Smt Sadhna Choudhary, SiddharthNagar V. ITO, Basti

ITA 226/LKW/2011

• Counselvise Citation: 22623714 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-07-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 29-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Keywords: Income from undisclosed sources
• Section: 234B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.226/LKW/2011 ASSESSMENT YEAR:2004 - 05 SMT. SADHNA CHAUDHARY, PROP. M/S CHAUDHARY FILLING STATION, BARHNI, SIDHARTHNAGAR. PAN:AESPC8573L VS. INCOME TAX OFFICER, BASTI. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY SHRI ALOK MITRA, D.R. DATE OF HEARING 23/07/2014 DATE OF PRONOUNCEMENT 2 8 /07/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - II, LUCKNOW DATED 09/02/2011 FOR ASSESSMENT YEAR 2004 - 2005. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN HOLDING THAT THE APPELLANT'S CASE WAS RIGHTLY SELECTED FOR SCRUTINY IN ACCORDANCE WITH BOARD'S INSTRUCTION AND FURTHER THAT THE PROCEEDINGS AND ASSESS MENT IN PURSUANCE TO NOT ICE UNDER SECTION 143(2) DATED 18 - 2 - 2005 ARE VALID. 2. TAT ON FACTS AND MATERIAL AVAILABLE ON RECORD, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUS TIFIED IN 2 CONFIRMING THE ADDITION OF RS.6,50,000/ - MADE BY THE ASSESSING OFFICER AS INCOME FROM UNDISCLOSED SOURCES. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, LUCKNOW IS NOT JUSTIFIED IN CONCLUDING THAT THE AGRI CULTURAL INCOME OF RS.77,500/ - AS DECLARED BY THE APPE LLANT IS NOT AGRICULTURAL INCOME. 4. THAT ON FACTS TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, LUCKNOW ERRED IN CONFIRMING THE ADDITION OF RS.3,51,000/ - UNSECURED LOANS AS MADE BY THE LEARNED ASSESSING OFFICER. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT AS PER THE ENACTMENT IN SECTION 208 READ WITH SECTION 234B OF THE I.T.ACT AND THE CASE LAW AS CITED BY THE APPELLANT, SHE IS NOT LIABLE TO PAY INTEREST UNDER SECTION 234B OF THE ACT. 6. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITUTE, MODIFY, DELETE OR AMEND ANY OR ALL GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT AS PER BOARDS INSTRUCTION NO. 10 OF 20 04 DATED 30 TH SEPT. 2004 IN RESPECT OF RETURN OF INCOME FILED BY THE ASSESSEE DURI NG FINANCIAL YEAR 2004 - 05, THE PROCESS OF SELECTION OF SCRUTINY CASES WAS REQUIRED TO BE COMPLETED WITHIN THREE MONTHS FROM THE DATE OF FILING OF RETURN OF INCOME. HE FURTHER SUBMITTED THAT THE RETURN OF INCOME WAS FILED ON 29/10/2004 AND THEREFORE, THE A SSESSING OFFICER SHOULD HAVE ISSUED NOTICE U/S 143 (2) LATEST BY 31/01/2005 BUT THE NOTICE WAS ISSUED BY THE ASSESSING OFFICER U/S 143(2) ON 18/02/2005 AND IT WAS SERVED ON THE ASSESSEE ON 25/02/2005. AFTER POINTING OUT THESE FACTS, HE SUBMITTED A COPY OF THE TRIBUNAL DECISION RENDERED IN THE CASE OF VISHAL MADNANI IN I.T.A. NO.669/LKW/2010 DATED 15/07/2014. HE SUBMITTED THAT UNDER THESE FACTS, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY TH IS TRIBUNAL DECISION 3 WHEREIN IT WAS HELD BY THE TRIBUNAL UN DER SIMILAR FACTS THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER IS NOT VALID. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE CASE OF VISHAL MADNANI, THE TRIBUNAL HAS CONSIDERED THE SAME BOARDS INSTRUCTION NO.10 DATED 30/09/2004 ISSUED BY THE BOARD WITH REGARD TO SCRUTINY OF ASSESSMENT. IN THAT CASE ALSO, RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 01/11/2004 AND THEREFORE, IT WAS HELD THAT THE SAME COULD HAVE BEEN SELECTED FOR SCRUTINY UP TO 31/01/2005 BUT THE SAME WAS SELECTED FOR SCRUTINY AND NOTICE WAS ISSUED ON 20/09/2005 AFTER THE PERIOD PRESCRIBED UNDER THE INSTRUCTION. THE TRIBUNAL FOLLOWED THE JUDGMENT OF HON'BLE CHHATISGARH HIGH COURT RENDERED IN THE CASE OF DCIT VS. SUNITA FINLEASE LTD. [2011] 330 ITR 491 AND ALSO THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF AM AL KUMAR GHOSH VS. ACIT AND OTHERS [2014] 361 ITR 458 (CAL.) AND BY FOLLOWING THESE JUDGMENTS , IT WAS HELD BY THE TRIBUNAL THAT AS PER THESE JUDGMENTS OF TWO DIFFERENT HIGH COURT S , IT WAS HELD THAT INSTRUCTIONS ISSUED BY THE BOARD ARE BINDING ON THE DEPART MENT AND THE CIRCULARS ARE TO BE STRICTLY COMPLIED WITH AND IF IT IS NOT FOLLOWED IN LETTER AND SPIRIT, THE ASSESSMENT FRAMED CONSEQUENT THERETO IS NOT VALID. BY FOLLOWING THESE TWO JUDGMENTS, IT WAS HELD BY THE TRIBUNAL THAT SINCE THE CASE WAS SELECTED F OR SCRUTINY AFTER THE PERIOD PRESCRIBED AS PER INSTRUCTION, THE SELECTION IS NOT PROPER AND THEREFORE, THE ASSESSMENT FRAMED CONSEQUENT THERETO IS NOT VALID. THE TRIBUNAL ANNULLED THE ASSESSMENT AND SET ASIDE THE ORDER OF CIT(A). SINCE THE FACTS IN THE P RESENT CASE ARE SIMILAR BECAUSE THE NOTICE WAS ISSUED AFTER EXPIRY OF TIME, BY RESPECTFULLY FOLLOWING THE TRIBUNAL DECISION AND THOSE TWO JUDGMENTS OF HON'BLE HIGH COURTS, WE HOLD THAT THE SELECTION OF THE SCRUTINY IS NOT PROPER 4 AND THEREFORE, ASSESSMENT FRAMED THERETO IS NOT VALID. WE, THEREFORE, ANNUL THE ASSESSMENT AND SET ASIDE THE ORDER OF CIT(A). SINCE WE HAVE ANNULLED THE ASSESSMENT, WE FIND NO JURISDICTION TO DEAL WITH THE APPEAL ON MERIT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLO WED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 8 /07/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR