Mrs Suman J Paighan, Ahmednagar V. ITO, Nashik

ITA 1367/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2710 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Keywords: Period of limitation; Validity of assessment; Time period of passing order
• Section: 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1367/PN/2012 $& ' !(' / ASSESSMENT YEAR : 2005-06 MRS. SUMAN J. PAIGHAN, AMBIKA HOUSING SOCIETY, NEAR MSEB QUARTERS, SHEVGAON, DISTT.-AHMEDNAGAR PAN : ANUPP7041G ....... / APPELLANT )& / V/S. INCOME TAX OFFICER, (CIB) 1, NASHIK / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 23-12-2015 / DATE OF PRONOUNCEMENT : 19-02-2016 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-CENTRAL, PUNE DATED 1 0-04-2012 FOR THE ASSESSMENT YEAR 2005-06. 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE: ON THE BASIS OF INFORMATION RECEIVED THROUGH AIR A NOTICE U/S. 142 (1) DATED 2 ITA NO. 1367/PN/2012, A.Y. 2005-06 29-08-2007 WAS SERVED ON THE ASSESSEE. DURING THE P ERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE HAD D EPOSITED CASH TO THE TUNE OF ` 12,74,410/- IN SAVING BANK ACCOUNT WITH NAGAR URBAN CO- OP. BANK LTD., SHEVGAON BRANCH. IN RESPONSE TO THE NOT ICE THE ASSESSEE FILED HER RETURN OF INCOME ON 20-12-2007 DECLARIN G AGRICULTURAL INCOME OF ` 2,00,000/-. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED T HAT THE ASSESSEE IS HAVING AGRICULTURAL LAND IN HER NAME ONLY TO T HE EXTENT OF 00.40 R IN GUT NO. 330. THEREFORE, THE CASH DEPOSIT BY TH E ASSESSEE IN HER SAVING BANK ACCOUNT BY NO STRETCH OF IMAGINATION CAN BE FROM AGRICULTURAL INCOME ARISING FROM THE LAND OWNED BY THE ASSE SSEE. THE CONTENTION OF THE ASSESSEE IS THAT APART FROM HER OWN LA ND THE ASSESSEE IS ALSO CULTIVATING THE LAND REGISTERED IN THE NAME OF HER LA TE FATHER-IN- LAW AND MOTHER-IN-LAW. THE AMOUNT DEPOSITED IN THE BANK IS FROM THE SALE OF AGRICULTURAL PRODUCE COTTON AND BAJARI CULTIVATED IN THE LAND OWNED BY ALL THE FAMILY MEMBERS. ACCORDING TO THE ASSES SEE, THE TOTAL AGRICULTURAL LAND WHICH IS UNDER CULTIVATION IS AS UNDER: GUT NO. OWNER AREA AGRI. PRODUCE 332 LATE SHRI YASHWANT W. PAIGHAN 01.53R COTTON 495 LATE SHRI YASHWANT W. PAIGHAN 01.41R COTTON 493 LATE SHRI YASHWANT W. PAIGHAN 00.41R COTTON 333 SMT. GEETABAI Y. PAIGHAN 01.97R COTTON & BAJ ARI 330 SUMANBAI J. PAIGHAN 00.40R COTTON 09.32R HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE SUBMISSIONS MADE BY THE ASSESSEE AND MADE ADDITION OF T HE ENTIRE UNEXPLAINED CASH DEPOSITED IN THE SAVING BANK ACCOUNT I.E. ` 12,74,410/-. 3 ITA NO. 1367/PN/2012, A.Y. 2005-06 AGGRIEVED BY THE ASSESSMENT ORDER DATED 28-12-2007, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSE E CHALLENGED THE ASSESSMENT PROCEEDINGS ON THE GROUND THAT THE NO TICE ISSUED U/S. 142(1) DATED 29-08-2007 IS BAD IN LAW, AS IT WAS SERVED BE YOND THE LIMITATION PERIOD FOR FILING RETURN OF INCOME U/S. 139(4) OF THE AC T. THE ASSESSEE ALSO CHALLENGED THE ASSESSMENT PROCEEDINGS BEIN G BARRED BY LIMITATION, AS THE ASSESSMENT ORDER AND DEMAND NOTICE SHO ULD HAVE BEEN SERVED TO THE ASSESSEE LATEST BY 31-12-2007, WHE REAS, THE ORDER WAS SERVED TO THE ASSESSEE ON 17-01-2008. THE ASSES SEE ALSO ASSAILED THE ASSESSMENT ORDER ON MERITS IMPUGNING THE ADDITION O F ` 12,74,410/- . THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER SEEKING TH E REMAND REPORT ON THE SUBMISSIONS MADE BY THE ASSESSEE DISMISS ED THE APPEAL OF THE ASSESSEE IN TOTO. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL AGAINST THE FINDINGS OF COMMISSIONER OF INCOME T AX (APPEALS). THE ASSESSEE HAS PRIMARILY ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ON THREE COUNTS: I. THE ASSESSMENT ORDER IS BARRED BY LIMITATION AS THE ASSE SSMENT ORDER WAS DELIVERED TO THE ASSESSEE BY POSTAL DEPARTME NT ON 17-01-2008 THAT IS BEYOND THE DATE OF LIMITATION I.E. 31-12-2007. II. CONFIRMING ADDITION OF ` 12,74,750/-. III. CHARGING OF INTEREST U/S. 234A AND 234B OF THE ACT. 3. SHRI M.K. KULKARNI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSMENT ORDER HAS BEEN PASSED AND SERVE D ON THE ASSESSEE MUCH AFTER THE ELAPSE OF PERIOD OF LIMITATION. THE ASSESSMEN T ORDER WAS PASSED ON 28-12-2007 AND DELIVERED TO THE ASSESSE E ON 17-01-2008. IN SUPPORT OF HIS SUBMISSIONS, THE LD. COUNSEL FOR THE 4 ITA NO. 1367/PN/2012, A.Y. 2005-06 ASSESSEE PLACED ON RECORD A PHOTOCOPY OF ENVELOP VIDE W HICH THE ASSESSMENT ORDER WAS DISPATCHED TO THE ASSESSEE THRO UGH SPEED POST. THE ENVELOP BEARS THE POSTAL STAMP DATED 17-01-2008. THE LD. COUNSEL SUBMITTED THAT THE ASSESSMENT ORDER AND NOTICE OF DEMAND SHOULD H AVE SERVED ON THE ASSESSEE ON OR BEFORE 31-12-2007 THROU GH REGISTERED POST ACKNOWLEDGMENT DUE. A PERUSAL OF ENVELOP WOULD SHOW THAT THE ASSESSMENT ORDER AND NOTICE OF DEMAND WAS SENT BY THE DEPARTMENT THROUGH SPEED POST. SPEED POST WAS NOT THE APPROVE D MODE OF SERVICE U/S. 282 OF THE ACT IN THE YEAR 2007-08. THE LD. COUNS EL IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. HOTLINE INTERNATIONAL P. LTD. REPORTED AS 296 ITR 333 (DELHI). 3.1 ON MERITS, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (AP PEALS). THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE APART FROM I NCOME FROM SALE OF AGRICULTURAL PRODUCE IS HAVING INCOME FROM SALE OF M ILK. THE FATHER IN LAW OF THE ASSESSEE HAD 15.04 ACRE OF LAND WHER EIN PRIMARILY COTTON AND BHUSAR CROPS WERE GROWN. THE FATHER IN LAW OF THE ASSESSEE DIED ON 28-03-2004 AND THE MOTHER IN LAW OF THE ASSESSE E IS AN AGED LADY. THE HUSBAND OF THE ASSESSEE, SHRI JANARDHAN YESW ANT PAUGHAN IS RUNNING A MEDICAL STORE AT SHEVGAON. THUS, THE ASSES SEE IS TAKING CARE OF AGRICULTURAL LAND AND CATTLES. THE ASSESSEE HAD PURCHASED 7 BUFFALOS DURING THE YEAR AND THE ASSESSEE IS HAVING TOTAL LIVE STOCK O F 30 CATTLES WHICH INCLUDE BUFFALOS PURCHASED BY HER FATHER-IN-LAW . THE ASSESSEE SELLS MILK TO SMALL VENDORS, WHO IN TURN WOULD SELL M ILK TO CONSUMERS. THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF A CCOUNT WHICH WERE PRODUCED BEFORE THE ASSESSING OFFICER FOR VERIFICA TION. THE 5 ITA NO. 1367/PN/2012, A.Y. 2005-06 BOOKS MAINTAINED BY THE ASSESSEE WERE NOT REJECTED BY THE ASSESSING OFFICER AND THE ADDITION HAS BEEN MADE MERELY ON SURMISES AND CONJECTURES. DESPITE THE FACT THAT THE ENTIRE INFORMATION WAS FURNISHED BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER CLOSED HIS EYES OVER THE SUPPORTING DOCUMENTS AND MADE ADDITION OF ENTIRE DEP OSITS IN THE SAVING BANK ACCOUNT. THE ASSESSEE HAD ALSO FURNISHED RE CONCILIATION OF THE DEPOSITS MADE IN THE BANK. HOWEVER, THE SAME WERE NOT CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE ADDITIONS HAVE BEEN MADE MERELY ON PROBABILITIES. THE LD. COUNSEL FURTHER SUBMIT TED THAT NO ADDITION CAN BE MADE ON THE BASIS OF AIR INFORMATION IF THE AMOUNTS HAVE BEEN DISPUTED BY THE ASSESSEE. IN SUPPORT OF HIS SUB MISSIONS, THE LD. COUNSEL PLACED RELIANCE ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ANS LAW ASSOCIATES VS. ASSISTANT C OMMISSIONER OF INCOME TAX REPORTED AS 63 (II) ITCL 216 (MUM-TRIB.). 4. ON THE OTHER HAND SHRI DHEERAJ KUMAR JAIN REPRESEN TING THE DEPARTMENT SUBMITTED THAT, BEFORE THE ASSESSING OFFICER TH E LAST DATE OF HEARING WAS 24-12-2007. THE ASSESSMENT ORDER WAS PAS SED BY THE ASSESSING OFFICER ON 28-12-2007 AND THE SAME WAS SERVED ON THE ASSESSEE ON 02-01-2008. IN SUPPORT OF HIS SUBMISSIONS, THE LD. DR FURNISHED A PHOTOCOPY OF THE ACKNOWLEDGMENT BEARING THE SEAL OF POSTAL DEPARTMENT DATED 02-01-2008. THE LD. DR ALSO PLACED ON RECORD PHOTOCOPY OF THE ORDER SHEET FROM THE FILE OF ASSESSING O FFICER TO SHOW LAST DATE OF HEARING OF THE CASE AND THE DATE ON WHICH T HE ASSESSMENT ORDER WAS PASSED. THE LD. DR SUBMITTED THAT A PERUSAL OF ORDER SHEET AND POSTAL ACKNOWLEDGMENT WOULD CLEARLY SHOW THAT THE ORDER WAS PASSED WELL WITHIN THE PERIOD OF LIMITATION. 6 ITA NO. 1367/PN/2012, A.Y. 2005-06 4.1 ON MERITS, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO SHOW THAT SHE WAS HAVING AUTHENTIC SOURCE OF INCOME. THE ASSESSEE HAS FAILED TO FURNISH ANY COGENT EVIDENCE TO SHOW THAT TH E ASSESSEE WAS HAVING INCOME FROM AGRICULTURAL OPERATIONS. THE ASSESSEE H AS NOT FILED ANY RETURN OF INCOME SHOWING INCOME FROM AGRICULTURE. THE LD. DR. VEHEMENTLY SUPPORTED THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS) AND PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE FIRST ISSUE RAISED BEFORE THE TRIBUNAL BY THE ASSESSEE IS WITH REGARD TO VALIDITY OF ASSESSMENT ORDER. THE CONTENTION OF THE ASSES SEE IS THAT THE ASSESSMENT ORDER AND THE DEMAND NOTICE WAS SERVED O N THE ASSESSEE ON 17-01-2008 THROUGH SPEED POST. NEITHER THE MODE O F SERVICE IS AS PER THE PROVISIONS OF SECTION 282 OF THE ACT, NOR THE OR DER AND NOTICE OF DEMAND WAS SERVED WITHIN THE PRESCRIBED PERIOD OF LIMITATIO N. THE LIMITATION FOR PASSING OF ORDER HAD EXPIRED ON 31-01-2007, W HEREAS THE ASSESSMENT ORDER AND THE DEMAND NOTICE WAS SERVED O N THE ASSESSEE THROUGH SPEED POST ON 17-01-2008. ON THE OTHER HAND THE REVENUE HAS PLACED ON RECORD A COPY OF THE NOTING SHEET AND A CKNOWLEDGMENT CARD TO SHOW THAT THE ASSESSMENT ORDER WAS PASSED O N 28-12-2007 AND THE SAME WAS DELIVERED TO THE ASSESSEE ON 02-01-2008. DE HORS THE DATE OF SERVICE, THE ASSESSMENT ORDER WAS PASSED WELL WIT HIN THE LIMITATION PERIOD ON 28-12-2007. THIS FACT HAS BEEN ADMITTE D BY THE ASSESSEE AS WELL. THE PROVISIONS OF THE ACT REQUIRE THAT THE ASSESSMENT ORDER SHOULD BE PASSED WITHIN THE PRESCRIBED PERIOD OF LIM ITATION. THERE IS NO REQUIREMENT OF SERVICE OF THE ASSESSMENT ORD ER WITHIN THE LIMITATION PERIOD. HOWEVER, THE ORDER SHOULD BE SERVED WITH IN THE 7 ITA NO. 1367/PN/2012, A.Y. 2005-06 REASONABLE PERIOD OF ITS PASSING. ACCORDING TO THE REVENU E ORDER WAS PASSED ON 28-12-2007 AND WAS SERVED ON 02-01-2008. THUS, THERE WAS NO DELAY IN SERVICE EITHER. AS FAR AS MODE OF SERVICE OF ASSESSMENT ORDER AND DEMAN D NOTICE IS CONCERNED, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS O F THE LD. COUNSEL FOR THE ASSESSEE. PRIOR TO THE AMENDMENT OF SEC TION 282 IN 2009 (W.E.F. 01-10-2009), SUB-SECTION (1) TO SECTION 282 READS AS UNDER : 282. SERVICE OF A NOTICE GENERALLY (1) A NOTICE OR REQUISITION UNDER THIS ACT MAY BE SERVED ON THE PERSON THEREIN NAMED EITHE R BY POST OR AS IF IT WERE A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE, 1908 IT IS AN UNDISPUTED FACT THAT THE ASSESSMENT ORDER WA S SERVED ON THE ASSESSEE BY POSTAL DEPARTMENT THROUGH SPEED POST AND THE ACKNOWLEDGMENT OF THE SAME WAS RECEIVED BACK BY THE D EPARTMENT. THUS, THE PROVISIONS OF SECTION 282, AS IT WAS THEN APPLICAB LE WERE COMPLIED WITH. THE LD. COUNSEL FOR THE ASSESSEE HAS TAKEN THE SUPPORT OF THE JUDGMENT RENDERED IN THE CASE OF CIT VS. HOTLINE I NTERNATIONAL P. LTD. (SUPRA). WE FIND THE FACTS OF THE SAID CASE ARE AT V ARIANCE FROM THE FACTS OF CASE IN HAND. IN THE AFORESAID CASE THE SERVICE OF NOTICE WAS DONE THROUGH AFFIXATION AND THE NOTICE SENT THROUGH REG ISTERED POST WAS NOT ALONGWITH ACKNOWLEDGMENT DUE. SINCE, SERVICE OF NOTICE TO THE ASSESSEE WAS NEITHER IN ACCORDANCE WITH SECTION 282 OF T HE ACT NOR IT WAS IN ACCORDANCE WITH ORDER V RULE 12 AND RULE 17 OF TH E CODE OF CIVIL PROCEDURE, THE HON'BLE HIGH COURT HELD THAT THERE WA S NO VALID SERVICE OF NOTICE. THUS, SAID JUDGMENT WILL NOT APPLY IN THE FACTS OF THE PRESENT CASE. ACCORDINGLY, THIS GROUND OF APPEAL OF THE A SSESSEE IS DISMISSED. 8 ITA NO. 1367/PN/2012, A.Y. 2005-06 6. IN SO FAR AS MERITS OF THE ADDITION ARE CONCERNED TH E ASSESSEE HAS TRIED TO EXPLAIN THAT THE DEPOSITS OF ` 12,74,410/- IN THE SAVING BANK ACCOUNT OF THE ASSESSEE ARE FROM SALE OF MILK AND AGRICULTU RE PRODUCE. IT IS AN ADMITTED FACT THAT TOTAL LAND OWNED BY THE ASSE SSEE AND OTHER FAMILY MEMBERS IS 09.23R. IT IS ALSO AN ADMITTED POSITION TH AT THE ASSESSEE WAS CULTIVATING COTTON AND BAJARI ON THE SAID LA ND. THE ASSESSEE MUST HAVE BEEN EARNING SOME INCOME FROM THE S ALE OF AGRICULTURAL PRODUCE. THEREFORE, THE ENTIRE AMOUNT DEPOSIT ED IN THE BANK ACCOUNT CANNOT BE SAID TO BE FROM UNEXPLAINED SOUR CES. FURTHER, THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE IS HAVIN G INCOME FROM DAIRY FARM. THE REVENUE HAS NOT DISPUTED THE FACT THAT THE ASSESSEE HAS PURCHASED BUFFALOS DURING THE YEAR. THE ASSESSEE H AS GIVEN THE BREAKUP OF MONTHLY INCOME FROM SALE OF MILK. THE AUTHORITIE S BELOW HAVE FAILED TO TAKE INTO CONSIDERATION THE INCOME OF THE A SSESSEE FROM SALE OF MILK AS WELL. THUS, IN VIEW OF THE FACT THAT THE ASSE SSEE HAS GIVEN THE DETAILS OF AGRICULTURAL INCOME AND THE INCOME FROM DAIRY FARM, THE AUTHORITIES BELOW HAVE ERRED IN NOT CONSIDERING THE S AME AND HAVE ADDED THE ENTIRE AMOUNT DEPOSITED IN THE BANK AS UNEXP LAINED CASH INVESTMENT MERELY ON ASSUMPTIONS. IN OUR CONSIDERED OP INION THIS ISSUE NEEDS A REVISIT TO THE ASSESSING OFFICER FOR DE-NOVO CONSIDERATION OF THE FACTS AND DOCUMENTS ON RECORD. THE ASSESSING O FFICER SHALL DECIDE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF HEARIN G TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 7. THE NEXT ISSUE RAISED IN APPEAL IS WITH RESPECT OF CHAR GING OF INTEREST U/S. 234A AND 234B OF THE ACT. CHARGING OF INTER EST U/S. 234A 9 ITA NO. 1367/PN/2012, A.Y. 2005-06 AND 234B IS MANDATORY AND CONSEQUENTIAL. ACCORDINGLY, TH IS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 19 TH DAY OF FEBRUARY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 19 TH FEBRUARY, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-CENTRAL, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE