Bindeshkumar J. Patel, Gandhinagar V. Income Tax Officer, Gandhinagar

ITA 2110/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94868 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OTHERS AP; VILAS V SHINDE DR ITA NO AHD
• Assessee Lawyers: SARKAR SHARMA
• Keywords: Reopening of assessment; Assessment record; Reason to believe; Reassessment proceedings
• Section: 147; 148

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.1847 AND 2111/AHD/2015 [ASSTT/YEAR 2006-2007 AND 2007-08] MANJULABEN JAGDISH PATEL PLOT NO.750, VASTUNIRMAN SOCIETY SECTOR 22 GANDHINAGAR 382 024. PAN : AFEPP 9231 R VS ITO, WARD-3, GANDHINAGAR. ./ ITA NO.1848 AND 2110/AHD/2015 [ASSTT/YEAR 2006-2007 AND 2007-08] BINDESHKUMAR J. PATEL PLOT NO.750, VASTUNIRMAN SOCIETY SECTOR 22 GANDHINAGAR 382 024. PAN : AOGPP 5239 D VS ITO, WARD-1, GANDHINAGAR. ./ ITA NO.1849 AND 2112/AHD/2015 [ASSTT/YEAR 2006-2007 AND 2007-08] JAGIDISHCHANDRA C. PATEL PLOT NO.750, VASTUNIRMAN SOCIETY SECTOR 22 GANDHINAGAR 382 024. PAN : ABAPP 7309 J VS ITO, WARD-2, GANDHINAGAR. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SARKAR SHARMA, AR REVENUE BY : SHRI VILAS V. SHINDE, DR ITA NO.1848/AHD/2015 & OTHERS (6 APPEALS) 2 ! / DATE OF HEARING : 02/12/2015 '#$ ! / DATE OF PRONOUNCEMENT: 09/12/2015 %& / O R D E R PER BENCH: THE PRESENT SIX APPEALS ARE DIRECTED AT THE INSTANC E OF THE ASSESSEES AGAINST SEPARATE ORDERS OF EVEN DATED 28. 4.2015 PASSED BY THE LD.CIT(A), GANDHINAGAR ON THE APPEALS OF RESPEC TIVE APPELLANTS IN THE ASSTT.YEAR 2006-07 AND 2007-08. 2. AT THE VERY OUTSET, THE LD.COUNSEL FOR THE ASSES SEE CONTENDED THAT THE ASSESSMENTS IN ALL THESE CASES HAVE BEEN REOPEN ED BY THE AO AFTER ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961. NOTICES HAVE BEEN ISSUED IN ALL THESE CASES IN THE MONTH OF MARCH, 2013 I.E. 26 TH , 27 TH , 28 TH AND 29 TH MARCH. NOTICES HAVE BEEN ISSUED AFTER LAPSE OF MORE THAN FIVE YEARS FROM THE END OF THE A SSESSMENT YEAR 2006-07. AS PER SECTION 151 OF THE INCOME TAX ACT, THE AO WAS REQUIRED TO OBTAIN PRIOR APPROVAL OF JT. COMMISSION ER/ADDITIONAL COMMISSIONER WHILE ISSUING NOTICES UPON THE ASSESSE ES. EITHER FROM THE REASONS RECORDED BY THE AO OR FROM THE COPY OF THE NOTICE, IT IS NOT DISCERNIBLE THAT THIS APPROVAL WAS TAKEN BY THE AO BEFORE ISSUANCE OF NOTICE. THUS, REOPENING OF THE ASSESSMENT IS NOT I N ACCORDANCE WITH LAW. HE FURTHER CONTENDED THAT A SPECIFIC PLEA TO THIS EFFECT WAS RAISED BEFORE THE LD.CIT(A), BUT THE LD.CIT(A) HAS NOT ADJ UDICATED THIS ISSUE BY RECORDING AN ANALYTICAL FINDING ON THIS ISSUE. TH EREFORE, ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE WITHOUT GOING INTO OTHER ISSUES/ADDITION MADE BY THE AO, IT IS NECESSARY TO ASCERTAIN WHETHE R ASSESSMENTS HAVE BEEN REOPENED IN ACCORDANCE WITH LAW OR NOT. FOR B UTTRESSING HIS ITA NO.1848/AHD/2015 & OTHERS (6 APPEALS) 3 CONTENTION, HE DREW OUR ATTENTION TOWARDS PAGE NO.8 OF THE PAPER BOOK IN THE CASE OF SHRI BINDESKUMAR J. PATEL (IN ITA NO .1848/AHD/2015) WHERE COPY OF THE REASONS FOR REOPENING ARE AVAILAB LE. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE REASONS IN OT HER CASES ARE ALSO ON THE SIMILAR LINE. HE FURTHER TOOK US THROUGH THE F INDING OF THE CIT(A) ON THIS ISSUE AVAILABLE ON PAGE NO.7 OF THE IMPUGNED O RDER. 3. ON THE OTHER HAND, THE LD.DR WAS UNABLE TO CONTR OVERT THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE. H E SUBMITTED THAT IT REQUIRES VERIFICATION FROM THE ASSESSMENT RECORD. THEREFORE, THE MATTER BE REMITTED BACK TO THE FILE OF THE AO FOR RECORDIN G A SPECIFIC FINDING. 4. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF THE CIT(A)S ORDER IN ITA NO.1848/AHD/2015 AND IN ITA NO.1847/AHD/2015, WE FI ND THAT THE ORDERS ARE VERBATIM EXCEPT IN QUANTUM AND DATES OF NOTICES ISSUED TO THE ASSESSEES. THE REASONS RECORDED BY THE AO IN T HE CASE OF BINDESH KUMAR J. PATEL READ AS UNDER: REASONS RECORDED FOR REOPENING OF ASSESSMENT U/S 14 7 OF THE ACT. COL. NO.II NAME AND ADDRESS OF THE ASSESSEE : SHRI BINDESHKUMA R J PATEL. PLOT NO.750. SECTOR NO- 22.VASTUNINNAN SOCIETY, GANDHINAGAR. PERMANENT ACCOUNT NUMBER NOT KNOWN STATUS IND IVIDUAL A.Y. 2006-07 THE ASSESSEE IS ONE OF THE BENEFICIARIES OF ACCOMMO DATION ENTRIES IN M/S. MAHASAGAR GROUP OF CASES. AS PER THE DATA R ELATED TO THE ITA NO.1848/AHD/2015 & OTHERS (6 APPEALS) 4 BENEFICIARIES OF THIS GROUP, THERE ARE ACCOMMODATIO N ENTRIES PERTAINING TO THE ASSESSEE, DURING THE F.Y.2005-06 RELEVANT TO THE A.Y.2006-07, WHICH WERE NOT DISCLOSED BY THE ASSESS EE IN THE RETURN OF INCOME FOR THE A.Y.2006-07. THEREFORE, I HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT TO THE ABOVE EXTENT FOR A.Y.2006-07. I T HEREFORE ISSUE NOTICE U/S.148 OF THE INCOME-TAX ACT, 1961. SD/- DATE: 28/03/2013 . (RAJIV DI WAKAR) INCOME-TAX OFFICER, WARD-1,GANDHINAGAR. 5. A PERUSAL OF THE SECTION 151 WOULD INDICATE THAT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR IF A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT IS BEING ISSUED, THEN, PR IOR SANCTION HAS TO BE TAKEN BY THE AO UNDER CLAUSE, 1, 2 AND 3 AS PER THE AVAILABLE CIRCUMSTANCES. IN THE PRESENT CASE, NOTICE HAS BEE N ISSUED BY THE ITO, WARD-1, GANDHINAGAR. HE IS NOT AN OFFICER IN THE R ANK OF JOINT COMMISSIONER OR ADDITIONAL COMMISSIONER. THEREFORE , BEFORE ISSUANCE OF SUCH NOTICE, APPROVAL FROM THE JOINT COMMISSION OUGHT TO HAVE BEEN TAKEN BY THE AO. FROM THE COPY OF THE REASONS OR C OPY OF THE NOTICE NO SUCH APPROVAL IS DISCERNIBLE. THE ASSESSEE HAS TAK EN A SPECIFIC PLEA BEFORE THE CIT(A). THE FINDING RECORDED BY THE CIT (A) IN THIS REGARD READS AS UNDER: (IV) THE APPELLANT HAS ALSO OBJECTED THAT THERE IS NO MENTION WHATSOEVER IN THE SAID NOTICE U/S 148, REGA RDING OBTAINING PRIOR SECTION OF THE JOINT COMMISSIONER/A DDITIONAL COMMISSIONER OF INCOME TAX FOR ISSUANCE OF SUCH NOT ICE U/S 148 WHICH IS A PRECONDITION AS PER THE PROVISIONS O F SECTION 151 OF THE ACT. THE APPELLANT HAS NOT BROUGHT ANY F ACTS THAT SUCH OBJECTIONS WERE ALSO RAISED BEFORE AO DURING REASSESSMENT PROCEEDINGS AND IN ABSENCE OF ANY EVID ENCE, THIS ARGUMENT OF APPELLANT CANNOT BE ACCEPTED AT TH IS STAGE. ITA NO.1848/AHD/2015 & OTHERS (6 APPEALS) 5 THUS, ON HOLISTIC CONSIDERATION OF ARGUMENTS RAISED BY APPELLANT, I THE REASSESSMENT NOTICE ISSUED BY AO IS VALID NOTIC E AND CONSEQUENTIAL REASSESSMENT ORDER PASSED BY AO IS A VALID ORDER AND RELATED GROUNDS OF APPEAL RAISED BY APPELLANT A RE DISMISSED. 6. ON DUE CONSIDERATION OF THE ABOVE FACTS, WE FIND THAT NEITHER THE AO NOR THE LD.CIT(A) HAS SPECIFICALLY DEALT WITH TH E PLEADING OF THE ASSESSEE THAT NO APPROVAL WAS TAKEN FROM THE JOINT COMMISSIONER BEFORE THE ISSUANCE OF NOTICE. THE ABOVE FINDING O F THE CIT(A) IS VAGUE AND NOT CATEGORICAL ON FACTS. THE LD.CIT(A) OUGHT TO HAVE RECORDED EITHER IN FAVOUR OF THE AO THAT APPROVAL WAS TAKEN OR AGAINST THE AO THAT NO APPROVAL WAS TAKEN, THEREFORE, REOPENING OF ASSESSMENT IS NOT JUSTIFIABLE. FACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE TO SET ASIDE BOTH THESE ORDERS AND RESTORE THIS CONTROVERS Y TO THE FILE OF THE AO. THE LD.AO IS DIRECTED TO CONSIDER THIS OBJECTI ON AND RECORD A FINDING ABOUT TAKING OF ANY APPROVAL FROM THE JOINT COMMISS IONER BEFORE THE ISSUANCE OF NOTICE UNDER SECTION 148. IN CASE THE LD.AO ARRIVES AT A CONCLUSION THAT SUCH APPROVAL WAS TAKEN, THEN MAKE REFERENCE OF THE DIARY NUMBER, VIDE WHICH, LETTER FOR TAKING SUCH AP PROVAL WAS SENT TO THE JOINT COMMISSIONERS OFFICE AND ALSO TO MAKE A MENTION OF INWARD DIARY NUMBER, VIDE WHICH SUCH APPROVAL WAS RECEIVED BY HIM. IN CASE IT IS FOUND THAT NO SUCH APPROVAL WAS TAKEN, THEN HE W OULD DROP REASSESSMENT PROCEEDINGS IN ALL THESE CASES. 7. SINCE, WE HAVE SET ASIDE THE ISSUES ON THE PRELI MINARY JURISDICTIONAL ISSUE FOR VERIFICATION AND RE-ADJUDI CATION AT THE LEVEL OF THE AO, WE DO NOT DEEM IT NECESSARY TO CONSIDER OTHER I SSUES ON MERITS AT THIS STAGE. IN CASE THE AO REJECTS THE CONTENTION OF THE ASSESSEE AND HELD THAT APPROVAL WAS TAKEN BEFORE ISSUANCE OF NOT ICE, THEN, THE ASSESSEES WOULD HAVE RIGHT TO RE-CHALLENGE ALL THE ISSUES ON MERITS IN APPEAL BEFORE THE LD.CIT(A) AS WELL AS BEFORE THE T RIBUNAL ALONG WITH ITA NO.1848/AHD/2015 & OTHERS (6 APPEALS) 6 CHALLENGE TO UPHOLDING OF REOPENING. IN OTHER WORD S, ALL OTHER ISSUES ON MERITS IMPLIEDLY BE SET ASIDE AND OUR ORDER WOULD N OT COME IN THE WAY OF ASSESSEE TO CHALLENGE THE ADDITIONS ON MERIT IN THE SECOND ROUND OF LITIGATION. WITH THE ABOVE OBSERVATIONS, ALL THESE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. 8 IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES A RE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 9 TH DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER