Satchidananda Mishra, Bhubaneswar V. ITO, Bhubaneswar

ITA 129/CTK/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4357 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 03-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P C SETHI
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence
• Section: 69

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 129/CTK /2011 (ASSESSMENT YEAR 2006 - 07) SRI SATCHIDANANDA MISHRA, PLOT NO.132 , CUTTACK ROAD, BHUBANESWAR PAN: ACMPM 7621 F. VERSUS INCOME - TAX OFFICER, WARD 1(1), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.C.SETHI, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR ORDER SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER : TH IS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INC OME - TAX (APPEALS) DT.13.12.2010 MAINLY ON THE FOLLOWING GROUNDS (I) THAT THE LEARNED CIT(A) IN NOT CONSIDERING THE APPLICATION OF THE ASSESSEE FOR A DMITTING THE ADDITIONAL EVIDENCE U/R.46A OF THE I.T.RULES PRODUCED BEFORE HIM; (I) THAT THE LEARNED CIT(A) HAS NOT GIVEN REASONABLE OPPORTUNITY TO THE ASSESSEE TO VENTILATE HIS GRIEVANCE; AND (II) THAT THE LEARNED CIT(A) HAS MISAPPLIED THE PROVISIONS OF SECTION 69 OF THE I.T.ACT. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DERIVES INCOME FROM BUSINESS IN AUTOMOBILE SPARE PARTS. HE FILED RETURN WHICH WAS TAKEN UP FOR SCRUTINY BY THE ASSESSING OFFICER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN ABOUT THE DEPOSITS OF 3 LAKHS MADE WITH STANDARD CHARTERED MUTUAL FUND. IN REPLY , THE ASSESSEE HAS STATED THAT HE HAS TAKEN THE SUM OF 3 LAKHS FROM DIFFERENT FIFTEEN PERSONS , WHO ARRANGED AND INVESTED THE SAID SUM IN THE STANDARD CHARTERED BANK ON 15.12.2005 IN THE NAME OF T HE ASSESSEE. BUT IN COURSE OF TIME, IT CAME TO KNOWLEDGE THAT THE VERSION OF THE AGENT WAS WRONG. THEREFORE, THE INVESTMENT AMOUNT WAS WITHDRAWN ON 12 TH JANUARY, 2006 AND DISTRIBUTED TO ITA NO.129/CTC/2011 2 THE RESPECTIVE PERSONS ACCORDING TO THEIR INVESTMENT. THE DETAIL LISTS OF PERSONS ALONG WITH THE CONFIRMATION CERTIFICATE OF THE PERSONS WERE FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. THEREAFTER THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THOSE FIFTEEN PERSONS, TO WHICH THE ASSESSEE STATED TO HAVE CH OSE TO REMAIN SILENT THE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE HOLDING THAT IT IS NOT BELIEVABLE THAT SO MANY PEOPLE WILL THRUST THEIR FAITH ON ONE PERSON TO GIVE AWAY THEIR MONEY FOR INVESTMENT. HOWEVER HE ACCEPTED THE CLAIM OF THE AS SESSEE THAT HE CONTRIBUTED AN AMOUNT OF 19,000 TOWARDS THE ABOVE INVESTMENT. THEREFORE, THE ASSESSING OFFICER MADE ADDITION OF REST OF THE MOUNT OF 2,81,000 (I.E., 3,00,000 19,000) AS THE UNEXPLAINED INVESTMENT OF THE ASSESSEE IN TERMS OF SECTION 69 OF THE I.T.ACT. 3. AGGRIEVED, THE ASSESS EE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME - TAX (APPEALS). IT WAS CONTENDED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) THAT THE ASSESSING OFFICER IS NOT RIGHT IN DIRECTING THE ASSESSEE TO PRODUCE THOSE 15 PERSONS ALONG WITH THEIR IDENTITY CARDS LI KE VOTER PHOTO IDENTITY CARDS ETC., FOR EXAMINATION. IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER HAD NOT ALLOWED PROPER OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE. AFTER CONSIDERING THE FACTS AND CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LEARNED CIT(A) OBSERVED THAT THE WHOLE AFFAIR IS A CONTRIVED ONE AND FAILS THE TEST OF HUMAN PROBABILITY AND IN SUPPORT, HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASES OF SUMATI DAYAL V. CIT (214 ITR 801 AND CIT V. DURGA PR A SAD M ORE, 82 ITR 840. ACCORDINGLY, THE LEARNED CIT(A) CONFIRMED THE ADDITION AS MADE BY THE ASSESSING OFFICER IN THIS REGARD AND HENCE, THE ASSESSEE IS IN THE PRESENT APPEAL BEFORE THE TRIBUNAL. ITA NO.129/CTC/2011 3 4. DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL, IT WAS CONTEN DED BY THE LEARNED AR OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS NOT GIVEN SUFFICIENT AND REASONABLE OPPORTUNITY FOR DEMONSTRATING HIS CASE BEFORE THE ASSESSING OFFICER. THEREFORE, HE SOUGHT FOR ANOTHER OPPORTUNITY BEFORE THE LEARNED CIT(A) FOR ADDUCIN G THE ADDITIONAL EVIDENCE IN ORDER TO SUBSTANTIATE HIS CLAIM MADE BEFORE THE ASSESSING OFFICER ON THE GROUND THAT THE LEARNED ASSESSING OFFICER WITHOUT ACCEPTING THE TIME PETITION HAS PASSED THE ASSESSMENT ORDER ON THE SAME DAY AND MADE THE ADDITION IN QUE STION. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAS NOW ENCLOSED AFFIDAVIT AND PROOF OF IDENTITY OF THOSE PERSONS, WHO DEPOSITED THE MONEY IN THE STANDARD CHARTERED BANK. IT IS NOT CLEAR FROM THE IMPU GNED ORDER AS TO WHETHER THE LEARNED CIT(A) HAS ACCEPTED OR NOT THOSE AFFIDAVITS AND PROOFS OF IDENTITY OF THOSE PERSONS FURNISHED BEFORE HIM. BUT, THE LEARNED CIT(A) PROCEEDED TO DECIDE THE ISSUE IN PARAGRAPH 5 OF THE IMPUGNED ORDER AND UPHELD THE ADDITIO N AS MADE BY THE ASSESSING OFFICER FOR THE REASONS MENTIONED THEREIN. 5. ON CAREFUL ANALYSIS OF THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A), IT IS FOUND THAT AS PER THE ASSESSMENT ORDER THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS ASKED TO PROD UCE THE FIFTEEN PERSONS BUT IT WAS NOT COMPLIED BY THE ASSESSEE. B EFORE THE TRIBUNAL IT WAS CONTENDED THAT THE ASSESSING OFFICER HAS ASKED THE PRODUCTION OF ALL THE FIFTEEN PERSONS GIVING ONE DAY TIME ONLY. AS IT WAS HUMANLY IMPOSSIBLE THE ASSESSEE WAS UNA BLE TO PRODUCE THOSE PERSONS AND THE LEARNED CIT(A) HAS NOT DEALT WITH THE PRODUCTION OF THE SAME BEFORE HIM TAKING INTO CONSIDERATION THAT THE ASSESSING OFFICER HAD NOT GIVEN PROPER OPPORTUNITY. SO, THE LEARNED CIT(A) HAS COMMITTED ERROR IN NOT CONSIDERI NG THIS ASPECT OF THE CASE AND ALSO THE EVIDENCES FURNISHED BEFORE HIM BY THE ASSESSEE TO SUBSTANTIATE HIS CLAIM. IN ITA NO.129/CTC/2011 4 THE FACTS AND CIRCUMSTANCES STATED ABOVE, IT IS CLEAR THAT BOTH THE LOWER AUTHORITIES HAVE NOT ALLOWED SUFFICIENT AND REASONABLE TIME TO TH E ASSESSEE TO SUBSTANTIATE HIS CONTENTION BEFORE THEM. THIS IS NOTHING BUT VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE COMMITTED BY THE AUTHORITIES BELOW, WHICH IS EXPECTED TO BE FOLLOW ED BY THE LOWER AUTHORITIES , THEY BEING QUASI - JUDICIAL AUTHORITIES U NDER THE ACT. ACCORDINGLY , WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO EXAMINATION OF THE CONTENTION OF THE ASSESSEE IN THE LIGHT OF EVIDENCE S PRODUCED BEFORE HIM AND ALSO B EFORE THE LEARNED CIT(A) , AFTER GIVING A REASONABLE AND SUFFICIENT OPPORTUNITY BEING HEARD TO THE ASSESSEE TO SUBSTANTIATE HIS CLAIM ON THIS ISSUE AND PASS NECESSARY CONSEQUENTIAL ORDER IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON DT. 30 TH JUNE, 2011 S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 30 TH JUNE, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: S RI SATCHIDANANDA MISHRA, PLOT NO .132, CUTTACK ROAD, BHUBANESWAR 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 1(1), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUA RD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.