Karamvir Singh, New Delhi V. AO WARD 32(2), New Delhi

ITA 2454/DEL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4811 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Validity of assessment
• Section: 143(3); 142(1); 13; 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI [THROUGH VIDEO CONFERENCING] BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA.NO.2454/DEL./2019 ASSESSMENT YEAR 2010-2011 MR. KARAMVIR SINGH, C-222, BADARPUR VILLAGE, MAIN MARKET, SOUTH DELHI, DELHI 110 044. PAN AMPPS3117D VS. THE INCOME TAX OFFICER, WARD 32 (2), ROOM NO.1108, 11 TH FLOOR, E-2 BLOCK, CIVIC CENTRE, MINTO ROAD, NEW DELHI - 110002. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI AJAY WADHWA, ADVOCATE. FOR REVENUE : SHRI R.K. GUPTA, SR. DR DATE OF HEARING : 03.08.2021 DATE OF PRONOUNCEMENT : 30 .09.2021 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 15.01.2019 OF THE LD. CIT(A)-11, NEW DELHI, RELATING TO THE A.Y. 2010-2011. 2 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER : 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN NOT UPHOLDING THE ASSESSMENT ORDER PASSED BY A.O. AS INVALID. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN GIVING A PERVERSE FINDING THAT A.O. WARD 32(2) HAS THE JURISDICTION OVER THE MATTER WHEN A.O. WARD 28(5) HAS THE VALID JURISDICTION OVER THE MATTER. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN GIVING A FINDING THAT NOTICE U/S 148 WAS SERVED ON THE APPELLANT BY AO WARD 32(2), NEW DELHI. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING THE ADDITIONAL GROUNDS OF APPEAL RAISED BY APPELLANT BEFORE HER VIDE APPLICATION DATED 10/01/2019. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. A.O. IN TREATING THE LOAN OF RS.30,00,000/- TAKEN BY THE APPELLANT AS UNEXPLAINED CASH CREDIT WHEN THE IDENTITY AND CREDITWORTHINESS OF THE LENDER WAS DULY PROVED. 3 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. 6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ADDING SUM OF RS.30,00,000/- IN THE ASSESSABLE INCOME OF THE APPELLANT ON PURCHASE OF CAR WHEN SOURCE OF INVESTMENT IN CAR WAS DULY EXPLAINED BY THE APPELLANT. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE LOAN CONFIRMATION OF MRS BHAGWATI OF ADVANCING LOAN OF RS.30,00,000/- TO THE APPELLANT. 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE VALIDITY OF ASSESSMENT ORDER PASSED BY AO WARD 32(2) WHEN ALREADY ASSESSMENT ORDER FOR THE SAME YEAR HAS ALREADY BEEN PASSED BY A.O. WARD 28(5) NEW DELHI. 9. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW IN ENHANCING THE ASSESSABLE INCOME OF THE APPELLANT BY RS 2,00,000/-. 10. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW TWO ASSESSMENTS OF APPELLANT FOR THE SAME YEAR. 11. THAT THE ABOVE GROUNDS ARE MUTUALLY EXCLUSIVE AND ARE WITHOUT PREJUDICE TO EACH OTHER. 4 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. 12. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT AIR INFORMATION WAS AVAILABLE WITH THE DEPARTMENT IN THIS CASE THAT THE ASSESSEE HAD DEPOSITED CASH OF RS.15,02,250/- IN HIS SAVINGS BANK ACCOUNT AND PURCHASED A CAR AMOUNTING TO RS.28,00,000/- DURING THE F.Y. 2009-2010 PERTAINING TO A.Y. 2010-2011. SINCE THE ASSESSEE HAD NOT FILED HIS RETURN OF INCOME FOR THE A.Y. 2010-2011, THE A.O. WAS OF THE OPINION THAT THE ASSESSEE HAD FAILED TO DISCLOSE THE SOURCE OF AMOUNT PAID FOR PURCHASE OF CAR AMOUNTING TO RS.28,00,000/- AND CASH DEPOSITS OF RS.15,02,250/-. SINCE THE ABOVE TRANSACTIONS REMAINED UNACCOUNTED FOR IN THE HANDS OF THE ASSESSEE, THE A.O. AFTER RECORDING REASONS UNDER SECTION 147 OF THE I.T. ACT, 1961 ISSUED NOTICE UNDER SECTION 148 DATED 29.03.2017 ASKING THE ASSESSEE TO FILE RETURN OF INCOME FOR THE A.Y. 2010-2011 WITHIN 30 DAYS OF SERVICE OF SUCH NOTICE. HOWEVER, THE SAME REMAINED 5 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. UNCOMPLIED WITH. SUBSEQUENTLY, NOTICES ISSUED UNDER SECTION 142(1) WERE ALSO REMAINED UNCOMPLIED WITH. SINCE THERE WAS NON-COMPLIANCE FROM THE SIDE OF THE ASSESSEE, THE A.O. COMPLETED THE ASSESSMENT UNDER SECTION 147/144 OF THE I.T. ACT, 1961 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.43,02,250/- BY MAKING ADDITION OF RS.15,02,250/- UNDER SECTION 68 OF THE I.T. ACT, 1961 BEING THE UNACCOUNTED CASH DEPOSIT AND RS.28 LAKHS BEING THE COST OF MOTOR CAR PURCHASED. 4. BEFORE THE LD. CIT(A), THE ASSESSEE APART FROM CHALLENGING THE ADDITIONS ON MERIT, CHALLENGED THE VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE AGRICULTURAL ACTIVITIES AND, THEREFORE, HE DID NOT FILE ANY RETURN OF INCOME. THE ASSESSEE HAD ALSO RECEIVED ONE NOTICE UNDER SECTION 147/148 FROM THE ITO, WARD-28(5), NEW DELHI AT SHOP NO.5, MOHAN COOPERATIVE INDUSTRIAL AREA, MATHURA ROAD, BADARPUR, NEW DELHI VIDE PAN AMPPS3117D. IT WAS ARGUED THAT THE A.O. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PASSED THE ORDER ACCEPTING THE RETURNED 6 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. INCOME OF RS.2,04,005/-. IT WAS SUBMITTED THAT THE ASSESSEE WAS NOT AWARE ABOUT THE NOTICES ISSUED BY THE SECOND A.O. I.E., ITO, WARD-32(2) AS THEY WERE BEING SENT TO ASSESSEES BROTHERS ADDRESS WHO DID NOT PASS-ON THE MESSAGE RELATING TO RECEIPT OF ANY NOTICE BECAUSE OF BAD RELATIONSHIP WITH HIS BROTHER DUE TO SOME FAMILY PROPERTY DISPUTE. IT WAS ARGUED THAT THERE CANNOT BE TWO ASSESSMENTS BY TWO DIFFERENT A.OS. FOR THE SAME ASSESSEE FOR THE SAME ASSESSMENT YEAR. 4.1. SO FAR AS THE MERITS OF THE CASE IS CONCERNED, IT WAS ARGUED THAT THE CASH DEPOSITED IN THE BANK ACCOUNT WAS OUT OF SALE PROCEEDS OF AGRICULTURAL LAND WHICH WAS PURCHASED BY THE FATHER OF THE ASSESSEE WHO EXPIRED BEFORE THE SALE OF THE SAID LAND. THE ASSESSEE ENCLOSED COPIES OF PURCHASE/SALE OF THE SAID AGRICULTURAL LAND. 4.2. SO FAR AS THE ADDITION OF RS.28 LAKHS ON ACCOUNT OF PURCHASE OF MOTOR CAR IS CONCERNED, IT WAS SUBMITTED THAT AN AMOUNT OF RS.30 LAKHS WAS RECEIVED BY THE ASSESSEE FROM MRS. BHAGWATI DEVI AS ADVANCE FOR PURCHASE OF SOME AGRICULTURAL LAND FOR HER, BUT, THE DEAL COULD NOT BE MATERIALIZED AND AS PER THE UNDERSTANDING WITH MRS. 7 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. BHAGWATI DEVI A CAR WAS PURCHASED BY THE ASSESSEE FOR RS.28,25,000/- AND RS.1,75,000/- WAS INCURRED ON INSURANCE, ROAD TAX AND ACCESSORIES FOR THE MOTOR CAR. THE BANK ACCOUNT OF THE ASSESSEE WAS FILED TO SUBSTANTIATE THE SOURCE OF MONEY FROM MRS. BHAGWATI DEVI ALONG WITH COPY OF HER BANK STATEMENT, INCOME TAX RETURN, COPY OF ACKNOWLEDGMENT OF RETURN AND COMPUTATION OF INCOME. 4.3. HOWEVER, THE LD. CIT(A) WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE. AFTER OBTAINING A REMAND REPORT FROM THE A.O. AND CONSIDERING THE REJOINDER OF THE ASSESSEE TO SUCH REMAND REPORT, THE LD. CIT(A) UPHELD THE ACTION OF THE A.O. 4.4. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LEARNED COUNSEL FOR THE ASSESSEE STRONGLY CHALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ACTION OF THE A.O. IN REOPENING OF THE ASSESSMENT AS WELL AS THE ADDITION ON MERIT. REFERRING TO THE COPY OF THE REASONS RECORDED BY THE ITO, WARD-28(5), COPY OF WHICH IS PLACED AT 8 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. PAGE NOS. 6 AND 7 OF THE PB LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE WAS REOPENED PRECISELY FOR THE PURPOSE OF VERIFICATION OF CASH DEPOSIT OF RS.15,02,250/- IN THE BANK ACCOUNT. REFERRING TO PAGE NOS.8 AND 9 OF THE PB, LEARNED COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE ORDER PASSED UNDER SECTION 143(3) DATED 04.12.2017 WHEREIN THE A.O. HAD COMPLETED THE ASSESSMENT ACCEPTING THE RETURNED INCOME OF RS.2,04,005/- UNDER SECTION 147/143(3) OF THE I.T. ACT, 1961. HE SUBMITTED THAT THERE CANNOT BE TWO SEPARATE ASSESSMENT ORDERS BY TWO DIFFERENT A.OS. FOR THE SAME ASSESSEE FOR THE SAME ASSESSMENT YEAR. RELYING ON VARIOUS DECISIONS, HE SUBMITTED THAT THE ACTION OF THE A.O. IN ASSUMING JURISDICTION AND MAKING THE ASSESSMENT IS INCORRECT AND THE LD. CIT(A) IS EQUALLY WRONG IN DISREGARDING THE FACT THAT ASSESSMENT HAS ALREADY TAKEN PLACE UNDER SECTIONS 147/143(3) OF THE I.T. ACT, 1961. 5.1. SO FAR AS THE MERITS OF THE CASE IS CONCERNED, HE SUBMITTED THAT ASSESSEE HAD ALREADY EXPLAINED THAT DEPOSIT IN THE BANK ACCOUNT IS OUT OF SALE OF AGRICULTURAL LAND AND 9 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. THE SOURCE OF PURCHASE MOTOR CAR IS THE AMOUNT RECEIVED FROM MRS. BHAGWATI DEVI TOWARDS SOME ADVANCE FOR SALE OF LAND WHICH WAS UTILISED FOR PURCHASE OF THE CAR. ASSESSEE HAD ALREADY FILED THE BANK STATEMENT AND COPY OF THE INCOME TAX RETURN ALONG WITH COMPUTATION OF SMT. BHAGWATI DEVI FROM WHOM THE ASSESSEE HAS RECEIVED THE ADVANCE. HE ACCORDINGLY SUBMITTED THAT BOTH LEGALLY AND FACTUALLY THE ORDER PASSED BY THE A.O. WHICH IS UPHELD BY THE LD. CIT(A) IS NOT SUSTAINABLE. 6. THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORDERS OF THE A.O. AND THE LD. CIT(A). 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE RECORD. IT IS A PECULIAR CASE OF REOPENING OF THE ASSESSMENT ON ACCOUNT OF CASH DEPOSIT OF RS.15,02,250/- IN THE BANK ACCOUNT BY TWO DIFFERENT ASSESSING OFFICERS FOR THE SAME ASSESSEE FOR THE SAME ASSESSMENT YEAR. I FIND IN THE INSTANT CASE, THE CASE OF THE ASSESSEE WAS REOPENED BY ITO, WARD-28(5), NEW DELHI ON 30.03.2017 BY RECORDING THE FOLLOWING REASONS : 10 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. 11 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. 7.1. I FIND THE A.O. COMPLETED THE ASSESSMENT ON 04.12.2017 ACCEPTING THE RETURNED INCOME OF RS.2,04,005/- IN THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961 WHICH IS REPRODUCED AS UNDER : 12 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. 13 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. 7.2. IT IS PERTINENT TO MENTION HERE THAT THE NAME OF THE ASSESSEE WITH PAN AMPPS3117D IS SAME IN THE FIRST 143(3)/147 ORDER AND THE SECOND 147/144 ORDER. I AM, THEREFORE, UNABLE TO UNDERSTAND WHEN THE ABOVE FACT WAS 14 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. BROUGHT TO THE NOTICE OF THE LD. CIT(A), HOW SHE COULD IGNORE THE SAME. FOR THE SAKE OF CONVENIENCE, THE SUBMISSIONS OF THE ASSESSEE BEFORE THE LD. CIT(A) WHICH HAS BEEN REPRODUCED BY HER IN PAGES 2 AND 3 OF THE IMPUGNED APPELLATE ORDER READS AS UNDER : BACKGROUND 1. THAT THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE AGRICULTURAL ACTIVITIES, THEREFORE HE DID NOT FILE ANY RETURN FOR ANY YEAR. 2. THE APPELLANT HAD ALREADY RECEIVED ONE NOTICE U/S 147/ 148 FROM WARD 28(5), NEW DELHI AT SHOP NO 5 , MOHAN CO-OPERATIVE INDUSTRIAL ESTATE, MATHURA ROAD NEW DELHI (PRESENT ADDRESS OF THE APPELLANT) FOR SAME A.Y. AND FOR SAME ISSUE. THE APPELLANT DULY COMPLIED WITH ALL THE NOTICES RECEIVED FROM A.O. WARD 28(5), NEW DELHI THROUGH HIS AUTHORIZED SIGNATORY AND AFTER DUE VERIFICATION OF ALL THE DOCUMENTS, THE ASSESSMENT ORDER WAS PASSED 15 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. VIDE ORDER DATED 04.12.2017 BY THE IT0 WARD 28(5) NEW DELHI. 3. THE APPELLANT WAS NOT AWARE ABOUT THE NOTICES SENT BY THE SECOND ASSESSING OFFICER I.E., IMPUGNED ITO WARD 32(2) AS THEY WERE BEING SENT TO THE BROTHER'S ADDRESS WHO DID NOT PASS THE MESSAGE RELATING TO RECEIPT OF ANY NOTICE AS THE APPELLANT DID NOT HAD ANY GOOD TERMS WITH THE BROTHER DUE TO FAMILY PROPERTY DISPUTE. THE APPELLANT HAS NOT BEEN RESIDING AT THAT ADDRESS AND HAD SHIFTED IN 2009 TO FARIDABAD & LATER ON TO MOHAN CO- OPERATIVE INDUSTRIAL ESTATE, MATHURA ROAD, NEW DELHI. HENCE, THE ASSESSEE WISHES TO SUBMIT THAT HE HAS NOT RECEIVED ANY OPPORTUNITY OF BEING HEARD. 4. NEVERTHELESS, HOW IS IT POSSIBLE TO HAVE TWO ASSESSMENTS OF SAME ASSESSMENT YEAR. SINCE THE APPELLANT HAS ALREADY BEEN ASSESSED ONCE ON SAME MATTER FOR SAME AY BY WARD 28(5), HOW ANOTHER NOTICE FOR ASSESSMENT OR ANOTHER 148 16 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. ASSESSMENT FOR SAME ASSESSMENT YEAR BY DIFFERENT OFFICER CAN HOLD JUSTICE. HENCE, THE SECOND NOTICE AND ASSESSMENT BY WARD 32(2) SHOULD BE TREATED AS NULL AND VOID. 5. FURTHER, THE APPELLANT IS IN POSSESSION OF ALL DOCUMENTS RELATED TO CASH DEPOSITED OF RS.15,02,250 AND PURCHASE OF CAR FOR RS.28,00,000 AND THERE IS NO MALA FIDE INTENTION OF EVADE TAXES. 7.3. THEREFORE, ONCE THE A.O. HAS ALREADY MADE AN ASSESSMENT IN THE ORDER UNDER SECTION 147/143(3) IN THE CASE OF THE ASSESSEE FOR THE SAME ASSESSMENT YEAR FOR THE REASON THAT ASSESSEE HAS MADE CASH DEPOSIT OF RS.15,02,250/- IN HIS BANK ACCOUNT, THEREFORE, IN MY OPINION IT IS NOT PERMISSIBLE BY ANOTHER A.O. TO REOPEN THE ASSESSMENT ON THE VERY SAME ISSUE AND PASS THE ORDER UNDER SECTION 147/144 OF THE I.T. ACT, 1961. WHEN THE PAN WAS AVAILABLE WITH THE DEPARTMENT AND AN ORDER HAD ALREADY BEEN PASSED UNDER SECTION 147/143(3) FOR THE SAME ASSESSMENT YEAR FOR THE SAME REASON, THEREFORE, THE SECOND 17 ITA.NO.2454/DEL./2019 MR. KARAMVIR SINGH, DELHI. ORDER PASSED BY THE A.O. DATED 07.12.2017 IN MY OPINION DOES NOT STAND IN THE EYES OF LAW UNLESS AND UNTIL THE FIRST ORDER IS WITHDRAWN. IN THIS VIEW OF THE MATTER, I AM OF THE CONSIDERED OPINION THAT THE SECOND ORDER PASSED BY THE ITO, WARD-32(2) IN THE INSTANT CASE DOES NOT SURVIVE SINCE THERE CANNOT BE TWO DIFFERENT ASSESSMENT ORDERS FOR THE SAME ASSESSEE FOR THE SAME ASSESSMENT YEAR WITH THE SAME PAN BY TWO DIFFERENT A.OS. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.09.2021. SD/- (R.K. PANDA) ACCOUNTANT MEMBER DELHI, DATED 30 TH SEPTEMBER, 2021 VBP/- COPY TO 1. THE APP ELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.