Satish Laxman Patil, Dhule V. Income-tax Officer,

ITA 1922/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0410 (ITAT-PUNE)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 30-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMITRA BANERJEE
• Keywords: Non compliance
• Section: 143(3); 142(1); 144

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO . 1922/P N /2016 / ASSESSMENT YEAR : 2005 - 06 SHRI SATISH LAXMAN PATIL FLAT NO.54, VRINDAVAN COLONY, DEOPUR, DHULE 424001 . / APPELLANT PAN : AGFPP7729L VS. THE INCOME TAX OFFICER, CIB, NASHIK . / RESPONDENT / APPELLANT BY : SHRI SANKET JOSHI / RESPONDE NT BY : MS. SUMITRA BANERJEE / DATE OF HEARING : 18.10.2016 / DATE OF PRONOUNCEMENT: 30 .11.2016 / ORDER PER SUSHMA CHOWLA, JM : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - 1, NASHIK DATED 22.06.2016 RELATING TO ASSESSMENT YEAR 2005 - 06 AGAINST THE ORDER PASSED U NDER S ECTION 144 OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE A SSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 2 ITA NO. 1922/P N /2016 1] THE ASST. ORDER U/S 144 IS BAD IN LAW SINCE THE ITO (CIB), NASHIK HAD NO JURISDICTION TO PASS THE ORDER U/S 144 IN THE CASE OF THE ASSESSEE AND HENCE, THE SAID ORDER MAY BE DECLARED AS NULL AND VOID IN LAW. 1.1 ] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT EVEN AS PER THE ORDER U/S 120 DATED 29.11.2007 RELIED UPON BY THE CIT(A), THE ITO (CIB), NASHIK DID NOT HAVE THE JURISDICTION TO PASS THE ASST. ORDER U/S 144 IN THE CASE OF THE ASSESSEE SINCE THE ASSESSEE WAS NOT A NON EXISTING ASSESSEE AND HE HAD DULY FILED HIS RETURN FOR A.Y 2005 - 06, (PAN - AGFPP7729L) WITH ITO, WARD NO.3(2), DHULE ON 31.08.2006 VIDE ACKN. NO. 030205577 AND THIS FACT HAS ALSO NOT BEEN DISPUTED BY THE CIT ( A) AND THEREFORE, THE ASST. ORDER U/S 144 DATED 28.12.2007 MAY BE DECLARED AS BAD IN LAW. 1.2 ] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ABOVE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF HONBLE ITAT, PUNE RENDE RED IN THE CASE OF DCIT (CIB) - 1, PUNE V/S. NANDKUMAR GANPATDAS SHAH (ITA NO. 1564/PN/2013) DATED 28.08.2014, ITO V. CHANDRABHAN V. KHALADE (ITA NO.928/PN/2013) DATED 28.04.2014 AND MRS. SAYALI ( APARNA) PATIL V ITO (ITA NO. 32/PN/2009) WHEREIN RELYING UPO N SIMILAR ORDER U/S 120, HONBLE TRIBUNAL HAS HELD THAT THE ASST. ORDER PASSED BY THE ITO (CIB) IS WITHOUT JURISDICTION AND THE SAME HAS BEEN DECLARED AS VOID IN LAW. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, IT IS SUBMITTED AS UNDER - 2] THE LEARNED CIT (A ) ERRED IN CONFIRMING THE ADDITION OF RS. 10,12,500/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS MADE IN SAVINGS BANK A/C OF THE ASSESSEE WITHOUT APPRECIATING THAT THE SAID DEPOSITS WERE MADE OUT OF CASH WITHDRAWN FROM ANOTHER BANK A/C OF THE ASSESSEE AND HEN CE, THERE WAS NO REASON TO MAKE ANY ADDITION IN RESPECT OF SUCH DEPOSITS. 2.1] THE LEARNED CIT (A) FAILED TO APPRECIATE THAT THE CASH WITHDRAWN FROM THE OTHER ACCOUNT WAS AVAILABLE WITH THE ASSESSEE FOR MAKING THE DEPOSITS IN THE OTHER ACCOUNT WAS AVAILABLE WITH THE ASSESSEE FOR MAKING THE DEPOSITS IN THE IMPUGNED BANK ACCOUNT ON THE RELEVANT DATES AND HENCE, THE CIT (A) WAS NOT JUSTIFIED IN REJECTING THE SAID SOURCE AS EXPLAINED BY THE ASSESSEE WITHOUT BRINGING ANY EVIDENCE ON RECORD TO SHOW THAT SUCH CASH WAS NOT AVAILABLE WITH THE ASSESSEE AS ON THE DATE OF DEPOSIT. 3] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3 . BRIEFLY, IN THE FACTS OF THE CASE , THE ASSESSEE WAS A CIVIL CONTRACTOR , WORKING AT DHULE AND FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FILED RETURN OF INCOME ON 31.08. 20 06 DECLARING TOTAL INCOME OF RS.1,0 2,500/ - . THE SAID RETURN OF INCOME WAS FILED WITH ITO, WARD 3 (2), DHULE. THE SAID RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, THE ITO (CIB) NASHIK ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT. THE SAID ITO AT NASHIK HAD RECEIVED INFORMATION THAT THE ASSESSEE HAD MADE CASH DEPOSIT S IN HIS SAVINGS ACCOUNT TOTALING RS. 10,12,500/ - DURING THE FINANCIAL YEAR 2004 - 05. THE ASSESSEE HAD F AILED TO COMPLY WITH THE NOTICE NO R FURNISH ED ANY REPLY . I NFORMATION WAS FURTHER SOUGHT BY THE ASSESSING OFFICER. THE NEXT 3 ITA NO. 1922/P N /2016 NOTICE ALSO REMAINED U N - COMPLIED WITH. THE ASSESSING OFFICER THUS TREATED THE CASH DEPOSIT S AS UNEX PLAINED INVESTMENT AND MADE THE ADDITION OF RS.10 ,12,500 / - . 4 . BEFORE THE CIT(A), T HE CONTENTION OF THE ASSESSEE WAS THAT THE ITO (CIB), NASHIK HAS NO JURISDICTION TO ASSESS INCOME OF ASSESSEE RESIDING AT DHULE , WHERE THE ASSESSEE HAD FILED ITS RETURN OF INCOME REGULARLY . WITH REGARD TO THE SOURCE OF CASH DEPOSIT S , IT WAS EXPLAINED THAT THE AMOUNT WHICH WAS WITHDRAWN FROM THE SAVINGS ACCOUNT IN DHULE DISTRICT CENTRAL CO OPERATIVE BANK AND THE SAME WAS DEPOSITED IN UNITED WESTERN BANK LTD. THE CIT(A) PROVIDE D OPPORTUNITY TO THE ASSESSEE AND HENCE THE GRIEVANCE OF ASSESSEE OF INADEQUATE OPPORTUNITY WAS HELD TO BE REDRESSED . C OMING TO THE OBJECTION TO THE ASSESSEE IN RESPECT OF JURISDICTION OF ITO (CIB), NAS HIK IN PASSING ASSESSMENT ORDER, T HE CIT(A) SO UGHT CLARIFICATION FROM THE ITO, WARD 3(2), DHULE WHO , BY LETTER DATED 10.06. 20 16 STATED THAT AS PER THE JURISDICTION ORDER PASSED UNDER SECTION 120 OF THE ACT BY THE CCIT, PUNE DATED 29.11. 20 07, THE ITO (CIB), NASHIK HAD JURISD ICTION TO ASSESS THE CASE OF THE ASSESSEE. THE SCAN NED COPY OF THE ORDER UNDER SECTION 120 OF THE ACT I S REPRODUCED AT PAGE 4 OF THE ASSESSMENT ORDER. THE CIT(A) THUS HELD THAT ITO (CIB) HA D JURISDICTION OVER ASSESSEES CASE AND HAD CORRECTLY PASSED THE ASSESSMENT ORDER. WITH REGARD TO THE MERITS OF THE ADDITION , THE CIT(A) HELD THAT NO CREDIBLE EVIDENCE WAS FOUND AND HENCE THE DECISION WAS UPHELD. 5 . THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 6 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT ASSESSEE WAS BEING REGULARLY ASSESSED AT DHULE. ATTENTION WAS DRAWN TO THE COPY OF IN TIM ATION ISSUED U NDER S ECTION 143(1) OF THE ACT FOR THE ASSESSMENT YEAR 2005 - 06, WHEREIN IT IS MENTIONED THAT THE RETURN OF INCOME WAS FILED ON 4 ITA NO. 1922/P N /2016 31.08. 20 06. THE SAID INTIMATION HAS BEEN ISSUED BY THE ITO, WARD 3(2), DHULE. THE SAID INTIMATION WAS ISSUED ON 06.12. 20 06. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT WAS PA SSED BY THE ITO (CIB), NASHIK ON 28.12. 20 07. HE HAS FURTHER STATED THAT PRIOR TO THIS, THE RETURN OF INCOME FOR THE ASSESSMENT YEAR S 2006 - 07 AND 2007 - 08 WERE FILED WITH THE ASSESSING OFFICER AT DHULE ON 31.08. 20 06 AND 14.06. 20 07 RESPECTIVELY. A TTENTION W AS DRAWN TO THE ORDER PASSED UNDER SECTION 120 OF THE ACT, WHEREIN IT IS STATED THAT ASSESSEES JURISDICTION ON ACCOUNT OF AIR INFORMATION FOR THE PERSON WITHOUT PAN NUMBER IS PROVIDED. UNDER THE SAID ORDER ITSELF, THE PERSON S WHO HAD REGULARLY FILED RETURN OF INCOME, THEN THEIR JURISDICTION HAD TO BE TRANSFERRED. HOWEVER, NO SUCH ORDER OF TRANSFER OF JURISDICTION WAS PASSED IN THE CASE OF ASSESSEE. 7 . W ITH REGARD TO THE NOTICE ISSUED , IT WAS POINTED OUT BY THE LEARNED AUTHORIZED RE PRESENTATIVE FOR THE ASSESSEE THAT T HE ASSESSEE BEING SMALL TAX PAYER COULD NOT UNDERSTAND HOW THE ASSESSING OFFICER AT NASHIK HAD ISSUED NOTICE TO HIM. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN DCIT (CIB) - 1, PUNE VS. NANDKUMAR GANPATDAS SHAH IN ITA NO.1564/PN/2013 RELATING TO ASSESSMENT YEAR 2005 - 06, ORDER DATED 28.08. 20 14. 8 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE CIT(A). 9 . ON PERUSAL OF THE RECORD AND AFTER HEARING BOTH THE LEARNED AUTHORI ZED REPRESENTAT IVES , THE PRIMARY ISSUE ARISING IN THE PRESENT APPEAL IS JURISDICTION AL ISSUE. THE ASSESSEE WAS CIVIL CONTRACTOR , WORKING AT DHULE AND WAS REGULARLY FIL ING RETURN S OF INCOME DECLARING INCOME FROM BUSINESS . F OR THE ASSESSMENT 5 ITA NO. 1922/P N /2016 YEAR UNDER CONSIDERATION , T HE ASSESSEE HAD FILED THE RETURN OF INCOME ON 31.08.2006 DECLARING TOTAL INCOME OF RS.10,12,500/ - . THE SAID RETURN WAS PROCESSED U NDER S ECTIO N 143(1) OF THE ACT AND INTIMATION WAS ISSUED BY THE ASSESSING OFFICER AT DHULE ON 06.12. 20 06. THE COPY OF THE SAID INTIMATION IS PLACED AT PAGE 4 OF THE PAPER BOOK . FOR THE ASSESSMENT YEAR 2006 - 07, THE ASSESSEE FILED THE RETURN OF INCOME ON 31.08. 20 06. THE ASSESSEE FILED THE RETURN OF INCOME ON 31.08. 20 06 AT DHULE AND THE COPY OF THE ACKNOWLEDGEMENT OF FILING RETURN OF INCOME AND COMP UTATION OF INCOME IS PLACED AT PAGE S 5 AND 6 OF THE PAPER BOOK . FURTHER, THE ASSESSEE ALSO FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007 - 08 WITH ITO AT DHULE ON 14 TH JUNE, 2007 AND THE COPY OF THE ACKNOWLEDGEMENT OF THE FILING RETURN OF INCOME AND THE COMP UTATION ARE PLACED AT PAGE S 7 AND 8 OF THE PAPER BOOK . 10 . THE ITO (CIB) NASHIK RECEIVED CERTAIN INFORMATION THRO UGH AIR REGARDING CASH DEPOSIT S IN THE BANK ACCOUNT OF THE ASSESSEE. TH E REAFTER , ORDER UNDER SECTION 120 OF THE ACT WAS PASSED . THE SCAN NED COPY OF THE SAID ORDER IS PLACED AT PAGE 4 OF THE APPELLATE ORDER. UNDER THE SAID ORDER, IT IS PROVIDED THAT THE PERSONS WHOSE NAME APPEARING IN THE AIR DATA RELATING TO PUNE REGION WHOSE PAN NUMBERS ARE NOT MENTIONED IN THE AIR DATA, THEN THE JURISDICTION WOULD BE WITH INCOME TAX OFFICER, CIB - 1, NASHIK. IT IS ALSO PROVI DED THAT THE DESIGNATED ASSESSING OFFICER SHALL HAVE CONCUR RENT JURISDICTION OVER THE CASES FOR ISSUING NOTICE UNDER SECTION 142(1) OF THE ACT AND FOLLOW UP ACTIONS. IN CASE OF NON EXISTING ASSESSEE , WHO HAVE NEVER FILED RETURN OF INCOME EARLIER , THE DAO SHALL ASSESS THE CASE UNDER SECTION 143(3) OR 144 OF THE ACT , AS THE CASE MAY BE. IN ALL OTHER CASES, THE DAOS SHALL TRANSFER THE AIR INFORMATION TO THE JURISDICTIONAL ASSESSING OFFICER I.E . JAO. 1 1 . COMING TO THE FACTS OF THE PRESENT CASE , WHERE THE A SSESSEE REGULARLY FILED RETURN OF INCOME AND HAS ALSO FILED RETURN OF INCOME FOR SUCCEEDING YEAR S 6 ITA NO. 1922/P N /2016 BEFORE ITO AT DHULE, THE QUESTION WHICH ARISES WHETHER IN SUCH CIRCUMSTANCES CAN THE ITO (CIB) AT NASHIK HA VE JURISDICTION OVER THE A SSESSEE IN RESPECT OF AIR DATA RECEIPT? THE ORDER PASSED UNDER SECTION 120 OF THE ACT IS CLEAR THAT THE DESIGNATED OFFICER AS PER THE SAID ORDER WOULD HAVE THE JURISDICTION IN RESPECT OF NON EXISTING ASSESSEE I.E . THOSE WHO HAVE NEVER FILED RETURN OF INCOME. BU T IN ALL OTHER CASES, THE AIR DATA HAD TO BE TRANSFERRED TO THE JURISDICTIONAL ASSESSING OFFICER. 1 2 . THE CASE OF THE ASSESSEE BEFORE THE TRIBUNAL IS ONE OF THE PERSON S WHO HAD ALREADY FILED THE RET URN OF INCOME FROM YEAR TO YEAR AND IN SUCH CIRCUMSTANCE S AND FOLLOWING THE DI CTATE OF ORDER UNDER SECTION 120 OF THE ACT, THE JURISDICTION OF THE CASE WAS WITH ITO, WARD 3 (2), DHULE I.E . THE ASSESSING OFFICER BEFORE WHOM THE ASSESSEE HAD FILED THE RETURN OF INCOME. EVEN I NTIMATION UNDER SECTION 143(1) OF THE ACT WHICH HAS BEEN ISSUED TO THE ASSESSEE MUCH BEFORE THE ISSUING NOTICE WAS BY THE ITO AT DHULE . THE FIRST NOTICE ISSUED WAS SERVED UPON THE ASSESSEE ON 27.08. 20 07. THE ASSESSEE , NO DOUBT , HAD NOT COMPLIED WITH THE NOTICE NO R FURN ISH ED ANY REPLY BUT SINCE THE ASSESSEE IS AN EXISTING ASSESSEE WHO REGULARLY FILED THE RETURN OF INCOME AT DHULE, THE JURISDICTION OVER SUCH ASSESSEE CAN BE EXERCISED BY THE ITO AT DHULE AND NOT BY ITO AT NASHIK. 1 3 . ANOTHER POINT TO BE NOTED THAT BEFORE ISSUING THE NOTICE UNDER SECTION 142(1) OF THE ACT , THE ASSESSEE HAD ALSO FILED THE RETURN OF INCOME FOR THE NEXT TWO YEARS. THE EXPLANATION OF THE ASSESSEE B EFORE US WAS THAT BEING SMALL TAX PAYER, HE COULD NOT UNDERS TAND THE INTRICACY OF THE NOTICE ISSUED BY THE ITO FROM NASHIK AND HENCE THE NON COMPLIANCE. THE ASSESSEE HAD EXPLAINED THE POSITION BEFORE THE CIT(A) WHO HAS REJECTED THE CLAIM OF THE ASSESSEE. HOWEVER, THERE IS MERIT IN THE PLEA OF THE ASSESSEE AND ACC ORDINGLY , I H O LD THAT 7 ITA NO. 1922/P N /2016 THE ASSESSMENT MADE IN THE CASE OF THE ASSESSEE BY THE ITO, NASHIK IS WITHOUT JURISDICTION AND INV A L I D. 1 4 . ACCORDINGLY, THE ASSESSMENT ORDER PASSED IN THE CASE OF ASSESSEE IS HELD TO BE VOID. THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE IS DECIDED IN FAVOUR OF THE ASSESSEE AND HENCE ISSUE ON MERIT S IS NOT BEING ADJUDICATED. 1 5 . THE GROUND OF APPEAL NO.1 IS ALLOWED AND GROUND OF APPEAL NO.2 BEING WITHOUT PREJUDICE, BECOMING ACADEMIC. 1 6 . IN THE RESULT, APPEAL OF THE ASS ESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF NOVEMBER , 201 6 SD/ - (SUSHMA CHOWLA) (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH NOVEMBER , 201 6 . SB / GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I, NASHIK ; 4. / PR. CIT - 1, NASHIK 5. , , , - / DR SMC , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / PRIVATE SECRETARY / ITAT, PUNE