Sh. Ashwani Kumar, Bathinda V. The Income Tax Officer, Bathinda

ITA 129/ASR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8781 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 02-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J K GUPTA
• Keywords: Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (SMC). BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.129(ASR)/2015 ASSESSMENT YEAR:2005-06 PAN: AIJPG7286K SH. ASHWANI KUMAR, VS. INCOME TAX OFFICER, H/NO.5099, AFFIM WALI GALI, WARD 2(1), BATHINDA. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.K. GUPTA, ADV. & MS. JYOTSNA, C A RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 21/03/2016 DATE OF PRONOUNCEMENT: 23/02/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2005-06, AGAINST THE ORDER, DATED 29.01.2015, PASSED BY THE LD. CIT(A), BATHINDA. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE R EOPENING THE CASE OF THE ASSESSEE ON VAGUE INFORMATION. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE R EOPENING THE CASE BY THE AO (ACIT, CIRCLE, BATHINDA) WHO DID NOT HAVE THE TERRITORIAL OR PECUNIARY JURISDICTION OVER THE ASSESSEE AT THE RELEVANT TIME. ACCORDINGLY, THE REASSESSMENT IS LIABLE TO BE QUASHED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THERE IS NO FAILURE ON THE PART OF THE ASSE SSEE IN SUBMITTING THE RETURN AS THE SAME WAS SUBMITTED ON 05.10.2005 WITH AO, WARD 2(1), BATHINDA WHO WAS HA VING PROPER JURISDICTION. ACCORDINGLY, THE REOPENING AS WELL AS RE- ASSESSMENT AFTER FOUR YEARS IS LIABLE TO BE QUASHE D. ITA NO. 129(ASR)/2015 ASSESSMENT YEAR: 2005-06 2 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) SHOULD HAVE QUASHED THE REASSESSMENT AS THE COPY OF REASONS RECORDED WAS NO T SUPPLIED DURING THE COURSE OF REASSESSMENT PROCEEDI NGS BUT DURING THE COURSE OF APPELLATE PROCEEDINGS. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN GIVING A FINDIN G THAT ANY IRREGULARITY ON THE PART OF THE AO IS CURED BY THE PROVISIONS OF SECTION 292BB OF THE ACT WHICH IS APPLICABLE ON LY FROM THE ASSESSMENT YEAR 2008-09 NOT FROM ASSESSMENT YEA R 2005-06. ACCORDINGLY, THE REASSESSMENT IS LIABLE TO BE QUASHED. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN GIVING THE REAS ONABLE OPPORTUNITY TO PRODUCE THE PURCHASER OF SHOP DURIN G THE COURSE OF APPELLATE PROCEEDINGS WHICH WAS NOT DONE BY THE AO DUE TO SHORTAGE OF TIME DURING THE COURSE OF REASSESSMENT PROCEEDINGS. ACCORDINGLY, THE RE-ASSES SMENT IS LIABLE TO BE QUASHED. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN GIVING THE REAS ONABLE OPPORTUNITY TO PROVE THE CAPACITY OF THE PURCHASER TO GIVE BIANA. SO, THE WHOLE OF THE ADDITION OF RS.8,40,000 /- IS LIABLE TO BE QUASHED. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, NO ADVERSE INFERENCE CAN BE TAKEN AGAINST THE ASSESSEE IF THE BIANA (AGREEMENT) IS NOT REGISTERED WITH ANY REVENUE AUTHORITY. EVEN THE WITNESSES WERE NOT CALL ED FOR EXAMINATION. SO, THE ADDITION IS LIABLE TO BE DELET ED. 9. THAT THE LD. AO/CIT(A) SHOULD HAVE HELPED THE AS SESSEE IN GETTING THE BANK ACCOUNT STATEMENT FOR THE PREVIOUS ASSESSMENT YEAR 2004-05 TO PROVE HIS POINT THAT THE ASSESSEE DEPOSI9TED THE ACCOUNT OF THE BIANA BEFORE 31.03.2004 AND SHOULD HAVE BEEN CONSIDERED FOR PEAK INVESTMENT. 2. ACCORDING TO GROUND NO.1, THE LD. CIT(A) HAS ERR ED IN UPHOLDING THE RE-OPENING OF THE CASE OF THE ASSESSEE ON VAGUE INFORMATION. ITA NO. 129(ASR)/2015 ASSESSMENT YEAR: 2005-06 3 3. THIS ISSUE HAS BEEN RAISED FOR THE FIRST TIME BE FORE ME, WHICH CAN BE DONE, AS THE ISSUE INVOLVED IS A LEGAL JURISDICT IONAL ISSUE GOING TO THE ROOT OF THE MATTER. 4. THE AO RECORDED REASONS FOR ISSUANCE OF NOTICE U /S 148 OF THE I. T. ACT, 1961, TO BELIEVE ESCAPEMENT OF INCOME. THESE R EASONS ARE AS FOLLOWS: REASONS FOR ISSUANCE OF NOTICE U/S 148 OF THE I. T . ACT, 1961. AS PER INFORMATION AVAILABLE FROM THE ANNUAL INFORM ATION RETURN (AIR) RELATING TO THE FINANCIAL YEAR 2004-05 RELEVA NT TO THE ASSESSMENT YEAR 2005-06, THE ABOVE MENTIONED PERSO N HAS DEPOSITED RS.11,60,000/- IN CASH IN SB ACCOUNT. HOW EVER, THE AFORESAID PERSON HAS NOT GIVEN PERMANENT ACCOUNT N UMBER (PAN) TO THE AIR FILER AND EVEN THE INFORMATION HAS BEEN RECEIVED AS AIR DATA WITHOUT PAN FROM THE CONCERNED AIR FILER. IT IS THUS ESTABLISHED THAT THE ABOVE MENTIONED PERSON IS NOT ASSESSED TO TAX. SINCE, THE AMOUNT OF INVESTMENT EXCEEDS THE MA XIMUM AMOUNT WHICH IS NOT CHARGEABLE TO TAX, I HAVE REASO NS TO BELIEVE THAT THE INCOME TO THE TUNE OF RS.11,60,000/- HAS E SCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OR IN RESPONSE TO A NOTICE I SSUED UNDER SUB-SECTION (1) OF SECTION 142 OF THE INCOME TAX AC T, 1961. ACCORDINGLY, I HAVE REASON TO BELIEVE THAT THE INCO ME OF RS.11,60,000/- OF THE ASSESSEE HAS ESCAPED ASSESSME NT, BESIDES ANY OTHER INCOME CHARGEABLE TO TAX WHICH WOULD HAVE ESCAPED ASSESSMENT AND WOULD COME TO NOTICE SUBSEQUENTLY IN THE COURSE OF ASSESSMENT PROCEEDINGS UNDER THIS SECTION, WITHI N THE MEANING OF SECTION 147 OF THE I.T. ACT. SD/- DATED: 20.03.2012 (DR. TARUNDEEP KAUR) ASSTT. COMMR. OF INCOME TAX, CIRCLE-1, BATHINDA. 5. CHALLENGING THE ABOVE REASONS RECORDED BY THE AO , TO BELIEVE ESCAPEMENT OF INCOME, THE LD. COUNSEL FOR THE ASSES SEE HAS CONTENDED THAT THESE REASONS ARE NOT REASONS IN LAW, SINCE T HEY HAVE BEEN RECORDED ITA NO. 129(ASR)/2015 ASSESSMENT YEAR: 2005-06 4 MERELY ON VAGUE INFORMATION, WHICH CANNOT BE DONE, AS HELD IN BIR BAHADUR SINGH SIJWALI VS. ITO, WARD-1, HALDWANI 53 TAXMAN. CO. 366 (DELHI TRIB.) (COPY PLACED ON RECORD). 6. ON THE OTHER HAND, THE LD. DR HAS CONTENDED THA T THIS IS A CASE WHERE AS PER INFORMATION AVAILABLE FROM THE AIR RE LATING TO THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD DEPOSITED RS .11,60,000/- IN CASH, IN HIS SAVING BANK ACCOUNT; THAT THE ASSESSEE , HOWEVER, DID NOT PROVIDE HIS PAN TO THE AIR FILER; THAT AS SUCH, TH E AOS BELIEF OF ESCAPEMENT OF INCOME IS WELL JUSTIFIED; AND THAT TH E AO, WAS, THEREFORE, CORRECT IN ISSUING TO THE ASSESSEE, A NOTICE UNDER SECTION 148 OF THE ACT. 7. THE FACTS ARE NOT DISPUTED. A BARE PERUSAL OF T HE REASONS RECORDED FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT, SHOWS TH AT THE ONLY MATERIAL AVAILABLE BEFORE THE AO WAS THE AIR INFORMATION OF THE ASSESSEE HAVING DEPOSITED AN AMOUNT OF RS.11.60 LAKHS IN HIS SAVING S BANK ACCOUNT. REMARKABLY, THE REASONS RECORDED DID NOT EVEN MENT ION THE BANK IN WHICH SUCH SAVINGS BANK ACCOUNT WAS MAINTAINED. THE ASSESSEE, AS AVAILABLE FROM THE FIRST PAGE OF THE ASSESSMENT ORD ER, WAS ISSUED A NOTICE U/S 148 OF THE ACT, IN PURSUANCE TO THE AFORESAID R EASONS. THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT IS DATED 25.03.2013. THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 05.1 0.2005 AND IT HAD BEEN STATED IN RESPONSE TO THE NOTICE U/S 148 OF T HE ACT THAT THIS RETURN BE TREATED AS HAVING BEEN FILED IN RESPONSE TO THIS NOTICE. IN BIR BAHADUR SINGH SIJWALI (SUPRA), LIKE IN THE PRESEN T CASE, THE REASONS ITA NO. 129(ASR)/2015 ASSESSMENT YEAR: 2005-06 5 RECORDED INDICATED THAT CASH DEPOSITS HAD BEEN MAD E IN THE BANK ACCOUNT OF THE ASSESSEE. THE TRIBUNAL HELD THAT THE MERE FACT THAT THE DEPOSITS HAVING BEEN MADE IN A BANK ACCOUNT DOES NO T INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAP ED ASSESSMENT. IT WAS OBSERVED THAT THE REASONS RECORDED DID NOT MAKE OUT A CASE THAT THE ASSESSEE WAS ENGAGED IN SOME BUSINESS AND THE INCOM E FROM SUCH A BUSINESS HAD NOT BEEN RETURNED BY THE ASSESSEE. IN THE CASE AT HAND ALSO, THE REASONS RECORDED DO NOT CONTAIN ANY SUCH RECITAL. THE TRIBUNAL HELD THAT THE FACTUM PER SE, OF DEPOSITS IN THE BAN K ACCOUNT OF THE ASSESSEE COULD NOT BE MADE THE BASIS FOR HOLDING TH E VIEW THAT INCOME HAD ESCAPED ASSESSMENT, OVER-LOOKING THAT THE SOURC ES OF THE DEPOSITS NEED NOT NECESSARILY BE THE INCOME OF THE ASSESSEE; AND THAT AS SUCH, THE REASONS RECORDED WERE NOT SUFFICIENT TO BELIEVE ESC APEMENT OF INCOME; THAT RATHER, THEY WERE REASONS TO SUSPECT ESCAPEMENT OF INCOME, WHICH WAS NOT ENOUGH FOR ISSUANCE OF A NOTICE U/S 148 OF THE ACT. 8. BIR BAHADUR SINGH SIJWALI (SUPRA), AS DISCUSS ED, IS CLEARLY APPLICABLE TO THE PRESENT CASE. NO DECISION TO THE CONTRARY HAS BEEN CITED BEFORE ME. 9. IN VIEW OF THE ABOVE, FINDING MERIT IN THE GRIEV ANCE RAISED BY THE ASSESSEE BY WAY OF GROUND NO.1, THE REASONS RECORDE D BY THE AO FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT ARE HELD TO B E INVALID, BEING REASONS NOT SUFFICIENT TO BELIEVE ESCAPEMENT OF INC OME, BASED ON VAGUE INFORMATION. ALL THE PROCEEDINGS PURSUANT THERETO, INCLUDING THE ITA NO. 129(ASR)/2015 ASSESSMENT YEAR: 2005-06 6 ASSESSMENT ORDER DATED 25.03.2013 AND THE IMPUGNED ORDER DATED 29.01.2015 ARE THUS ANNULLED AND CANCELLED. ACCORDI NGLY, ALL THE OTHER ISSUES ON MERITS ARE RENDERED ACADEMIC AND INFRUCTU OUS. 10. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/03/ 2 016. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 23/03/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. ASHWANI KUMAR, BATHINDA. 2. THE ITO WARD 2(1), BATHINDA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.