Vishnu Tukaram Wagh, Nashik V. Income-tax Officer,

ITA 161/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1144 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 27-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.161/PN/2014 % % / ASSESSMENT YEAR : 2005-06 SHRI VISHNU TUKARAM WAGH, AT & POST : DUGAON, TALUKA & DIST : NASHIK, NASHIK 422 101 PAN NO. ABIPM1483E . / APPELLANT V/S ITO, CIB, NASHIK . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI RAJESH DAMOR / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17-12-2013 OF THE CIT(A)-I, NASHIK RELATING TO A.Y. 2005-06. 2. IN GROUNDS OF APPEAL NO.1 & 2 THE ASSESSEE HAS CHALLE NGED THE JURISDICTION OF THE AO AS WELL AS THE VALIDITY OF THE A SSESSMENT. IN GROUNDS OF APPEAL NO.3 & 4 THE ASSESSEE HAS CHALLENGE D THE ORDER OF THE CIT(A) IN SUSTAINING THE ADDITION OF RS.14,94,000/-. / DATE OF HEARING : 07.07.2015 / DATE OF PRONOUNCEMENT: 07.09.2015 2 ITA NO.161/PN/2014 3. THIS IS THE THIRD ROUND OF LITIGATION BEFORE THE TRIBUNAL. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ITO, CIB, NASHIK ISSUED NOTICE TO THE ASSESSEE U/S.142(1) ON THE BASIS OF INFORMATIO N RECEIVED FROM THE TRANSACTIONS REPORTED IN AIR FURNISHED U/S. 285BA OF THE INCOME TAX ACT ACCORDING TO WHICH THE ASS ESSEE HAS MADE DEPOSITS IN CASH IN HIS SAVINGS BANK ACCOUNT AGGREG ATING RS.14,94,000/- DURING THE F.Y. 2004-05. ALTHOUGH THE NOTIC E WAS DULY SERVED ON THE ASSESSEE, NONE APPEARED ON BEHALF O F THE ASSESSEE FOR WHICH THE ASSESSING OFFICER PASSED AN EXPART E ORDER TREATING THE DEPOSIT OF RS.14,94,000/- AS UNEXPLAINED INVEST MENT AND BROUGHT TO TAX THE SAME AS INCOME FROM OTHER SOURCES. 4. IN APPEAL THE LD.CIT(A) UPHELD THE ADDITION MADE BY TH E AO. THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL CHALLENG ING THE JURISDICTION OF THE AO ON THE GROUND THAT IN VIEW OF THE ORDER ISSUED U/S.120 OF THE I.T. ACT BY THE CCIT, PUNE VIDE ORD ER DATED 1-08-2007 THE AO WHO PASSED THE ORDER HAS NO JURISDIC TION OVER THE ASSESSEE AND THEREFORE THE ENTIRE PROCEEDINGS SHOU LD BE HELD AS VOID AB-INITIO. BASED ON THE ARGUMENTS ADVANCED BY T HE ASSESSEE THE TRIBUNAL RESTORED THE ISSUE TO THE FILE OF TH E CIT(A) WITH A DIRECTION TO ADJUDICATE THE JURISDICTION ISSUE IN THE LIGHT OF THE INSTRUCTIONS ISSUED BY THE CCIT, PUNE. THE CIT(A) IN H IS ORDER DATED 17-12-2013 HELD THAT THE AO HAS VALIDLY ASSUMED JURISDICTION OVER THE ASSESSEE AND THEREFORE OBJECTION O F THE ASSESSEE RAISING THE ISSUE OF JURISDICTION IS NOT TENABLE. HE HOWEVER REQUESTED THE TRIBUNAL TO DECIDE THE ISSUE ON MERIT. 5. THE LD. COUNSEL FOR THE ASESSEE AT THE TIME OF HEAR ING SUBMITTED THAT THE ASSESSEES ONLY SOURCE OF INCOME IS AGRICULTURE 3 ITA NO.161/PN/2014 AND THE INCOME BELONGS TO THE HUF. THE ASSESSEE DOES N OT HAVE ANY OTHER BUSINESS ACTIVITY. ALL THE DETAILS WERE FURNISHED BEFORE THE LD.CIT(A) AND IT WAS SUBMITTED THAT THE CASH DEPOSITE D IN THE BANK ACCOUNT BELONGS TO THE HUF. HE SUBMITTED THAT TH E LD.CIT(A) IGNORING THE PRINCIPLES OF NATURAL JUSTICE DID NOT ACCEPT T HE ADDITIONAL EVIDENCES FURNISHED BEFORE HIM. HE SUBMITTED THA T THE SOURCE OF CASH DEPOSITS WERE DULY EXPLAINED WITH SUPPORT ING EVIDENCES AND THEREFORE THE CIT(A) WAS NOT JUSTIFIED IN SUS TAINING THE ADDITION MADE BY THE AO. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT T HE ASSESSEE HAD NOT COOPERATED IN THE ASSESSMENT PROCEE DINGS FOR WHICH THE AO HAS PASSED THE ORDER U/S.144 OF THE I.T. ACT. SINCE THE ASSESSEE HAD NOT EXPLAINED THE REASONS FOR NOT FURN ISHING THESE DETAILS BEFORE THE AO, THEREFORE, THE CIT(A) WAS JUST IFIED IN REJECTING THE ADDITIONAL EVIDENCES FILED BEFORE HIM. HE ACCORD INGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND IT IS AN UNDISPUTED FACT THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PR OCEEDINGS HAS NOT PARTICIPATED IN THE ASSESSMENT PROCEEDINGS NOR REPLIE D TO THE QUERIES RAISED BY THE AO FOR WHICH THE AO MADE ADDITION O F RS.14,94,000/- WHICH IS THE CASH DEPOSITED IN THE BANK AC COUNT OF THE ASSESSEE. WE FIND THE ASSESSEE BEFORE THE CIT(A) HA D SUBMITTED THAT THE AGRICULTURAL LAND CULTIVATED BY HIM BELON GS TO THE HUF WHICH ARE ANCESTRAL PROPERTIES AND HAVE BEEN R ECEIVED ON 4 ITA NO.161/PN/2014 PARTITION OF ANCESTRAL PROPERTIES. THE TWO 6D EXTRACTS E VIDENCING INHERITANCE FROM GRAND FATHER TO FATHER AND PARTIAL PARTITIO N WERE SUBMITTED BEFORE THE CIT(A). IT WAS ARGUED THAT THE SAV ING BANK ACCOUNT HELD WITH CENTRAL BANK OF INDIA REFERRED THE OCCU PATION AS AGRICULTURE. IT WAS ACCORDINGLY ARGUED THAT THIS BANK ACCOUNT BELONGS TO THE HUF AND NOT TO THE ASSESSEE AS INDIVIDUA L. FURTHER, THE ASSESSEE HAD ALSO SUBMITTED BEFORE THE CIT(A) THAT THE ENTIRE TRANSACTIONS IN THE BANK ACCOUNT RELATE TO TRANSACTIONS RELATING TO THE AGRICULTURAL ACTIVITY ONLY AND THE ASSESSEE DOES NOT MAINTAIN ANY SEPARATE BOOKS OF ACCOUNTS. COPIES OF 7/12 EXTRACTS OF THE LAND OWNED CONTAINING CROP ENTRIES FOR THE YEAR A.Y. 2004-05 W ERE SUBMITTED BEFORE CIT(A). 8. THE ASSESSEE HAD ALSO SUBMITTED BEFORE THE CIT(A) T HAT HE WAS OWNING AGRICULTURAL LAND OF 11.75 ACRES JOINTLY WITH THE OTHER MEMBERS AND CASH CROPS SUCH AS GRAPES ETC. ARE PRODU CED. IT WAS SUBMITTED THAT THE CROPS ARE NORMALLY SOLD THROUGH THE TRADERS FROM UNORGANIZED SECTOR AND THE PROCEEDS ARE NORMALLY RECEIVED IN CASH WHICH HAS BEEN DEPOSITED IN BANK. THE ASSESSEE HA D ALSO PRODUCED SALE BILLS OF CROPS, AFFIDAVITS AND EXTRACTS OF THE LA ND HOLDING ETC. UNDER THESE CIRCUMSTANCES, WE ARE OF THE CO NSIDERED OPINION THAT THE CIT(A) WAS NOT JUSTIFIED IN REJECTING THE V ARIOUS DOCUMENTS FURNISHED BY THE ASSESSEE BEFORE HIM. EVEN DU RING THE REMAND PROCEEDINGS IT HAS NOT BEEN PROVED BY THE AO T HAT THE ASSESSEE WAS INDULGED IN SOME OTHER ACTIVITIES OTHER THAN AGRICULTURE. EVEN THE AO IN HIS REMAND REPORT HAS ACCE PTED A PART OF THE CASH DEPOSITED, I.E. RS.5,00,000/- OUT OF RS.7,00,000/- DEPOSITED ON 03-02-2005 AS ADVANCE RECEIVED FROM GANES H FRUITS, AZADPUR, DELHI FOR WHICH THE ASSESSEE HAS FILED CONFIRMATION LE TTER. 5 ITA NO.161/PN/2014 THE AO HAS HELD IN THE REMAND REPORT THAT THE ASSESSE E AND HIS BROTHERS ARE CULTIVATING CROPS ON THE LAND BELONGING TO THE ASSESSE E AND HIS BROTHERS. THE LAND HOLDING OF 4.7 HECTARES HAS ALSO BEEN CONFIRMED BY THE AO IN THE REMAND REPORT. EVEN THE AO HAS DEPUTED HIS INSPECTOR TO MAKE ENQUIRY ABOUT THE ACTIVITIE S OF THE ASSESSEE WHO HAD REPORTED THAT THE ASSESSEE IS DOING AGRICULTURAL ACTIVITY ALONG WITH HIS BROTHERS AND ARE STAYING TOGETHER AND THE ASSESSEE IS THE MAIN PERSON HANDLING THE ACTIVITIES OF HIS FAMILY. THE INSPECTOR HAD ALSO REPORTED THAT THE ASSESSEE HAS NO OTHER ACTIVITIES EXCEPT AGRICULTURE. THE REPORT OF THE INSPECTOR WAS ALSO ENCLOSED ALONG WITH THE REMAND REPORT. DESPITE ALL THESE EVIDENCES THE CIT(A) UPHELD THE ACTION OF THE AO, WHICH IN OUR OPINION , IS UNCALLED FOR. SINCE THE ASSESSEE IS AN AGRICULTURIST AND IS NOT CONVERSANT WITH THE COMPLEXITIES OF LAW, SOME LENIENCY SHOULD HAVE BEEN TAKEN BY THE REVENUE AUTHORITIES. HOWEVER, THE LD .CIT(A) OUTRIGHTLY REJECTED THE ADDITIONAL EVIDENCES FILED BEFORE HI M AND HELD THAT THE SAME IS IN CONTRAVENTION OF PROVISIONS OF S ECTION 46A. HAD THE ASSESSEE BEEN IN BUSINESS THE SAME WOULD HAVE BEEN JUSTIFIED. HOWEVER, UNDER THE FACTS AND CIRCUMSTANCES OF T HE CASE, WHEN THE ASSESSEE IS AN AGRICULTURIST, THE VARIOUS EVIDEN CES SUCH AS 7/12 EXTRACTS, AREA OF LAND, NATURE OF CROPS, AFFIDAVITS ETC. FILED DURING THE COURSE OF APPEAL PROCEEDINGS SHOULD NOT HAVE BEEN REJECTED. IN THIS VIEW OF THE MATTER WE SET ASIDE THE O RDER OF THE CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. 9. SINCE THE ASSESSEE SUCCEEDS ON MERIT THE GROUNDS CHALLENGING THE VALIDITY OF THE JURISDICTION OF THE AO BECOM E ACADEMIC IN NATURE AND THEREFORE ARE NOT BEING ADJUDICATED. 6 ITA NO.161/PN/2014 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07-09-2015. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 07 TH SEPTEMBER, 2015. ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. & ( ) / THE CIT(A)-I, NASHIK 4. & , / THE CIT-I, NASHIK 5. ) ,,- , - , / DR, ITAT, A PUNE; 6. 1 / GUARD FILE. / BY ORDER , ) , //TRUE COPY// 34 , - / SR. PRIVATE SECRETARY -, / ITAT, PUNE