Mahesh Kumar, Delhi V. ITO, Rewari

ITA 1795/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7534 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 03-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: IN CIRCUMSTANCES OF CA SE
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice; Peak credit; Right to appeal; Notional interest; Reassessment proceedings
• Section: 80C; 153A; 263; 144

Judgement Text

ITA NO. 1795/DEL/2013 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADI N MISHRA, ACCOUNTANT MEMBER ITA NO.:- 1795/DEL/2013 ASSESSMENT YEAR: 2009-10 SHRI MAHESH KUMAR, C/O KAPIL GOEL, ADV., A-1/25, SECTOR 15, ROHINI, DELHI. PAN AVAPK1750C VS. I TO WARD 2, REWARI. (APPELLANT) (RESPONDENT) O R D E R PER ANADI N MISHRA, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A), ROHTAK DATED 2.1.2013 FOR A.Y 2009-10. THE GROUNDS OF APPEAL ARE AS UNDER :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT-A ERRED IN UPHOLDING THE ASSESS MENT MADE BY LD. AO U/S 144 OF THE ACT, BOTH CONTRARY TO AVAILABLE MATERIAL, IN VIOLATION OF NATURAL JUSTICE PRINCIPLES. (SUPREME COURT 249 ITR 216 TIN BOX CASE) 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LEARNED CIT-A ERRED IN UPHOLDING THE ADDITION ON ACCOUNT OF CASH DEPOSITS AMOUNTING TO RS. 15,57,500 /- WITHOUT GIVING BENEFIT OF ACCUMULATED SAVINGS IN CA SH, TELESCOPING THEORY (CASH WITHDRAWN RECYCLED FOR CAS H DEPOSITS); PEAK THEORY AND INCOME OFFERED IN REGULA R ROI. ASSESSEE BY : SHRI KAPIL GOEL, ADV. DEPARTMENT BY: SHRI U C DUBEY, SR. DR DATE OF HEARING 03/08 /2016 DATE OF PRONOUNCEMENT /08 /2016 ITA NO. 1795/DEL/2013 2 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LEARNED CIT-A ERRED IN UPHOLDING THE ADDITION ON ACCOUNT OF NOTIONAL INTEREST ADDITION OF RS. 186,90 0 WITHOUT ANY BASIS OF THE SAME, BEING HYPOTHETICAL ADDITION. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LEARNED CIT-A ERRED IN SUSTAINING THE ADDITION MADE BY LD. AO AMOUNTING TO RS. 15,57,500/- & RS. 186,900 D EHORS THE MATERIAL AVAILABLE ON RECORD BASED ON PERVERSE FINDINGS AND CONCLUSIONS, IGNORING ASSESSEES WRITTEN SUBMIS SIONS. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LEARNED CIT-A ERRED IN DIRECTING THE LD. AO TO VERIFY DEDUCTION U/S 80C INSTEAD OF HIMSELF ALLOWING IT ON BASIS OF EVIDENCE SUBMITTED. (AMOUNT RS. 100,000) 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND, M ODIFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GROUNDS STA TED HEREIN ABOVE, EITHER BEFORE OR AT THE TIME OF HEARI NG OF THIS APPEAL. 2. DURING ASSESSMENT PROCEEDINGS, THE LD. AO ISSUED SHOW CAUSE NOTICE ALONGWITH NOTICES U/S 143(2)/142 (1) OF INCOME TAX ACT TO THE ASSESSEE, WHICH WAS SERVED UPON THE ASSESSEE ON 1.11.2011, FIXING U P THE CASE FOR 11.11.2011. IN RESPONSE TO THE SHOW CAUSE NOTICE NEITHER ANYBODY A TTENDED BEFORE THE LD. AO ON BEHALF OF THE ASSESSEE NOR ANY WRITTEN REPLY WAS FI LED. THEREAFTER, WITHOUT GIVING THE ASSESSEE ANY FURTHER OPPORTUNITY, LD. ASSESSING OFFICER COMPLETED ASSESSMENT U/S 144 OF I.T. ACT WHEREIN AN ADDITION OF RS. 17,4 4,400/- WAS MADE ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT OF THE ASSESSEE. MORE OVER, THE DEDUCTION CLAIMED U/S 80C OF I.T. ACT AMOUNTING TO RS. 1,10,575/- WAS DISALLOWED. THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. AO WAS DISMISSED BY LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL IN ITAT. FOR T HE SAKE OF CONVENIENCE, ALL GROUNDS OF APPEAL ARE TAKEN UP TOGETHER. IN THE COU RSE OF HEARING, THE LD. AR OF ITA NO. 1795/DEL/2013 3 THE ASSESSSEE SUBMITTED THAT THE LD. AO PROVIDED ON LY ONE OPPORTUNITY FOR COMPLIANCE OF SHOW CAUSE NOTICE. HE FURTHER CONTEND ED THAT TIME GIVEN FOR COMPLIANCE WAS INADEQUATE. HE REQUESTED TO RESTORE THE CASE TO LD. ASSESSING OFFICER FOR DE-NOVO ASSESSMENT WHILE ASSURING US TH AT THE ASSESSEE WILL COOPERATE WITH THE LD. AO IN MAKING COMPLIANCES AT THE TIME O F DE-NOVO ASSESSMENT. ON THE OTHER HAND LD. DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. HE CONTENDED THAT ADEQUATE OPPORTUNITY WAS PROVIDED TO THE ASSES SEE BY LD. CIT(A), WHICH THE ASSESSEE FAILED TO AVAIL. 3. WE HAVE HEARD BOTH SIDES. WE HAVE ALSO PER USED THE MATERIAL AVAILABLE ON RECORD. AS THE LD. AO PROVIDED ONLY ONE OPPORTUNIT Y TO THE ASSESSEE AND AS TIME GIVEN FOR COMPLIANCE WAS INADEQUATE; WE ARE OF THE VIEW THAT THE LD. AO DID NOT PROVIDE PROPER AND REASONABLE OPPORTUNITY TO THE A SSESSEE FOR COMPLIANCE OF SHOW CAUSE NOTICE DATED 1.11.2011. THE ASSESSEE HA S THE RIGHT TO EXPLAIN HIS CASE FIRST TO THE ASSESSING OFFICER ; BEFORE HE IS FORCE D TO EXPLAIN HIS CASE TO APPELLATE AUTHORITIES . IF AN ASSESSEE EXPLAINS HIS CASE AT T HE FIRST STAGE, I.E. AT THE STAGE OF ASSESSING OFFICER, TO THE SATISFACTION OF THE ASSES SING OFFICER; THE MATTER, IN A WAY, ATTAINS LIMITED FINALITY, BECAUSE REVENUE HAS NO RIGHT OF APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER. THUS, THOUGH THE MA TTER MAY BE REVISITED BY REVENUE UNDER CERTAIN GIVEN FACTS AND CIRCUMSTANCES , SUCH AS IN REASSESSMENT PROCEEDINGS (U/S 147 R.W.S. 148 OF I.T. ACT); REVIS ION PROCEEDINGS (U/S 263 OR U/S ITA NO. 1795/DEL/2013 4 264 OF I.T. ACT); RECTIFICATION PROCEEDINGS (U/S 15 4 OF I.T. ACT); U/S 153A OF I.T. ACT ; ETC. THE FACT THAT REVENUE HAS NO RIGHT OF AP PEAL AGAINST THE ORDER OF ASSESSING OFFICER IMPLIES THAT THE MATTER ATTAINS, IN A WAY, LIMITED FINALITY IF THE ASSESSEE IS ABLE TO EXPLAIN HIS CASE AT THE FIRST S TAGE, I.E. AT THE STAGE OF ASSESSING OFFICER, TO THE SATISFACTION OF THE ASS ESSING OFFICER. THAT IS WHY IT IS OF UTMOST IMPORTANCE THAT THE ASSESSEE GETS PROPER AND REASONABLE OPPORTUNITY AT THE FIRST STAGE (I.E. AT THE STAGE OF ASSESSING OFF ICER) SO THAT HE HAS THE CHANCE TO HAVE THE BENEFIT OF LIMITED FINALITY AT FIRST STA GE; IF HE IS ABLE TO EXPLAIN THE MATTER TO THE SATISFACTION OF THE ASSESSING OFFICER AT THAT STAGE. IF THE ASSESSING OFFICER TAKES AN ADVERSE VIEW AGAINST THE ASSESSEE WITHOUT GIVING HIM PROPER AND REASONABLE OPPORTUNITY, THE ASSESSEE MAY (OR MAY N OT, BUT EVEN ASSUMING THAT HE DOES) GET RELIEF AT THE STAGE(S) OF PROCEEDINGS BEFORE COMMISSIONER OF INCOME TAX (APPEALS) / INCOME TAX APPELLATE TRIBUNAL / HIG H COURT / SUPREME COURT ; BUT EVEN THEN THE FACT THAT REVENUE HAS RIGHT TO APPEAL AGAINST ORDERS OF LD. CIT(A) / ITAT / HC AND MOREOVER, THE FACT THAT REVE NUE ALSO HAS RIGHT TO MOVE SPECIAL LEAVE PETITION BEFORE HONBLE SUPREME COUR T IMPLIES THAT THERE IS LIKELIHOOD OF THE ASSESSEE BEING UNJUSTLY AND UNFAI RLY DENIED THE CHANCE TO OBTAIN THE BENEFIT OF LIMITED FINALITY AT THE FIRST STAGE. THUS , FAILURE OF THE ASSESSING OFFICER TO PROVIDE PROPER AND REASONABLE OPPORTUNIT Y AT THE FIRST STAGE RESULTS IN THE ASSESSEE BEING UNJUSTLY AND UNFAIRLY DENIED THE CHANCE TO OBTAIN BENEFIT OF LIMITED FINALITY AT FIRST STAGE. THUS, EVEN IF THE ASSESSEE IS LATER PROVIDED ITA NO. 1795/DEL/2013 5 SUFFICIENT OPPORTUNITY AT APPELLATE PROCEEDINGS AND EVEN IF HE GETS RELIEF FROM HIGHER AUTHORITIES ON MERITS OF THE CASE, IT CANNOT BE DENIED THAT THE ASSESSEE WAS UNJUSTLY AND UNFAIRLY DENIED THE CHANCE HE HAD TO OBTAIN BENEFIT OF LIMITED FINALITY AT FIRST STAGE, HAD THE ASSESSING OFFICER PROVIDED PROPER AND REASONABLE OPPORTUNITY. IT IS OF UTMOST IMPORTANCE THAT THE AS SESSEE GETS PROPER AND REASONABLE OPPORTUNITY AT THE FIRST STAGE OF PROCEE DINGS BEFORE ASSESSING OFFICER TO PLAY HIS BEST HAND, SO TO SAY; SO THAT HE HAS A CHANCE TO OBTAIN THE BENEFIT OF LIMITED FINALITY AT FIRST STAGE. IF THE ASSESSEE IS UNJUSTLY DENIED THE CHANCE HE HAS TO OBTAIN THE BENEFIT OF LIMITED FINALITY AT FIRST STAGE ; HE NOT ONLY HAS TO TAKE PART IN PROCEEDINGS BEFORE LD. CIT(A) / ITAT/HC/SC AND BEAR RELATED EXPENSES ; BUT HE ALSO HAS TO GO THROUGH AN AGONIZING PERIOD OF UN CERTAINTY OF TAX DISPUTE DURING WHICH HE MAY, IN ADDITION, BE ALSO ASKED BY REVENU E, TO ADD TO HIS AGONY, TO MAKE PART/FULL PAYMENT OF TAX. WHEN THE ASSESSEE I S BURDENED WITH A LIKELIHOOD OF THIS AVOIDABLE HARDSHIP UNJUSTLY AND UNFAIRLY BE CAUSE HE WAS NOT PROVIDED REASONABLE AND PROPER OPPORTUNITY BY THE ASSESSING OFFICER AT THE FIRST STAGE; THE ASSESSEE HAS THE RIGHT TO CLAIM SUCH OPPORTUNITY AT A LATER STAGE, IRRESPECTIVE OF WHETHER OR NOT THE ASSESSEE WAS LATER PROVIDED ADEQ UATE OPPORTUNITY AT APPELLATE STAGE. RIGHT OF PROPER AND REASONABLE OPPORTUNITY A T FIRST STAGE IS SACROSANCT, BECAUSE IT IS ONLY AT THAT STAGE THAT THE ASSESSEE HAS THE CHANCE TO OBTAIN THE BENEFIT OF LIMITED FINALITY. IF THIS RIGHT WAS DENI ED BY THE ASSESSING OFFICER, THE ASSESSEE CAN JUSTIFIABLY CLAIM THIS RIGHT AT A LAT ER STAGE. FOR THIS PROPOSITION, WE ITA NO. 1795/DEL/2013 6 TAKE SUPPORT FROM THE DECISION OF HONBLE APEX COUR T IN THE CASE OF TIN BOX COMPANY VS. CIT 249 ITR 216 (SC). HONBLE SUPREME COURT HAS HELD IN THE CASE OF TIN BOX COMPANY VS. CIT (SUPRA) AS UNDER :- THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFOR E THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CO NSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MA DE AFTER THE ASSESSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE H IGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESSMENT AFT ER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD. 4. IN VIEW OF THE FOREGOING, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THE CASE TO THE FILE OF THE LD. ASSESSING OFFICER FOR DENOVO ASSESSMENT. THE LD. ASSESSING OFFICER IS DIRECTED TO PROVIDE PROPER AND REASONABLE OPPORTUNITY TO THE ASSESSEE DURING THE PROCEEDINGS FOR DENOVO ASSESSME NT. 5. IN THE RESULT THIS APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 9 TH AUGUST, 2016. SD/- SD/- (H.S. SIDHU) (ANADI N MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 9 TH AUGUST, 2016. * VEENA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGI STRAR