I.T.O., Ward-2(2), Farrukhabad V. Sh. Surya Pratap Singh, Farrukhabad

ITA 181/AGR/2013

• Counselvise Citation: 18120314 RSA 2013
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-08-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 04-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Unexplained investment; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 181/AGRA/2013 ASSTT. YEAR : 1997-98 INCOME-TAX OFFICER, VS. SHRI SURYA PRATAP SINGH, WARD 2(2), FARRUKHABAD. 1/88A, CIVIL LINES, FATEHGARH, DISTT. FARRUKHABAD. (PAN: ADMPS 3786 J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.K. MISHRA, JR. D.R. RESPONDENT BY : SHRI ANIL VERMA, ADVOCATE DATE OF HEARING : 05.08.2013 DATE OF PRONOUNCEMENT OF ORDER : 08.08.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), MUZAFFARNAGAR DATED 13.02.2013 FOR THE ASSESSMENT Y EAR 1997-98 ON THE FOLLOWING GROUNDS :- 1. THE LD. CIT(A), MUZAFFARNAGAR ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ASSESSEE NEVER SOUGHT THE REASONS FOR ISSUE OF NOTICE U/S. 148 OF THE INCOME TAX ACT AND INSTEAD COMPLIED WITH THE NOTICE U/S. 148 EVEN TILL DATE OF COMPLETI ON OF ORIGINAL ASSESSMENT ON 26.03.2002. THEREFORE, NON SUPPLY OF REASONS CANNOT BE MADE GROUND SUBSEQUENTLY FOR DECLARING TH E ASSESSMENT PROCEEDINGS AS NULL AND VOID. ITA NO. 181/AGRA/2013 2 2. THE LD. CIT(A), ERRED IN LAW AND ON FACTS IN ACC EPTING ASSESSEES SUBSEQUENT PLEA THAT REASONS FOR ISSUE O F NOTICE U/S. 148 WERE NOT RECEIVED WHICH IS CONTRADICTORY TO ASSESSE ES OWN ADMISSION THAT THE RECORDED REASONS FOR ISSUE OF NO TICE U/S. 148 WERE SUPPLIED BY THE A.O. THEREFORE, DECLARING THE REASSESSMENT PROCEEDINGS AS NULL & VOID ON THE GROUND OF NON SUP PLY OF REASONS IS UNJUSTIFIED. 3. THE LD. CIT(A), MUZAFFARNAGARS ORDER DATED 13.0 2.2013 MAY BE QUASHED AND THAT OF AO MAY BE RESTORED. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MA TERIAL AVAILABLE ON RECORD. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL DERIVING INCOME FROM PRACTICE IN CIVIL COURTS, FATEHGARH. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF SMT. MANJEET KAUR W/O ASSESSEE, IT WAS GATHERED BY THE AO THAT SHE HAD ADMITTED THAT ALONG WITH THE ASSESSEE, SHE HAD MADE INVESTMENT IN THE CONSTRUCTION OF RESIDENTIAL HOUSE. THE AO FOUND THE INVESTMENT TO BE ESCAPED INCOME AND INITIATED THE P ROCEEDINGS U/S. 147 BY ISSUING NOTICE U/S. 148 OF THE IT ACT ON 16.09.1999 . THE AO COMPLETED PROTECTIVE ASSESSMENT IN THE HANDS OF SMT. MANJEET KAUR AND INCOME FROM TUITION, WHICH REMAINED UNEXPLAINED, WAS ASSESSED O N SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE. THE ASSESSMENT WAS COMPLETED ON 26.03.2002 ON INCOME OF RS.10,00,120/-. THE ASSESSEE PREFERRED APPEAL BE FORE THE LD. CIT(A), ITA NO. 181/AGRA/2013 3 GHAZIABAD, WHO VIDE ORDER DATED 01.04.2004 ALLOWED CERTAIN RELIEF TO THE ASSESSEE. THE LD. CIT(A) DIRECTED THE AO TO SPLIT T HE UNEXPLAINED INVESTMENT IN DIFFERENT YEARS. THE DEPARTMENT AS WELL AS THE ASSE SSEE WENT IN APPEAL BEFORE ITAT, AGRA BENCH WHO VIDE ORDER DATED 30.04.2007 RE STORED THE MATTER TO THE FILE OF AO WITH THE DIRECTION TO THE AO TO SUPPLY T HE REASONS TO THE ASSESSEE AND DECIDE THE OBJECTIONS, IF ANY, RAISED BY THE ASSESS EE AND THEREAFTER PASS THE ASSESSMENT ORDER AFRESH AS PER LAW. IT WAS MENTIONE D BY THE AO THAT THE REASONS U/S. 147 WERE SUPPLIED TO THE ASSESSEE FOR FILING O BJECTION. ACCORDING TO THE AO, THE DIRECTIONS MADE BY THE LD. CIT(A), GHAZIABAD HA D BEEN GIVEN EFFECT TO. REGARDING UNEXPLAINED INVESTMENT IN CONSTRUCTION OF PROPERTY AND OTHER ADDITIONS, THE ASSESSEE HAD ALREADY BEEN PROVIDED O PPORTUNITY DURING THE COURSE OF ORIGINAL PROCEEDINGS. IN THE LIGHT OF THE DIRECT IONS OF THE LD. CIT(A), INCOME FROM HOUSE PROPERTY WAS DETERMINED AT NIL. THE AO A DDED THE INCOME EARNED AT RS.47,000/- OF SMT. MANJEET KAUR AS PER ORDER OF TH E THEN AO AND CIT(A). UNEXPLAINED INVESTMENT WAS DETERMINED AT RS.6,46,48 0/- AND THE AO COMPLETED ASSESSMENT U/S. 143(3)/148/251/254 DATED 08.12.2008. THE ASSESSEE CHALLENGED THE ADDITIONS AS WELL AS VALIDITY OF REA SSESSMENT PROCEEDINGS BEFORE THE LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE ASSE SSEE IS INCORPORATED IN THE APPELLATE ORDER, IN WHICH THE ASSESSEE BRIEFLY EXPL AINED THAT NO REASONS U/S. 147/148 HAVE BEEN SUPPLIED TO THE ASSESSEE DESPITE MAKING SEVERAL REQUESTS AND ITA NO. 181/AGRA/2013 4 AS PER DIRECTIONS OF THE TRIBUNAL. THE ASSESSEE ALS O REFERRED TO THE LETTER OF THE AO, IN WHICH IT WAS STATED THAT NO REASONS ARE AVAI LABLE AS PER RECORD. THE LD. CIT(A) REPRODUCED THE ORDER OF THE TRIBUNAL IN WHIC H DIRECTION WAS GIVEN EARLIER TO SUPPLY THE REASONS U/S. 148 TO THE ASSES SEE BEFORE MAKING THE ASSESSMENT. THE LD. CIT(A) ALSO REPRODUCED THE LETT ER OF THE AO DATED 17.09.2008 (COPY OF WHICH IS FILED AT PAGE 7 & 8 OF THE PAPER BOOK), IN WHICH THE AO INTIMATED THE ASSESSEE THAT THE REASONS ARE NOT AVAILABLE ON RECORD. THE LD. CIT(A) CONSIDERING THE MATERIAL ON RECORD AND L ETTER OF THE AO DATED 17.09.2008 GAVE A FINDING OF FACT THAT ADMITTEDLY, THE AO HAS NOT RECORDED THE REASONS U/S. 147 BEFORE ISSUE OF NOTICE U/S. 148 ON DATED 16.09.1999. THEREFORE, THE AO COULD NOT HAVE FORMED HIS BELIEF THAT INCOME ESCAPED ASSESSMENT. THEREFORE, THE ORDER PASSED ON DATED 08.12.2008 WAS HELD TO BE NULL AND VOID AND THE APPEAL OF THE ASSESSEE WAS ALLOWED. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. THE FINDING OF FACT RECORDED BY THE LD. CIT(A) ARE THAT THE AO DID NOT RECORD ANY REASONS U/S. 147 BEFORE I SSUE OF NOTICE U/S. 148 ON DATED 16.09.1999. THE FINDING OF FACT RECORDED BY T HE LD. CIT(A) HAVE NOT BEEN REBUTTED THROUGH ANY EVIDENCE ON RECORD. THE LD. CI T(A) PERUSED THE RECORD AS WELL AS THE LETTER OF THE AO DATED 17.09.2008, IN W HICH THE AO HAS CATEGORICALLY ITA NO. 181/AGRA/2013 5 MENTIONED THAT THE REASONS ARE NOT AVAILABLE ON REC ORD. SINCE, IT IS A DEPARTMENTAL APPEAL, THEREFORE, IT IS THE DUTY OF T HE DEPARTMENT TO HAVE PRODUCED REASONS, IF ANY, RECORDED BY THE AO BEFORE ISSUING NOTICE U/S. 148 ON DATED 16.09.1999 AT THE TIME OF HEARING OF APPEAL. ACCORD ING TO SECTION 148(2), IT IS MANDATORY FOR THE ASSESSING OFFICER TO RECORD REASO NS FOR ISSUING NOTICE U/S. 147/148 OF THE IT ACT. THUS, MANDATORY PROVISIONS O F LAW HAVE BEEN VIOLATED. THEREFORE, THE LD. CIT(A) WAS JUSTIFIED IN DECLARIN G/HOLDING THE REASSESSMENT ORDER DATED 08.12.2008 TO BE NULL AND VOID. THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED TO PB-1, WHICH IS REPLY OF INCOME-TAX OFFI CER, WARD 2(2), FARRUKHABAD DATED 23.07.2013 UNDER RIGHT TO INFORMATION ACT, IN WHICH ALSO, IT HAS BEEN CONFIRMED THAT AS PER RECORD, NO REASON WAS RECORDE D BY THE AO PRIOR TO ISSUE OF NOTICE U/S. 148 ON 16.09.1999. THUS, THE FINDING OF THE LD. CIT(A) COULD NOT BE ASSAILED TO DURING THE COURSE OF HEARING. BOTH T HE GROUNDS OF APPEALS RAISED BY THE REVENUE ARE WHOLLY IRRELEVANT AND INCORRECT TO THE MATTER IN ISSUE AND ISSUE DECIDED BY THE LD. CIT(A) AS ABOVE. IT IS, TH EREFORE, A FIT CASE FOR DISMISSAL OF THE DEPARTMENTAL APPEAL. THE LD. COUNSEL FOR THE ASSESSEE ALSO PRAYED THAT SINCE IT IS A FRIVOLOUS APPEAL, THEREFORE, COST MAY BE IMPOSED ON THE DEPARTMENT. THE LD. CIT/DR, SHRI ANIRUDH KUMAR, PRESENT IN THE COURT, HAS ASSURED THE BENCH THAT HE WOULD TAKE UP THE MATTER WITH THE CON CERNED AUTHORITIES SO THAT IN THIS TYPE OF DEPARTMENTAL APPEAL, THE COMPETENT AUT HORITY MAY NOT SANCTION FOR ITA NO. 181/AGRA/2013 6 FILING OF DEPARTMENTAL APPEAL. IN VIEW OF THE STATE MENT OF THE LD. CIT/DR, WE DO NOT IMPOSE COST UPON THE DEPARTMENT. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY