Shri Virsa Singh Sidhu, Manimajra V. ITO, W-3(4), Chandigarh

ITA 1462/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0766 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 27-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Opportunity of being heard; Assessment record; Onus to prove; Set aside
• Section: 143(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH .. , BEFORE SHRI N.K.SAINI, VICE PRESIDENT ./ ITA NO. 1462/CHD/2018 / ASSESSMENT YEAR : 2007-08 SH. VIRSA SINGH SIDHU, SCO 834, FIRST FLOOR, CABIN NO.1,NAC MANIMAJRA, CHANDIGARH VS. THE ITO, WARD-3(4), CHANDIGARH ./PAN NO: ADYPS3624F / APPELLANT /RESPONDENT ! ' # /ASSESSEE BY : SH. TEJMOHAN SINGH, ADVOCATE $ ' # / REVENUE BY : SH. MANJIT SINGH, CIT DR % & ' ! ' /DATE OF HEARING : 19.03.2019 ()* ' ! ' / DATE OF PRONOUNCEMENT : 26.03.2019 !' / ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 29.5.2014 OF LD. CIT(A), CHANDIGARH. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN HOLDING THAT THE NOTICE ISSUED UNDER SECTION 143(2) IS NOT TIME BARRED BEING PROCEDURAL IN NATURE WHICH IS NOT THE CORRECT INTERPRETATION OF LAW AND AS SUCH THE ORDER PASSED IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION O F RS.10,80,000/- TREATING AGRICULTURAL INCOME TO BE INCOME FROM OTHER SOURCES IN UTTER DISREGARD OF THE ITA NO. 1462-CHD-2018- SH. VIRSA SINGH SINDHU, CHANDIGARH 2 EXPLANATIONS RENDERED WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 31.7.2007 DECLARING AN INCOME OF 49,307/- FROM OTHER SOURCES AND AGRICULTURAL INCOME OF 10,80,000/-. THE SAID RETURN WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (I N SHORT 'THE ACT'). LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH GIRDWARI OF LAND AND ALSO PRODUCE SHRI BA KSHISH SINGH TO WHOM THE ASSESSEE HAD GIVEN THE LAND ON LEASE (THEK A). THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD NOT FILED GIRDWARI OF LAND AND ALSO FAILED TO PRODUCE SHRI BAKSHISH SINGH FOR VERI FICATION. HE ALSO OBSERVED THAT THE LEASE AGREEMENT FILED BY THE ASSE SSEE WAS ON A SIMPLE PAPER, SELF-PREPARED AND UNREGISTERED WHICH HAVE NO EVIDENTIAL VALUE. HE FURTHER OBSERVED THAT THE ASSESSEE OWNED 167 KANAL LAND AND BALANCE OUT OF 300 KANAL & 8 MARLA BELONGED TO HIS BROTHER & LATE FATHER. HE ALSO OBSERVED THAT THE ASSESSEE HAD NOT DEPOSITED THE LEASE MONEY RECEIVED IN CASH IN HIS BANK ACCOUNT. HE, THE REFORE, CONSIDERED THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AS I NCOME FROM OTHER SOURCES. ITA NO. 1462-CHD-2018- SH. VIRSA SINGH SINDHU, CHANDIGARH 3 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION BY OBSERVING IN PARA 5 TO 5.5 AS UNDER:- 5. I HAVE CONSIDERED THE FACTS OF THE CASE. I HAVE ALSO PERUSED ASSESSMENT RECORDS OF THE CASE. THE LD . COUNSEL HAS TAKEN UP THE ISSUE OF JURISDICTION ALSO IN THE APPELLATE PROCEEDINGS AND SUBMITTED THAT THE RETURN OF INCOME WAS FILED IN THIS CASE ON 31.07.20 07 AND FIRST NOTICE U/S 143(2) WAS ISSUED ON 11.08.200 8, WHEREAS AS PER SECTION 143(2), AS APPLICABLE ON THE DATE OF FILING OF RETURN, THE FIRST NOTICE U/S 143( 2) COULD NOT HAVE BEEN ISSUED AFTER 31.07.2008 AND SO NOTICE U/S 143(2) WAS NOT IN TIME. THIS CONTENTION OF THE APPELLANT IS NOT ACCEPTABLE BECAUSE PROVISIONS OF SECTION 143(2) ARE PROCEDURAL IN NATURE AND SO LAW PREVAILING AS ON THE DATE OF ISSUE OF NOTICE U/S 14 3(2) IS TO BE APPLIED AND AS PER THE AMENDED LAW WITH EFFECT FROM 01-04.2008, THE NOTICE U/S 143(2) COULD HAVE BEEN ISSUED BY 30.09.2008 FOR RETURNS FILED ON 31.07.2007. THE APPELLANT HAS RELIED UPON THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (188 TAXMANN 113), BUT IN THAT CASE NOTICE U/S 143(2) HAD NOT BEEN ISSUED AT ALL AND SO RATIO, OF THAT JUDGMENT DOES NOT APPLY TO THE CASE OF THE APPELLANT. THEREFORE, THE ARGUMENT TAKEN BY THE LD. COUNSEL THAT FIRST NOTICE U/S. 143(2) WAS NOT ISSUED IN TIME AND SO THE ASSESSING OFFICER HAS ACT ED WITHOUT JURISDICTION IS REJECTED. 5.1 REGARDING THE ISSUE OF TREATING AGRICULTURAL INCOME, DECLARED BY THE APPELLANT AS INCOME FROM OTHER SOURCES, IT HAS BEEN SUBMITTED THAT APPELLAN T WAS IN POSSESSION OF AGRICULTURAL LAND OF 167 KANAL S 16 MARLAS IN HIS OWN NAME AND THE AGRICULTURAL LAND , MEASURING 132 KANALS 12 MARLAS IN THE NAME OF HIS LATE FATHER, WAS ALSO UNDER POSSESSION AND CONTROL OF THE APPELLANT THOUGH IT HAS NOT BEEN ENTERED INTO MUTATION IN THE NAME OF THE APPELLANT AFTER THE DEA TH OF HIS FATHER. THE LD. COUNSEL HAS ALSO SUBMITTED T HAT THE ASSESSING OFFICER HAD WRITTEN TO SH. BAKSHISH SINGH ON 10.12.2009 FOR PERSONAL PRESENCE, BUT HE HAD EXPIRED ON 07.09.2009. THE CONTENTION OF THE APPELLANT REGARDING THE DEATH OF SH. BAKSHISH SINGH ITA NO. 1462-CHD-2018- SH. VIRSA SINGH SINDHU, CHANDIGARH 4 IS CORRECT, BUT THE ASSESSING OFFICER HAD ASKED THE APPELLANT TO PRODUCE SH. BAKSHISH SINGH FOR VERIFICATION VIDE LETTER DATED 10.12.2009, BUT THE APPELLANT HAD HIDDEN THE FACT OF DEATH OF SH. BAKSHISH SINGH, SINCE THE APPELLANT CHOSE NOT TO FI LE ANY REPLY TO THE QUESTIONNAIRE DATED 10.12.2009. MOREOVER, IF SH. BAKSHISH SINGH HAD DIED, THE APPELLANT SHOULD HAVE PRODUCED SOME OTHER EVIDENCE TO PROVE THAT HE HAD ACTUALLY RECEIVED THE AMOUNT O F RS. 10,80,000/- FROM SH. BAKSHISH SINGH, 5.2 IN THE ABOVE REFERRED LETTER DATED 10,12.2009, CERTAIN OTHER QUERIES AS UNDER, WERE MADE BY THE ASSESSING OFFICER: DETAILS OF DEBIT AND CREDIT ENTRIES BANK ACCOUNT OF M/S V2 CREATIONS. GIDAWARI OF LAND BASIS OF COMPUTATION OF DAIRY INCOME. CASH FLOW STATEMENT WHERE THE AMOUNT OF RS. 12,00,000/- RECEIVED DURING THE YEAR WAS INVESTED? THE APPELLANT HAD NOT FILED REPLY TO ANY OF THE AFORESTATED QUERIES AND SINCE THE ASSESSMENT WAS GETTING BARRED BY LIMITATION, THE ASSESSING OFFICER HAD NO OPTION, BUT TO FRAME ASSESSMENT AND THE ORDE R WAS PASSED ON 24.12.2009. 5.3 THE LD. COUNSEL HAS ARGUED THAT NO INVESTMENT OR DEPOSIT WAS EXPLAINED OUT OF AGRICULTURAL INCOME AND SO THE AGRICULTURAL INCOME, IF NOT PROVED, SHOU LD HAVE BEEN IGNORED. THIS CONTENTION OF THE LD. COUNSEL IS NOT ACCEPTABLE, SINCE THE DEPARTMENT IS NOT EXPECTED TO BE AWARE OF ENTIRE FINANCIAL AFFAIR S OF THE APPELLANT. THE ONUS TO PROVE AS TO WHERE THE APPELLANT INVESTED OR HOW THE INCOME EARNED WAS SPENT CANNOT BE ON THE DEPARTMENT. 5.4 THE APPELLANT HAS ALSO CONTENDED THAT THE AGRICULTURAL INCOME FROM LEASE OF SAME LAND WAS ACCEPTED IN A.Y. 2005-06, BUT THIS ARGUMENT DOES NO T HOLD WATER BECAUSE PRINCIPLE OF RES-JUDICATA DOES N OT APPLY TO THE INCOME TAX PROCEEDINGS. AS THE APPELLA NT COULD NOT PROVE THAT HE HAD, IN FACT, EARNED AGRICULTURAL INCOME DECLARED BY HIM, THE SAME HAS T O BE TAXED AS INCOME FROM OTHER SOURCES. ITA NO. 1462-CHD-2018- SH. VIRSA SINGH SINDHU, CHANDIGARH 5 5.5 IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD THA T THE ASSESSING OFFICER HAS RIGHTLY ASSESSED THE AGRICULTURAL INCOME OF 10,80,000/- UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AND HER ACTION IN THIS REGARD IS UPHELD. GROUNDS OF APPEAL TAKEN BY THE APPELLANT ARE DISMISSED. 5. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT A SIMILAR AGRICULTURAL INCO ME SHOWN FOR THE ASSESSMENT YEAR 2005-06 WAS ACCEPTED BY THE ASSESSI NG OFFICER AND THAT WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SHRI BAKSHISH SINGH VIDE LETTER DATED 10.12.2009, HE HAD ALREADY EXPIRED ON 7.9.2009. SO IT WAS NOT POSSIBLE TO PRODUCE THE DEAD PERSON. HE ACCORDINGLY, SUBMITTED THAT THE ADDITION MADE BY T HE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUS TIFIED. 6. IN HIS RIVAL SUBMISSIONS, THE LD. CIT DR STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND REITERATED THE OBSERVATIONS MADE IN THEIR RESPECTIVE ORDERS. 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, THE LD. CIT(A) CATEGORICALLY STATED IN PARA 5 .2 OF THE IMPUGNED ORDER THAT THE ASSESSING OFFICER ASKED THE FOLLOWIN G DETAILS:- DETAILS OF DEBIT AND CREDIT ENTRIES BANK ACCOUNT OF M/S V2 CREATIONS. GIDAWARI OF LAND BASIS OF COMPUTATION OF DAIRY INCOME. CASH FLOW STATEMENT WHERE THE AMOUNT OF RS. 12,00,000/- RECEIVED DURING THE YEAR WAS INVESTED? ITA NO. 1462-CHD-2018- SH. VIRSA SINGH SINDHU, CHANDIGARH 6 THE LD. CIT(A) OBSERVED THAT THE ASSESSEE DID NOT FILE REPLY TO ANY OF THE AFORESAID QUERY, THEREFORE, THE ADDITION MA DE BY THE ASSESSING OFFICER WAS JUSTIFIED. ACCORDINGLY, THE IMPUGNED AD DITION WAS CONFIRMED. THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE ASSESSEE IS IN A POSITION TO PRODUCE ALL THE DETAIL S BEFORE THE ASSESSING OFFICER WHICH WERE NOT AVAILABLE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 8. IN THE PRESENT CASE, IT IS NOT CLEAR AS TO WHETH ER THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO HOW THE AMOUNT OF 10,80,000/- SHOWN AS AGRICULTURE INCOME WAS UTILIZE D BY HIM. IT IS ALSO NOT CLEAR AS TO WHETHER THE LAND IN THE NAME O F BROTHER OR LATE FATHER OF THE ASSESSEE , WAS IN THE POSSESSION OF THE ASSESSEE AND AS TO WHETHER THE FACTS UNDER CONSIDERATION WERE IDENTICA L TO THE FACTS FOR THE YEAR 2005-06, WHEN THE SIMILAR AGRICULTURAL IN COME FROM THE LAND LEASE WAS ACCEPTED. I, THEREFORE, DEEM IT APPROPRIA TE TO SET ASIDE THIS CASE, BACK TO THE FILE OF THE ASSESSING OFFICER TO BE ADJUDICATED AFRESH, IN ACCORDANCE WITH LAW AFTER PROVIDING A DUE AND RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 26 /03 /2019) ( .. / N.K. SAINI) / VICE PRESIDENT DATED : 26 .03.2019 .. ITA NO. 1462-CHD-2018- SH. VIRSA SINGH SINDHU, CHANDIGARH 7 , ' !-. /.! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % 0! / CIT 4. % 0! ( )/ THE CIT(A) 5. .12 !3 , ' 3 , 45627 / DR, ITAT, CHANDIGARH 6. 26 8& / GUARD FILE , % / BY ORDER, 9 $ / ASSISTANT REGISTRAR