Puspa Ramanlal Sabadra, Nashik V. ITO, Ahmednagar

ITA 1426/PUN/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1092 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-08-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 25-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: C V CHITALE
• Keywords: Unexplained investment; Rectification of order
• Section: 142(1); 133A; 148; 144; 154; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , ! # $% , & ' BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ( / ITA NO. 1426/PN/2012 ) * +* / ASSESSMENT YEAR : 2001-02 SMT. PUSHPA RAMANLAL SABADRA, A/P LASALGAON, DISTRICT-NASHIK PAN : BIMPS0398J ....... / APPELLANT ) / V/S. THE INCOME TAX OFFICER, WARD 3, AHMEDNAGAR / RESPONDENT ASSESSEE BY : SHRI C.V. CHITALE REVENUE BY : SHRI P.L. KUREEL / DATE OF HEARING : 10-08-2016 / DATE OF PRONOUNCEMENT : 12-08-2016 , / ORDER PER VIKAS AWASTHY, JM : THE ASSESSEE HAS FILED APPEAL AGAINST THE ORDER OF COMMIS SIONER OF INCOME TAX (APPEALS)-I, PUNE DATED 11-08-2011 FOR THE ASSESSMENT YEAR 2001-02. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS RUNNING A KIRANA SHOP AT POST LASALGAON, DIST RICT-NASHIK. 2 ITA NO. 1426/PN/2012, A.Y. 2001-02 A SURVEY ACTION U/S. 133A WAS CARRIED OUT AT THE BUS INESS PREMISES OF THE ASSESSEE ON 24-10-2003 WHEREIN BOOKS OF ACCOUNT A ND CERTAIN DOCUMENTS WERE IMPOUNDED. ON VERIFICATION OF THE IMPOUNDED BOOKS OF ACCOUNT IT WAS NOTICED THAT THE ASSESSEE HAD JOINTLY PURCHASED LAND MEASURING 57R COMPRISING IN S. NO. 50/3A/3 AT CHAHURANA ON 19-06- 2000. THE TOTAL CONSIDERATION FOR PURCHASE OF LAND WAS ` 10,75,000/-. THE ASSESSEE BEING 1/4 TH OWNER OF THE LAND ALLEGEDLY CONTRIBUTED ` 2,68,750/-. NOTICE U/S. 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 06-03-2000 WHICH WAS DULY SERVED. THEREAFTER, NOTICES U /S. 142(1) WERE ISSUED TO THE ASSESSEE ON 20-06-2006, 26-09-2006 , 11-10-2006, 01-11-2006 AND 21-11-2006. HOWEVER, THE ASSESSEE NEIT HER RESPONDED TO THE NOTICE NOR PARTICIPATED IN THE ASSESSMENT PROCEE DINGS. THE ASSESSING OFFICER WAS CONSTRAINED TO MAKE ASSESSMENT U/S . 144 OF THE ACT. THE ASSESSING OFFICER MADE ADDITION OF ` 2,68,500/- U/S. 69 OF THE ACT BEING UNEXPLAINED INVESTMENT IN LAND. AGGRIEVED BY THE ASSESSMENT ORDER DATED 04-12-2006, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD TH E FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE A SSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI C.V. CHITALE APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSING OFFICER HAD ORIGINALLY MADE ADDITION U/S. 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN ASSESSMENT Y EAR 2000-01, WHEREAS, THE ASSESSEE HAD MADE THE INVESTMENT IN FINANCIA L YEAR 2000-01 I.E. THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2001-02. SUBSEQUENTLY, THE ASSESSING OFFICER IN AN ARBITRARY AND UN JUSTIFIED 3 ITA NO. 1426/PN/2012, A.Y. 2001-02 MANNER WITHOUT FOLLOWING THE DUE PROCEDURE OF LAW CHANGED THE ASSESSMENT YEAR FROM 2000-01 TO 2001-02. THE LD. AR PLA CED ON RECORD A COPY OF COMMUNICATION DATED 18-03-2009 FROM TH E ASSESSING OFFICER ADDRESSED TO COMMISSIONER OF INCOME TAX (APPEALS) IN RESPONSE TO REMAND REPORT SOUGHT BY THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSING OFFICER IN THE SAID COMMUNICATION HAS STATED THE FACT THAT THE ORIGINAL ASSESSMENT ORDER DATED 04-12-2006 W AS PASSED U/S. 144 FOR THE ASSESSMENT YEAR 2000-01, ON NOTICING THE MIS TAKE, AN ORDER U/S. 154 WAS PASSED ON 22-03-2007 RECTIFYING THE ASSE SSMENT YEAR FROM 2000-01 TO 2001-02 AS MENTIONED IN THE ORDER PASS ED ON 04-12-2006. THE LD. AR CONTENDED THAT NO NOTICE OF SUO MOTU PROCEEDINGS U/S. 154 OF THE ACT INITIATED BY THE ASSESSING OFFICER FOR RECTIFICATION OF MISTAKE WAS EVER SERVED ON THE ASSESSEE. THEREAFTER, THE ASSESSING OFFICER VIDE COMMUNICATION DATED 19-06-2012 INFORMED THE ASSESSEE REGARDING FINALIZATION OF PENALTY PROCEEDINGS U /S. 271(1)(C) OF THE ACT. IN THE SAID NOTICE THE ASSESSMENT YEAR MEN TIONED BY THE ASSESSING OFFICER IS 2000-01. THUS, THE ASSESSING OFFICER HIM SELF IS NOT CLEAR AS TO IN WHICH ASSESSMENT YEAR THE ADDITION HAS TO BE MADE AND NO FORMAL ORDER OF RECTIFICATION PASSED U/S. 154 WAS EVER COMMUNICATED TO THE ASSESSEE. THE LD. AR ASSERTED THA T A PERUSAL OF COMMUNICATION DATED 19-06-2012 WOULD SHOW THAT THE SAM E RELATES TO ASSESSMENT YEAR 2000-01, IF THE ASSESSING OFFICER HAS ALREA DY CARRIED OUT RECTIFICATION WITH RESPECT TO ASSESSMENT YEAR BY PAS SING ORDER U/S. 154, THE SUBSEQUENT COMMUNICATION FROM THE ASSESSING OFFIC ER WOULD NOT HAVE MENTIONED ASSESSMENT YEAR 2000-01, THUS, IT CLE ARLY INDICATES THAT THERE IS NO RECTIFICATION ORDER PASSED BY ASSESSING OFFICER. THE LD. AR SUBMITTED THAT EVEN ON MERITS THE ASSESSEE HAS PRIM A FACIE GOOD CASE AS THE ASSESSEE HAD SUFFICIENT FUNDS TO MATCH THE INVESTMENT 4 ITA NO. 1426/PN/2012, A.Y. 2001-02 MADE IN THE LAND. THE LD. AR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER. 4. ON THE OTHER HAND SHRI P.L. KUREEL REPRESENTING THE D EPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCO ME TAX (APPEALS) IN CONFIRMING THE ADDITION OF ` 2,68,750/- U/S. 69 OF THE ACT. THE DR SUBMITTED THAT THE ASSESSEE HAS NO RESPECT FOR THE LAW OF LAND. THE ASSESSEE NEVER APPEARED BEFORE THE ASSESSING OFFICER DESPITE SERVICE OF NOTICES. THE LD. DR FURTHER SUBMITTED THAT EVEN BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) NEITHER THE ASSESSEE NOR THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE REGULARLY PUR SUED THEIR APPEAL. THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDE R HAS OBSERVED THAT THE APPEAL WAS PENDING FOR MORE THAN 4 Y EARS AND THE ASSESSEE WAS GRANTED 20 TO 25 OPPORTUNITIES TO PRESEN T HER CASE. NONE APPEARED ON BEHALF OF THE ASSESSEE EXCEPT ON CERTAIN OC CASIONS. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) DESPITE REPEATED OPPORTUNITIES THE ASSESSEE COULD NOT PRODUCE ANY RELIABLE EVIDENCE TO SHOW THE SOURCE OF INVESTMENT IN LAND. AS REGARDS RECT IFICATION OF ASSESSMENT YEAR, THE LD. DR SUBMITTED THAT NOTICE U/S. 1 48 DATED 06-03-2006 WAS ISSUED TO THE ASSESSEE FOR ASSESSMENT YEAR 2001-02. EVEN THE SUBSEQUENT NOTICES U/S. 142(1) AND 143(2) WERE IS SUED FOR ASSESSMENT YEAR 2001-02, HOWEVER, WHILE PASSING THE ASS ESSMENT ORDER THE ASSESSMENT YEAR WAS WRONGLY MENTIONED AS ASSESSM ENT YEAR 2000-01. THE MISTAKE WAS RECTIFIED BY PASSING ORDER U/S. 154 ON 22-03-2007. THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE IN ABSENCE OF ANY MATERIAL WHICH WOULD SUBSTANT IATE THE PLEA OF THE ASSESSEE. 5 ITA NO. 1426/PN/2012, A.Y. 2001-02 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORIT IES BELOW. A PERUSAL OF ORDER OF THE AUTHORITIES BELOW SHOWS THAT THE ASSESSEE HAS BEEN NEGLIGENT IN PURSUING HER CAUSE IN THE FIRST INSTANCE BEFORE THE ASSESSING OFFICER AND THEREAFTER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSING OFFICER WAS CONSTRAINED TO PASS AS SESSMENT ORDER U/S. 144 AS NEITHER THE ASSESSEE NOR ANY AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE HAD PARTICIPATED IN THE A SSESSMENT PROCEEDINGS. THE POSITION BEFORE THE COMMISSIONER OF INCOM E TAX (APPEALS) WAS EQUALLY DEJECTING. HOWEVER, ON SOME OCCASION S THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND MADE SOME SUBMISSIONS. THE ASSESSEE WAS NEGLIGENT AND SLACK IN PURS UING HIS APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSING OFFICER MADE ADDITION ON THE BASIS OF MATERIAL AVAILA BLE BEFORE HIM AND THE COMMISSIONER OF INCOME TAX (APPEALS) UPH ELD THE FINDINGS OF ASSESSING OFFICER IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED BEFORE HIM BY THE ASSESSEE. 6. BEFORE THE TRIBUNAL THE LD. AR OF THE ASSESSEE POINTED THAT THE ORIGINAL ASSESSMENT ORDER WAS PASSED FOR THE ASSESSMENT YEAR 2000-01, WHEREAS THE INVESTMENT IN LAND WAS MADE BY THE ASSESSE E DURING THE FINANCIAL YEAR 2000-01 I.E. DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2001-02. IT HAS BEEN ARGUED THAT THE ASSESSING OFFICER SUO MOTU INITIATED PROCEEDINGS FOR RECTIFICATION OF THE ASSESSMENT ORD ER DATED 04-12-2006 TO CHANGE THE ASSESSMENT YEAR FROM 2000-0 1 TO 2001-02. THE LD. AR HAS PLACED ON RECORD A COPY OF REMAND REPO RT DATED 18-03-2009. A PERUSAL OF SAME SHOWS THAT THE ASSESSING OFFICER HAD CARRIED OUT THE ALLEGED RECTIFICATION IN THE ASSESSMENT YEA R MENTIONED 6 ITA NO. 1426/PN/2012, A.Y. 2001-02 IN THE ASSESSMENT ORDER FROM 2000-01 TO 2001-02. THE ASSESSEE HAS ALSO PLACED ON RECORD A COPY OF COMMUNICATION DATED 19-0 6-2012 RECEIVED FROM THE ASSESSING OFFICER REGARDING FINALIZATION OF PE NALTY PROCEEDINGS U/S. 271(1)(C) FOR THE ASSESSMENT YEAR 2000-01 . A PERUSAL OF THE SAID COMMUNICATION SHOWS THAT THE PENALTY PROCEED INGS U/S. 271(1)(C) HAVE BEEN INITIATED AGAINST THE ASSESSEE FOR ADDITIONS MADE FOR THE PERIOD RELEVANT TO ASSESSMENT YEAR 2000-01. THE LD . AR OF THE ASSESSEE HAS ASSERTED THAT NEITHER THE NOTICE FOR RECT IFICATION OF ASSESSMENT ORDER WAS SERVED ON THE ASSESSEE NOR THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 154 HAS BEEN RECEIVED BY THE A SSESSEE TILL DATE. A PERUSAL OF THE DOCUMENTS ON RECORD REVEAL THAT THE A SSESSING OFFICER ERRED IN NOT MAKING THE ADDITION IN THE CORRECT ASS ESSMENT YEAR. THEREAFTER, WHILE INITIATING RECTIFICATION PROCEEDINGS U/S. 154, NO NOTICE WAS ISSUED TO THE ASSESSEE. THE LD. DR HAS NOT BEEN A BLE TO CONTROVERT THE ASSERTIONS OF THE LD. AR OF THE ASSESSEE. THE ASSES SING OFFICER WAS DUTY BOUND TO ISSUE NOTICE TO ASSESSEE BEFORE MAKING AN Y RECTIFICATION IN THE ORDER WHICH HAS THE EFFECT OF ENHANCING THE ASSESS MENT. THE ASSESSING OFFICER HAS VIOLATED THE BASIC PRINCIPLES OF NATURA L JUSTICE WHILE PASSING THE QUASI JUDICIAL ORDER. THUS, IN VIEW OF THE FACT THAT THE APPEAL RELATES TO ASSESSMENT YEAR 2001-02 NO USEFUL PUR POSE WOULD BE SERVED BY REMITTING THE MATTER BACK TO THE FILE OF ASSESS ING OFFICER WHEN THE AMOUNT INVOLVED IS MEAGER. IN SUCH CIRCUMSTANCES, W E DEEM IT APPROPRIATE TO QUASH THE IMPUGNED ORDER AND DELETE THE ADDITION. 7. FURTHER, IN VIEW OF THE ADMITTED POSITION THAT THE ASSE SSEE HAD MADE INVESTMENT IN THE PERIOD RELEVANT TO ASSESSMENT YE AR 2001-02 NO 7 ITA NO. 1426/PN/2012, A.Y. 2001-02 ADDITION COULD HAVE BEEN MADE IN ASSESSMENT YEAR 2000-0 1. THE NOTICE DATED 19-06-2012 WITH RESPECT TO FINALIZATION OF PEN ALTY PROCEEDINGS INITIATED U/S. 271(1)(C) OF THE ACT REVEALS THAT T HE ADDITION WAS MADE IN ASSESSMENT YEAR 2000-01 AND THE ALLEGED RE CTIFICATION OF ASSESSMENT YEAR IN PROCEEDING U/S. 154 OF THE ACT, IF ANY WAS NOT GIVEN EFFECT. ACCORDINGLY, WE ACCEPT THE GROUNDS OF APPEAL RAIS ED BY THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 12 TH DAY OF AUGUST, 2016. SD/- SD/- (PRADIP KUMAR KEDIA) (VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 12 TH AUGUST, 2016 RK ,-#./0+. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. # # $ () / THE CIT(A)-I, PUNE 4. # # $ / THE CIT-I, PUNE 5. '() *+ , # *+ , , ,-. , / DR, ITAT, B BENCH, PUNE. 6. )/0 12 / GUARD FILE. // ' // TRUE COPY// #3 / BY ORDER, 4 *. / PRIVATE SECRETARY, # *+ , / ITAT, PUNE