ITO, Trichy V. Dr. Dhass Praveen, Trichy

ITA 1700/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64643 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 05-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S KEERTHIRAJAN
• Keywords: Gift; Opportunity of being heard
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI V. DURGA RAO, JUDICIAL MEMBER ------- ITA NO. 1698/MDS/2012 ASSESSMENT YEAR : 2004-05 THE INCOME TAX OFFICER, WARD-I(1), TRICHY V. DR. DHASS, NO. 137-A, MADURAI ROAD, MANAPPARAI, TRICHY-621 306. (PAN :AAGPD3592E) AND ITA NOS. 1699 & 1700/MDS/2012 ASSESSMENT YEARS : 2004-05 & 2005-06 THE INCOME TAX OFFICER, V. DR. DHASS PRAV EEN, WARD-I (1), N O. 137-A, TRICHY. MADURAI RD.,MANAPPARAI TRICHY-621 306. (PAN : AEOPD0016R) (APPELLANT) (RESPONDENTS) APPELLANT BY : SHRI GURU BASHYAM, JCIT RESPONDENTS BY : SHRI S. KEERTHIRAJAN, CA DATE OF HEARING : 13-12-2012 DATE OF PRONOUNCEMENT : 14-12-2012 ITA NOS.1698-1700/MDS /2012 : 2 : O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : ALL THESE THREE APPEALS ARE DIRECTED AGAINST THE O RDERS PASSED BY THE CIT(APPEALS), TRICHY DATED 15-06-2012 FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 RELATING TO FA THER AND SON. AS COMMON ISSUES ARE INVOLVED IN THESE APPEAL S, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ITA NO. 1698/MDS/2012: THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE IS A PROFES SIONAL PRACTISING MEDICINE. HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 25-10-2004 DECLARING TOT AL INCOME OF ` 6,85,850/-. INITIALLY THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) OF THE INCOME TAX AC T, 1961 ('THE ACT' FOR SHORT). SUBSEQUENTLY, AFTER ISSUING NOTICE U/S 148 OF THE ACT THE ASSESSING OFFICER MADE AN ADDITION O F ` 21,67,530/-. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT IN THE COURSE OF SURVEY ON 22 -02-2006 THE ASSESSEE HAD DEPOSED THAT HE HAD REPAID A PARTI CULAR LOAN OF ` 1 LAKH WHICH WAS BORROWED FROM ONE SHRI MOHAN DURI NG ITA NOS.1698-1700/MDS /2012 : 3 : THE FINANCIAL YEAR 2003-04. THE MODE OF REPAYMENT WAS CASH. THE ASSESSING OFFICER FOUND THAT THE SAID LOAN WAS STILL REMAINING IN THE BALANCE SHEET. THE ASSESSEE ALSO A DVANCED ` 36,25,767/- TO HIS SON, DR. D. PRAVEEN DURING THE F INANCIAL YEAR 2003-04 AND HE ALSO BORROWED A LOAN FROM 9 PERSONS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH DET AILS IN REGARD TO THE PAYMENT MADE TO SHRI MOHAN AND ALSO I N REGARD TO THE BORROWALS FROM THE SAID 9 PERSONS AS MENTION ED IN THE ASSESSMENT ORDER AT PAGE NO.2. NO ONE APPEARED. N O DETAILS WERE FILED AND THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE ACT. 3. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE CIT(APPEALS). BEFORE THE LEARNED CIT(APP EALS) THE ASSESSEE FILED ALL THE DETAILS IN RESPECT OF THE PA YMENTS MADE AND THE DETAILS WITH REGARD TO THE BORROWALS. THE LEARNED CIT(APPEALS) AFTER CONSIDERING THE DETAILS AND WITH OUT CALLING FOR ANY REMAND REPORT DELETED THE ADDITION AND ALLO WED THE APPEAL FILED BY THE ASSESSEE. 4. THE REVENUE HAS CARRIED THE MATTER BEFORE THE TR IBUNAL. THE LEARNED DR SUBMITTED THAT BEFORE THE ASSESSING OFFICER NO DETAILS WERE FILED. ALL THE ADDITIONS MADE BY THE ASSESSING ITA NOS.1698-1700/MDS /2012 : 4 : OFFICER WERE DELETED BY THE LEARNED CIT(APPEALS) BA SED ON THE VARIOUS DETAILS FILED BY THE ASSESSEE FOR THE FIRST TIME BEFORE HIM AND THEREFORE IT AMOUNTED TO VIOLATION OF RULE 46A OF THE INCOME TAX RULES. 5. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT HE HAD TRIED TO FILE ALL THE DETAILS BEFORE THE ASSESSING OFFICER BUT HE REFUSED TO TAKE. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. AFTER CONSIDERING THE ORDERS PASSED BY THE LEARNED CIT(AP PEALS) AND THE ASSESSING OFFICER WE FIND THAT BEFORE THE ASSES SING OFFICER, EXCEPT ON ONE OCCASION, NONE APPEARED. WE FIND THA T FOR THE FIRST TIME THE ASSESSEE FILED THE DETAILS IN RESPEC T OF THE ADDITION MADE BY THE ASSESSING OFFICER. THE LEARNE D CIT(APPEALS) WAS UNDER OBLIGATION TO CALL FOR THE R EMAND REPORT/COMMENTS FROM THE ASSESSING OFFICER. IN THI S CASE THE LEARNED CIT(APPEALS) HAS NOT CALLED FOR ANY REMAND REPORT/COMMENTS FROM THE ASSESSING OFFICER. IN OUR OPINION, IT IS VIOLATION OF RULE 46A OF THE INCOME TAX RULES. THEREFORE WE ARE OF THE OPINION THAT THE ORDER PASSED BY THE LEARNED CIT(APPEALS) HAS TO BE SET ASIDE AND WE DO SO. THE MATTER IS ITA NOS.1698-1700/MDS /2012 : 5 : SENT BACK TO THE ASSESSING OFFICER WITH THE DIRECTI ON TO PASS A DE NOVO ASSESSMENT ORDER AFTER GIVING REASONABLE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. THIS APPEAL FILED BY THE ASSESSEE IS THEREFORE ALLOWED FOR STATISTICAL PURPO SES. 7. ITA NO. 1700/MDS/2012: IN THIS APPEAL THE REVENUE HAS RAISED 6 EFFECTIVE GROUNDS AND ONE OF T HE GROUNDS RAISED BY THE REVENUE IS GROUND NO.6 RELATI NG TO VIOLATION OF RULE 46A OF THE INCOME TAX RULES. IN THIS CASE THE ASSESSEE, SHRI DHASS PRAVEEN, FILED RETURN OF I NCOME DECLARING TOTAL INCOME OF ` 2,11,934/-. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS OBSERVED THAT THE PROBA BLE ESCAPEMENT TOWARDS THE COST OF BUILDING WAS ` 9,11,945/-. FURTHER IT WAS SEEN FROM THE CASH FLOW STATEMENT TH AT THE ASSESSEE HAD RECEIVED GIFT OF ` 42 LAKH AND A LOAN OF ` .10.09 LAKH FROM DR. DHASS (FATHER OF THE ASSESSEE). HOWE VER, THE MODE OF PAYMENT AND OTHER DETAILS WERE NOT PROVIDED IN THE RECORD AND THE ASSESSMENT WAS RE-OPENED. BEFORE TH E ASSESSING OFFICER THE LEARNED COUNSEL FOR THE ASSES SEE APPEARED. HOWEVER, NO EVIDENCE LIKE BILLS AND VOUC HERS FOR COST OF CONSTRUCTION OF THE BUILDING, DOCUMENTARY O R ORAL EVIDENCES FOR GIFTS AND LOANS RECEIVED WERE PRODUCE D DESPITE ITA NOS.1698-1700/MDS /2012 : 6 : MANY OPPORTUNITIES AND APPEARANCES. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED A NOTICE DATED 7-12-2011 W HICH WAS SERVED ON THE ASSESSEE ON 8-12-2011 CALLING UPON TH E ASSESSEE TO FILE ALL THE DETAILS. BUT NO DETAILS WE RE FILED AND THEREFORE THE ASSESSING OFFICER PASSED THE ASSESSME NT ORDER UNDER SECTION UNDER SECTION 147 READ WITH SECTION 144 OF THE ACT. 8. THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARN ED CIT(APPEALS). BEFORE THE LEARNED CIT(APPEALS) ALL T HE DETAILS IN RESPECT OF THE CONSTRUCTION AND DETAILS IN RESPE CT OF GIFTS AND LOANS WERE FILED FOR THE FIRST TIME. THE LEARN ED CIT(APPEALS) WITHOUT CALLING FOR THE REMAND REPORT FROM THE ASSESSING OFFICER SIMPLY ALLOWED THE APPEAL OF THE ASSESSEE. 9. THE REVENUE HAS COME UP IN APPEAL BEFORE THE TRI BUNAL. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORDS A ND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT FOR THE FIRST TIME THE ASSESSEE FILED THE DETAILS BEFOR E THE CIT(APPEALS) AND THE LEARNED CIT(APPEALS) WAS UNDER OBLIGATION TO CALL FOR THE REMAND REPORT/COMMENTS F ROM THE ASSESSING OFFICER. IN THIS CASE THE LEARNED CIT(AP PEALS) HAS NOT CALLED FOR ANY REMAND REPORT/COMMENTS FROM THE ITA NOS.1698-1700/MDS /2012 : 7 : ASSESSING OFFICER. IN OUR OPINION, IT IS VIOLATION OF RULE 46A OF THE INCOME TAX RULES. THEREFORE WE ARE OF THE OPIN ION THAT THE ORDER PASSED BY THE LEARNED CIT(APPEALS) HAS TO BE SET ASIDE. THE MATTER IS THEREFORE SENT BACK TO THE AS SESSING OFFICER WITH THE DIRECTION TO PASS A DE NOVO ASSESSMENT ORDER AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS APPEAL FILED BY THE ASSESSEE IS ACC ORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 10. ITA NO. 1699/MDS/2012: SO FAR AS THIS APPEAL IS CONCERNED, THE LEARNED DR SUBMITTED THAT THE RE- OPENING WAS NOT ONLY BASED ON THE DIFFERENCE OF COST OF CON STRUCTION BUT ALSO ON OTHER GROUNDS. THEREFORE, THE LEARNED CIT(APPEALS) WITHOUT CONSIDERING ALL THE FACTS SIMP LY DECIDED THE ISSUE BY CONSIDERING ONLY ONE ASPECT I.E. TOWAR DS COST OF CONSTRUCTION OF BUILDING AT ` 10,03,473/-. 11. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM PAGE 3 OF THE ASSESSMENT ORDER WE FIND THAT THE ASSESSME NT WAS RE- OPENED ON THE GROUND THAT, THE PROBABLE ESCAPEMENT TOWARDS THE COST OF BUILDING WAS ` 10,03,473/-. FURTHER IT WAS SEEN FROM THE CASH FLOW STATEMENT THAT ITA NOS.1698-1700/MDS /2012 : 8 : THE ASSESSEE HAD RECEIVED A GIFT OF ` 14 LAKH AND A LOAN OF ` 36.3 LAKH FROM DR. DHASS AND THE MODE OF PAYMENT NOT PROVIDED. 12. AFTER CAREFUL CONSIDERATION, WE FIND THAT THE L EARNED CIT(APPEALS), WITHOUT PROPERLY CONSIDERING THE JUST IFICATION FOR THE RE-OPENING, HELD THAT THE RE-OPENING WAS INVALI D. WE THEREFORE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(APPEALS) AND REMIT THE MATTER BACK TO THE FILE OF THE LEARNED CIT(APPEALS) AGAIN TO DECIDE THE ISSUE AFRE SH IN ACCORDANCE WITH LAW AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND GIVING REASONABLE OPP ORTUNITY TO THE ASSESSEE OF BEING HEARD. 13. IN THE RESULT, ALL THE THREE APPEALS FILED BY T HE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 14 TH OF DECEMBER, 2012, AT CHENNAI. SD/- SD/- (DR. O. K. NARAYANAN) (V.DURGA RAO) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 14 TH DECEMBER, 2012. H. COPY TO: ASSESSEE/AO/CIT(A)/CIT/D.R./GUARD FILE