Sabita Swain, Bhubaneswar V. ITO, Bhubaneswar

ITA 20/CTK/2011

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0808 (ITAT-CUTTACK)
• Duration Of Justice: 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2011
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2000-2001
• Appeal Filed On: 10-01-2011
• Court: TRIBUNAL
• Department Lawyers: J KHANRA
• Assessee Lawyers: J M PATNAIK
• Keywords: Opportunity of being heard; Reason to believe

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, (SMC) CUTTACK BENCH, CUTTACK () BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. / I.T.A.NOS.20,21 AND 22 /CTK/2011 / ASSESSMENT YEAR 2000 - 01, 2003 - 04 AND 2004 - 05 SMT.SABITA SWAIN, AT: N 2/152,IRC VILLAGE, NAYAPALLI,BHUBANESWAR PAN: ANFPS 2950 K - - - VERSUS - INCOME - TAX OFFICER, WARD 2(3), BHUBANESWAR. ( /APPELLANT ) (/ RESPONDENT ) / FOR THE APPELLANT : / SHRI J.M.PATNAIK, AR / FOR THE RESPONDENT: / SHRI J.KHANRA, DR / ORDER (SMC) . . , , SHRI K.K.GUPTA, ACCOUNTANT MEMBER . THESE THREE APPEALS BY THE ASSESSEE AR E FOR THE AYS 2000 - 01, 2003 - 04 AND 2004 - 05 ADJUDICATED UPON BY THE LEARNED CIT(A) BY WAY OF A COMMON ORDER DT.23.11.2010 WHICH ALSO INCLUDES DISPOSAL OF ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2005 - 06 AGAINST WHICH THE ASSESSEE HAS NOT COME UP IN APPEAL BEFORE THE TRIBUNAL. 2. THE LEARNED CIT(A) HAS DISMISSED THE APPEALS FILED BY THE ASSESSEE FOR THESE AYS WHICH WERE DISPOSED OFF U/S.144/147. A COMMON ISSUE HAS BEEN RAISED BY THE ASSESSEE IN THESE IMPUGNED APPEALS REGARDING THE ASSESSING OFFICER PROCEED ING TO BRING TO TAX THE PURPORTED FIXED DEPOSITS HELD BY THE ASSESSEE DURING THE IMPUGNED AYS WHICH IN VIEW OF THE ASSESSING OFFICER WERE NOT DEPOSITED ON THE BASIS OF SALARY RECEIPTS AS AN EMPLOYEE OTHER THAN AS WORKING PARTNER OF A FIRM IN ACCORDANCE WIT H THE PROVISIONS OF THE INCOME - TAX ACT,1961. / I.T.A.NOS.20,21 AND 22 /CTK/2011 2 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEALS FOR THE ASSESSMENT YEAR 2001 - 02 AND 2002 - 03 ARE PENDING BEFORE THE LEARNED CIT(A) ON THE BASIS OF ASSESSING OFFICER MAKING SAME ADDITIONS ON THE BASIS OF FIXED DEPOSITS FOR THE IMPUGNED AYS HAVING ESCAPED ASSESSMENT TO INITIATE PROCEEDINGS U/S.147/148. 4. THE LEARNED COUNSEL SUBMITTED THAT THE SUMMONS WERE ISSUED TO THE EMPLOYER OF THE ASSESSEE IN ORDER TO VERIFY THE AMOUNT OF SALARY PAID TO THE ASSESSEE IN THE IMPUGNED AYS WHICH THE LEARNED CIT(A) HAS ALSO MADE NOTE OF BY WAY OF A CHART ON PAGE 5 OF THE APPELLATE ORDER WHICH CLEARLY INDICATES THAT THE INFORMATION REGARDING IMPUGNED AYS WAS NOT MADE AVAILABLE TO HIM. HE HAD OBTAINED REMAND FROM T HE ASSESSING OFFICER IN VIEW OF THE FACT THAT THE ASSESSING OFFICER HAD ISSUED SUMMONS FOR GATHERING INFORMATION U/S.133(6) PRIOR TO THE PASSING OF THESE ASSESSMENTS WHICH INFORMATION WAS RECEIVED AFTER THE DATE OF ASSESSMENT ORDER WAS THEREFORE NOTED BY THE LEARNED CIT(A) REMANDING AND CALLING FOR INFORMATION FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER REPORTED THAT HE HAS GOT NO FURTHER INFORMATION OTHER THAN WHAT WAS ADJUDICATED UPON BY HIS PREDECESSOR ASSESSING OFFICER. BASED ON THESE FACTS, THE LEARNED CIT(A) WAS CONSTRAINED TO CONFIRM THE ADDITION INSPITE OF THE ASSESSEE APPELLANT BRINGING TO THE NOTICE OF THE LEARNED CIT(A) THAT THIS INFORMATION WHICH HE REQUIRED WERE AVAILABLE TO THE ASSESSEE AS PER THE DOCUMENTS ATTACHED TO THE PAPER BOOK NOW ENCLOSED. FOR THIS PURPOSE HE HAS INCLUDED THE COPIES OF THE FIXED DEPOSIT RECEIPTS FOR THE IMPUGNED ASSESSMENT YEARS WHICH, INCLUDING THE MATURED AMOUNT HAVE BEEN RE - INVESTED WHICH THEREFORE COULD NOT BECOME IDENTICAL TO AMOUNTS EARNED DURING THE YEAR FO R TAXATION. HE TRIED TO ANALYZE THE MISINTERPRETATION OF / I.T.A.NOS.20,21 AND 22 /CTK/2011 3 HOLDING THE FIXED DEPOSITS AT THE END OF THE FY AS COMPARABLE TO THE RETURN IN THAT YEAR ONLY WAS CONSIDERED BY THE ASSESSING OFFICER AS WITHOUT INCORPORATING THE INCOME RENDERED FOR WANT OF VERIFIC ATION FROM THE EMPLOYER U/S.133(6). NOW THAT THE INFORMATION IS AVAILABLE AND THE ASSESSEE IS ABLE TO EXPLAIN THE HOLDING OF FIXED DEPOSITS FOR THE IMPUGNED AYS HE PRAYED THAT THE ISSUE BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR FRAMING ASSESSMEN T AFRESH IN VIEW OF THE FACT THAT THE ASSESSING OFFICER OUGHT TO TAKE NOTE OF THE INCOME RETURNED BY THE ASSESSEE INCLUDED INCOME FROM TERM DEPOSITS (INTEREST ACCRUED NOT DUE) WHICH HAD BEEN RE - INVESTED FOR HOLDING A HIGHER AMOUNT OF FIXED DEPOSITS IN THA T PARTICULAR YEAR. THE LEARNED CIT(A), AS MAY BE PERUSED, IN HIS ORDER AGREED TO THE PROPOSITION THAT A PROPER CASH FLOW AND FUND FLOW WOULD SATISFY THE CONTENTION OF THE ASSESSING OFFICER TO VERIFY FROM THE DOCUMENTS AND CONFIRMATIONS RECEIVED FROM THE EM PLOYER U/S.133(6) WAS RECEIVED ONLY AFTER THE ASSESSMENT HAD BEEN PASSED BY THE ASSESSING OFFICER. THIS WOULD SATISFY THE INITIATION OF THE PROCEEDINGS FOR VERIFYING THE REASON TO HOLD A BELIEF THAT INCOME HAD ESCAPED THE ASSESSMENT WHICH THE ASSESSEE HEL D IN THE FORM OF FIXED DEPOSITS WITH THE ICICI BANK LTD. 5. THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFICER ON THE SPECIFIC QUERY HAD ASKED THE ASSESSEE TO ESTABLISH HOLDING OF THE FIXED DEPOSITS FOR THE IMPUGNED AYS ON THE BASIS OF REASON TO BELIEVE THAT THE INCOME DECLARED BY THE ASSESSEE DID NOT MATCH THE AMOUNT OF FIXED DEPOSITS HELD BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THAT THE AMOUNT OF FIXE D DEPOSITS HELD IN A PARTICULAR YEAR AS PER THE INFORMATION AVAILABLE WAS AVAILABLE TO THE ASSESSEE ON THE BASIS OF INCOME RENDERED TO / I.T.A.NOS.20,21 AND 22 /CTK/2011 4 TAX WITHOUT BRINGING FORWARD THE ALREADY TAXED INCOME BEING HELD AS FIXED DEPOSITS IN AN EARLIER YEAR. THE ASSESSEE COULD BE ABLE TO SUBSTANTIATE THE INCOME RENDERED AS INCOME FROM OTHER SOURCES TO MATCH WITH THE INTEREST INCOME WHICH HE PROPOSED TO RE - INVEST IN FIXED DEPOSITS IN AN EARLIER YEAR. 6. AFTER HEARING THE RIVAL CONTENTIONS AND PERUSING THE MATERIAL AVAILABLE ON RECORD, I AM OF THE CONSIDERED VIEW THAT THE PRAYER OF THE LEARNED COUNSEL FOR THE ASSESSEE SOUNDS REASONABLE IN SO FAR AS THE CONTENTION OF THE LEARNED DR HAS TO BE VERIFIED IN VIEW OF THE FACT THAT THE ASSESSING OFFICER HAD RECEIVED CONFIRMATION OF INCOM E PAID TO THE ASSESSEE BEING AN EMPLOYER OF THE ASSESSEE IN REPLY TO NOTICE U/S.133(6). THE ASSESSEE IS REQUIRED TO RECONCILE THE HOLDING OF FIXED DEPOSITS VIS - - VIS THE INCOME GENERATED THROUGH THE SPAN OF THESE YEARS WHEN INCOME FROM INTEREST ON FIXED DE POSITS AND ON MATURITY HAD BEEN RENDERED TO TAX UNDER THE MERCANTILE SYSTEM OF ACCOUNTING. NEEDLESS TO SAY THAT THE ASSESSEE BE AFFORDED A REASONABLE OPPORTUNITY OF BEING HEARD AND FURNISH EXPLANATION TO THE DOCUMENTS RELATING TO THEIR VERIFICATION BEING S ALARY PAID BY THE EMPLOYER AND AVAILABLE TO THE ASSESSING OFFICER ALREADY. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE CONSIDERED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. S D/ - (. . ), , (K.K.GUPTA), ACCOUNTANT MEMBER. () DATE: ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY. / I.T.A.NOS.20,21 AND 22 /CTK/2011 5 - COPY OF THE ORD ER FORWARDED TO: 1. / THE APPELLANT : SMT.SABITA SWAIN, AT: N 2/152,IRC VILLAGE, NAYAPALLI,BHUBANESWAR 2 / THE RESPONDENT: INCOME - TAX OFFICER, WARD 2(3), BHUBANESWAR. 3. / THE CIT, 4. ()/ THE CIT(A), 5. / DR, CUTTACK BENCH 6. GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY