V. Nagaraj, Bangalore V. ITO, Bangalore

ITA 233/BANG/2012

• Counselvise Citation: 23321114 RSA 2012
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-06-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNDER RAJAN
• Assessee Lawyers: V SRINIVASAN
• Keywords: Opportunity of being heard
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER I.T.A. NO.233/BANG/2012 (ASSESSMENT YEAR : 2005-06) SHRI V. NAGARAJ, NO.90, 38 TH MAIN, III CROSS, ROSE GARDEN, 6 TH PHASE, J.P. NAGAR, BANGALORE-560 078. . APPELLANT. VS. INCOME TAX OFFICER, WARD 3, BANGALORE. .. RESPONDENT. APPELLANT BY : SHRI V. SRINIVASAN. RESPONDENT BY : SHRI SUNDER RAJAN. DATE OF HEARING : 27.08.2012. DATE OF PRONOUNCEMENT : 07.09.2012. O R D E R PER SHRI JASON P. BOAZ, A.M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, BANGALORE DT.14.11.2011. 2. THE FACTS OF THE CASE, IN BRIEF, ARE AS UNDER : 2.1 THE ASSESSEE IS A MILK VENDOR IN WHOSE CASE THE ASSESSING OFFICER RECEIVED AIR INFORMATION THAT THERE WERE DEPOSITS OF RS.13,23,00 0 IN HIS SAVINGS BANK ACCOUNT WITH CANARA BANK IN THE PERIOD RELEVANT TO ASSESSMENT YE AR 2005-06. THE ASSESSING OFFICER 2 ITA NO.233/BANG/12 INITIATED ASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE U/S. 142(1) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS 'THE ACT') ON 17. 9.2007 CALLING UPON THE ASSESSEE TO FILE THE RETURN OF INCOME FOR ASSESSMENT YEAR 2005-06 WH ICH WAS SERVED ON THE ASSESSEE ON 22.9.2007. AS THERE WAS NO COMPLIANCE, A REMINDER WAS ISSUED ON 5.11.2007 WHICH WAS RETURNED UNSERVED. THEREAFTER, ANOTHER LETTER DT.1 8.12.2007 WAS ISSUED TO THE ASSESSEE INFORMING HIM THAT IN THE EVENT OF HIS FAILURE TO F ILE THE RETURN OF INCOME AND DETAILS OF DEPOSITS IN HIS SAVINGS BANK ACCOUNT WITH CANARA BA NK FOR THE RELEVANT PERIOD, THE DEPOSITS OF RS.13,23,000 THEREIN AS PER AIR INTIMATION WOUL D BE BROUGHT TO TAX AS HIS INCOME. AS THERE WAS NO COMPLIANCE THERETO, THE ASSESSING OFFI CER COMPLETED THE ASSESSMENT EX- PARTE UNDER SECTION 144 OF THE ACT BRINGING TO TAX THE SUM OF RS.13,23,000 REPRESENTING DEPOSITS IN HIS CANARA BANK ACCOUNT UNDER SECTION 6 9A OF THE ACT. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DT.31 .12.2007, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). VARIOUS GROUNDS CHALLENGING THE JURISDICTION OF THE ITO, WARD 4(3), BANGALORE TO PASS THE ORDER OF ASSESSMENT, DETAILS OF SERVICE OF NOTICE, ETC WERE FILED. THE LEARNED CIT(A) AFTER CONSIDERING THE SAME DISMI SSED THE ASSESSEES APPEAL STATING THAT NEITHER BEFORE HER IN APPEAL PROCEEDINGS NOR T HE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS HAD THE ASSESSEE EXPLAINED THE SOURCE O F DEPOSITS OF RS.13,23,000 IN HIS SAVINGS BANK ACCOUNT WITH CANARA BANK AND THEREFORE CONFIRMED THE ASSESSING OFFICERS ACTION OF BRINGING THIS AMOUNT TO TAX UNDER SECTION 69A OF THE ACT. 3 ITA NO.233/BANG/12 3.1 AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), T HE ASSESSEE IS NOW IN APPEAL BEFORE US. LENGTHY AND ARGUMENTATIVE GROUNDS OF APPEAL 1 TO 10 WERE FILED ALONG WITH FORM NO.36. SUBSEQUENTLY, THE ASSESSEE FILED CONCISE GROUNDS OF APPEAL AND PRAYED FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL BOTH OF WHICH ARE REP RODUCED HEREUNDER : 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO F AR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVI DENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOL DING THE ORDER PASSED BY THE LD. ASSESSING OFFICER UNDER SECTION 144 OF THE I T ACT, 1961. 3. THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G ORDER PASSED BY THE LD. ASSESSING OFFICER I.E. ITO, WARD 7(3), BANGALORE, W HO DID NOT HAVE THE REQUISITE JURISDICTION OVER THE CASE OF THE APPELLA NT UNDER THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE. GROUNDS NOT BEFORE CIT(A). 4. THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOL DING THE ADDITION OF RS. 13,23,000 AS UNEXPLAINED DEPOSITS UNDER THE FACTS A ND CIRCUMSTANCES OF THE APPELLANTS CASE. THE ADDITION IS PURELY ON SUSPIC ION AND SURMISE, ASSUMPTIONS AND PRESUMPTIONS AND REQUIRES TO BE DELETED. 5. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED. 3.2 IN RESPECT OF THE ADDITIONAL GROUNDS RAISED A ND THE PRAYER OF ADMISSION OF THE SAME, THE ASSESSEE HAS SUBMITTED THAT THESE GROUNDS DO NOT INVOLVE INVESTIGATION OF FACTS OTHERWISE THAN FOUND ON THE RECORDS OF THE DEPARTME NT AND THAT THE ADDITIONAL GROUNDS BE ADMITTED AND DISPOSED OFF ON MERITS IN ACCORDANC E WITH THE RATIO OF THE DECISIONS OF THE HON'BLE APEX COURT IN 229 ITR 383 AND THE HON'B LE HIGH COURT OF KARNATAKA IN 70 ITR 70. THE LEARNED DEPARTMENTAL REPRESENTATIVE FA IRLY STATED THAT HE HAD NO OBJECTION FOR THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL R AISED BY THE ASSESSEE. WE HAVE 4 ITA NO.233/BANG/12 CAREFULLY PERUSED THE ADDITIONAL GROUNDS OF APPEAL NOW RAISED (SUPRA) AND THE SUBMISSION OF THE ASSESSEE FOR ADMISSION OF THE SAME. IN THE INTEREST OF EQUITY AND JUSTICE, WE ADMIT THE ADDITIONAL GROUNDS OF APPEAL RAISED FOR CONSIDE RATION AND DISPOSAL ON MERITS. 4.0 AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE GROUNDS OF APPEAL RAISED AT S.NOS.2 & 3 ARE NOT PRESSED IN THIS APPEAL. WE, THEREFORE, DI SMISS THEM AS INFRUCTUOUS. 5.0 THE GROUNDS OF APPEAL AT S.NOS.1 & 5 ARE GENERAL IN NATURE AND THEREFORE NO ADJUDICATION IS CALLED FOR THEREON. 6.1 ONLY GROUND OF APPEAL AT S.NO.4 NOW SURVIVES FOR CONSIDERATION IN THIS APPEAL. TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT MER ELY BASED ON THE AIR INFORMATION, THE ASSESSING OFFICER BY AN EX-PARTE ORDER BROUGHT TO T AX IN THE ASSESSEES HANDS THE ENTIRE DEPOSITS IN THE ASSESSEES SAVINGS BANK ACCOUNT IN CANARA BANK UNDER SECTION 69A OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED T HAT IT IS EVIDENT FROM A READING OF THE ORDERS OF THE AUTHORITIES BELOW THAT THE DEPOSITS I N THE ASSESSEES BANK ACCOUNTS WERE NEITHER EXAMINED NOR SCRUTINIZED. HE SUBMITTED THA T IT IS IN THE INTEREST OF FAIRNESS AND JUSTICE THAT THIS EXERCISE BE CARRIED OUT BEFORE, T HE CORRECT INCOME OF THE ASSESSEE ARISING THEREFROM CAN BE BROUGHT TO TAX, IF SO WARR ANTED, AS WAS THE REQUIREMENT OF LAW. FOR THIS TO BE DONE, THE LEARNED COUNSEL FOR THE AS SESSEE SUBMITTED, IT WAS NECESSARY THAT THIS ISSUE BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR DE-NOVO EXAMINATION AND 5 ITA NO.233/BANG/12 CONSIDERATION ON MERITS. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON HIS PART DID NOT HAVE ANY OBJECTION TO THE PROPOSITION PUT FORTH BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE MATTER BE REMANDED TO THE FILE OF THE ASSE SSING OFFICER FOR DE-NOVO CONSIDERATION ON MERITS. 6.2 WE HAVE HEARD BOTH PARTIES AND CAREFULLY PERUSE D THE MATERIAL ON RECORD. ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THERE HAS BEEN NO EXAMINATION OR SCRUTINY OF THE AIR INTIMATION REGARDING DEPOSIT S OF RS.13,23,000 IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE IN CANARA BANK IN THE RELEV ANT PERIOD BEFORE THE SAME WAS ENTIRELY BROUGHT TO TAX IN THE ASSESSEES HANDS UND ER SECTION 69A OF THE ACT. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THIS ISSUE B E REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DE-NOVO EXAMINATION AND CONSI DERATION AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO COMPLY WITH THE REQUIREMENTS OF NOTICES AND LETTERS ISSUED BY THE A SSESSING OFFICER BY FURNISHING INFORMATION AND EXPLANATION CALLED FOR SO THAT THE MATTER BE DISPOSED OFF EXPEDITIOUSLY. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPT., 2012. SD/- SD/- (P. MADHAVI DEVI) (JASON P BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER *REDDY GP 6 ITA NO.233/BANG/12 COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, - C BENCH. 6. GUARD FILE. (TRUE COPY ) BY ORDE R SR. PRIVATE SECRETARY, ITAT, BANGALORE