Yogesh Gupta, Delhi V. ITO, New Delhi

ITA 1553/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3526 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 29-06-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 08-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: V K TULSIAN
• Keywords: Reopening of assessment; Gift; Opportunity of being heard; Bogus loan; Set aside
• Section: 133(6); 143(1); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH I DELHI ] BEFORE SHRI C. L. SETHI, JM AND SHRI K. D. RANJAN, AM I. T. APPEAL NO. 1553 (DEL) OF 2010. ASSESSMENT YEAR : 2002-03. SHRI YOGESH GUPTA, THE INCOME-TAX OFFICER, 2525, NAIWARA, CHAWRI BAZAR, D E L H I 110 006. VS. W A R D : 28 (4), A N D 46, KUNDEWALAN, AJMERE GATE, D E L H I. N E W D E L H I. P A N / G I R NO. AAA PG 6947 G. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI V. K. TULSIAN, C. A.; DEPARTMENT BY : MS. ANUSHA KHURANA, SR. D.R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 200 2-03 ARISES OUT OF THE ORDER OF THE LD. CIT (APPEALS)-XXV, NEW DELHI. 2. THE GROUNDS OF APPEAL, RAISED BY THE ASSESSEE, A RE REPRODUCED AS UNDER:- 1. WHETHER THE LD. CIT (APPEALS) WAS JUSTIFIED BY UPHOLDING THE ASSUMPTION OF JURISDICTION EXERCISED UNDER SECTION 147 BY THE LD. AO JUST ON THE PREMISE AND SUO MOTO OBSERVATION THAT THERE WAS NO GENERAL INFO RMATION / ROVING ENQUIRY; 2 I. T. APPEAL NO. 1553 (DEL) OF 2010. 2. WHETHER THE LD. CIT (APPEALS) WAS JUSTIF IED BY GOING BEYOND THE APPELLATE RECORD WITHOUT EVEN CONFRONTING THE APPELLANT OR RE QUIRING THE ALLEGED DETAILS, ON WHICH BASIS SECTION 147 WAS EXERCISED BY LD. AO; 3. WHETHER THE LD. CIT (APPEALS) WAS JUSTIF IED BY UPHOLDING THE ASSUMPTION OF JURISDICTION UNDER SECTION 147 BY THE LD. AO SPE CIFICALLY WHEN THERE WAS NO SATISFACTION RECORDED IN THE ASSESSMENT ORDER NOR IN THE APPELLATE ORDER; 4. WHETHER THE LD. CIT (APPEALS) WAS JUSTIF IED BY NOT AFFORDING A SHORT ADJOURNMENT REQUESTED ON THE FIXED DATE I.E. 4/03/1 0 AND NOT EVEN CONSIDERING THE SUBMISSION MADE ON 5/03/10 IN HER OFFICE; 5. WHETHER THE LD. CIT (APPEALS) WAS JUSTIF IED BY UPHOLDING THE ADDITION ON ACCOUNT OF ENTIRE GIFTS OF RS.28,50,000/- UNDER SECTION 68 WITHOUT CONSIDERING THE EVIDENCE ON RECORD OR ANY CONTRARY MATERIAL ON RECORD TO DRAW ANY ADVERSE INFERENCE. 3. THE FIRST ISSUE FOR CONSIDERATION RELATES TO ASS UMPTION OF JURISDICTION UNDER SECTION 147 OF THE ACT. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE RETURN OF INCOME FILED ON 17/09/2002 WAS PROCESSED UNDER SECTION 143(1) ON 29/01/2003. THEREAFTER, THE INVESTIGATION WING OF THE DEPARTMENT DURING THE COURSE SEARCH AND SURVEY PRO CEEDINGS WAS FOUND THAT THE VARIOUS PERSONS / PARTIES WERE INVOLVED IN GIVING BOGUS LOAN, GIFTS AND SHARE CAPITAL AFTER TAKING CASH AND ISSUING CHEQUES TO THE BENEFICIARIES. IT WAS ALSO NOTED TH AT SHRI MUKESH KUMAR WAS INVOLVED IN BOGUS ENTRY OPERATIONS AND HAD GIVEN TWO GIFT CHEQUES OF RS.2,00,000/- EACH DATED 13/12/2001 AND 3/02/2002 TO THE ASSESSEE. ON THE BASIS OF INFORMA TION RECEIVED FROM THE INVESTIGATION WING THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 A FTER RECORDING REASONS THEREFOR. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE GIFTS RECEIVED FROM SHRI MUKESH KUMA R AS ALSO CONFIRMATION FROM THE CREDITORS AND SOURCE OF THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. THE ASSESSEE SOUGHT ADJOURNMENT. THE ASSESSING OFFICER SENT NOTICE UND ER SECTION 133(6) DATED 21 ST NOVEMBER, 20087 BY REGD. POST, WHICH WAS RECEIVED BACK UN-DELIVERED WITH THE POSTAL REMARK THAT THERE WAS NO SUCH PERSON OF THAT IDENTITY AT THE GIVEN ADDRESS. SINCE THE ASSESSEE WAS NOT COOPERATING THE ASSESSING OFFICER THUS COMPLETED ASSESSMENT ON 22 ND DECEMBER, 2008 BY MAKING ADDITION OF THE AMOUNT OF GIFTS AS UNEXPLAINED. LIKEWISE, THE ASSE SSING OFFICER ALSO FOUND DEPOSITS OF 3 I. T. APPEAL NO. 1553 (DEL) OF 2010. RS.28,50,000/- IN THE BANK BY CHEQUE. THE ASSESSIN G OFFICER ADDED THE AMOUNT OF RS.24,80,000/- BY REDUCING THE GIFT AMOUNT OF RS.4,00,000 FROM THE DEPOSITS FOUND IN THE BANK ACCOUNT. 5. ON APPEAL BEFORE THE LD. CIT (APPEALS) THE ASSES SEE TOOK GROUND REGARDING ASSUMPTION OF JURISDICTION UNDER SECTION 148 OF THE ACT. IT WAS CONTENDED THAT THE ASSESSING OFFICER HAD ERRED IN INVOKING PROVISIONS OF SECTION 148 IN THE CLOSING H OURS WHILE THE ASSESSMENT WAS GETTING TIME- BARRED. IT WAS ARGUED THAT THE INFORMATION ON THE BASIS OF WHICH ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT WAS GENERAL AND TRITE AND THAT THE ASSESSMENT WAS RE-OPENED FOR MAKING ROVING AND FISHING ENQUIRIES. IT WAS ARGUED THAT IN THE ABSENCE OF ANY SATISFACTION AND SUPPLY OF REASONS THE RE-ASSESSMENT PROCEEDINGS WER E CONTRARY TO PROVISIONS OF LAW AND HENCE BE CANCELLED. THIS CONTENTION OF THE ASSESSEE WAS REJ ECTED BY THE LD. CIT (APPEALS) ON THE GROUND THAT THE ASSESSING OFFICER REOPENED THE ASSESSMENT ON THE BASIS OF SPECIFIC INFORMATION. THEREFORE THERE WAS PRIMA FACIE MATERIAL ON WHICH A SSESSMENT COULD BE RE-OPENED. THE LD. CIT (APPEALS) ALSO NOTED THAT AT NO POINT OF TIME DURIN G THE ASSESSMENT PROCEEDINGS, THE ASSESSEE REQUESTED FOR REASONS FOR REOPENING OF ASSESSMENT. IN FACT, THE AUTHORIZED REPRESENTATIVE FILED A LETTER ON 24 TH DECEMBER, 2008, SEEKING THE REASONS FOR REOPENING WHILE ASSESSMENT ORDER WAS PASSED ON 22/12/2008 ITSELF. THEREFORE, THE ACTION OF THE ASSESSING OFFICER IN REOPENING THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 UPON BASED ON SPECIFIC INFORMATION RELATING TO THE ESCAPEMENT OF INCOME WAS IN ORDER. ACCORDINGLY, TH E LD. CIT (APPEALS) REJECTED THE GROUND RAISED BY THE ASSESSEE FOR ASSUMPTION OF JURISDICTI ON UNDER SECTION 148 OF THE ACT. 6. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE RAISED OBJECTION FOR REOPENING OF ASSESSMENT. AS PER THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO (2003) 259 ITR 19 (SC), THE ASSESSING OFFICER WAS REQUIRED TO FURNISH REASONS WITHIN A REASONABLE TIME. THE NOTI CEE WAS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER WAS BOUND TO DI SPOSE OF THE SAME BY PASSING A SPEAKING ORDER. SINCE IN THE INSTANT CASE, THE ASSESSING OFFICER HA D NOT PASSED SPEAKING ORDER ON THE OBJECTIONS FILED, THE ORDER PASSED BY THE ASSESSING OFFICER IS BAD IN LAW AND DESERVES TO BE QUASHED. 4 I. T. APPEAL NO. 1553 (DEL) OF 2010. 7. ON THE OTHER HAND, THE LD. SR. DR SUBMITTED THAT THE ASSESSEE FILED LETTER DATED 22 ND DECEMBER, 2008 ON 24 TH DECEMBER, 2008 SEEKING COPY OF THE OBJECTIONS WHER EAS THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICE R ON 22 ND DECEMBER, 2008. THEREFORE, THE ASSESSEE HAD MADE EX-POST FACTO REQUEST FOR PROVIDI NG COPY OF REASONS. HENCE, ASSESSMENT CANNOT BE QUASHED. 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE COPY OF LETTER DATED 22/12/2008 WHICH WAS FILED WITH THE ASSESSING OFFICER ON 24 TH DECEMBER, 2008 AT 2.00 PM WHEREIN A REQUEST WAS MADE TO PROVI DE THE COPY OF REASONS. IT WAS ALSO REQUESTED THAT IN CASE IT WAS NOT POSSIBLE AT THAT STAGE THEN THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT SHOULD BE DROPPED. FROM THESE FACTS , IT IS CLEAR THAT THE ASSESSEE SOUGHT COPY OF REASONS ON 24 TH DECEMBER, 2008 WHEREAS ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER ON 22 ND DECEMBER, 2008. HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO (SUPRA) HAS OBSERVED THAT WHEN A NOTICE UND ER SECTION 148 OF THE I. T. ACT, 1961 IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE THE RETURN AND, IF HE SO DESIRES, TO SE EK REASONS FOR ISSUING THE NOTICES. THE ASSESSING OFF ICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF THE REASONS, THE NO TICEE IS ENTITLED TO FILE OBJECTIONS TO THE ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOU ND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE CASE BEFORE US, THE ASSESSE E HAS SOUGHT REASONS AFTER ASSESSMENT HAS BEEN PASSED. IT IS A FACT THAT THE ASSESSING OFFICER HA D NOT PROVIDED COPY OF REASONS PRIOR TO PASSING OF THE ORDER. THEREFORE, IN OUR CONSIDERED OPINION, I T WILL BE FAIR TO SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIONS TO PROVID E COPY OF THE REASONS FOR REOPENING OF ASSESSMENT. THE ASSESSEE WILL BE ENTITLED TO RAISE OBJECTIONS ON RECEIPT OF THE REASONS FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER WILL BE B OUND TO DISPOSE OF THE OBJECTIONS BY PASSING A SPEAKING ORDER. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 9. SINCE WE HAVE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER ON ASSUMPTION OF JURISDICTION, THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT 5 I. T. APPEAL NO. 1553 (DEL) OF 2010. (APPEALS) IS ALSO SET ASIDE WITH THE DIRECTIONS TO BE DECIDED DE NOVO AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED, FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 23 RD JULY, 2010. SD/- SD/- [ C. L. SETHI ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23 RD JULY, 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT. 6 I. T. APPEAL NO. 1553 (DEL) OF 2010. 7 I. T. APPEAL NO. 1553 (DEL) OF 2010.