Smt. Udha Agarwal, Agra V. I.T.O., Ward-4(4), Agra

ITA 194/AGR/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7069 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-04-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 30-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Reopening of assessment; Onus to prove; Reason to believe; Borrowed satisfaction

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. 194/AGRA/2011 ASSTT. YEAR : 1998-99 SMT. USHA AGARWAL, VS. INCOME-TAX OFFICER, G-693, KAMLA NAGAR, WARD 4(4), AGRA. AGRA (PAN : ABRPA5581G). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH, ADVOCATE. RESPONDENT BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 11.04.2012 DATE OF PRONOUNCEMENT OF ORDER : 11.04.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-II (DEHRADUN) CAMP AT AGRA DATED 01.03.2011 FOR THE AS SESSMENT YEAR 1998-99 ON THE FOLLOWING REVISED/MODIFIED GROUNDS OF APPEAL : 1. BECAUSE THE INITIATION OF PROCEEDINGS U/S. 147 OF THE ACT, ISSUANCE OF NOTICE U/S. 148 OF THE ACT AND RESULTAN T ASSESSMENT IS VOID AB INITIO, ILLEGAL AND WITHOUT JURISDICTION FOR THE FOLLOWING REASONS : I) REASON TO BELIEVE NOT BEING IN CONFORMITY WITH LAW BEING BASED ON BORROWED SATISFACTION, ON INCORRECT PRESUMPTION OF FACTS AND WITHOUT VERIFICATION OF FACTS ON HIS OWN II) REASON RECORDED SUPPLIED BEYOND PERIOD OF SIX YEARS . III) NOTICE HAVING BEEN ISSUED U/S. 148 OF THE ACT TO R EASSESS THE INCOME WHEREAS THERE WAS NO ASSESSMENT. ITA NO. 194/AGRA/2011 2 2. BECAUSE UPON DUE CONSIDERATION OF FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, THE AUTHORITIES BELOW HA D WRONGLY, ILLEGALLY AND ARBITRARILY MADE AND CONFIRMED ADDITION OF RS.1 0,02,948/- IGNORING THE SUBMISSION OF THE APPELLANT AND WITHOU T THERE BEING IOTA OF EVIDENCE AGAINST THE APPELLANT. 3. BECAUSE THE LD. CIT(A) HAS ERRED IN SUSTAINING T HE ADDITION OF RS.10,02,948/- IGNORING THE FACT THAT THE ASSESS ING OFFICER FAILED TO DISCHARGE THE BURDEN WHICH LAY UPON HIM U/S. 147 OF THE ACT. 4. BECAUSE VARIOUS OBSERVATION/FINDING IN THE IMPUG NED ORDER ARE BASED ON NO EVIDENCE AND ARE PERVERSE. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO R ECEIVED INFORMATION FROM CBDT, NEW DELHI THAT THE ASSESSEE HAD FURNISHED DEC LARATION UNDER VDIS, 1997 WHEREIN SHE HAD DECLARED AN AMOUNT OF RS.10,02,948/ - ON 31.12.1997, BUT FAILED TO PAY TAX THEREON. THEREFORE, NO CERTIFICATE WAS ISSU ED TO HER. SINCE THE ASSESSEE HAD ALREADY MADE A DECLARATION REGARDING HER UNDISCLOSE D INCOME UNDER VDIS, 1997, THE AO TOOK A CALL TO BRING TO TAX THE AMOUNT, WHIC H HAD BEEN DECLARED UNDER THE SCHEME, ON WHICH NO TAX HAS BEEN PAID. THE AO REPRO DUCED THE ABOVE REASONS FOR REOPENING OF THE ASSESSMENT IN THE ASSESSMENT ORDER FOR INITIATING THE PROCEEDINGS U/S. 147/148 OF THE IT ACT. THE NOTICE U/S. 148 WAS SERVED UPON THE ASSESSEE AND THEREAFTER STATUTORY NOTICES AND QUERY LETTERS WERE ISSUED TO THE ASSESSEE CALLING FOR HER EXPLANATION ON THE SUBJECT MATTER, BUT SEVERAL NOTICES ISSUED WERE NOT COMPLIED WITH. ULTIMATELY, THE AO ISSUED SHOW CAUSE NOTICE A S TO WHY THE ABOVE ADDITION SHOULD NOT BE MADE AGAINST THE ASSESSEE. THE ASSESS EES HUSBAND IN COMPLIANCE TO THE NOTICE APPEARED AND THEREAFTER THE ASSESSEE WAS REPRESENTED BY THE COUNSEL AND ITA NO. 194/AGRA/2011 3 COPY OF REASONS FOR REOPENING OF THE ASSESSMENT WER E SUPPLIED TO THE ASSESSEE, BUT NO REPLY WAS RECEIVED THEREAFTER. THE AO, THEREAFTE R, ISSUED SUMMONS U/S. 131 OF THE IT ACT AND THE ASSESSEE ALONG WITH HER HUSBAND AND HER COUNSEL APPEARED BEFORE THE AO AND HER STATEMENT WAS RECORDED, IN WH ICH SHE EXPLAINED THAT SHE HAS NOT DISCLOSED ANY UNDISCLOSED INCOME UNDER VDIS, 19 97. REPLY TO THAT EFFECT WAS ALSO FURNISHED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE THE AO. HOWEVER, THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE, PART ICULARLY BECAUSE THE ASSESSEE TOOK LONG TIME TO GIVE REPLY TO THE NOTICE AND THE AO NO TED THAT SINCE INFORMATION WAS RECEIVED FROM CBDT THAT THE ASSESSEE FILED DECLARAT ION UNDER VDIS, 1997, BUT DID NOT PAY TAX THEREON AND THE EXPLANATION OF THE ASSE SSEE WAS NOT FOUND SATISFACTORY, ADDITION OF RS.10,02,948/- WAS MADE AGAINST THE ASS ESSEE. THE ASSESSEE CHALLENGED THE REOPENING OF ASSESSMENT AND THE ADDITION ABOVE BEFORE THE LD. CIT(A) ON SEVERAL GROUNDS OF APPEAL. THE LD. CIT(A) CONSIDERI NG THE EXPLANATION OF THE ASSESSEE NOTED THAT SINCE THE ASSESSEE MADE VDIS, 1 997 DECLARATION BEFORE THE CIT AND HER COMPLETE ADDRESS WAS AVAILABLE WITH THE DEP ARTMENT, THEREFORE, THERE IS NO MERIT IN THE CONTENTION OF THE ASSESSEE. THE LD. CI T(A) ALSO NOTED THAT LIKE THE ASSESSEE, SEVERAL OTHER DEFAULTERS HAVE ALSO MADE A PPLICATION UNDER VDIS, 1997, BUT DID NOT PAY TAX THEREON. NO ONE HAD AN IDEA THA T THE DEPARTMENT WAS DUTY BOUND TO CHASE SUCH PERSONS WHO HAD MADE DECLARATIO N UNDER VDIS, 1997, BUT DID NOT PAY TAX AND THE ASSESSEE FALLS IN THAT CATEGORY ONLY. THE LD. CIT(A) NOTED THAT ITA NO. 194/AGRA/2011 4 THE ASSESSEE HAS NOT GIVEN ANY EVIDENCE IF SHE HAS MADE ANY PETITION TO THE CBDT AS TO HOW HER NAME HAD FIGURED IN THE LIST OF DECLA RANTS WHEN SHE HAD MADE NO DECLARATION IN THIS RESPECT. THE LD. CIT(A), ACCORD INGLY, DISMISSED THE APPEAL OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THERE WAS NO R EASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT BECAUSE THERE WAS NO MATERIA L ON RECORD TO SUPPORT SUCH PRESUMPTION. NO DECLARATION UNDER VDIS, 1997 REFERR ED TO BY THE AUTHORITIES BELOW HAVE BEEN SUPPLIED TO THE ASSESSEE AND THE ADDITION IS MADE MERELY ON PRESUMPTION. SINCE THE ASSESSEE DENIED FILING OF AN Y VDIS DECLARATION, THEREFORE, THE PROCEEDINGS SHOULD HAVE BEEN DROPPED BY THE AUT HORITIES BELOW UNLESS THE RELEVANT MATERIAL IS SUPPLIED TO THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE LETTER OF THE AO DATED 02.10.2006 ( PB-19), WHICH IS REMAND REPORT FILED BEFORE THE LD. CIT(A), IN WHICH THE AO EXPRES SED HIS OPINION THAT FOR EXAMINING THE PLEA OF THE ASSESSEE, ORIGINAL VDIS D ECLARATION IS REQUIRED/NEEDED AND, THEREFORE, REQUESTED THE LD. CIT TO DIRECT SOM EONE FOR THIS PURPOSE. HE HAS SUBMITTED THAT THE LD. CIT(A) THEREAFTER, DID NOT T AKE ANY ACTION INTO THE MATTER. THEREFORE, THE ADDITION IS CLEARLY UNJUSTIFIED. HE HAS ALSO RELIED UPON THE ORDER OF ITAT, LUCKNOW BENCH IN THE CASE OF INDER KUMAR BACH ANI (HUF) VS. ITO, 101 ITA NO. 194/AGRA/2011 5 TTJ (LUCKNOW) 450. ON THE OTHER HAND, THE LD. DR RE LIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD AND WE DO NOT SUBSCRIBE TO THE VIEWS TAKEN BY THE AUTHORIT IES BELOW. ACCORDING TO THE AO, HE RECEIVED SOME INFORMATION FROM CBDT THAT THE ASS ESSEE HAD FILED A DECLARATION UNDER VDIS, 1997, BUT THE ASSESSEE HAS NOT PAID TAX THEREON. THEREFORE, NO CERTIFICATE HAD BEEN ISSUED TO HER. NO OTHER MATERI AL WAS SUPPLIED TO THE AO IN RESPECT OF THE AFORESAID ALLEGATION AND INFORMATION . THE ASSESSEE WHEN APPEARED BEFORE THE AO WAS EXAMINED U/S. 131 OF THE IT ACT A ND THE ASSESSEE SPECIFICALLY EXPLAINED BEFORE THE AO THAT SHE HAS NOT DECLARED A NY UNDISCLOSED INCOME UNDER VDIS, 1997. THE ASSESSEES REPRESENTATIVE ALSO FILE D REPLY TO THE SAME EFFECT BEFORE THE AO ON 24.03.2006 BEFORE COMPLETION OF TH E ASSESSMENT THAT THE ASSESSEE NEVER FILED ANY VDIS, 1997 DECLARATION, COPY OF WHI CH IS FILED AT PAGE 11 OF THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSEE ALSO R EFERRED TO THE REMAND REPORT OF THE AO (BP-19), WHICH IS A LETTER ADDRESSED TO THE LD. CIT-II, AGRA DATED 02.10.2006 IN WHICH THE AO COULD NOT CARRY OUT THE DIRECTIONS OF THE LD. CIT(A) TO VERIFY THE VDIS ENCLOSURES IF FILED BY THE ASSESSEE . THE AO IN THE REMAND REPORT REQUESTED THE LD. CIT THAT FOR CARRYING OUT THE VER IFICATION OF VDIS DECLARATION, ORIGINAL IS NEEDED AND FOR DOING THE NEEDFUL REQUES T WAS MADE TO THE LD. CIT TO ITA NO. 194/AGRA/2011 6 DIRECT SOMEONE FOR THAT PURPOSE. THESE FACTS WOULD SHOW THAT THE ASSESSEE SINCE BEGINNING HAS TAKEN THE STAND BEFORE THE AUTHORITIE S BELOW THAT SHE HAD NOT MADE ANY DECLARATION UNDER VDIS, 1997 AND THAT THE LD. C IT(A) DIRECTED THE AO TO VERIFY THE SAME AT THE APPELLATE STAGE, BUT THE AO COULD NOT CARRY OUT ANY VERIFICATION OF VDIS, 1997 DECLARATION ALLEGED TO H AVE BEEN FILED BY THE ASSESSEE BECAUSE ORIGINAL WAS NOT SUPPLIED TO HIM. THESE FAC TS WOULD PROVE THAT EXCEPT INFORMATION FROM CBDT THAT THE ASSESSEE FILED DECLA RATION UNDER VDIS, 1997, THE AO WAS NOT HAVING ANY EVIDENCE OR MATERIAL BEFORE H IM AT THE TIME OF RE-OPENING OF ASSESSMENT OR RECORDING REASONS FOR REOPENING OF THE ASSESSMENT. SINCE THE ASSESSEE DENIED TO HAVE FILED ANY SUCH DECLARATION UNDER VDIS, 1997, IT WAS NECESSARY FOR THE AO TO BRING SUCH EVIDENCE OR MATE RIAL ON RECORD TO PROVE THAT THE INFORMATION RECEIVED FROM THE CBDT WAS CORRECT AND ALSO SHOULD HAVE SUPPLIED COPY OF SUCH DECLARATION UNDER VDIS, 1997 TO THE AS SESSEE WHICH IS ALLEGED TO HAVE BEEN FILED BY HER. THE LD. CIT(A) NOTED IN THE IMPU GNED ORDER THAT THE ASSESSEE HAS NEVER GIVEN ANY EVIDENCE IF SHE MADE ANY PETITION T O THE CBDT AS TO HOW HER NAME FIGURED IN THE LIST OF DECLARANTS. THE LD. CIT (A) FAILED TO NOTE THAT THE ASSESSEE CANNOT BE PUT TO NEGATIVE ONUS TO PROVE TH AT SHE HAS NOT FILED ANY SUCH DECLARATION UNDER VDIS, 1997.THE AO WANTED TO RELY UPON VDIS, 1997 DECLARATION AGAINST THE ASSESSEE AS PER INFORMATION RECEIVED FROM CBDT. THEREFORE, THE BURDEN IS UPON THE AO TO PROVE SUCH ASSERTIONS AND CONTENTIONS. ITA NO. 194/AGRA/2011 7 THE LD. CIT(A) ALSO FAILED TO NOTE THAT WHEN AT THE APPELLATE STAGE, HE HAS DIRECTED THE AO TO VERIFY VDIS ENCLOSURES AND DECLARATION AN D THE AO FAILED TO CARRY OUT SUCH VERIFICATION BECAUSE ORIGINAL DECLARATION WAS NOT BEFORE HIM, WOULD SUPPORT THE CASE OF THE ASSESSEE THAT THERE WAS NO INCRIMIN ATING MATERIAL AVAILABLE WITH THE REVENUE DEPARTMENT TO MAKE OUT ANY CASE AGAINST THE ASSESSEE. THE LD. CIT(A) INSTEAD OF TAKING FURTHER RECOURSE IN THE MATTER AF TER RECEIVING THE REMAND REPORT FROM THE AO ON 02.10.2006, MERELY DISMISSED THE APP EAL OF THE ASSESSEE WITHOUT ANY JUSTIFICATION. CONSIDERING THE FACTS AND CIRCUM STANCES NOTED ABOVE, WE ARE OF THE VIEW THAT THE AO PROCEEDED TO INITIATE RE-ASSES SMENT PROCEEDINGS WITHOUT HAVING ANY EVIDENCE OR MATERIAL AGAINST THE ASSESSE E AND NO ACTUAL VERIFICATION OF MATERIAL OR DOCUMENT HAVE BEEN MADE BEFORE INITIATI NG RE-ASSESSMENT PROCEEDINGS AND NO INCRIMINATING MATERIAL IS SUPPLIED TO THE AS SESSEE. THEREFORE, THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE BOTH THE ISSUE S OF REOPENING OF ASSESSMENT AND ADDITION ON MERIT TO THE FILE OF THE AO WITH THE DI RECTION TO RE-DECIDE BOTH THE ISSUES AFRESH BY GIVING REASONABLE AND SUFFICIENT O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO IS DIRECTED TO SUPPLY COPY OF VDIS , 1997 DECLARATION ALLEGED TO HAVE BEEN FILED BY THE ASSESSEE AS PER INFORMATION OF THE CBDT WITHIN THREE MONTHS FROM THE RECEIPT OF THIS ORDER. THEREAFTER, THE AO SHALL DECIDE THE OBJECTIONS OF THE ASSESSEE FOR REOPENING OF THE ASS ESSMENT BY SPEAKING ORDER AND ITA NO. 194/AGRA/2011 8 SHALL PASS REASONED ORDER THEREON. WE MAKE IT CLEAR THAT IN CASE THE AO IS NOT ABLE TO SUPPLY THE COPY OF VDIS, 1997 ALLEGED TO HAVE BE EN FILED BY THE ASSESSEE WITHIN SUCH PERIOD, THE AO WOULD DROP THE RE-ASSESSMENT PR OCEEDINGS AGAINST THE ASSESSEE. 5. WITH THE ABOVE OBSERVATIONS AND DIRECTIONS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11.04.2012. 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 ASSISTANT REGISTRAR TRUE COPY