Anand Sheshrao Bharose, Pune V. Income-tax Officer,

ITA 252/PUN/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9814 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-02-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 19-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Reopening of assessment; Capital asset; Validity of assessment
• Section: 143(3); 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO S.251 TO 254 /P U N/201 6 / ASSESSMENT YEAR S : 20 05 - 06 TO 2008 - 09 ANAND SHESHRAO BHAROSE, MZSK & ASSOCIATES, LEVEL 3, BUSINESS BAY, PLOT NO.84, WELLESELY ROAD, PUNE 411001 . / APPELLANT PAN : AHQPB3651B VS. THE INCOME TAX OFFICER , WARD 1(4), PARBHANI . / RESPONDENT / APPELLANT BY : S HRI RAJIV THAKKAR / RESPONDENT BY : SHRI MUKESH JHA / DATE OF HEARING : 26 .0 7 . 201 8 / DATE OF PRONOUNCEMENT: 24 . 0 9 .201 8 / ORDER PER SUSHMA CHOWLA, J M : TH IS BUNCH OF FOUR APPEALS FILED BY THE SAME ASSESSEE ARE AGAINST SEPARATE ORDER S OF CIT (A) - 1, AURANGABAD, ALL DATED 01.12.2015 RELATING TO ASSESSMENT YEAR S 20 05 - 06 TO 2008 - 09 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 14 3(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THIS BUNCH OF APPEALS RELATING TO THE SAME ASSESSEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO S.251 TO 254/PUN/2016 SHRI ANAND S BHAROSE 2 3. THE ASSESSEE IN ALL THE APPEALS IS AGGRIEVED BY RE - ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A). HOWEVER, IN ORDER TO ADJUDICATE THE ISSUE, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO.251/PUN/2016, RELATING TO ASSESSMENT YE AR 2005 - 06. 4 . THE ASSESSEE IN ITA NO.251/PUN/2016, RELATING TO ASSESSMENT YEAR 2005 - 06 HAS RAISED THE FOLLOWING GROUND S OF APPEAL: - 1. THE L EARNED TAXING AUTHORITIES BELLOW HAD ERRED IN DISALLOWING THE AGRICULTURAL INCOME OF RS.760583/ - AND MAKING AN ADD ITION AS INCOME FROM OTHER SOURCES. CONSIDERING THE FACTS OF THE CASE AND PROVISIONS OF LAW, THE AGRICULTURAL INCOME BE ALLOWED IN FULL AND THE ADDITION MADE TO OTHER INCOME BE DELETED. JUST AND PROPER RELIEF MAY BE GRANTED TO T H E APPELLANT. 2. THE O PINION EXPRESSED IN THE ORDER MAY SEVERELY AFFECT THE REPUTATION OF THE ASSESSEE. THEREFORE APPELLANT REQUEST TO DELETE THE OPINION EXPRESSED IN PARA 9 (PAGE 6 & 7) OF THE ORDER BY HONBLE C.I.T. 3. THE APPELLANT PRAYS TO ALLOWED TO ADD, DELETE, ENLA RGE THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 5 . THE ASSESSEE HAS RAISED ADDITIONAL GROUND OF APPEAL WHICH READS AS UNDER: - ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW, IT BE HELD THAT, THE ASSESSMENT FRAMED U/S 147 R.W.S. 143(3) OF THE ACT IS WITHOUT FOLLOWING THE LAW AND THE PROVISIONS OF INCOME - TAX ACT, 1961. THE ASSESSMENT SO FRAMED DESERVES TO BE QUASHED. JUST AND PROPER RELIEF BE GRANTED TO THE APPELLANT IN THIS RESPECT. 6 . THE ASSESSEE IN THE FIRST INS TANCE HAS RAISED JURISDICTIONAL ISSUE OF VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT REASONS WERE RECORDED FOR REOPENING THE ASSESSMENT ON THE GROUND THAT THE ASSESSEE HAD NOT DISCLOSED PURCHASE OF FLAT IN ADARSH HOUSING SOCIETY, MUMBAI, WHEREAS THE ADDITIONS WERE MADE ON VARIOUS OTHER ITEMS I.E. AGRICULTURAL INCOME, BUT FOR NOT DISCLOSING THE PURCHASE OF FLAT. IN THIS REGARD, HE STATED THAT WHERE THE ADDITIONS WERE MADE ON ISSUES WHICH WERE NOT FORM ING ITA NO S.251 TO 254/PUN/2016 SHRI ANAND S BHAROSE 3 PART OF REASONS RECORDED BY REOPENING THE ASSESSMENT, THEN THE ORDER OF RE - ASSESSMENT PASSED BY ASSESSING OFFICER WAS BEYOND THE AMBIT OF REASONS RECORDED AND THE SAME WAS NOT SUSTAINABLE, IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. JET AIRWAYS (I) LTD. (2011) 331 ITR 236 (BOM) . 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, HAS FILED PAPER BOOK AND POINTED OUT THAT THERE WAS ONLINE RECORDING OF REASONS FOR REOPENING THE ASSESSMENT AND FURTHER, THERE WAS ONLINE APPROVAL OF THE JCIT AND HENCE, REOPENING WAS VALID. 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REJOINDER , POINTED OUT THAT ORDER SHEET ENTRIES FOR RECORDIN G REASONS FOR REOPENING THE ASSESSMENT WERE ON 20.09.2011. HOWEVER, AS PER SCREEN SHOT OF ITD SOFTWARE, JCIT APPROVED INITIATION OF RE - ASSESSMENT PROCEEDINGS ON 19.09.2011. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO OPPOSED ARGUMENTS OF LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT REASONS FOR REOPENING OF ASSESSMENT WERE SAID TO BE SUBMITTED ONLINE ON 17.09.2011 AND THE APPROVAL ON 19.09.2011 WAS THUS, VALID . IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THE SAID REASONS WERE SIGNED ON 20.09.2011 ON THE ORDER SHEET AS FILED BY LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. HE ALSO POINTED OUT THAT IN THE ABSENCE OF ANY PROVISIONS OF THE ACT FOR RECORDING OF REASONS AND OBTAINING THE APPRO VAL ONLINE, THE RE - ASSESSMENT PROCEEDINGS SHOULD BE QUASHED. IN THIS REGARD, HE PLACED RELIANCE ON THE DECISION OF PUNE BENCH OF TRIBUNAL IN THE BUNCH OF APPEALS WITH LEAD ORDER IN SHRI TUSHAR R. JAGTAP VS. ACIT IN ITA NOS.725 TO 728/PUN/2015, RELATING TO ASSESSMENT YEARS 2005 - 06 TO 2008 - 09, ORDER DATED ITA NO S.251 TO 254/PUN/2016 SHRI ANAND S BHAROSE 4 09.02.2018. ANOTHER DISCREPANCY WHICH WAS POINTED OUT WAS THAT UNDER SECTION 148 OF THE ACT, AS PER ORDER SHEET ENTRY, NOTICE WAS ISSUED AND SERVED ON 20.09.2011 BUT THE DATE OF ISSUE AND SERVICE OF NOTICE WAS 30.03.2012 . ONE MORE DISCREPANCY POINTED OUT WAS WITH REGARD TO JURISDICTION OF THE JCIT I.E. ONLINE APPROVAL MENTIONS TO BE JCIT, RANGE - I, AURANGABAD BUT AS PER SCREEN SHOT OF IT SOFTWARE, APPROVAL OF JCIT, RANGE - I, JALGAON , WAS OBTAINED . HE ALSO P OINTED OUT THAT JCIT WHILE ACCORDING HIS SATISFACTION AS PER SECTION 151 OF THE ACT HAS NOT RECORDED SATISFACTION BUT HAS ONLY ACCORDED HIS APPROVAL WHICH WAS MECHANICAL AND THE SAME CANNOT BE UPHELD IN VIEW OF SERIES OF DECISIONS . HE THEN MADE SPECIFIC A RGUMENTS FOR ASSESSMENT YEARS 2007 - 08 AND 2008 - 09, WHEREIN IN THE ORDER SHEET OF REASONS RECORDED ON 16.09.2011 IT IS MENTIONED THAT NOTICE UNDER SECTION 148 OF THE ACT WAS SERVED ON THE ASSESSEE ON 17.09.2011 POINTING OUT THAT REASONS WERE RECORDED AFTER THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. HE CHALLENGED THE NOTING IN ORDER SHEET AND POINTED OUT HOW THE ASSESSING OFFICER COULD COME TO KNOW THAT ON 16.09.2011 THAT NOTICE UNDER SECTION 148 OF THE ACT W OULD BE SERVED UPON THE ASSESSEE ON 17.09.2 011. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, STRONGLY OPPOSED THE ARGUMENTS OF LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND PLACED RELIANCE ON THE REPLY GIVEN BY ASSESSING OFFICER ON VARIOUS ISSUES. 10. A FTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES AND AFTER PERUSING THE RECORDS, THE SHORT SUBMISSIONS MADE BY ASSESSEE IN WRITING AND REPLY OF THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , WHEREIN VARIOUS SUBMISSIONS HAVE BEEN MADE BY B OTH THE PARTIES IN SUPPORT AND ITA NO S.251 TO 254/PUN/2016 SHRI ANAND S BHAROSE 5 AGAINST INITIATION OF RE - ASSESSMENT PROCEEDINGS. THOUGH THE PROCESS OF INITIATION OF PROCEEDINGS IS JURISDICTIONAL ISSUE AND THE SAME NEEDS TO BE ADJUDICATED FIRST BUT SECOND ASPECT OF THE ISSUE RAISED IS ALSO JURISDICTIONAL , I FIND THAT THE ASSESSING OFFICER HAD RECORDED REASONS FOR REOPENING THE ASSESSMENT ON THE GROUND OF INVESTMENT IN ADARSH HOUSING SOCIETY. IT MAY BE POINTED OUT THAT THE ASSESSEE HAD DECLARED THE AFORESAID INVESTMENTS IN ITS BOOKS OF ACCOUNT AND IN THE BALANCE SHEET FURNISHED BEFORE THE ASSESSING OFFICER. COPIES OF REASONS RECORDED FOR VARIOUS YEARS ARE PLACED AT PAGES 70 TO 76 OF PAPER BOOK. THE ASSESSING OFFICER IN THE FINAL ANALYSIS IN ALL THE YEARS HAS NOT MADE ANY ADDITION ON ACCOUNT OF INVESTMENT IN ADARSH HOUSING SOCIETY EXCEPT FOR ADDING DIFFERENCE IN THE OPENING BALANCE OF CAPITAL ASSET IN ASSESSMENT YEAR 2007 - 08 OF 10,51,138/ - . 11. THE HONBLE BOMBAY HIGH COURT IN CIT VS. JET AIRWAYS (I) LTD. (SUPRA) HAVE HELD THAT IN CASE THE ASSESSMENT IS REOPENED ON AN ISSUE AND NO ADDITION IS MADE ON THAT GROUND AND THE ADDITION IS MADE ON OTHER ISSUES WHICH DID NOT FIND MENTION IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT, THEN SUCH ORDER OF RE - ASSESSMENT CANNOT BE UPHELD. APPLYING THE SAID P RINCIPLE TO THE F ACTS OF THE PRESENT CASE BEING THE DECISION OF JURISDICTIONAL HIGH COURT, THERE IS NO MERIT IN RE - ASSESSMENT ORDER PASSED UNDER SECTION 148 OF THE ACT. THE OTHER JURISDICTIONAL ISSUE OF ONLINE RECORDING OF REASONS AND ONLINE APPROVAL OF J CIT IN THE ABSENCE OF SPECIFIC PROVISIONS UNDER THE ACT PROVIDED FOR THE SAME, CANNOT BE UPHELD SINCE IN THE RELEVANT ASSESSMENT YEARS, NO SUCH AMENDMENT WAS MADE TO THE INCOME - TAX ACT. WITHOUT GOING INTO ALLEGATION OF RECORDING OF REASONS ON A DATE BEFOR E THE DATE OF APPROVAL BY THE JCIT OR AFTER ISSUING NOTICE , ARE NOT BEING INDIVIDUALLY ADDRESSED AS IT IS CASE OF REVENUE THAT PROCEEDINGS FOR RE - ASSESSMENT WERE INITIATED ON THE BASIS OF ONLINE APPLICATION, ITA NO S.251 TO 254/PUN/2016 SHRI ANAND S BHAROSE 6 ONLINE SEEKING OF APPROVAL BY THE ASSESSING OFFI CER FROM JCIT AND THE SAID APPROVAL BEING GRANTED BY JCIT ONLINE. IN THE ABSENCE OF ANY PROVISIONS IN THE ACT AT THE RELEVANT POINT OF TIME, I FIND NO MERIT IN THE RE - ASSESSMENT PROCEEDINGS INITIATED AGAINST ASSESSEE AND THE SAME ARE HELD TO BE BAD IN LAW . ACCORDINGLY, RE - ASSESSMENT ORDER PASSED IN THE CASE IS HELD TO BE INVALID. I HAVE DECIDED THE ISSUE ON JURISDICTION AL ISSUE AND I DO NOT ADDRESS THE ISSUE RAISED ON MERITS. THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, ALLOWED. IN A SSESSMENT YEAR 2007 - 08, ADDITION IS MADE ON ACCOUNT OF DIFFERENCE IN OPENING BALANCE OF INVESTMENT IN THE SAID PROPERTY BUT NO ADDITION IS MADE ON ACCOUNT OF INVESTMENT PERSE AS NOTED IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. THUS, THE SAME AL SO DO NOT SURVIVE. 12. THE FACTS AND ISSUES IN ITA NOS.252/PUN/2016 TO 254/PUN/2016 ARE IDENTICAL TO THE FACTS AND ISSUES IN ITA NO.251/PUN/2016 AND THE DECISION IN ITA NO.251/PUN/2016 SHALL APPLY MUTATIS MUTANDIS TO ITA NOS.252/PUN/2016 TO 254/PUN/2016. 1 3 . IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 24 TH DAY OF SEPTEMBER , 201 8 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 24 TH SEPTEMBER , 201 8 . GCVSR ITA NO S.251 TO 254/PUN/2016 SHRI ANAND S BHAROSE 7 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1, AURANGABAD ; 4. THE PR. CIT - 1, AURAN GABAD ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE