Bhimrao Narayanrao Sawant, Parbhani V. Income-tax Officer, Ward - Parbhani, Parbhani,

ITA 1856/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0597 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Salary income; Source of fund; Reason to believe; Reassessment proceedings
• Section: 147

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.1856/PUN/2018 / ASSESSMENT YEAR : 2008-09 BHIMRAO NARAYANRAO SAWANT GEETANJALI NIWAS, RAHUL NAGAR, PARBHANI. PAN : AQIPS7575E . /APPELLANT VS. ITO, WARD-PARBHANI, PARBHANI . / RESPONDENT / APPELLANT BY : SMT. DEEPA KHARE / RESPONDENT BY : SHRI M. K. VERMA / DATE OF HEARING : 14.02.2019 / DATE OF PRONOUNCEMENT: 01.03.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-2, AURANGABAD, DATED 05.10.2018 FOR THE ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE REASSESSMENT PROCEEDINGS U/S 147 INITIATED BY ISSUE OF NOTICE/S 148 AFTER EXPIRY OF FOUR YEARS IN ABSENCE OF REASON TO BELIEVE THAT THERE WAS FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT WITHIN THE MEANING OF FIRST PROVISO TO SECTION 147 ARE VALIDLY INITIATED AS PER LAW. THE IMPUGNED REASSESSMENT PROCEEDINGS BEING INITIATED WITHOUT VALID JURISDICTION MAY KINDLY BE HELD TO BE BAD IN LAW. 2. WHETHER THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.2,24,212/- IN RESPECT OF INVESTMENT IN UTI AS ITA NO.1856/PUN/2018 -2- UNDISCLOSED WHEN IT WAS DULY RECORDED IN THE BALANCE SHEET AND DISCLOSED ALONG WITH THE RETURN OF INCOME. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING ADDITION OF RS.2,24,212/- U/S INCOME FROM UNDISCLOSED SOURCE IN RESPECT OF INVESTMENT IN UTI WHICH WAS FULLY AND SUBSTANTIALLY EXPLAINED WITH REFERENCE TO THE SOURCES OF INCOME. 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSEE REPORTED AGRICULTURAL INCOME AND SALARY INCOME. ON RECEIPT OF AIR INFORMATION RELATING TO NON FILING OF RETURN AND PURCHASE OF UNITS OF MUTUAL FUNDS, THE ASSESSING OFFICER RECORDED REASONS FOR ISSUE OF NOTICE UNDER SECTION 147/148 OF THE ACT. THE REASONS ARE EXTRACTED AS FOLLOWS: 02. THE REASONS FOR REOPENING THE ASSESSMENT U/S 147 IN CASE OF SHRI BHIMRAO NARAYAN SAWANT, PAN AQIPS7575E A Y 2008-09 ARE AS UNDER. AS PER THE INFORMATION POSSESSED BY THE DEPARTMENT THE ASSESSEE HAS PAID RS.2,24,212/- FOR PURCHASE OF UNITS OF MUTUAL FUND, DURING THE F.Y. 2007-08. HOWEVER, ON VERIFICATION OF AST DATA, IT IS REVEALED THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. I HAVE THEREFORE REASON TO BELIEVE THAT THE INCOME TO THE EXTENT OF RS.2,24,212/- IS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. 4. FROM THE ABOVE, IT IS EVIDENT THAT (I) THE FAILURE OF THE ASSESSEE TO FILE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09; AND (II) THE NON DISCLOSURE OF TRANSACTIONS RELATING TO PURCHASE OF UNITS OF MUTUAL FUNDS OF RS.2,24,212/-, ARE THE TWIN REASONS FOR FORMING THE REASON TO BELIEVE FOR THE ASSESSING OFFICER TO ISSUE THE ABOVE SAID NOTICE UNDER SECTION 148 OF THE ACT. EVENTUALLY, IN THE RE-ASSESSMENT, THE ASSESSING OFFICER MADE THE SAID ADDITION AS PER DISCUSSION GIVEN IN PARA 8 OF THE ASSESSMENT ORDER. THE CIT(A) CONFIRMED THE SAME. 5. AGGRIEVED WITH THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE GROUNDS MENTIONED ABOVE. ITA NO.1856/PUN/2018 -3- 6. REFERRING TO THE LEGAL ISSUE VIDE GROUND NO.1 RELATING TO THE VALIDITY OF RE-ASSESSMENT ORDER, THE LD. COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO THE ABOVE SAID GROUND AND SUBMITTED THAT AST DATA WHICH GAVE WRONG INFORMATION ABOUT NON FILING OF RETURN OF INCOME BY THE ASSESSEE. LD. AR STATED THAT IT IS NOT CORRECT ON FACTS. LD. AR BROUGHT MY ATTENTION TO THE PAGE 7 OF PAPER BOOK AND SUBMITTED THE FACT OF FILING THE RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 23.06.2008 BEARING RECEIPT NO.001114. 7. THEREFORE, ON HEARING BOTH SIDES ON THIS ISSUE, I FIND THE ASSUMPTION OF ASSESSING OFFICER ABOUT NON FILING OF RETURN OF INCOME BY THE ASSESSEE FOR THE SAID ASSESSMENT YEAR UNDER SECTION 139(1) OF THE ACT IS NOT SUSTAINABLE. THEREFORE, THAT PART OF GROUND IS ALLOWED IN FAVOUR OF ASSESSEE. ACCORDINGLY, THE REASON TO BELIEVE TO THAT EXTENT SUFFERS FROM ILLEGALITY. 8. COMING TO THE SECOND REASON ABOUT THE NON DISCLOSURE OF TRANSACTIONS RELATING TO PURCHASE OF UNITS OF MUTUAL FUNDS OF RS.2,24,212/-, THE LD. COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO PAGE 9 (BALANCE SHEET AS ON 31.03.2008) OF PAPER BOOK AND SUBMITTED THE FACT RELATING TO REFLECTION OF SAID ASSET OF UTI INFRASTRUCTURE FUND WORTH RS.2,24,212/- IN THE BALANCE SHEET OF THE RELEVANT RETURN OF INCOME SO FILED BY THE ASSESSEE. 9. ON PERUSAL OF THE SAME, I FIND THE ASSESSING OFFICER ISSUED THE NOTICE FOR REOPENING OF THE ASSESSMENT ON WRONG FACTS AND WRONG REASONS. HENCE, THE SAME SUFFERS FROM ILLEGALITY ON FACTS. THEREFORE, THIS PART OF REASONS MENTIONED BY THE ASSESSING OFFICER BEFORE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT IS ALSO INCORRECT. THUS, THIS IS THE CASE WHERE REOPENING IS DONE ITA NO.1856/PUN/2018 -4- BASED ON THE WRONG ASSUMPTION OF FACTS AND THEREBY FORMATION OF WRONG REASON TO BELIEVE THAT THE INCOME HAD ESCAPED ASSESSMENT. THEREFORE, THAT MAKES THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 148 R.W.S. 143 OF THE ACT IS NOT CORRECT AND UNSUSTAINABLE. CONSEQUENTLY RE- ASSESSMENT MADE BY THE ASSESSING OFFICER IS VOID-AB-INITIO . ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. IN VIEW OF THE SAME, THE ADJUDICATION OF OTHER GROUNDS ON MERIT BECOMES AN ACADEMIC EXERCISE ONLY. HENCE, THE SAME ARE DISMISSED AS ACADEMIC. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 01 ST DAY OF MARCH, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 01 ST MARCH, 2019. GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-2, AURANGABAD; 4. THE PR.CIT-1, AURANGABAD; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE