Sh. Het Singh( Deceased), Agra V. I.T.O., Ward-2(1), Agra

ITA 200/AGR/2014

• Counselvise Citation: 20020314 RSA 2014
• Duration Of Justice: 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 01-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: VITHAL DAS
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 200 & 201/AGRA/2014 ASSESSMENT YEAR : 2007-08 & 2008-09 SHRI HET SINGH (DECEASED), VS. INCOME-TAX OFFICE R, THROUGH LEGAL HEIR (SON) WARD 2(1), AGRA. PREETAM SINGH, 56/11, CHANAKYA NAGAR, NEAR IDGAH, HOTEL PARIJAT, AGRA. (PAN: ADBPS 5528 D) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VITHAL DAS, ADV OCATE RESPONDENT BY : SHRI SUREND RA KUMAR, JR. DR DATE OF HEARING : 03.09.2014 DATE OF PRONOUNCEMENT : 03 .09.2014 ORDER BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST DIFFERENT ORDERS OF LD. CIT(A)-I, AGRA DATED 16.06.2014 FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09. 2. BOTH THE APPEALS ARE FILED ON COMMON GROUNDS OF APPEALS. THE SAME READ AS UNDER :- 1. BECAUSE THE CIT(A) DECISION TO ALLOW WITHDRAWAL OF APPLICATION FILED BY ONE OF THE THREE LEGAL HEIRS O F THE DECEASED AND DISMISSING THE APPEAL IS IMPROPER AND INCONSISTENT WITH THE RULES OF EQUITY AND FAIR PLAY. ITA NO.200 & 201/AGRA/2014 2 2. BECAUSE THE WITHDRAWAL APPLICATION FILED BY ONE OF THE THREE LEGAL HEIRS OF THE DECEASED BEING APPARENTLY MALICI OUS, INTENDED TO CAUSE THEM HARM TO THE OTHER TWO LEGAL HEIRS, WITHO UT ADEQUATE INQUIRY IS CONTRARY TO THE STATUTE OF LAW AND JUDIC IAL PRONOUNCEMENTS. 3. BECAUSE THE CIT(A) IN ALL FAIRNESS, SHOULD HAVE DECIDED THE APPEAL LEGALLY FILED BEFORE HIM ON MERITS AS WELL. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN ASSES SMENT YEAR 2007-08, THE ASSESSEE FILED RETURN OF INCOME AT RS.1440/-. THE C ASE WAS REOPENED FOR ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FROM OFFICE OF ADIT(INV.), AGRA REGARDING UNEXPLAINED INVESTMENT IN CONSTRUCTION OF A HOTEL BUILDING, NAMELY, HOTEL PARIJAT, VIP ROAD, NAGLA FAQUIR CHAND, AGRA. THE ASSESSEE DU RING THE COURSE OF ASSESSMENT PROCEEDINGS EXPIRED ON 18.12.2013. AFTER HIS DEATH, HIS SON ABHISHEK HAS REPRESENTED THE CASE BEFORE THE AO. THE AO, AFT ER MAKING DISCUSSION REGARDING THE COST OF CONSTRUCTION SHOWN BY THE ASS ESSEE AND ESTIMATED BY AVO, MADE ADDITION OF RS.3,72,122/- ON ACCOUNT OF UNEXPL AINED INVESTMENT U/S. 69 OF THE IT ACT. 3.1 SIMILARLY, THE ASSESSEE IN ASSESSMENT YEAR 2008 -09, DECLARED INCOME OF RS.1,28,643/- IN RETURN OF INCOME. ON THE SAME REAS ONS, AS NOTED ABOVE, THE ASSESSMENT WAS REOPENED FOR UNEXPLAINED COST OF CON STRUCTION. AFTER DEATH OF THE ASSESSEE, HIS SON ABHISHEK REPRESENTED HIM BEFORE T HE AO AND THE AO MADE ITA NO.200 & 201/AGRA/2014 3 ADDITION OF RS.90,000/- ON ACCOUNT OF UNEXPLAINED I NVESTMENT U/S. 69 OF THE IT ACT. BOTH THE ASSESSMENT ORDERS WERE FRAMED ON 04.03.201 4.THE ASSESSEES LEGAL HEIR ABHISHEK KUSHWAHA PREFERRED APPEAL BEFORE THE LD. C IT(A), CHALLENGING THE ASSESSMENT ORDER TO BE NULL AND VOID AND ADDITIONS ON MERIT. HOWEVER, SHRI ABHISHEK KUSHWAH, LEGAL HEIR OF THE ASSESSEE FILED A LETTER BEFORE THE LD. CIT(A) SEEKING WITHDRAWAL OF BOTH THE APPEALS. THE LD. CIT (A), ACCORDINGLY, DISMISSED BOTH THE APPEALS AS WITHDRAWN. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE FINDINGS OF THE AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO COPY OF THE WILL OF THE DECEASED ASSESSEE TO SAY THAT THE ASSESSEE HAS LEFT THREE LEGAL HEIRS, MUNNA LAL, PREETAM SINGH AND ABHISHEK AND TWO OTHER DAUGHTERS. THE ADDITION RELATES TO THE PROPERTY WHICH IS REFERRED TO IN THE WILL AND ACCOR DING TO THE WILL OF THE ASSESSEE, AFTER HIS DEATH, THE PROPERTY IN QUESTION WILL BE D IVIDED AMONG THE THREE SONS AS MENTIONED ABOVE. THE LD. COUNSEL FOR THE ASSESSEE R EFERRING TO THE SAID WILL STATED THAT SINCE THE PROPERTY IN QUESTION IS HELD BY ALL THE THREE SONS OF THE ASSESSEE AS PER WILL OF THE DECEASED ASSESSEE, THEREFORE, WITHD RAWAL OF APPEALS BY ONE OF THE LEGAL HEIRS WAS NOT COMPETENT. HE HAS RELIED UPON T HE DECISION OF HIGH COURT OF LAHORE IN THE CASE OF CIT VS. NAWAB SHAH NAWAZ KHAN , 6 ITR 370, IN WHICH IT WAS HELD THAT NO POWER OF WITHDRAWAL OF APPEAL BEFORE THE AAC IS VESTED WITH THE ITA NO.200 & 201/AGRA/2014 4 ASSESSEE. IF THE ASSESSEE IS ALLOWED TO WITHDRAW TH E APPEAL, IT WILL NULLIFY THE POWERS OF AAC TO ENHANCE THE ASSESSMENT. HE HAS RELIED UPON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS. RAI BAHDU HARD UTROY MOTILAL CHAMARIA, 1968 AIR 153 (66 ITR 443), IN WHICH HONBLE SUPREME COURT AT PAGE 450 OBSERVED THAT IT IS ALSO WELL-ESTABLISHED THAT AN ASSESSEE HAVING ONCE FILED AN APPEAL CANNOT WITHDRAW IT. IN OTHER WORDS, THE A SSESSEE HAVING FILED AN APPEAL AND BROUGHT THE MACHINERY OF THE AC T INTO WORKING CANNOT PREVENT THE AAC FROM ASCERTAINING AND SETTLI NG THE REAL SUM TO BE ASSESSED, BY INTIMATION OF HIS WITHDRAWAL OF THE APPEAL. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT THE LD. CIT(A) INSTEAD OF DISMISSING THE APPEALS AS WITHDRAWN SHOULD HAVE DEC IDED THE APPEALS ON MERITS. THE LD. DR JUSTIFIED THE DISMISSAL OF APPEALS ON WI THDRAWAL MADE BY ONE OF THE LEGAL HEIRS OF THE DECEASED ASSESSEE. ON GOING THRO UGH THE SUBMISSIONS OF THE PARTIES IN THE LIGHT OF THE FACTS AND CASE LAWS CIT ED ABOVE, I AM OF THE VIEW THAT THE LD. CIT(A) SHOULD NOT HAVE ALLOWED SHRI ABHISHEK KU SHWAHA TO WITHDRAW THE APPEALS. ABOVE DECISIONS CLEARLY SUPPORT THE CASE O F THE ASSESSEE THAT ONCE THE APPEAL IS FILED BEFORE THE LD. CIT(A), IT CANNOT BE WITHDRAWN BY THE ASSESSEE. I MAY ALSO RELY UPON THE DECISION OF HONBLE RAJASTHA N HIGH COURT IN THE CASE OF CIT VS. SMT. PUSHPA DEVI, 250 ITR 495, IN WHICH IT WAS HELD HELD, (I) THAT THE ACTION OF THE INCOME-TAX OFFICER IN NO T ISSUING NOTICE TO ALL THE LEGAL REPRESENTATIVES WAS NOT BONA FIDE AND ITA NO.200 & 201/AGRA/2014 5 DILIGENT. LITIGATION WAS THE DIRECT RESULT OF DISRE GARD OF THE BASIC REQUIREMENT OF ISSUING NOTICE TO ALL THE LEGAL REPR ESENTATIVES. (II). THAT THE ASSESSMENT ORDER MADE WITHOUT NOTIC E TO ALL THE LEGAL REPRESENTATIVES OF THE DECEASED ON SUBMISSION OF THE RETURNS SUFFERED FROM PROCEDURAL IRREGULARITIES ONLY AND WA S LIABLE TO BE CORRECTED BY SETTING ASIDE THE ORDER AND DIRECTING THAT THE NOTICE BE ISSUED TO ALL THE LEGAL REPRESENTATIVES IN ACCORDAN CE WITH LAW. THE ASSESSMENT WAS NOT VOID AND NOT LIABLE TO BE ANNULL ED. 4.1 IN THE PRESENT CASE, ONCE AT THE ASSESSMENT STAGE, THE AO WAS INTIMATED OF THE DEATH OF THE ASSESSEE THEN THE AO SHOULD HAVE V ERIFIED ABOUT OTHER LEGAL HEIRS OF THE ASSESSEE. THE SAME ACTION SHOULD HAVE BEEN T AKEN BY THE LD. CIT(A) IN THIS REGARD. THEREFORE, INSTEAD OF PERMITTING THE WITHDR AWAL OF THE APPEALS BY ONE OF THE LEGAL HEIRS, THE APPEALS SHOULD HAVE BEEN DECIDED O N MERITS BY ASCERTAINING THE OTHER LEGAL HEIRS BECAUSE OTHER LEGAL HEIRS AS PER WILL OF THE ASSESSEE WERE ALSO ENTITLED TO SOME RIGHTS AND INTEREST IN THE PROPERT Y AND THEIR RIGHTS OR INTERESTS COULD HAVE BEEN AFFECTED BY PERMITTING ONE OF THE LEGAL H EIRS OF THE DECEASED ASSESSEE TO WITHDRAW THE APPEALS. CONSIDERING THE ABOVE DISCUSS ION, I AM OF THE VIEW THAT IT WAS NOT FAIR ON THE PART OF THE LD. CIT(A) TO DISMI SS THE APPEALS OF THE ASSESSEE ON WITHDRAWAL MADE BY ONE OF THE LEGAL HEIRS. THUS, TH E MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LD. CIT(A). I, THEREFORE, SET ASIDE BOTH THE IMPUGNED ORDERS AND RESTORE BOTH THE APPEALS TO THE FILES OF LD. CIT(A) WITH DIRECTION TO RE-DECIDE BOTH THE APPEALS ON MERITS S TRICTLY IN ACCORDANCE WITH LAW. ITA NO.200 & 201/AGRA/2014 6 THE LD.CIT(A) SHALL GIVE REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO ALL THE LEGAL HEIRS OF THE DECEASED ASSESSEE BEFORE DEC IDING THE APPEALS ON MERITS. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT(A), CONCERNED 4. CIT, CONCERNED ASSTT. REGISTRAR 5. DR, ITAT, AGRA 6. GUARD FILE TRUE COPY