT THE REQUEST OF THE ASSESSEE, AND THE M ATTER IS FIXED AGAIN FOR HEARING ON MERITS. THAT IS HOW WE HAVE COME TO BE IN SEISIN OF THE MATTER. 2. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 2 ND NOVEMBER 2011 PASSED BY THE LEARNED CIT(A), IN THE MATTER OF ASSESSMENT UNDER S ECTION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2001-02. 3. WE HAVE TO BE TAKE UP A PRELIMINARY AND FOUNDATI ONAL ASPECT FIRST, WHICH GOES TO THE ROOT OF THE VALIDITY OF THE IMPUGNED REASSESSMENT O RDER AND ON WHICH BOTH THE PARTIES HAVE BEEN HEARD. THE ISSUE IS THIS. ACCORDING TO THE LEA RNED COUNSEL FOR THE ASSESSEE, NO ADDITIONS HAVE BEEN MADE IN RESPECT OF THE GROUNDS SET OUT IN THE REASONS RECORDED FOR REOPENING HE ASSESSMENT, AND, THEREFORE, NO OTHER A DDITIONS COULD ALSO HAVE BEEN MADE IN I.T.A. NO.: 116/AGRA/2012 ASSESSMENT YEAR: 2001-02 PAGE 2 OF 4 THE COURSE OF THIS REASSESSMENT. THE CONTENTION OF THE ASSESSEE IS THAT IN A SITUATION IN WHICH ADDITIONS ARE NOT MADE IN RESPECT OF THE REAS ONS RECORDED FOR REOPENING THE ASSESSMENT, THE VERY BASIS OF INITIATION OF REASSES SMENT PROCEEDINGS IS ACCEPTED TO BE INCORRECT, AND THE REASSESSMENT ITSELF IS TO BE QUA SHED. 4. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. IN TH IS CASE, THE ASSESSMENT WAS REOPENED AND THE RELATED NOTICE UNDER SECTION 148 WAS SERVED ON THE ASSESSEE. AS FOR THE REASONS FOR INITIATION OF PROCEEDINGS UNDER SECTION 147, THE AS SESSING OFFICER HAS MADE THE FOLLOWING NOTING : REASONS FOR INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 1. NAME OF THE ASSESSEE : LORD SHIVA INVESTMENTS 20A, JAI RAM BAGH, DAYAL BAGH AGRA 2. PAN : 3. ASSESSMENT YEAR : 2001-02 INFORMATION IS IN POSSESSION OF THIS OFFICE (WHICH HAS BEEN RECEIVED FROM INVESTIGATION WING, AGRA) REVEALING THAT THE FOLLOW ING TRANSACTIONS MADE BY AAYUSHI STOCK BROKERS PVT LTD, SANJAY PLACE, AGRA, WHICH HA VE BEEN FOUND TO HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE I S PRIMA FACIE UNEXPLAINED. DATE BANK NAME DD NO. A/C NO. AMOUNT 01.05.00 10,00,000 01.0500 11,00,000 21.06.00 SB PATIALA CLG CHEQUE 3,80,000 RETURNED/50 17.07.00 SB PATIALA CLG CHEQUE 5,00,000 RETURNED/74 22.09.00 FEDERAL BANK -DO-/190 2,00,000 09.10.00 -DO- -DO-/224 1,50,000 09.10.00 -DO- -DO-/226 1,50,000 29.12.00 SB, PATIALA -DO-/333 3,00,000 29.02.01 CL. BALANCE 37,80,000 TOTAL 75,60,000 I HAVE EXAMINED AND HAVE REASONS TO BELIEVE THAT IN COME CHARGEABLE TO TAX AMOUNTING TO RS 75,60,000 HAS ESCAPED ASSESSMENT FO R AY 2001-02 TO ASSESSEE/ REASSESS SUCH INCOME, I PROPOSE TO* I SSUE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961. SD/XX *SUBJECT TO APPROVAL I.T.A. NO.: 116/AGRA/2012 ASSESSMENT YEAR: 2001-02 PAGE 3 OF 4 5. AGGRIEVED, INTER ALIA, BY THE REOPENING OF ASSES SMENT PROCEEDINGS, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. LEARNED CIT(A) UPHELD THE VALIDITY OF THE REASSESSMENT PROCEEDINGS . THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 7. THE LEGAL POSITION IS FAIRLY WELL SETTLED ON THE ISSUE THAT IN A REASSESSMENT PROCEEDING, WHEN NO ADDITIONS ARE MADE IN RESPECT O F THE INCOME, PURPORTEDLY ESCAPING THE ASSESSMENT, SET OUT IN THE REASONS FOR RE-OPENING T HE ASSESSMENT, NO OTHER ADDITIONS CAN BE MADE EITHER. AS A MATTER OF FACT, THE VERY REASSESS MENT FAILS IN SUCH A SITUATION. THE UNDERLYING PRINCIPLE IS NOT DIFFICULT TO FATHOM. TH E RE-ASSESSMENT PROCEEDINGS ARE FOR THE PURPOSE OF INCOME ESCAPING THE ASSESSMENT, AS SET O UT IN THE REASONS RECORDED, AND WHEN NO ADDITIONS ARE MADE IN RESPECT OF THE REASONS REC ORDED, THE VERY FOUNDATION OF REASSESSMENT PROCEEDINGS CEASES TO LEGALLY SUSTAINA BLE. OF COURSE, ONCE ADDITIONS ARE MADE IN RESPECT OF ANY OF THE ITEMS SET OUT IN THE REASONS RECORDED FOR RE-OPENING THE ASSESSMENT, IT IS OPEN TO THE ASSESSING OFFICER TO MAKE OTHER ITEMS, AS HE MAY DEEM FIT, AS WELL. IN A RATHER RECENT CASE OF CIT VS JET AIRWAYS (331 ITR 236), ELABORATING ON THIS SETTLKED LEGAL POSITION, HONBLE BOMBAY HIGH COURT HAS OBSER VED THAT IF AFTER ISSUING A NOTICE UNDER S. 148, HE ASSESSING OFFICER DOES NOT HOLD THAT TH E INCOME WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE HAD ESCAPED ASSESSMENT, IS NOT RE QUIRED TO BE ADDED TO THE ASSESEES TAXABLE INCOME, IT IS NOT OPEN TO HIM TO INDEPENDEN TLY ASSESS SOME OTHER INCOME. THEIR LORDSHIPS HAVE ADDED THAT, IF HE INTENDS TO DO SO, A FRESH NOTICE UNDER S. 148 WOULD BE NECESSARY, THE LEGALITY OF WHICH WOULD BE TESTED IN THE EVENT OF A CHALLENGE BY THE ASSESSEE IN THE PRESENT CASE, SEEMINGLY NO ADDITIONS HAVE BE EN MADE IN RESPECT OF THE ITEMS SET OUT IN THE REASONS FOR REOPENING THE ASSESSMENT, AS REP RODUCED EARLIER IN THIS ORDER, AND YET THE ASSESSING OFFICER HAS MADE SEVERAL OTHER ADDITIONS TO INCOME. HOWEVER, AS A MEASURE OF ABUNDANT CAUTION, WE REMIT THIS LIMITED ASPECT OF V ERIFICATION OF FACTS TO THE FILE OF THE COMMISSIONER (APPEALS). HE HAS TO EXAMINE VALIDITY OF REOPENING OF ASSESSMENT AFRESH, IN THE LIGHT OF INTER ALIA, THESE OBSERVATIONS. A PLAIN LOOK AT THE REASONS REC ORDED FOR REOPENING THE ASSESSMENT ALSO PRIMA FACIE SHOWS THE CASUAL MANNER IN WHICH THE EXERCISE HAS B EEN CARRIED OUT SIMPLY ON THE BASIS OF INPUTS RECEIVED FROM THE INVESTIGATION INASMUCH AS THE AGGREGATE OF EIGHT ENTRIES, WHICH IS SHOWN AS CLOSI NG BALANCE, IS AGAIN ADDED TO THE ENTRIES AND, AS AGAINST TOTAL ENTRIES OF RS 37,80,000, THE INCOME ESCAPING THE ASSESSMENT IS TAKEN I.T.A. NO.: 116/AGRA/2012 ASSESSMENT YEAR: 2001-02 PAGE 4 OF 4 AT DOUBLE THAT AMOUNT I.E. RS 75,60,000. HOWEVER, W E REFRAIN FROM MAKING ANY FURTHER OBSERVATIONS ON THIS ISSUE AND, SUFFICE TO SAY, THA T LEARNED COMMISSIONER (APPEALS) WILL DEAL WITH ALL ISSUES RELATING TO VALIDITY OF REOPENING T HE ASSESSMENT, INCLUDING THE ISSUES TOUCHED UPON ABOVE, AS THE ASSESSEE MAY RAISE, GIVE A FAIR AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND DECIDE THE MATTER IN ACCORDANCE WI TH THE LAW AND BY WAY OF A SPEAKING ORDER. WE ORDER SO. IN VIEW OF THE FACT THAT THIS I S AN OLD MATTER, AND WITH A VIEW THAT THE SWORD OF UNCERTAINTY SHOULD NOT BE ALLOWED TO HANG OVER THE APPELLANTS FOR LONG, WE FURTHER DIRECT THE LEARNED COMMISSIONER (APPEALS) TO DISPOS E OF THE MATTER WITHIN SIX MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER 8. AS THE MATTER REGARDING THE VALIDITY OF ASSESSME NT PROCEEDINGS ITSELF STANDS RESTORED TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS), IT IS NOT REALLY NECESSARY TO DEAL WITH ALL OTHER ISSUES IN THIS APPEAL. 9. IN THE RESULT, THE APPEAL IS ALLOWED FOR THE STA TISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 6 TH TH DAY OF JUNE, 2014. SD/- SD/- JOGINDER SINGH PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AGRA, THE 6 TH DAY OF JUNE, 2014. COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA