RAJENDRA M. GADHECHA, MUMBAI V. ITO 29(3)(1), MUMBAI

ITA 1605/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1357 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 08-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Bogus purchase; Opportunity of cross examination; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE SHRI R. C. SHARMA, AM, & HONBLE SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO. 1605/MUM/2017, ( / ASSESSMENT YEAR: 2009-10) RAJENDRA M. GADHECHA 4-B, AARTI APARTMENT, S. N. ROAD, MULUND(WEST) MUMBAI-400080 / VS. ITO 29(3)(1) MUMBAI PIN- ./ ./ PAN/GIR NO. AEDPG5052M ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRIDEVENDRA JAIN, AR / RESPONDENTBY : SHRI CHAITANYA ANJARIA, DR / DATE OF HEARING : 09/08/2018 / DATE OF PRONOUNCEMENT : 30.08.2018 / O R D E R PER SANDEEP GOSAIN, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE ASSESSEEIS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-40, 2 I.T.A. NO. 1605/MUM/2017 RAJENDRA M. GADHECHA MUMBAIDATED 01.12.16 FOR AY 20 09-10 ON THE GROUNDS MENTIONED HEREIN BELOW:- 1. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING T HE REASSESSMENT PROCEEDINGS INITIATED U/S 147 BY THE LEARNED ASSESSING OFFICER WITHOUT INDEPENDENT APPLICATION OF MIND ON THE INFORMATION RECEIVED FRO M DGIT(INVESTIGATION). 2. IN FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED CIT(A)-40 HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER OF COMPLETING THE ASSESSMENT U/S 143(3) WITHOUT PROVIDING ANY OPPORTUNITY OF CROSS EXAMINATION OF THE WITNESSES RELIED UPON BY THE ASSESSING OFFICER AND THUS VIOLA TING THE LAW LAID DOWN BY HONORABLE SUPREME COURT IN THE CASE OF KISHANCHANDCHELLARAM V. CIT (1980) 125 ITR 713 AND ANDAMAN TIMBER INDUSTRIES V. COMMISSIONER OF CENTRAL EXCISE (CIVIL APPEAL NO. 4228 OF 2006.) 3. IN FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED CIT(A)-40, MUMBAI HAS ERRED IN UPHOLDING THE AD HOC ADDITION OF RS. 51,86,620/- BE ING 12.5% OF ALLEGED BOGUS PURCHASES OF RS. 4,14,92,962 /-, MERELY ON SURMISES AND CONJECTURES. 3 I.T.A. NO. 1605/MUM/2017 RAJENDRA M. GADHECHA 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDER WAS FILED BY THE ASSESSEE O N 27.09.09 DECLARING TOTAL INCOME AT RS. 2,32,620/-. THE RETUR N WAS PROCESSED AND SUBSEQUENTLY THE CASE WAS SELECTED FO R SCRUTINY AFTER RECORDING DUE REASONS FOR RE-OPENING THE ASSE SSMENT U/S 147 OF THE ACT. ASSESSMENT ORDER U/S 143(3) R.W.S. 147 OF THE I.T. ACT WAS PASSED BY THE AO ASSESSING THE TOTAL INCOME AT RS. 58,65,460/- THEREBY MAKING ADDITIONS. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED AP PEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES PARTLY ALLOWED THE APPEAL OF THE A SSESSEE. NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRES ENT APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. 1 3. THIS GROUND RAISED BY THE ASSESSEE RELATES TO CH ALLENGING THE ORDER OF LD. CIT(A)IN UPHOLDING THE REASSESSMEN T PROCEEDINGS INITIATED U/S 147 BY THE AO WITHOUT IND EPENDENT APPLICATION OF MIND ON THE INFORMATION RECEIVED FRO M DGIT(INVESTIGATION). 4 I.T.A. NO. 1605/MUM/2017 RAJENDRA M. GADHECHA 4. FROM THE RECORDS, WE NOTICED THAT THIS GROUND WA S NEVER RAISED BEFORE LD. CIT(A), THEREFORE LD. CIT(A) HAD NO OCCASION TO ADJUDICATE THE SAME. THOUGH, IT IS A SETTLED LAW THAT A LEGAL ISSUE CAN ALWAYS BE RAISED BY THE PARTIES AT ANY ST AGE OF PROCEEDING, HENCE THE ASSESSEE IS WELL WITHIN HIS R IGHTS TO CHALLENGE THE RE-ASSESSMENT PROCEEDINGS INITIATED U /S 147 OF THE I.T. ACT AT THIS STAGE. SINCE THE ASSESSEE HAS CATEGORICALLY RAISED SPECIF IC GROUND NO. 1 OF APPEAL TO THE EFFECT THAT LD. CIT(A) HAS E RRED IN UPHOLDING THE RE-ASSESSMENT PROCEEDINGS INITIATED U /S 147 BY THE AO, HOWEVER ON PERUSAL OF THE IMPUGNED ORDER PASSED BY LD. CIT(A), THERE ARE NO FINDINGS AS SUCH AS NO SUCH GR OUND WAS EVER RAISED BY THE ASSESSEE BEFORE LD. CIT(A). BE THAT AS IT MAY, CONSIDERING THE FACTS AND CIRCU MSTANCES OF THE CASE AND KEEPING IN VIEW THE INTEREST OF JUS TICE, WE ARE OF THE VIEW THAT DECISION ON INITIATION OR LEGALITY OF RE- ASSESSMENT PROCEEDINGS GOES TO THE ROOTS OF THE CAS E AND TOUCHES THE VERY FOUNDATIONS OF THE IMPUGNED ORDER . THEREFORE, WE REMIT THE MATTER BACK TO LD. CIT(A) T O ADJUDICATE THIS GROUND ON MERITS AND THEREAFTER PASS AFRESH OR DER. IT IS 5 I.T.A. NO. 1605/MUM/2017 RAJENDRA M. GADHECHA NEEDLESS HERE TO MENTION THAT BEFORE PASSING THE OR DER, THE LD. CIT(A) SHALL PROVIDE SUFFICIENT OPPORTUNITY OF HEAR ING TO THE ASSESSEE. BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECIS ION TO RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A) S HALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF THE DISPUTE, WHICH SHALL BE ADJUDICATED BY LD. C IT(A) INDEPENDENTLY IN ACCORDANCE WITH LAW. GROUND NO. 2 & 3 5. SINCE WE HAVE ALREADY REMITTED BACK GROUND NO. 1 OF APPEAL TO LD. CIT(A) FOR ADJUDICATION, THEREFORE TH ESE GROUNDS AT THIS STAGE BECOME INFRUCTUOUS. 6. IN THE NET RESULT, THE APPEAL FILED BY THE ASSES SEE STANDS PARTLY ALLOWED WITH NO ORDERS AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH AUGUST, 2018. (R. C. SHARMA) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 30.08.2018 SR.PS. DHANANJAY 6 I.T.A. NO. 1605/MUM/2017 RAJENDRA M. GADHECHA / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ ( ) / THE CIT(A) 4. $ / CIT- CONCERNED 5. #% &###' , #' , / DR, ITAT, MUMBAI 6. & ()* / GUARD FILE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI