Shri Ajitkumar Ramanlal Desai, Valsad V. The Income Tax Officer, Ward-1, Valsad

ITA 2284/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1858 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 06-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S CHOUDHARY
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 147; 148

Judgement Text

AJITKUMAR RAMANLAL DESAI VS. ITO, WARD-1, VALSAD ITA NO.2284/AHD/2016/A.Y.2006-07 PAGE 1 OF 4 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT , . . , BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A. NO.2284/AHD/2016/SRT / ASSESSMENT YEAR : 2006-07 AJITKUMAR RAMANLAL DESAI, HANUMAN BHAGDA, VALSAD 396 001. [PAN: ABXPD 0352 M] VS. THE INCOME TAX OFFICER, WARD-1, VALSAD. APPELLANT /RESPONDENT /ASSESSEE BY SHRI SAKAR SHARMA CA /REVENUE BY SHRI P.S.CHOUDHARY SR.DR / DATE OF HEARING: 0 7 . 0 1 .201 9 /PRONOUNCEMENT ON 09 .01.2019 /O R D E R PER DIVA SINGH, JM: 1. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 13/06/2016 OF CITA (A) WHILE VALSAD PERTAINING TO 2006 07 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THE LD CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING ACTION OF ASSESSING OFFICER IN ISSUING NOTICE U/S 148 AND MAKING OF ASSESSMENT U/S 147 EVEN THOUGH STATUTORY REQUIREMENTS UNDER BOTH THE PROVISIONS WERE NOT COMPLIED WITH. 2. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS.26,53,180/- FOR ALLEGED UNEXPLAINED CASH DEPOSITED IN THE AXIS BANK ACCOUNT INSPITE OF FURNISHING OF CORROBORATIVE EVIDENCES. 2. THE LD. AR REFERRING TO THE RECORD SUBMITTED THAT THE ASSESSEE HAD MOVED AN APPLICATION DATED 12/09/2018 FOR ADMISSION OF FRESH EVIDENCES. ADDRESSING THE SAME IT WAS SUBMITTED THAT THE NEED AND NECESSITY FOR PLEADING, FRESH EVIDENCES ARISES ON ACCOUNT OF THE FACT THAT MATERIAL RELEVANT AND CRUCIAL FOR DETERMINING THE ISSUE COULD NOT BE PLACED BEFORE THE TAX AUTHORITIES AS THE ASSESSEE HAVING LEFT HIS BUSINESS WAS OUT OF THE COUNTRY AND NOT IN TOUCH WITH THE PARTIES. IT WAS HIS SUBMISSION THAT THE AJITKUMAR RAMANLAL DESAI VS. ITO, WARD-1, VALSAD ITA NO.2284/AHD/2016/A.Y.2006-07 PAGE 2 OF 4 ASSESSEE WAS RESIDING AT USA AT THE TIME WHEN NOTICE UNDER SECTION 148 HAD BEEN ISSUED AND THE SAID NOTICE HAD NEVER BEEN RECEIVED BY HIM AND IT IS ONLY WHEN HE NEXT CAME TO INDIA FOR ATTENDING SOME SOCIAL FUNCTIONS THAT HE FILED A RETURN. HOWEVER IT WAS HIS SUBMISSION THAT ON MERITS THE ADDITIONAL EVIDENCE BEING CRUCIAL AND RELEVANT FOR DETERMINING THE ISSUE DESERVES TO BE ADMITTED AS THE RELEVANT EVIDENCE COULD NOT BE FILED AS ON MOVING TO USA HE HAD LOST CONTACT WITH HIS CLIENTS. 3. THE LD. A.R. ALSO SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE THE COPY OF NOTICE STATED TO HAVE BEEN SIGNED BY THE ASSESSEE EVIDENCING RECEIPT OF NOTICE BY THE ASSESSEE TO SUPPORT THE ACTION HAS NOT BEEN RECEIVED BY HIM NOR SIGNED BY THE ASSESSEE. IT WAS ALSO HIS SUBMISSION THAT THE SIGNATURE AS SHOWN BY THE DEPARTMENT AS ASSESSEES SIGNATURE DOES NOT CARRY ANY IDENTIFICATION AS HAVING BEEN SIGNED FOR OR ON BEHALF OF ASSESSEE ETC. IT WAS HIS SUBMISSION THAT AT THE RELEVANT POINT OF TIME THE ASSESSEE WAS IN USA, PASSPORT AFFIRMING THE FACT THAT UPTO 17/10/2013 THE ASSESSEE WAS IN USA AND CAME TO INDIA ONLY ON 17/10/2013 AND STAYED UP TO 05/03/2014, IS AVAILABLE ON RECORD. THE NOTICE UNDER SECTION 148 IT WAS SUBMITTED COULD NEVER HAVE BEEN SIGNED BY THE ASSESSEE. PAPER BOOK PAGE 1 ALLEGEDLY CARRYING THE ASSESSEES SIGNATURE DATED 31/03/2013 ON THE COPY OF THE NOTICE ISSUED UNDER SECTION 148 RELIED UPON BY THE REVENUE WAS STRONGLY DENIED BY THE ASSESSEE AS HIS SIGNATURE. 4. THE LD.SR.DR REFERRING TO THE VERY SAME DOCUMENT TOOK THE POSITION THAT IT APPEARS TO BE THE ASSESSEES SIGNATURE. THE SAID POSITION WAS STRONGLY REPULSED BY THE LD. AR. 5. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND ARE SATISFIED THAT THE ADMISSION OF FRESH EVIDENCES IN THE PECULIAR FACTS OF THE PRESENT CASE IS FULLY WARRANTED HOWEVER THE OCCASION TO CONSIDER THE SAME WOULD ARISE ONLY IF THE ASSESSEE FAILS ON THE JURISDICTIONAL ISSUE. THE REVENUE HAS TO FIRST AT THE THRESHOLD MEET THE JURISDICTIONAL CHALLENGE POSED BY THE ASSESSEE. ACCORDINGLY, IN THE INTERESTS OF JUSTICE THE IMPUGNED ORDER IS SET-ASIDE BACK TO THE FILE OF THE CIT(A) TO FIRST DECIDE AJITKUMAR RAMANLAL DESAI VS. ITO, WARD-1, VALSAD ITA NO.2284/AHD/2016/A.Y.2006-07 PAGE 3 OF 4 THE JURISDICTIONAL CHALLENGE AND THEN PROCEED TO DECIDE THE ISSUE ON MERIT IF NEED BE. WE HAVE COME TO THE SAID DECISION ON A READING OF THE APPLICATION DATED 12/09/2018 WHICH HAS BEEN FILED BY THE ASSESSEE FOR ADMISSION OF FRESH EVIDENCES. RELEVANT EXTRACTS THEREOF ARE REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS: DURING THE COURSE OF PROCEEDINGS BEFORE ASSESSING OFFICER AS WELL AS BEFORE THE CIT (A) I HAD CONTENDED THAT I WAS ENGAGED IN PURCHASE IN PURCHASE AND SALE OF SHARES FOR MY CLIENTS USING MY AXIS BANK ACCOUNT AND DUE TO WHICH CASH CAME TO BE DEPOSITED IN THE MY BANK ACCOUNT BEING RECEIVED FROM MY CLIENTS. AGAINST THE DEPOSIT OF CASH IN THE BANK ACCOUNT I HAD MADE PAYMENT TO KOTAK SECURITIES LTD FOR SHARES PURCHASED FOR AND ON BEHALF OF MY CLIENTS. I HAD PLACED MY DEMAT ACCOUNT STATEMENT MAINTAINED WITH STOCK HOLDING CORPORATION OF INDIA IN SUPPORT OF MY CONTENTIONS BEFORE THE ASSESSING OFFICER AND FEW CONFIRMATIONS THROUGH MY AUTHORISED REPRESENTATIVE BEFORE THE CIT (A). SINCE I WAS RESIDING AT USA AT THE TIME OF ISSUANCE OF NOTICE U/S 148, I HAD NO OCCASION TO RECEIVE NOTICE U/S 148 ON THE STRENGTH OF WHICH PROCEEDINGS HAD BEEN INITIATED ON ME. I CAME TO INDIA FOR A SHORT PERIOD OF TIME TO ATTEND SOCIAL FUNCTIONS OF MY FAMILY AND OTHER RELATIVES AND SINCE I HAD LOST CONTACT WITH MY CLIENTS I WAS NOT ABLE TO GET CONFIRMATIONS AND RELEVANT DOCUMENTS FOR THE PURPOSE OF SUBSTANTIATING MY CLAIM THAT ENTIRE CASH DEPOSITED IN THE BANK ACCOUNT WAS NOTHING BUT PURCHASE CONSIDERATION PAID BY MY CLIENTS FOR PURCHASE OF SHARES. UNDER THESE CIRCUMSTANCES I HAD, THEREFORE, FURNISHED MY RETURN OF INCOME U/S 148 BY COMPUTING MY COMMISSION INCOME. FURTHER, TO REITERATE AND REAFFIRM THAT I EARNED ONLY COMMISSION INCOME AND ENTIRE CASH WHICH CAME TO BE DEPOSITED IN THE AXIS BANK ACCOUNT WAS RECEIPTS FROM MY CLIENTS AGAINST PURCHASE OF SHARES OF HAD SUBMITTED SWORN AFFIDAVIT TO THE ASSESSING OFFICER THROUGH MY AUTHORISED REPRESENTATIVE AS I HAD A SCHEDULED TRAVELLING TO USA. DURING ENTIRE PERIOD OF APPELLATE PROCEEDINGS BEFORE THE CIT(A) I WAS NOT ABLE TO VISIT INDIA AND THEREFORE, CONFIRMATIONS TO THE EXTENT I COULD GATHER BASED ON AVAILABLE CLIENTS CONTACTS WERE FURNISHED IN THE COURSE OF APPELLATE PROCEEDINGS. NEITHER THE ASSESSING OFFICER NOR THE CIT (A) APPRECIATED THE DOCUMENTARY EVIDENCES FURNISHED BY ME WHICH LED TO DISMISSAL OF MY APPEAL BY CIT(A). POST COMPLETION OF APPELLATE PROCEEDINGS I TRAVELLED BACK TO INDIA FEW MONTHS BACK AND MADE SINCERE ATTEMPT TO COLLECT CONFIRMATIONS AND OTHER REQUISITE EVIDENCES TO THE EXTENT BEST POSSIBLE BEING PERTAINING TO FINANCIAL YEAR 2005- 06 FROM MY CLIENTS AS WELL AS FROM OTHER SOURCES. THESE EVIDENCES AND DOCUMENTS I HAVE PLACED AT PAGES 1 AND 126-210 OF MY PAPER BOOK TO SUBSTANTIATE THAT CASH DEPOSIT IN BANK ACCOUNT WHICH HAS BEEN BROUGHT TO TAX IS NOT MY INCOME BUT REPRESENTS AMOUNT RECEIVED BY ME FROM MY CLIENTS AGAINST PURCHASE OF SHARES BY THEM THROUGH ME AND FOR WHICH I HAD ISSUED CHEQUES FROM MY BANK ACCOUNT TO KOTAK SECURITIES. I, THEREFORE, REQUEST THE HONBLE BENCH TO ADMIT ADDITIONAL EVIDENCES APPEARING AT PAGE 1 AND 126-210 OF MY PAPER BOOK IN THE INTEREST OF JUSTICE AND PROPER ADJUDICATION OF MY APPEAL. I COULD NOT FURNISH THESE EVIDENCES BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) AS I WAS NOT IN INDIA DURING MAJOR PART OF ASSESSMENT PROCEEDINGS AND ENTIRELY DURING THE COURSE OF APPELLATE PROCEEDINGS. THE ADDITIONAL EVIDENCES ARE BEING SUBMITTED TO REITERATE AND SUPPORT MY CONTENTIONS MADE BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A). 6. ON A READING OF THE ABOVE IT IS SEEN THAT THE ASSESSEE HAS CATEGORICALLY DENIED HIS SIGNATURE APPEARING ON THE NOTICE ISSUED UNDER SECTION 148. IT GOES WITHOUT SAYING THAT THE BED ROCK OF THE DEPARTMENTAL ACTION ADMITTEDLY IS THE NOTICE ISSUED TO THE ASSESSEE. IN THE PRESENT PROCEEDINGS THE ASSESSEE HAS AGITATED THAT NO NOTICE WAS SERVED UPON THE ASSESSEE AND HAS QUESTIONED THE VERY CORRECTNESS OF THE ASSUMPTION OF AJITKUMAR RAMANLAL DESAI VS. ITO, WARD-1, VALSAD ITA NO.2284/AHD/2016/A.Y.2006-07 PAGE 4 OF 4 JURISDICTION UNDER SECTION 147 BY THE ASSESSING OFFICER. THE ASSESSEE HAS STRONGLY CONTESTED THAT THE SIGNATURES RELIED UPON BY THE REVENUE AS ASSESSEES SIGNATURES ARE INFACT NOT HIS NOR COULD THEY HAVE BEEN HIS AS ON 31/03/2013 THE SPECIFIC DATE THE ASSESSEE WAS IN USA AND ARRIVED IN INDIA ONLY ON 17/10/2013. THE DETERMINATION OF THE SAID ISSUE BEING CRUCIAL TO DECIDE THE ASSUMPTION OF JURISDICTION AND SINCE WE ARE NOT HANDWRITING EXPERTS IN THE CIRCUMSTANCES WE DEEM IN APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO SEEK A REPORT OF THE FORENSIC EXAMINER/HANDWRITING EXPERT AND THEREAFTER DECIDE THE ISSUE, FIRST ON ASSUMPTION OF JURISDICTION AND ONLY THEREAFTER IF NEED BE HE SHALL PROCEED TO DECIDE THE ISSUE ON MERITS. NEEDLESS TO SAY THAT BEFORE THE PASSING OF THE ORDER THE ASSESSING OFFICER SHALL GIVE A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. THE ORDER PRONOUNCED IN THE OPEN COURT ON 09.01.2019. SD/- SD/- ( .. / O.P.MEENA) ( /DIVA SINGH) /ACCOUNTANT MEMBER ( /JUDICIAL MEMBER) / SURAT, DATED : 9 TH JANUARY , 2019/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT