Sri Pankaj Kumar Roy, L/H of Late Prasanta Kr. Roy, Kolkata V. I.T.O., Ward -25(2), Kolkata, Kolkata

ITA 248/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2533 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 17-06-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 08-02-2010
• Court: TRIBUNAL
• Department Lawyers: A RAJHANS
• Assessee Lawyers: S BANDOPADHYAY
• Keywords: Opportunity of being heard; Reassessment proceedings

Judgement Text

, SMC (A) , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH - SMC (A) , KOLKATA ( ) BEFORE . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND / I.T.A.NO. 248/KOL/2010 / ASSESSMENT YEAR 1995 - 96 SRI PANKAJ KUMAR ROY, LEGAL HEIR OF LATE PRASANTA KUMAR ROY, FLAT NO.2C, 25/2/245/1, PRINCE GULAM MD. SHAH RIOD, KOLKATA 700 045. AGRPR 4348 H - - - VERSUS - . INCOME - TAX OFFICER, WARD 25(2), KOLKATA. ( / A PPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI S. BANDOPADHYAY, AR / FOR THE RESPONDENT : / SHRI A. RAJHANS, DR / ORDER . . , SHRI B.R.MITTAL, JUDICIAL MEMBER. THE AS SESSEE HAS FILED THIS APPEAL AGAINST THE ORDER DT.30.10.2009 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) XIV, KOLKATA FOR THE ASSESSMENT YEAR 1995 - 96 ON THE FOLLOWING GROUNDS. 1 . THAT THE LD. A.O. & THE LD. C.I.T.(A) FAILED TO ASCERTAIN THAT THERE WAS A NY VALID INITIATION OF PROCEEDINGS U/S. 148 FOR THE ASSESSMENT YEAR 1995 - 1996. 2. THAT THE NOTICE U/S. 148 DATED 28.05.1998 WAS ALLEGEDLY SERVED ON THE ASSESSEE, WHICH IS TOTALLY INCORRECT AS NO NOTICE COULD BE SERVED ON A DEAD PERSON, WHO EXPIRED ON 29.0 1.1998 I.E. FIVE (5) MONTHS EARLIER. 3. THAT SERVICE OF THE ALLEGED NOTICE U/S. 148 WAS ALL ALONG DISPUTED. THE BURDEN OF ESTABLISHING PROPER SERVICE OF NOTICE LIES ON THE REVENUE, WHICH IT FAILED INSPITE OF REPEATED DEMANDS. 4. THAT NO NOTICE U/S. 148 W AS SERVED ALSO ON ANY SUCCESSOR OF THE ASSESSEE. ANY OTHER NOTICE SERVED ON THE WIFE OF THE ASSESSEE IS INVALID, SINCE THERE WAS NO INITIATION OF PROCEEDINGS. 5. THAT THE LD. C.I.T.(A) IS ALSO WRONG IN SUSTAINING ADDITION OF RS.1,00,000/ - , WHEREAS A G.P. COULD BE ASSESSED AND NOT A TURNOVER. 6. THAT FURTHER POINTS OF OBJECTION MAY BE PUT FORWARD BEFORE OR AT THE TIME OF HEARING. / I.T.A.NO.248/KOL/2010 2 2. THE ASSESSMENT U/S.143(3) FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS COMPLETED ON18.06.1997. THE SAID ASSESSMENT WAS R EOPENED U/S.147 OF THE ACT AND NOTICE U/S.148 WAS ISSUED ON 28.5.1998. DUE TO NON - COMPLIANCE, THE ASSESSMENT WAS PASSED EXPARTE QUA ASSESSEE U/S.144/147 OF THE ACT ON 29.3.2001. IN APPEAL, THE SAID ASSESSMENT WAS CONFIRMED BY THE CIT(A) VIDE ORDER DT.28.1. 2005 AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DT.5.10.2005 IN ITA NO.1084/KOL/2005 SET ASIDE THE ORDER OF THE CIT(A) AND SENT BACK THE MATTER TO THE ASSESSING OFFICER TO MAKE FRESH ASSESSMENT AFTER ALLOWING OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. PURSUANT TO SUCH ORDER OF THE TRIBUNAL DT.5.10.2005, THE ASSESSING OFFICER PASSED THE IMPUGNED ASSESSMENT ORDER DT.28.12.2006 U/S.144/147/254 OF THE ACT BY MAKING ADDITION TOWARDS UNDER - ASSESSED INCOME OF RS.1,00 ,000. AGGRIEVED, THE ASSESSEE AGAIN PREFERRED APPEAL BEFORE THE CIT(A) AND BEING UNSUCCESSFUL HAS FILED THE PRESENT APPEAL HERE BEFORE THE TRIBUNAL. 3. IN GROUNDS NO.1 TO 4 OF THE APPEAL, THE ASSESSEE HAS DISPUTED THE VALIDITY OF THE INITIATION OF PROCEEDI NGS U/S.148 OF THE INCOME - TAX ACT,1961 AND CONSEQUENT ASSESSMENT. 4. IN SUPPORT OF THE ABOVE GROUNDS, THE LEARNED AR OF THE ASSESSEE CONTENDED THAT VIDE ORDER DT.5.10.2005 THE TRIBUNAL RESTORED THE MATTER TO THE ASSESSING OFFICER TO MAKE FRESH ASSESSMENT AFTER ALLOWING OPPORTUNITY TO THE ASSESSEE OF BEING HEARD, WHEREIN IT HAS NEVER SAID TO MAKE ASSESSMENT IN THE NAME OF LEGAL HEIR OF THE DECEASED ASSESSEE. HE CONTENDED THAT NOTICE U/S.148 OF THE ACT ISSUED BY THE ASSESSING OFFICER ON 28.5.1998 WAS NEVER R ECEIVED BY THE DECEASED ASSESSEE, AS THE DECEASED EXPIRED ON 29.1.1998 I.E., MUCH BEFORE THE ISSUE OF NOTICE. THEREFORE, THE RE - ASSESSMENT MADE IN THE NAME OF LEGAL HEIR IS ILLEGAL, INVALID AND AS SUCH THE SAME SHOULD BE QUASHED. 5. ON THE OTHER HAND, TH E LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND JUSTIFIED THE ASSESSMENT MADE BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE TRIBUNAL WHILE RESTORING THE ASSESSMENT TO THE ASSESSING OFFICER FOR MAKING FRESH ASSESSMENT CONSIDERED THE ISSUE O F INITIATION OF REASSESSMENT PROCEEDINGS. HE SUBMITTED THAT THE LEGAL HEIRS OF THE ASSESSEE NEVER INFORMED THE DEPARTMENT ABOUT THE DEATH OF THE DECEASED ASSESSEE AND THEREFORE, THE ASSESSING / I.T.A.NO.248/KOL/2010 3 OFFICER ISSUE NOTICE U/S.148 OF THE ACT IN THE NAME OF THE DECEA SED ASSESSEE . HE FURTHER SUBMITTED THAT THE SAID NOTICE WAS RECEIVED BY THE WIFE OF DECEASED ASSESSEE AND SHE ALSO DID NOT INFORM THE ASSESSING OFFICER ABOUT THE DEATH OF HER HUSBAND AND THEREFORE, THE AO COMPLETED THE ASSESSMENT IN THE NAME OF THE DECEASE D ASSESSEE. HE SUBMITTED THAT WHEN THE MATTER WAS RESTORED BY THE TRIBUNAL TO THE ASSESSING OFFICER FOR MAKING FRESH ASSESSMENT, THE TRIBUNAL DIRECTED TO PASS THE ASSESSMENT ORDER AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HE SUBMITTED THAT NO DETAILS WERE FILED BY THE LEGAL HEIRS OF THE DECEASED ASSESSEE INSPITE OF GIVING NUMBER OF OPPORTUNITIES AND THEREFORE, THE ASSESSING OFFICERS ACTION COMPLETING EXPARTE ASSESSMENT AGAINST THE LEGAL HEIRS OF THE DECEASED ASSESSEE AFTER SUBSTITUTION IS V ALID AND THE SAME SHOULD BE CONFIRMED. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES. THE FACTS UNDISPUTED ARE THAT THE ORIGINAL ASSESSMENT WAS SET ASIDE BY THE TRIBUNAL VIDE ORDER DT.5.10.2005 IN ITA NO.1084/KOL/ 2005 (COPY PLACED ON PAGES 3 TO 5 OF PB) WITH A DIRECTION TO THE ASSESSING OFFICER TO PASS THE ASSESSMENT AFRESH AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN THE SAID APPEAL, THE TRIBUNAL HAS ALSO CONSIDERED THE VALIDITY OF THE NOTICE AND OBSERV ED IN PARAGRAPH 4 OF THE ORDER AS UNDER : 4. .. I FIND THAT THERE IS NO DISPUTE THAT WHILE ISSUING NOTICE U/S.148 AND IN COMPLETING THE ASSESSMENT U/SS.144/147 THE ASSESSING OFFICER WAS UNAWARE OF THE DEATH OF THE ASSESSEE WHO EXPIRED ON 29.1.1998. T HERE IS NO MATERIAL ON RECORD TO SHOW THAT THE LEGAL HEIR DID INFORM TO THE ASSESSING OFFICER ABOUT THE DEATH OF THE ASSESSEE. I FURTHER FIND THAT THERE IS NO DISPUTE THAT THE NOTICE ISSUED U/S.148 WAS SERVED UPON THE ASSESSEES WIFE ON 30.1.2001 AND THERE IS NO REFUSAL OF THE SA ID NOTICE U/S.148 AT ANY STAGE. ON THE BASIS OF ABOVE FINDINGS AND RELYING ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KAMLESH KUMAR MEHTA V. CIT (116 ITR 855), THE TRIBUNAL WAS OF THE VIEW THAT THE ASSESSM ENT MADE IN THE NAME OF THE DECEASED ASSESSEE IS LIABLE TO BE SET ASIDE FOR FRESH ASSESSMENT IN ACCORDANCE WITH LAW. IT MAY BE WORTH MENTIONING HERE THAT THE LEARNED CIT(A) IN HIS ORDER HAS MENTIONED THAT THE ASSESSEE ALSO FILED MISC. APPLICATION BEARING NO.MA.NO.360/KOL/2005 IN I TA NO.1084/KOL/2005 DT.20.1.2006 AND THE SAME HAS BEEN DISMISSED BY THE TRIBUNAL. / I.T.A.NO.248/KOL/2010 4 7. IN VIEW OF THE UNDISPUTED FACTS DISCUSSED IN THE FOREGOING PARAGRAPH, IT IS NOTICED THAT THE ISSUE REGARDING VALIDITY OF NOTICE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL VIDE ORDER DT.5.10.2005 READ WITH ORDER DT.20.1.2006 AND THE ASSESSMENT NOW IMPUGNED WAS PASSED BY THE ASSESSING OFFICER PURSUANT TO SUCH TRIBUNAL ORDER. THEREFORE, ONCE A N ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL ON SAME SET OF FACTS, I AM OF THE CONSIDER ED VIEW THAT IT WOULD NOT BE JUSTIFIED TO AGAIN DEAL WITH THE SAME ISSUE AND IF DONE, IT WILL AMOUNT TO REVIEW OF OWN ORDER, WHICH IS NOT PERMISSIBLE UNDER THE LAW. IT IS NOT DISPUTED BY THE LEARNED AR OF THE ASSESSEE THAT THE PRESENT ASSESSMENT HAS BEEN MADE ON SUBSTITUTION OF LEGAL HEIRS. IN SUCH VIEW OF THE MATTER, I DO NOT FIND ANY MERIT IN GROUNDS 1 TO 4 OF THE APPEAL TAKEN BY THE ASSESSEE. I DISMISS THESE GROUNDS AND CONFIRM THE ACTION OF THE AUTHORITIES BELOW ON THIS PO INT. 8. IN GROUND NO.5 THE ASSESSEE HAS DISPUTED THE CONFIRMATION OF THE ADDITION OF RS.1,00,000. 9. THE FACTS, IN BRIEF, ARE THAT DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD A SALES OF RS.2,98,000 VIDE B ILL NO.241DC DT.3.2.1995 ASCERTAINED FROM THE LIST OF SALES OF THE EXECUTIVE ENGINEER OF PHE DEPARTMENT, GOVERNMENT OF WEST BENGAL, DARJEELING. BUT IN THE TOTAL SALES, THIS AMOUNT WAS SHOWN AS RS.1,98,000 AND THUS THERE WAS AN ESCAPEMENT OF ASSESSMENT OF R S.1,00,000 ( I.E., RS.2,98,000 RS.1,98,000). THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE DIFFERENCE BUT THE ASSESSEE FAILED TO EXPLAIN THE SAME. THE ASSESSING OFFICER OBSERVED THAT THE AR OF THE ASSESSEE OBTAINED CERTIFIED COPIES OF ALL THE R EQUIRED DOCUMENTS ON 20.10.2006 AND 1.11.2006, BUT FAILED TO EXPLAIN THE DIFFERENCE. ACCORDINGLY HE ADDED THE SAID AMOUNT OF RS.1,00,000 TO THE TOTAL INCOME OF THE ASSESSEE. 10. IN APPEAL BEFORE THE CIT(A), ON BEHALF OF THE ASSESSEE IT WAS CONTENDED THAT ONLY THE PROFIT ELEMENT OF THE SALES OF RS.1,00,000 COULD BE ADDED. THE LEARNED CIT(A) WAS OF THE VIEW THAT THE EXPENSES HAVE ALREADY BEEN DEBITED BY THE ASSESSEE IN THE P & L ACCOUNT AND ONLY THE SHORT REPORTING OF SALE HAS BEEN DETECTED. THEREFORE, THE WHOLE UNREPORTED SALE HAS TO BE TREATED AS UNDISCLOSED INCOME. 11. HAVING HEARD BOTH SIDES AND PERUSING THE IMPUGNED ORDERS OF THE / I.T.A.NO.248/KOL/2010 5 AUTHORITIES BELOW, IT IS SEEN THAT AT THIS STAGE SIMILAR IS THE CONTENTION OF THE LEARNED AR OF THE ASSESSEE AS WAS TAKEN BE FORE THE LEARNED CIT(A) THAT ONLY THE PROFIT ELEMENT ON THE SALES OF RS.1,00,000 COULD BE ADDED. THE LEARNED AR OF THE ASSESSEE IN SUPPORT OF HIS SUCH CONTENTION PLACED RELIANCE ON THE DECISIONS IN THE CASE OF COMMISSIONER OF INCOME - TAX V. BALCHAND AJIT KU MAR [2003] 263 ITR 610 (MP) ,WHEREIN THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. PRESIDENT INDUSTRIES [2002] 258 ITR 654 HAS BEEN FOLLOWED. IN THE CASE OF CIT V. PRESIDENT INDUSTRIES (SUPRA) HONBLE HIGH COURT OF GUJARAT IN A SIMILAR M ATTER CAME TO HOLD THAT I T CANNOT BE A MATTER OF AN ARGUMENT THAT THE AMOUNT OF SALES BY ITSELF CANNOT REPRESENT THE INCOME OF THE ASSESSEE WHO HAS NOT DISCLOSED THE SALES. THE SALES ONLY REPRESENTED THE PRICE RECEIVED BY THE SELLER OF THE GOODS FOR THE AC QUISITION OF WHICH IT HAS ALREADY INCURRED THE COST. IT IS THE REALISATION OF EXCESS OVER THE COST INCURRED THAT ONLY FORMS PART OF THE PROFIT INCLUDED IN THE CONSIDERATION OF SALES. THE LEARNED AR OF THE ASSESSEE FURTHER RELIED ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX V. S. M. OMER [1993] 201 ITR 608 (CAL), WHEREIN HONBLE COURT HAS HELD THAT THE ASSESSEE SUPPLIED THE GOODS AFTER INCURRING CERTAIN COST AND AFTER MANUFACTURING THE GOODS AND THE AMOUNT T HAT WAS RECEIVED FROM THE DEFENCE DEPARTMENT COULD NOT REPRESENT THE NET INCOME BUT IT WAS THE SUM RECEIVED INCLUDING THE PROFIT AND EXPENDITURE. IN VIEW OF THE ABOVE DECISIONS, ONLY THE PROFIT ELEMENT I.E., THE AMOUNT OF SALES MINUS EXPENDITURES ETC., CAN ONLY BE TREATED AS INCOME. BUT IN THE PRESENT CASE ON HAND, THE LEARNED CIT(A) HAS CATEGORICALLY OBSERVED IN HIS ORDER THAT THE EXPENSES HAVE ALREADY BEEN DEBITED BY THE ASSESSEE IN THE P & L ACCOUNT AND ONLY THE SHORT REPORTING OF SALE HAS BEEN DETECTED. THE LEARNED AR OF THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE NEGATING SUCH FINDING OF THE LEARNED CIT(A). THE ASSESSEE ADMITTEDLY HAS SHOWN RECEIPT OF SALES OF RS.1,98,000 IN RESPECT OF SALES OF RS.2,98,000 AND FOR SUCH SALES EXPENDITURES HAS ALREADY BEEN DEBITED IN THE PROFIT & LOSS ACCOUNT. IF IT IS SO, I AM OF THE CONSIDERED VIEW THAT THE AMOUNT OF RS.1,00,000 FOUND UNDISCLOSED BY THE ASSESSEE IS THE INCOME OF THE ASSESSEE AS RIGHTLY HELD BY THE AUTHORITIES BELOW. IN SUCH VIEW OF THE MATTER THE DECISION S RELIED ON BY THE LEARNED AR OF THE ASSESSEE IS OF NO HELP TO THE ASSESSEE. THEREFORE, I CONFIRM THE ACTION OF THE AUTHORITIES BELOW IN / I.T.A.NO.248/KOL/2010 6 MAKING ADDITION OF THE ENTIRE AMOUNT OF RS.1,00,000 TO THE TOTAL INCOME OF THE ASSESSEE AND ACCORDINGLY, I CONFIRM THE SAME AND DISMISS GROUND NO.5 OF THE APPEAL TAKEN BY THE ASSESSEE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 30.06.2010 SD/ - ( . . ), ( B.R.MITTAL ), JUDICIAL MEMBER ( ) DATE : 30.06.2010 - COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : SRI PANKAJ KUMAR ROY, LEGAL HEIR OF LATE PRASANTA KUMAR ROY, FLAT NO.2C, 25/2/245/1, PRINCE GULAM MD. SHAH RIOD, KOLKATA 700 045. 2 / THE RESPONDENT - INCOME - TAX OFFICER, WARD 25(2), KOLKATA. 3. / THE CIT, 4. ( )/ THE CIT(A), 5. / DR, KOLKATA BENCH 6. GUARD FILE . / TRUE COPY , / BY ORDER , / DEPUTY REGISTRAR . ( /) H.K.PADHEE / SNR.PRIVATE SECRETARY .