The Income tax Officer, Phagwara V. Sh. Satnam Singh, Phagwara

ITA 14/ASR/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94999 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 12-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LAXMAN SINGH
• Keywords: Reopening of assessment; Business income; Reason to believe
• Section: 143(3); 142(1); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.23(ASR)/2011 ASSESSMENT YEAR:2002-03 PAN :ARQPS6196J SH. SATNAM SINGH VS. THE INCOME TAX OFFICER, C/O SH. NIRMAL MAHAJAN & ASSOCIATES, WARD-3, JALANDHAR. PHAGWARA. (APPELLANT) (RESPONDENT) I.T.A. NO.14(ASR)/2011 ASSESSMENT YEAR:2002-03 THE INCOME TAX OFFICER, VS. SH. SATNAM SINGH, WARD-3, PHAGWARA. 258, HARGOBIND NAGAR, PHAGWARA. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY:SH. LAXMAN SINGH, CIT(DR) DATE OF HEARING:18/07/2012 DATE OF PRONOUNCEMENT:06/08/2012 ORDER PER BENCH ; THESE CROSS APPEALS OF THE ASSESSEE AND THE REVEN UE ARISE FROM THE ORDER OF THE CIT(A)-II, LUDHIANA, DATED 15.11.2010 FOR THE ASSESSMENT YEAR 2002-03. 2 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THE CIT(A) IS WRONG IN HOLDING THAT THE GROUND WHICH RELATED TO ILLEGALITY OF ORDER AND WITH TEMPERING OF RECORD RELATES TO REOPENING OF ASSESSMENT U/S 148. FURTHER, HE FAILED TO ADJUDICATE ON THE POINT OF ILLEGALITY RAISED BY THE APPELLANT. 2. THE CIT(A) IS WRONG IN HOLDING THAT THE GROUND W HICH RELATED TO JURISDICTION OF THE AO, RELATES TO RE-OPENING U/S 148. FURTHER, HE FAILED TO ADJUDICATE ON THE VARIOUS CON TENTIONS RAISED BY THE APPELLANT ON THE POINT OF JURISDICTIO N. 3. THE CIT(A) IS WRONG IN HOLDING THAT THE REOPENIN G U/S 148 IS JUSTIFIED WITHOUT PASSING A SPEAKING ORDER AND ALSO ADJUDICATING ON VARIOUS POINTS RAISED BY THE APPELLANT. 4. THE CIT(A) IS WRONG IN HOLDING THAT THE SERVIC E TO THE ASSESSEE IS AS PER LAW AND EX-PARTE ASSESSMENT IS JUSTIFIED. HE FURTHER FAILED TO PASS ANY SPEAKING ORDER AND ALSO DID NOT ADJUDICATE ON VARIOUS CONTENTIONS RAISED BY THE APPELLANT. 5. THE CIT(A) IS WRONG IN HOLDING THAT THE ADDITION OF RS.21,50,000/- MADE BY THE A.O., ON ACCOUNT OF BANK DEPOSITS IS JUSTIFIED. 3. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.8,50,000/- ON ACCOUNT OF BUSINESS INCOME FROM REAL ESTATE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT (A) HAS FAILED TO APPRECIATE THAT THE ADDITION OF RS.8,50,0 00/- WAS MADE BY THE AO ON THE BASIS OF INFORMATION REGARDING VAR IOUS TRANSACTIONS OF PURCHASE AND SALE OF PROPERTIES. 4. THE BRIEF FACTS IN THE PRESENT APPEALS ARE THAT THE ORDER HAS BEEN PASSED BY THE AO UNDER SECTION 144 OF THE ACT. FOR THE SAKE OF CLARITY, THE ORDER OF THE AO IS REPRODUCED AS UNDER: 3 IN THIS CASE PROCEEDINGS U/S 148 WERE INITIATED ON THE BASIS OF INFORMATION IN THE POSSESSION OF THE DEPTT. THAT T HE ASSESSEE HAS EXPLAINED DEPOSITS IN HER BANK ACCOUNT, AFTER RECO RDING THE FOLLOWING REASONS: S.NO. NAME OF THE BANK A/C NO. DATE OF CREDIT CR EDIT 1. BANK OF BARODA 18780 05.10.2001 RS.9,00,000/- G.T.ROAD, PHAG. 06.10.2001 RS.3,00,000/- 27.12.2001 RS.21,50,000/- FURTHER, THERE IS INFORMATION WITH REGARD TO VARI OUS TRANSACTIONS OF PURCHASE AND SALE OF PROPERTY SHOWING THAT THE A SSESSEE WAS ENGAGED IN REAL ESTATE BUSINESS AT A LARGE SCALE. I NCOME FROM SUCH BUSINESS IS ESTIMATED AT RS.8,50,000/-. THEREFORE, I HAVE REASONS TO BELIEVE THAT INCOME T O THE TUNE OF RS.30,00,000/- HAS ESCAPED ASSESSMENT FOR THE ASSES SMENT YEAR 2002- 03. THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR THE A.Y. 2002-03 DECLARING HIS RETURN INCOME OF RS.40,000/- ON 16.01 .2003. NOTICES U/S 143(2) AND 142(1) ALONGWITH NOTICE U/S 143(3) ISSUED ON 07.11.2009. THESE NOTICES WERE SERVED THR OUGH AFFIXTURE. ON THE DATE OF HEARING NOBODY PRESENT NOR ANY COMPL IANCE WAS MADE. AGAIN NOTICE U/S 143(2) , 142(1) ALONGWITH QUESTION NAIRE ISSUED FOR 25.11.2009. THESE NOTICES WERE ALSO SERVED THROUGH AFFIXTURE. ON THE FIXED DATE NOBODY PRESENT NOR ANY COMPLIANCE WAS MA DE. THIS SHOWS THE NON COOPERATIVE ATTITUDE OF THE ASSESSEE. FINALLY NOTICE U/S 143(1), 142(1) ALONGWITH NOTICE U/S 143(3) ISSUED TO THE ISSUE FOR 4.12.2009. THESE NOTICES W ERE ALSO SERVED THROUGH AFFIXTURE. AGAIN NON PRESENTED NOR ANY COMP LIANCE WAS MADE. THE PROCEEDING ARE GETTING TIME BARRED AND THE UNDE RSIGNED LEFT WITH NO OTHER ALTERNATIVE EXCEPT TO MAKE THE ASSESSMENT EXPARTE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. INSPECTOR OF THIS OFFICE WAS DEPUTED TO MAKE ENQUIRIES REGARDING ASSESSEES ACTIV ITIES IN THE BUSINESS OF REAL ESTATE.INSPECTORS REPORT SHOWS THA T THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF REAL ESTATE. INSPECTORS REPORT SHOWS THAT THE ASSESSEE WAS ENGAGED IN THIS BUSINESS OF REAL E STATE ON A LARGE SCALE. TOTAL OF DEPOSITS IN BANK OF BARODA, G.T. ROAD, PH AGWARA COMES TO RS.21,50,000/- . IN THE ABSENCE OF ANY SOU RCE FILED WITH THE DEPARTMENT, THIS WAS ASSESSEES INCOME EARNED FROM SOURCES NOT DISCLOSED TO THE DEPARTMENT. ASSESSEES ENGAGEMENT IN REAL ESTATE 4 SHOWS THAT HE EARNED A LOT IN THIS BUSINESS. I ESTI MATE THIS INCOME AT RS.8,50,000/- WHICH REPRESENTS HIS INCOME FROM UNDI SCLOSED SOURCES. PENALTY NOTICE U/S 271(1)(C) IS BEING ISSUED SEPAR ATELY FOR CONCEALMENT OF PARTICULARS OF INCOME. INCOME OF THE ASSESSEE IS COMPUTED AS UNDER: INCOME RETURNED 40,000/- DEPOSITS IN BANK OF BARODA, G.T. ROAD, PHAGWARA. 31,50,000/ INCOME FROM REAL ESTATE BUSINESS 8,50,000/- TOTAL 30,40,000/- 5. BEFORE, THE LD. CIT(A), THE ASSESSEE AGITATED A GAINST THE REOPENING OF THE ASSESSMENT ON LEGAL ISSUE AND ALSO ON ADDITIONS MADE OF RS.21,50,000/- AND RS.8,50,000/-. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE REJECTED THE APPEAL OF THE ASSESSEE ON LEGAL ISSUE AND ALSO THE APPEAL ON THE ADDITION OF RS.21,50,000 /-. HOWEVER, THE LD. CIT(A) VIDE PARA 9 OF HIS ORDER TELESCOPED THE ADD ITION OF RS.8,50,000/- AND ACCORDINGLY THE ADDITION OF RS.8,50,000/- WAS DELE TED FOR THE REASONS MENTIONED IN THE ORDER. 6. SINCE NO ONE APPEARED INSPITE OF NOTICES SENT TO THE ASSESSEE, THEREFORE, WE HAVE NOT ALTERNATIVE EXCEPT TO DECIDE BOTH THE APPEALS EX-PARTE, AFTER HEARING THE LD. CIT(DR), MR. LAXMAN SINGH. 7. AS REGARDS GROUNDS NO. 1 TO 4, THE REASONS RECO RDED BY THE AO HAVE BEEN PERUSED BY US, AS AVAILABLE IN THE ASSESSMENT ORDER. ON PERUSAL OF THE SAME, WE ARE OF THE VIEW THAT THE AO HAD REASON TO BELIEVE THAT INCOME 5 CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THE NOTIC ES ISSUED U/S 143(2) & 142(1) WERE NOT ATTENDED TO BY THE ASSESSEE INSPITE OF FINAL NOTICES SERVED THROUGH AFFIXTURE AND NO COMPLIANCE WAS MADE. THE A O HAD RIGHTLY MADE EX-PARTE ASSESSMENT UNDER SECTION 144 OF THE ACT. A S REGARDS THE FABRICATION OF THE ORDER SHEET, AS AGITATED BEFORE THE LD. CIT( A), NO MATERIAL HAD BEEN PLACED BEFORE THE LD. CIT(A) AND THE LD. COUNSEL FO R THE ASSESSEE HAD SUBMITTED THAT ORDER-SHEET SEEMS TO BE FABRICATED. IN THE ABSENCE OF ANY EVIDENCE OF FABRICATION OR ANY COMPLAINT TO THE SUP ERIOR OF THE AO DURING ASSESSMENT PROCEEDINGS OR EVEN THEREAFTER, SUCH ALL EGATION DOES NOT STAND AND CANNOT BE GIVEN ANY EVIDENTIARY VALUE. SINCE IN THE ABSENCE OF ANY COOPERATION IN THE ASSESSMENT PROCEEDINGS AND AO HAVING RECORDED VALID REASONS AND IN THE ABSENCE OF ANY COGENT EXPLANATIO N BEFORE THE LD. CIT(A) WITH REGARD TO THE GROUNDS RAISED BEFORE HIM, WE FI ND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUNDS NO. 1 TO 4 O F THE ASSESSEE ARE DISMISSED. 7.1. AS REGARDS GROUND NO.5 OF THE ASSESSEE AND GR OUNDS OF THE REVENUE, THE ASSESSEE HAD MADE DEPOSITS ON THREE DIFFERENT D ATES TOTALING RS.21,50,000/-. SIMPLY FILING SUBMISSION THAT THE ASSESSEE HAD DEPOSITED CASH IN BANK ACCOUNT AND THE BANK ACCOUNT IS MAINTA INED SINCE LONG AND THE ASSESSEE IS REGULARLY DEPOSITING AND WITHDRAWING AMOUNT FROM HIS BANK ACCOUNTS CANNOT BE TREATED AS COGENT EXPLANATION OF THE ASSESSEE. THE AMOUNT DEPOSITED IS OUT OF CASH IN HANDS AVAILABLE WITH THE ASSESSEE WAS 6 SUBMITTED BY THE ASSESSEE. SUCH SUBMISSION IN THE A BSENCE OF ANY COGENT EXPLANATION CANNOT BE ACCEPTED. BUT KEEPING IN VIE W THE NATURE OF BUSINESS OF THE ASSESSEE, THE LD. CIT(A) HAS RIGHTLY TELESCO PED THE ADDITION OF RS.8,50,000/- AND HAS RIGHTLY CONFIRMED THE ADDITIO N OF RS.21,50,000/-. WE FIND NO ERROR IN THE ORDER OF THE LD. CIT(A) IN THI S REGARD. THUS, BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE ARE DISMISS ED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.23(ASR)/2011 AND THE APPEAL OF THE REVENUE IN ITA NO.14(ASR)/2011 AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH AUGUST, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6 TH AUGUST, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SATNAM SINGH, PHAGWRA. 2. THE ITO WARD-3, PHAGWARA. 3. THE CIT(A), JLR. 4. THE CIT, JLR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.