Joginder Singh, Sangrur V. ITO, Ward, Sunam

ITA 1277/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0928 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-11-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 24-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN JCIT
• Keywords: Principle of natural justice; Assessment record; Set aside
• Section: 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 1277/CHD/2019 / ASSESSMENT YEAR : 2010-11 SHRI JOGINDER SINGH, RANDHAWA FARM, VIII CHHAJLI SUNAM ROAD, SANGRUR. VS THE ITO, WARD, SUNAM. ./ PAN NO: ITSPS5008B / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE # ! ' / REVENUE BY : SHRI ARVIND SUDERSHAN, JCIT $ % ! &/ DATE OF HEARING : 05.11.2020 '()* ! &/ D ATE OF PRONOUNCEMENT : 14.12.2020 HEARING CONDUCTED VIA WEBEX $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 04.07. 2019 OF CIT(A) PATIALA PERTAINING TO 2010-11 ASSESSMENT YEA R ON THE FOLLOWING GROUND : 1. THAT THE IMPUGNED ORDER OF THE LD. CIT (APPEALS) PA TIALA AND ORDER OF ITO WARD-SUNAM IS BAD IN LAW AND AGAINST THE FACTS OF T HE CASE. 2. THAT LD. CIT (A) ERRED IN UPHOLDING THE ORDER OF A. O. WITHOUT APPLICATION OF JUDICIOUS MIND AND WITHOUT APPRECIATING THE MATERIA L ON RECORD. THE ORDER PASSED IS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND IN PARTICULAR PRINCIPLES OF INCOME TAX LAWS. 3. THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ASSESSME NT OF A.O. MADE ON THE BASIS OF FAKE AGREEMENT TO SELL AND MANIPULATED STA TEMENT OF WITNESS AND ARBITRARILY MAKING ADDITION OF RS. 25,00,000/- ON A CCOUNT OF ALLEGED PAYMENT OF ADVANCE MADE TO THE SELLER OF LAND. ITA 1277 /CHD/2019 A.Y. 2010-11 PAGE 2 OF 7 4. THAT THE RELIANCE PLACED ON THE DECISION OF HON'BLE ITAT CHANDIGARH BENCH CHANDIGARH IN THE CASE OF MOHINDER SINGH AND MALKIA T SINGH IS MISPLACED, AS THE FACTS OF THE CASE OF APPELLANT ARE DISTINGUI SHABLE FROM THE FACTS OF THAT CASE. 2. THE LD. AR READING FROM THE SUBMISSIONS BEFORE T HE AO AND THE ARGUMENTS ADVANCED BEFORE HIM AS WELL AS BEFORE THE CIT(A) RECORDED IN THE ORDER ITSELF SUBM ITTED THAT THE ORDERS PASSED BY THE TAX AUTHORITIES ARE B AD IN LAW FOR WANT OF JURISDICTION. IT WAS HIS SUBMISSIO N THAT THE SO CALLED INFORMATION RELIED UPON IS THE STATEM ENT OF SHRI BHAGWANT SINGH STATED TO BE WITNESS TO THE AGR EEMENT TO SELL WHICH IS A PHOTO COPY AND THAT TOO NOT VERY LEGIBLE. INVITING ATTENTION TO THE IMPUGNED ORDER PAGE 4-5 I T WAS HIS SUBMISSION THAT SHRI BHAGWANT SINGH HAD WRITTEN TO THE PR. CIT, PATIALA STATING THAT HIS SIGNATURES HA D BEEN TAKEN ON A BLANK PAGE BY SOME OFFICIAL AND THE ASSE SSEE HAS BEEN REQUESTING FOR INFORMATION AS TO WHO HAS R ECORDED THE STATEMENT AND UNDER WHAT AUTHORITY. DESPITE THE SE EFFORTS, THE TAX AUTHORITIES HAVE REMAINED SILENT. INVITING ATTENTION TO THE IMPUGNED ORDER PAGE 5, IT WAS HIS SUBMISSION THAT THE ASSESSEE HAS ARGUED BEFORE THE CIT(A) THAT INFACT THE ORDERSHEET OF THE AO REVEALS THAT N O NOTICE U/S 131 WAS ISSUED TO SHRI BHAGWANT SINGH. DESPITE THIS CLEAR SUBMISSION REFERRING TO RECORDS, THE LD. CIT( A) FAILS TO ADDRESS IT. RELIANCE ON BHAGWANT SINGHS STATEMENT ON ITA 1277 /CHD/2019 A.Y. 2010-11 PAGE 3 OF 7 WHICH THE ENTIRE ACTION IS BASED MAKES THE WHOLE ED IFICE FUNDAMENTALLY WEAK AND THUS, DESERVES TO BE QUASHED . THE SO CALLED THEORY THAT MONEY WAS DEPOSITED BY SH RI AJMER SINGH ON A SPECIFIC DATE, IT WAS ARGUED, WAS FROM THE SOURCES OF THE ASSESSEE IS PURE CONJECTURE. THE PO SITION TAKEN BY THE TAX AUTHORITIES THAT THERE WAS AN ADVA NCE PAYMENT OF RS. 25 LACS BY THE ASSESSEE RESTS ON EVI DENCE WHICH IS NOT RELIABLE NAMELY, FIRSTLY IT IS A PHOTO COPY, SECONDLY THE SIGNATURES OF THE ASSESSEE THEREON ARE DENIED AND MOREOVER, THE SPECIFIC STATEMENT GIVEN BY SHRI BHAGWANT SINGH DENIED BY HIM IS EVEN OTHERWISE LACK ING AS THE INGREDIENTS AS TO UNDER WHAT AUTHORITY AND BY W HOM IT WAS RECORDED REMAIN MISSING. THE FACT THAT THE SIGN ATURES OF SHRI BHAGWANT SINGH WERE GIVEN ON BLANK PAPER AN D HAVE CLEARLY BEEN ADDRESSED IS FURTHER TO BE DISCAR DED ON THE GROUND THAT NO OPPORTUNITY WAS MADE AVAILABLE T O THE ASSESSEE BY WAY OF ENABLING THE ASSESSEE TO CROSS-E XAMINE SHRI BHAGWANT SINGH. SUCH OPPORTUNITY HAS BEEN DEN IED WHICH IS A CLEAR AND GROSS VIOLATION OF THE PRINCIP LES OF NATURAL JUSTICE. THE ORDER, IT WAS SAID IS FULL OF LEGAL LOOPHOLES AND MAY NOT BE SUSTAINED. 3. THE LD. SR.DR MR. A.SUDERSHAN RELIES UPON THE IMPUGNED ORDER. HOWEVER, HE WAS UNABLE TO ADDRESS H OW THE SPECIFIC ALLEGATION OF THE ASSESSEE NAMELY THAT NO ITA 1277 /CHD/2019 A.Y. 2010-11 PAGE 4 OF 7 NOTICE U/S 131 HAS BEEN ISSUED BY THE AO STATED TO BE EVIDENT FROM THE ORDERSHEETS AND SHRI BHAGWANT SING HS LETTER TO THE PR. CIT PATIALA STATING THAT HIS SIGN ATURES WERE TAKEN BY SOME OFFICIAL ON BLANK PAPER SINCE TH ESE HAVE NOT BEEN ADDRESSED BY THE CIT(A) MADE A PRAYER THAT THE ORDER MAY NOT BE QUASHED AND THE ISSUES MAY BE RESTORED AND THE RECORDS MAY BE SEEN. THE LD. AR I N THE CIRCUMSTANCES AGREED THAT THE MATTER MAY BE REMANDE D BACK FOR VERIFICATION ON THE SPECIFIC POINTS. THE PARTIES AGREED THAT THE REMAND MAY BE MADE TO THE AO. 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY THE SELLER OF THE LA ND SHRI AJMER SINGH DEPOSITED SPECIFIC AMOUNT IN HIS BANK A CCOUNT AND THE TAX AUTHORITIES RELYING UPON THE AGREEMENT TO SELL WHICH IS STATED TO BE A PHOTO COPY HAVE FORMED THE BELIEF THAT RS. 25 LACS WERE ADVANCE PAYMENT BY THE ASSESS EE PAID IN CASH FOR PURCHASE OF THE SPECIFIC PROPERTY WHICH ULTIMATELY WAS PURCHASED IN THE FOLLOWING YEAR. THE ASSESSEE HAS DENIED THE PAYMENT OF RS. 25 LACS IN C ASH. THE ASSESSEE DENIES HIS SIGNATURES ON THE PHOTO COP Y OF THE AGREEMENT TO SELL. SINCE NONE OF US ARE HANDWR ITING EXPERTS IF THE EVIDENCE IS CONSIDERED TO BE RELEVAN T AND CRUCIAL, IT SHOULD BE SUBJECTED TO FORENSIC EXAMINA TION. EVEN OTHERWISE, IT IS SEEN THAT SHRI BHAGWANT SINGH , ITA 1277 /CHD/2019 A.Y. 2010-11 PAGE 5 OF 7 WITNESS TO THE AGREEMENT WHOSE STATEMENT IS BEING R ELIED UPON BY THE TAX AUTHORITIES APPARENTLY HAS STATED T HAT HIS SIGNATURES WERE GIVEN ON BLANK PAPER AND IT WAS NOT HIS STATEMENT. FOR READY REFERENCE, RELEVANT EXTRACT F ROM PAGE 4-5 OF THE IMPUGNED ORDER IS REPRODUCED HEREUNDER F OR THE SAKE OF COMPLETENESS : THE LD.AO HAS MADE THE ADDITION OF RS. 25,00,000/- ON THE BASIS OF FAKE AGREEMENT AND STATEMENT OF SH. BHAGWANT SINGH, A WI TNESS TO THE AGREEMENT WHOSE STATEMENT WAS ILLEGALLY RECORDED BY THE OFFIC IAL, GETTING HIS SIGNATURES ON PLAIN PAPER. THIS FACT WAS REPORTED BY SH. BHAGW ANT SINGH TO THE PR. CTT, PATIALA AND REQUEST THE PR. CTT, PATIALA TO TA KE ACTION AGAINST THE OFFICIAL. COPY OF HIS APPLICATION TO PR. CIT, PATIA LA IS PLACED AT PAGE OF THE PAPER BOOK. THE LD. AO ARBITRARILY DISBELIEVED THE STATEMENT OF THE APPLICANT DENYING TO HAVE MADE ANY AGREEMENT ON 02. 09.2009 AND DENIAL OF THE PAYMENT OF RS. 25,00,000/- TO SRI. AJMER SINGH ... 5. THE ASSESSEE ALSO ASSAILS THE ORDER ON THE GROUN DS THAT THE STATEMENT RELIED UPON HAS BEEN RECORDED AT HIS BACK WITHOUT AFFORDING ANY OPPORTUNITY OF CROSS- EXAMINATION WHICH AGAIN IS A VIOLATION OF THE PRINC IPLES OF NATURAL JUSTICE BECAUSE IF THE EVIDENCE IS RELEVANT AND CRUCIAL, THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNIT Y TO CROSS-EXAMINE SHRI BHAGWANT SINGH WHO ANYWAY DENIES THAT ANY SUCH STATEMENT WAS GIVEN. THE ASSESSEE IN FACT GOES ON TO SUPPORT THE FACT THAT THE RECORD DOES NO T REFER TO ANY STATEMENT OF SHRI BHAGWANT SINGH BEING RECOR DED. THE RELEVANT STATEMENT IS EXTRACTED AT PAGE 5 OF TH E IMPUGNED ORDER WHEREIN LD. CIT(A) HAS EXTRACTED THE ITA 1277 /CHD/2019 A.Y. 2010-11 PAGE 6 OF 7 WRITTEN SUBMISSIONS OF THE ASSESSEE. FOR THE SAKE OF COMPLETENESS, IT IS REPRODUCED HEREUNDER : .EVEN THE FACT OF RECORDING HIS STATEMENT IS NOT APPEARING ON THE ASSESSMENT RECORD . COPY OF ORDER SHEET WRITTEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS PLACED AT PAGE OF THE PAPER BOOK. 'THE PERUSAL OF THE ORDER SHEET REVEALS THAT NO NOTICE U/S 131 WAS ISSUED TO SH. BHAGWANT SINGH FOR HIS APPEARANCE IN THE OFFICE OF THE AO AND THERE IS NO MENTION THAT HIS STATEMENT WAS RECORDED ON 26.12.2017. THIS FACT CLEARLY SHOWS THAT THE RECORDING OF STATEMENT IS NO T GENUINE ONE BUT IT WAS WRITTEN TO SERVE THE PURPOSE OF THE AO FOR THE COMP LETION OF ASSESSMENT BY HOOK OR CROOK.. 6. ACCORDINGLY, IN THE PECULIAR FACTUAL BACKGROUND AS SET OUT HEREIN ABOVE, IN ORDER TO ARRIVE AT A CONCLUSIO N WHETHER THE ACTION IS BAD IN LAW ON JURISDICTION OR MERITS, IT IS NECESSARY TO FIRST ADDRESS THE FACTS. ACCORD INGLY, IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH, THE IMPUGNED ORDER FOR THE REASONS SET OUT H EREIN ABOVE IS SET ASIDE BACK TO THE FILE OF THE AO WITH A DIRECTION TO SEEK FORENSIC EXAMINATION FROM HANDWRI TING EXPERT AND VERIFY THE CORRECTNESS OF THE ASSESSEES POSITION DENYING HIS SIGNATURES ON THE AGREEMENT TO SELL. T HE MANNER IN WHICH THE STATEMENT OF SHRI BHAGWANT SING H WAS RECORDED IS ASSAILED BY WAY OF SPECIFIC LETTER TO PR. CIT, PATIALA NEEDS TO BE ADDRESS IN ACCORDANCE WITH LAW. IT IS FURTHER DIRECTED THAT IN THE EVENTUALITY, THE EV IDENCE IS CONSIDERED TO BE RELEVANT AND RELIABLE, THEN THE AS SESSEE MAY BE PERMITTED TO CROSS EXAMINE SHRI BHAGWANT SIN GH WHOSE STATEMENT IS BEING RELIED UPON BY THE DEPARTM ENT. ITA 1277 /CHD/2019 A.Y. 2010-11 PAGE 7 OF 7 IN TERMS OF THE ABOVE DIRECTIONS, THE IMPUGNED ORDE R IS SET ASIDE BACK TO THE FILE OF THE AO. SAID ORDER WAS PR ONOUNCED AT THE TIME OF VIRTUAL HEARING VIA WEBEX. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 14/12/2020. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( /AG (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ / / CIT 4. $ / ( )/ THE CIT(A) 5. -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE (+ $ / BY ORDER 8 # / ASSISTANT REGISTRAR